The big trouble with Google’s little mobile ads

See that little iPhone “sponsored link” ad at top? That’s all you get with Google’s new iPhone app. Google redesigned its iPhone web interface yesterday. Instead of the “real web” — the actual HTML screen you’d find on your personal computer — Google has mobile-fied a new version just for iPhones, with larger type, a cleaner search window, no need to zoom in, and five friendly tabs for home, Gmail, calendar, Reader, and “more.”

Trouble is, this clean new design shrinks the space allocated for competing advertisers. On regular Google web pages, there are three slots at top and several more down the right side for advertisers to jockey for position with PPC text ads. Hunt for “kitchen cabinets” or “bariatrics surgery” and 9 or 10 providers vie for your attention. With this new iPhone app, we see … one little slot.

There’s lots of talk about the Google redesign, including some hinting that Google is dumbing down the iPhone interface to make way for its Android consortium in the near future. We think the real story is Google is strangling the very channel that made it successful by limiting advertising slots. This design move may have been unavoidable as consumers move to smaller internet screens … but if inventory gets too tight, advertisers may search elsewhere.

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