Google has recently presented some positive results from its Alphabet subsidiary, announcing three billion app installs. The news follow two billion app installs by Facebook.
Google Alphabet with positive growth in app install ads
Google launched app installs in 2014 and has since driven up demand across iOS and Android. Whilst the company noted a 9% average decline in ad prices across CPC models, Facebook’s prices increased by 9% year-on-year.
A price decline for Google may be driven by YouTube growth where advertisers demand lower ad prices. On average, Google search ad prices are suggested to be having a positive impact by generating higher bids.
However, apps are facing weaker demand as more and more app developers flood the market and consumers aren’t catching up. Ultimately such demand drives advertising and a growing number of developers are willing to splash out more cash to pay for mobile ads.
Whilst Facebook is predicted to generate around $3.40 per app install, Google could hike prices to earn a predicted $10bn from app-install advertising this year. The company made $74.5bn in revenue in 2015.
In addition, Google revenue across its own websites was up by 22% in 2016 already.
Adam Levy, Writer, The Motley Fool, writes:
“It’s safe to crown Google the new king of app-install ads, but Facebook investors don’t need to worry about one of its biggest money makers. The company’s management loves to downplay the importance of the ad units, and it’s now focused on video ads more than anything else.”
However, Alphabet is currently being investigated over back taxes owed in Indonesia. Here, Google may face over $400m for 2015 if it’s found to having avoided payments. The local tax office claims that Google Indonesia paid less than 0.1% in total income tax last year.