BANGALORE: The shift away from desktop browsing to mobile web has put the squeeze on Google's advertising revenues from traditional pay-per-click. But the tech giant is trying to set things right by sneaking ads into the user's inbox.
The latest example involves the introduction of tabs in Google-owned popular email service Gmail. Google places both emails as well as advertisements under the Promotions tab in the inbox and users find it difficult to distinguish between the two.
Industry observers said this tactic, which has already become the talk of the ad industry, signals Google's renewed attempt at tackling what has been considered the company's biggest weakness: slowing ad sales from desktops.
"Google earnings show that its clickrates have gone down over the past two quarters, so this is possibly a great way to catch-up and place ads right in front of its users to increase sales," said Prasanth Mohanachandran, founder and chief executive of AgencyDigi, a Mumbai-based digital communications agency.
In an emailed response, Google said the new ads replace the ones that were earlier shown on top under the old design. Last week, the Mountain View, California-based Google reported second-quarter earnings that fell short of analyst estimates mainly due to slowness in desktop search and a fall in ad prices. With over 90% of its revenues coming from advertisements, getting people to click on them is crucial for Google.
Over the past few quarters, companies like Facebook and Google have been trying to improve their mobile advertising revenues as more users access web services on smartphones. On Wednesday, rival internet firm Facebook said mobile ads generated 41% of its revenue last quarter, up from 14% from last year.
Internet privacy experts said the decision to place advertisements that are disguised as emails is a "sneaky way of getting more users to click on ads" as Google tries to mitigate the effects of slowing ad sales on desktops. "Users would often mistake these advertisements for actual emails.May be that's the cost of using a free product," said Sunil Abraham, executive director of Bangalore-based research firm Centre for Internet and Society. "Previously, ads used to look like ads. Of late, Google has been trying to mix ads with content and that's where the privacy angle comes into play," he added.
A Google spokesman said these ads aren't exactly the same as emails because they don't take up inbox storage. "The new ads act like the old normal inbox ads. When people click the ads, they will either be directed to an advertiser's landing page or the ad will expand within Gmail," the company said in an emailed response.