Jamie Hill, CEO & Founder of adMarketplace, Shares His 2015 Predictions: It’s Time To Mind the App Gap

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2014 marked the year that mobile usage surpassed desktop. Accordingly, 2014 also marked the year that mobile search surpassed desktop search. Search is becoming increasingly fragmented, and Google desktop search is losing share because it is fighting a war on two fronts. Users are shifting away from desktop computing, and Google search in general. The reason behind this particular phenomenon is actually quite simple: choice. In terms of internet search, users have more choice than ever before. The resulting shift in user behavior has numerous implications for internet users and the digital advertising ecosystem.

Our phones are replacing desktop computers for most of our computing needs, and search is no exception. One recent study found that roughly 75% of mobile searches occur in the same room as an available desktop or laptop. Mobile search has expanded beyond convenient on-the-go search and is now the primary method of search for many. The trend is pretty clear: desktop search is on the decline.

This rise in mobile usage has not only changed where we search, it’s changed how we search. Apps often function as curated links to specialized websites, and they are replacing web browsers for many types of user behavior.

Search advertising used to be pretty simple; brands could advertise on a search engine result page, or they could advertise on a partner network. With the advent of mobile search and app search, things are a bit more complex. Ads must be priced according to device type.

Right now, advertisers are clamoring for more mobile coverage, but they aren’t willing to pay competitive prices for it. Google mobile PPCs are low when compared to desktop, and Google isn’t paying much attention to mobile search on the partner network. These low CPCs have established an industry standard pricing model that is advantageous to advertisers, but not sustainable given the current trend. As we head into 2015, we see an increased demand for mobile supply, but without an increase in advertiser confidence. I expect this to change rapidly.

I expect that publishers who have optimized their sites to account for the surge in mobile search will win big in the coming years. Right now, publisher supply is not in sync with advertiser demand on mobile. Advertisers want to serve more mobile ads, but the inventory isn’t quite there. This gap will close quickly — mobile supply will certainly rise to meet demand in 2015. However, we still do not know if mobile pricing will rise to meet expected value in the same time frame.

This is a turning point in search advertising. The last few years marked the first time in over a decade where both advertisers and publishers had to rethink their entire search advertising strategy. This shift is certainly a boon to advertisers, as they now have more and better options to reach their target audience. On the other side, the publishers who are able to adapt quickly to a more mobile-centric search landscape will also see substantial growth in the coming years.

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