Google to show ads on homepage of app

By Paresh Dave

SAN FRANCISCO (Reuters) – Alphabet Inc’s Google will begin featuring ads on the homepage of its smartphone app worldwide later this year, it said on Tuesday, giving the search engine a huge new supply of ad slots to boost revenue.

Google will also start placing ads with a gallery of up to eight images in search results, potentially increasing ad supply further.

The changes come as choppy revenue growth prompt questions from some Alphabet investors about whether services such as Amazon.com Inc and Facebook Inc’s Instagram are drawing online shoppers and in turn, advertisers away from Google.

Google executives told reporters on Monday the latest features were a response to how users behave, not competition.

The company wants to make it easier for users to discover and buy new products because they shop in brief spurts while watching TV or sitting in the bathroom, said Oliver Heckmann, vice president of engineering for Travel and Shopping.

“It actually changed with mobiles and what users expect from an online service like Google,” he said.

The ads on the Google homepage appear on what the company calls its Discover feature, a Facebook-style news feed that users swipe through to view an algorithmically personalized set of links to articles, videos and other online content.

The company said on Monday that ads would run where ever Discover is available, including on its mobile website, but clarified on Tuesday that ads would only be in the Google app.

Google has been testing ads on Discover since last fall, when it said more than 800 million people were using the feature monthly.

The gallery ads are part of a Google effort to make search results more visual, the company said. Ads with images are expected to garner more clicks, which could lead them being shown in more results, executives said.

Google – which announced the changes at its Marketing Live conference for advertisers – also said it would begin showing personalized content on its Google Shopping home page. That offers only a search box in most countries at present.

The company will continue to use the Shopping service to take orders for in-store pick up or delivery from a variety of shops. But it will phase out its Google Express delivery brand in favor of Google Shopping.

Google first launched a more robust shopping page in India last year.

(The story corrects headline and lede to remove mention of mobile website following Google clarification.)

(Reporting by Paresh Dave, editing by Deepa Babington)