An interesting little theory for the New Year: Apple is being eaten away inside by Google. I think it's slightly over egged this theory, myself, but there's certainly some truth to it. Essentially, by writing the apps for various Google services they're managing to take control of some to much of the iOS traffic on the Web. Thus making Google rather than Apple money:
Call it "the worm strategy"—because Google is attacking Apple from the inside out.
Over the past six months, Google has begun to systematically replace core, Apple-made iOS apps with Google-made iOS apps.
OK, and this leads to a world where:
Instead, the world has become one where people there are two kinds of people.
There are Android users, surrounded by Google search, and there are iPhone users, downloading Google apps—all of which make Google search a prominent feature.
Fair enough, although as I say while I think there's some truth to it I think that more than just a little too much emphasis is being placed on it. However, that doesn't mean that Google has either won or faces plain sailing. For Google faces exactly the same problem that everyone else does: how do you monetize mobile? This is something that no one has worked out as yet:
The key driver is that mobile CPMs are only 15 percent of desktop CPMs. As traffic migrates, seven ads on mobile bring the same revenue as one on the desktop, because the lower CPMs coincide with lower click-through rates.
It's great to control the traffic, or the advertising that appears on that traffic. But the aim of all this is to be able to monetise that traffic. And if people simply don't click through ads on mobile (or a great deal less than they used to) then that traffic will be worth less. It might be that mobile traffic will never produce the same revenues as desktop for any number of reasons. People are using the Web differently, or perhaps size and form factor are too different.
But that is the real problem being faced by the current Web ecosystem. Traffic is flooding from desktop to mobile and no one has yet really worked out how to make good money from mobile traffic. And there's no certainty at all (although it's a good bet) that if there is a solution to be found that it will be Google that finds it, in the same way they did with AdWords for Web 1.0.
Gaining great chunks of iOS traffic through apps is just great: but that traffic still has to be monetised.
