People use desktop search to research big-ticket items: cars, vacations, mortgages, life insurance, mesothelioma, consumer electronics, etc. There's a lot of value in a sale there. A personal-injury lawyer may collect hundreds of thousands of dollars from a client with a solid case. As a result, these keywords get bid up really high, because the profit potential of a new customer is high.
People currently use mobile search for day-to-day local needs. What restaurant should I go to? Where can I find parking? What's there to do in this town? Most of these have sale prices in the $10-50 range, and so there's just not as much money coming out of the sale. As a result, the keywords don't get bid up as high, and CPC is lower.
These use cases are not substitutes. Just because people are searching for restaurants does not mean they aren't also searching for mesothelioma. We see this in the revenue numbers, which continue to rise. But as a percentage of the total addressable market, high-value keywords like insurance and lawsuits will shrink as the market becomes larger. If you're looking at aggregate CPC numbers this will look like Google is becoming less attractive to advertisers, but what's actually happening is that Google is becoming viable for less attractive advertisers. The total market size is expanding, and with that come more marginal customers.
This, BTW, is one reason why I think Wall Street analysts are idiots. They pay attention to the wrong metrics, because those are the only numbers they have to pay attention to. I have my own set of metrics that I use to judge when it's time to sell Google stock, but I'm not going to reveal them here.
Facebook isn't having the same problems monetizing mobile. I haven't looked too deeply into their results, but last I checked their ad margins are rising rapidly. Facebook ads seem to be a lot more valuable to advertisers than a Google ad, and they have lots of runway with a lot of premier real estate on mobile devices (Instagram, WhatsApp).
If the "post-pc" trend continues and people increasingly do their computing on tablets or phones, the future doesn't bode well for Google.
Facebook has a very different ad strategy on both desktop and mobile. They target brand awareness much more than purchasing intent. As a user, I'm starting to see Facebook ads in my newsfeed of sites I never searched for or Liked on Facebook; AFAICT, they're using cookie data from the advertiser's website itself to inject the ad into your stream, so that you're reminded of the product on a regular basis. I can see why this would be worth a lot to the advertiser (targeted brand advertising!), but as a user, it is creepy and annoying as hell.
They also own AdMob, which is one of the more successful in-app-advertising platforms.
On the search side I am fairly indifferent.
