The single biggest challenge Google is facing over the next year is the lack of advertisers with a clear mobile strategy. The growth of the mobile market is exponential and set to take over as the main method of accessing the internet in just a couple of years.
If someone asked you whether you'd rather give up your mobile device or your TV, what would you say? I know what I would give up. I'd stick with my mobile (my kids have taken control of the TV in any case), and if given the same choice, so would roughly 20% of Australian smartphone owners.
Australia is going mobile in a big way. In a recent study with Ipsos Research, Google found that Australia has the second highest smartphone penetration in the world - ahead of the US, UK, and Japan. And the pace of change is revolutionary.
The majority of smartphone owners we surveyed had bought their device in the preceding 12 months. One in three had bought it in the last six months. This amounts to a dizzying pace of growth: we estimate that every month, 1-2% of the Australian population buys a smartphone and already over 20% of Australian internet searches are now from mobile devices.
If this sounds like a golden opportunity for advertisers large and small to engage with consumers, that's because it is. But the hard truth is that for digital marketers, mobile advertising is no longer merely an opportunity. It's a necessity.
Consumers have embraced the mobile revolution - which means advertisers should too. Consider some of our other findings: 49% of the people we surveyed use their smartphone to research and then call businesses - while 45% have visited a business they've found using their smartphone. One in four had made a purchase using their mobile phone, while one in five had searched for a house or apartment.
Each one of those actions represents a brand new opportunity for Australia's advertisers to grow their businesses on mobile. And yet nearly 80% of advertisers don't have mobile friendly websites. If you asked a business owner whether she'd ignore every fourth customer to walk into her shop, the answer would certainly be no. But with 25% of shopping-related queries coming in on mobile, not having a mobile website is tantamount to the same thing. For businesses looking to go mobile, the rewards for first movers are significant. However, with smartphone growth only set to continue, the good news for both advertisers and publishers is that it's not too late to be early.
Google's growth depends on the success of our advertisers, so when our advertisers miss out on opportunities we do too. In order for Google's horizons to continue to expand, we have to help digital marketers to realise the true potential of mobile. This will be our biggest challenge over the coming year. Advertisers who don't act are at risk of becoming invisible to their customers.
The good news is that businesses can start with the basics - and that doesn't mean hiring a developer to design a fancy mobile app, or even advertising on mobile right away. The most basic step is creating a version of your website that's optimised for visitors coming from mobile devices. But almost four out of five Australian businesses don't have mobile-optimised websites, which means that even if they do advertise on phones, their customers won't be able to fully engage with the business or the brand.
The second thing many businesses get wrong is that they think an iPhone app is the same thing as a mobile strategy - it's not. Businesses need to build and integrate their mobile strategy with their existing campaigns. When developing mobile strategy, marketers need to incorporate all available mobile platforms and devices, as well as the mobile web and tablets. And they need to start by defining what they're trying to achieve. A restaurant may want to reach new patrons, while a large multinational company may want to find a new way to engage customers with its brand.
Finally, if there is one thing we have learned from the last 15 years it's that those who react early to big changes in technology and media do so much better than those who are late. Being early carries risks but it gives access to new and unique information about what works and what doesn't. As is true with other digital mediums, advertisers need to use that data to make informed decisions about their future mobile strategy - and even about their broader business strategy.
For example, when Lexus Australia launched the first luxury hybrid hatch on the Australian market, they wanted to design a campaign that targeted their customer base - people in their late 20s to early 40s, who value style, design and technology - a group of people at ease with today's smartphones. So Lexus built an iPhone gaming app featuring the car and distributed it via mobile ads on the AdMob network. Rather than clicking through to a static company website, consumers who tapped the ad could download an entire game in a single click. As more people downloaded and played it, the more popular it ranked on the app store, eventually generating downloads without any direct advertising at all. Lexus used the power of mobile to move beyond a more traditional banner ad - engaging their customers actively with the Lexus brand.
With the advent of smartphones, the web has gotten a whole lot bigger. Twelve months ago, the question for advertisers and publishers thinking about mobile was "why should I act?"; today it's "how do I act?" The good news is that it's not too late to be early... but it soon will be.