Most online companies are compelled to extend towards mobile devices for advertising revenue, but so far, there have been unremarkable results. For example, Microsoft posted unsatisfactory numbers this week which showed their struggles with the new Surface RT tablet. Google and Facebook also said that advertising revenue from tinier screens remain challenging.
When it comes to mobile and social media, the most successful brands that come to mind are Instagram and Twitter, and yet these brands, when all is said and done, actually elude advertising.
According to a new study authored by Byron Sharp, a Marketing Science professor at the University of South Australia, brand advertising found in search engine results page have no immediate paybacks, and also, “returns from all other keywords are a fraction of conventional estimates.”
Moreover, the study mentioned in its conclusion that users tend to get better at circumventing advertisements as they use the web more and become more acquainted with it. Ads have a positive impact on “new and infrequent users,” but the purchasing behavior of “existing loyal users” is not impacted on by paid search. It seems as if the online advertising business is getting more challenging.
Facebook’s Advertising Challenges
Facebook is criticized for persuading uses to look at more advertisements for apps that they are not interested in. Furthermore, it is very easy for a Facebook user to grow less interested in the social networking site if she or he sees commercials that are unappealing to them or go beyond their ideals and standards.
This is a challenge not just for brands using online advertising in general, but also for brands who need to get used to the fact that screens are reducing in size.
Microsoft’s tablet struggles
In lieu of Apple’s success with mobile devices, Microsoft decided that Windows 8 will have to be as good on personal computers as they are on tablets. However, while this goal was accomplished by Microsoft, it still isn’t at par with Samsung or Apple’s tablets.
As such, Microsoft reduced the price of the Surface RT Tablet to 350 dollars, from its original price of 499 dollars. This translates to taking a charge of 900 million dollars, and a loss of 0.07 dollars per share. So far Windows 8 OS has been unable to give Microsoft its tablet boost and help stop the decline of PCs.
Google’s Mobile Ads Struggles
Google is still a leading force on the web, but when it comes to mobile phones, the company has a hard time making ads appealing enough for users to click on. One reason is that Google’s new designs are geared towards being neat and pleasing to the eye, essentially without room for ugly advertisements.
This is true despite the fact that most popular mobile devices nowadays use Google-owned Android OS. In fact, Google’s shares tumbled in New York, although with other products Google expects that its revenues will continue to increase.