Why has Google revamped Adwords for Mobile and Tablets?

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Lots has been made of the recent revamp of Google’s Adwords network to improve targeting smartphone and tablet users.

The majority of coverage has focused on the need to simplify the process of targeting mobile users in the face of increasing mobile web traffic (the number of daily Google searches from mobile devices will surpass searches from PCs and laptops by next year – according to a Guardian report). With this increase, businesses are only going to want to target more mobile users and so it goes that they’ll need a simplified Adwords tool to do just that.

But it’s also worth considering another reason why a search engine like Google might change its model this way: the increasing threat of cheaper mobile ads.

To date, businesses run mobile only ad campaigns because they have huge reach but for much cheaper cost per click fees than campaigns targeting desktop users.

Massive mobile web growth means that businesses are only going to divert more of their ad budgets from desktop to mobile ads, which means cheaper ads for all, but much less revenues for a search engine like Google.

So, in the face of dropping ad revenues, how should a search engine react? Perhaps move to a new model where the two types of platforms are less distinct and charge one price for both mobile and desktop ad campaigns?

Bing / Yahoo now has a huge opportunity. Can we expect to see marketing campaigns from them that draw attention to the ability to still run mobile only / cheaper ad campaigns on their platforms?

Will we see a massive migration of brands that live and die by specifically targeting mobile users to Bing / Yahoo?