Mr. Spero didn't provide specific plans Google might have, but
did mention Now on Tap. Yet to be released, the program would
"scrape" a conversation between two people who were messaging each
other, for example, and identify their questions -- from movie
showtimes to whether Christopher Walken stars in Showtime's hit
series "Ray Donovan" (it's actually Jon Voight). In the future, the
company might learn enough about your routine to know when you're
hungry and what type of food you like, in order to recommend a
restaurant when you're in Google Maps, for example.
"These changes mean that if marketers haven't already gone
through the exercise of reinventing their approach to search, they
run the risk of their entire search program becoming stagnant," Mr.
Shamberg said. "Whether they do this directly or putting their
agency on notice to do so, they must place a much heavier
commerce-oriented lens on their budget allocation and success
criteria. This has particularly massive implications for CPG, where
commerce-driven searches within Amazon and potentially Jet.com will
become the norm."
Still, while Google can use its own apps to increase its bottom
line, the bulk of its revenue, of course, comes from search and
advertising. There, too, mobile is ascending. For the first time
ever, mobile advertising will surpass desktop in 2015, according to
eMarketer, with about $27.6 billion expected
to be spent on desktop compared with mobile's $30.5 billion.
Google doesn't break out how much it makes from mobile, but in
2014, the company saw approximately $59.1 billion in ad revenue. Of
that, $11.8 billion came from mobile search and about 75% was
generated through a deal with Apple to be the default search engine
for the iPhone and iPad Safari browser, according to an equity
research report from Goldman Sachs released earlier this year.
"Google has already made a huge push into mobile as a means to
hedge against declines in desktop and it isn't just in product
development," Mr. Shamberg said. As Google shares "data back with
marketers and agencies, [it] consistently calls out mobile
performance—and, more importantly, spend—against the
market as a whole. In other words, mobile maintains a premium and
priority position in their sales approach."
Out of this year's mobile-spending budget, search advertising
gobbled up $13.6 billion, or about 45%, and that number is only
expected to increase in future years, eMarketer said. The data did
not specify whether the searches were traditional or vertical.
And while some companies are beginning to advertise in vertical
spaces like Yelp or Amazon, the amount of money they're spending is
typically dwarfed when compared with other advertising avenues. "A
lot of this is just happening and you're not going to see it show
up in budgets for another 12 months," Mr. Belsky said.
That might be because vertical search is still in its infancy
and major players are still trying to grow it. About 53% of people
surveyed in a 2015 Forrester study said Amazon is their go-to site
for researching products and services. Additionally, 30% of all
product searches start at Amazon, not Google, according to a 2012
study also conducted by the same group.
Recently, Amazon launched its own Text Ads, adding that Product
Ads, a cost-per-click advertising program meant to drive traffic
from Amazon.com to a seller's website, will be discontinued Oct.
31, according to an Amazon spokeswoman.
"Amazon is really interesting," Mr. Belsky said. "They have been
testing an all-out Text Ad product that resembles Google in many
facets. It actually has a quality score, a way to bid on keywords,
you can tether your products to sponsor categories. The only thing
is you have to sell those goods within Amazon, not off Amazon."
Amazon's forthcoming self-service, pay-per-click Text Ads, has
yet to receive a release date and a spokeswoman declined to
While Amazon will be launching its own text ads, Google can
still offer more. The company syndicates its search ads outside of
search environments by doing things like running them as display
ads on other sites or mobile apps.
"When you take into account the generational usage of mobile,
and you get to millennials and the generation underneath them, they
are not going to learn from desktop computers," Mr. Shamberg said.
"This is going be an all-mobile experience for them, and it is part
of the reason why over the last three years, Google has been
laser-focused on these vertical search experiences because they are
trying to stem the bleeding of what's being lost off their platform
in these vertical search areas."
"Google's mission is the exact same mission that it has been
from the start," Mr. Spero said. "Google is still trying to
organize the world's information and make it accessible. We believe
the consumer is still going to need to map out information
virtually and we need to make it available every minute of the day
as opposed to when we were just sitting indoors with the