Google/AdMob - new focus on Mobile Advertising

November 10, 2009

Google Inc. is acquiring AdMob, a mobile display ad technology provider, for $750 million in stock. AdMob offers a variety of mobile advertising tools for creating, serving and analyzing emerging mobile ads formats.

“Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,” said Susan Wojcicki, VP of product management at Google in a statement. “AdMob is the quintessential Silicon Valley startup — generating impressive year on year revenue growth — and we’re excited to welcome this talented team to Google.”

AdMob brings an extensive network of display ad inventory on 15,000 mobile Web sites and applications for iPhone and Android along with mobile web banners. To date, AdMob has been one of the largest (if not the largest) mobile ad network for in-app ad inventory on the iPhone. This has brought new implications for demographic targeting and audience segmentation to Google. The combination of AdMob’s display and in-app advertising coupled with search adverticing makes Google king of the hill again in mobile.

What does this mean for Mobile Marketing and Advertising?

First, it’s clear that Google is serious about mobile advertising and sees the space as a growth market. We too are excited about the space and the future mobile advertising holds for marketers, brands and consumers. Google also brings credibility (think about online advertising BEFORE AdWords). The ease of use AdMob is able to demonstrate with it’s platform will also lead to a better advertiser experience when researching and placing mobile advertisements. This deal also brings better ad formats and options to Google – something Google knows very well how to monetize.

AdMob offers a variety of sizes for mobile ads.

In addition, Google will ad focus to this emerging market opportunity of self-service advertising. Google will help bring mobile to an entirely new audience. Google has been testing mobile advertising for several years with their own mobile search, banner and in-app ad networks and now mobile analytics.

What Admob did was to help businesses and agencies navigate the space with a platform that is easy to use and has evolved from text links to interactive banners and in App advertisements.

Next, this move will lead to a shift in mobile acquisition and bring new investment to mobile. Let’s face it, it’s great to run a mobile ad, but to covert traffic is an entirely separate event. Then to resell or market to these new prospects and finally, lead them to water – the Holy Grail – a purchase or some sort of transaction. This will also lead to greater focus on Mobile Analytics too over the entire mobile ecosystem.

This purchase is very similar to other acquisitions made by AOL (Third Screen Media), MicroSoft (TellMe and ScreenTonic) and Yahoo (Actionality and RightMedia).

With Google sitting on top of the mobile advertising scene, it still leaves other competitors to focus on their edge over the other companies. These companies include Quattro Wireless, Millennial Media, Jumptap and 4INFO to name a few.

Mobile Advertising Projected Growth

Gartner projects that the worldwide revenue for mobile advertising will be $13.5 billion in 2013, up from around $500 million in 2008. This includes mobile banner ads, SMS, text links, search and maps, ads in applications and games, ads in videos and TV shown on a mobile phone. Until now, Google has focused mainly on search advertising, but this deal signals that it has its sights set on other areas as well.

Focusing on display, search and messaging-based advertising, eMarketer predicts that U.S. mobile advertising spending will grow from $320 million last year to $416 million this year to more than $1.5 billion by 2013.

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