Its a well known fact that Google is catching up with Facebook on offering mobile advertising solutions. Facebook with its native mobile App inventory has helped App publishers in achieving millions of app downloads. Google still relies on 3rd party publishers to generate its mobile inventory with much lesser control on the UI placement.
Google’s biggest owned inventory is Youtube App and without doubt they make tonnes of money with it. So why can’t they do this with Play Store? They have some great numbers going there:
Google made $1.3bn in revenues from Play Store last year. They will probably make $3bn this year. They can add another $1bn (calculations at the end on how I arrived at this figure) if they create a new property — AdWords for Play Store. Here is how it may look like:
And this is how the advertiser panel in Adwords would look:
Advertising is in Google’s DNA so they must already be working on it. Only reasons for not doing so may include:
Legal/Commercial issues with handset manufacturers
Upcoming Google mobile search upgrade may have a better app download solution
How I arrived at $1bn revenue projection: Total yearly downloads = 35bn approx. 2% paid downloads/year =700mn x $1.5 (average CPI) = $1.05bn. Since this inventory belongs to Google, they do not share this revenue.