It was an awful week for Google. On Tuesday it took some stinging criticism from European data protection commissioners who accused Google of providing “insufficient information to its users on its personal data processing operations”. Then, on Thursday its third quarter results were accidentally released a few hours early without a reassuring explanation from the chief executive officer, Larry Page. Shareholders bolted to the tune of $45m per second before Google managed to suspend trading.
Much of the panic can be explained by the herd mentality that can grip an uncertain market working with incomplete information. How many of those who sold shares in Google actually took the time to read the press release and digest its implications in the eight minutes before trading was halted?
Google’s profits were down on last year because, like other established superpowers of the Internet such as Facebook, it is struggling with our smartphone addiction. We increasingly like to surf the Web on smartphones, whereas Google likes us to surf on bigger PCs or laptops where it can display more advertising and get more click throughs.
Here’s where newspapers come in. They’re suffering from exactly the same problem. Let’s take guardian.co.uk as an example. I just clicked on their top story at the time of writing from my PC. Here’s a screenshot:
There is one banner ad across the top and another ad to the side. What you can’t see from the screenshot is also another ad at the bottom of the article, several Ads by Google, an ad for the Guardian Bookshop and a selected job from Guardian Jobs.
View the same page on mobile and it’s a different story. There is one banner ad at the top, one at the bottom and two sponsored features.
The Guardian’s rate card shows the difference in revenue they received when I clicked from my laptop compared with on mobile. A banner on guardian.co.uk has a CPM of £30 for a run of network. This means that for every thousand views of a page with that ad (cost per mille – CPM) the Guardian gets £30. A banner on m.guardian.co.uk, their mobile site, costs just £10 per 1000 viewers. As we saw above, on the desktop site they can cram in more ads, at higher rates.
The numbers for online ads for newspapers didn’t add up even before smartphones. Mobile adds another unknown to the equation that newspapers have been puzzling over for almost as long as Fermat’s Last Theorem. This time, though, they have internet giants like Google and Facebook with them for company.