Googles AdMob platform has changed its pricing structure for all cost-per-click (CPC) mobile ads, switching to an AdWords-style second-price auction, in which the winning price will be determined by the quality of the ad and the other bids on that impression.

“Advertisers will benefit from more efficient pricing and could receive cheaper clicks depending on the inventory on which they bid,” says Chrix Finne, product manager at Google, writing in a blog post. “High quality ads will be rewarded with an improved chance at winning the auction.”

One source told Mobile Marketing that the move is a statement of intent that makes it harder for other companies to compete, and has turned the market on its head. The source also suggested that this could be a pre-emptive move against Facebooks rumoured venture into mobile advertising – but Google itself is quick to downplay the significance of the move.

The change is another natural step, the company says, towards integrating AdMob – which Google acquired in May 2010 – into AdWords, by bringing the format in line with how search ads have functioned for the last 10 years.

Thomas Schulz, CEO of mobile marketing firm Somo, and former MD of EMEA at AdMob, believes that ultimately, advertisers will benefit. He told Mobile Marketing: “Advertisers are beginning to move their marketing budgets to become proportionate to the amount of time people are spending consuming mobile media. As ad dollars start to increase, were seeing the two big players, Apple and Google, go head-to-head to try and disrupt the market and secure those budgets. We expect further disruption when Facebook launches its mobile advertising proposition, but the winners will be advertisers, who should see their marketing budgets go further on mobile as ad inventory becomes cheaper.”