The best news in mobile marketing every Thursday.
GoogMob Deal “A Watershed Moment” For Mobile Advertising
Just as the introduction of the iPhone changed everything in the consumer world of mobile and helped usher in the era of the mobile internet, the pending Google acquisition of mobile display ad network AdMob is an almost equally significant event for mobile advertising. Over the past few years mobile advertising and marketing have been gaining steam, helped by a steady stream of research, positive case studies and evidence of mobile ad effectiveness — as well as the rich display units for the iPhone and other smartphones developed by AdMob and its competitors (Quattro, JumpTap, Millennial Media and others).
The fact of Google’s intended acquisition and the price tag ($750 million) help validate mobile (display) advertising in a number of ways. It’s the third largest acquisition price Google has paid, after YouTube and DoubleClick. It also shows how serious Google is about mobile advertising in general. According to an interview with Bloomberg, Google CEO Eric Schmidt said, “Our mobile revenue is growing faster than our regular revenue . . . All of the signs indicate a great success in this space.”
And rather than being publicly upset by the acquisition, AdMob’s competitors and others in the mobile ad universe are all but rejoicing. I was sent a link to a “facts” page Google had put together in support of the deal. Here’s a representative remark from Paran Johar, CMO of AdMob competitor JumpTap:
“The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising. We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google.”
Many of the other players in the mobile ad network space now expect some sort of M&A activity to begin (a few years ago there were a number of mobile acquisitions by the big online players). That’s clearly one reason they’re excited. But Johar’s remark is accurate in that if nothing else it makes those in the digital marketing world take mobile seriously, if they weren’t doing so already. The “credibility” that Google brings to mobile advertising will accelerate mobile media buying and mobile ad revenues accordingly.
Google is already the mobile search volume leader and it has been porting search ads over to smartphones automatically. On that front the company didn’t need any help. But its display efforts were, to date, fairly week in my opinion. With the AdMob network added to its own mobile AdSense efforts, Google arguably becomes the mobile ad network with the greatest reach in the US. But gaining the network and AdMob technology assets is only part of it for Mountain View. As Google Engineering VP Vic Gundotra told AdAge:
“Having [AdMob’s] kind of talent and innovation within our own engineering teams is one of the primary drivers for this deal. … We think it really accelerates our progress in a very critical and strategically important area for us.”
The AdMob team will help coordinate and spearhead the next “iteration” of Google’s mobile ad efforts and strategy. Unlike on the PC where Google came late to display advertising with YouTube, DoubleClick and the DoubleClick Exchange, Google is now out in front in mobile display. Microsoft and Yahoo, which both have mobile display assets and growth aspirations, will need to respond to this move at some point in the near future. Yahoo had arguably been the leader in mobile display among the major search engines; however, Google’s move puts the company at least at parity — at least.
I envision a time in the not-too-distant future when Google offers display ad buying across platforms through its Exchange. In a quick post-announcement briefing call Google VP Susan Wojcicki alluded to this (prompted by my question) in saying that she saw an opportunity to take an “holistic approach” to digital advertising. This is the dream that died a little when Google shuttered newspaper print ads and radio ads. But it rises again with this acquisition. And Google can also do some very interesting things now with mobile search and display combinations that it couldn’t do before.
There are some analysts that have downplayed mobile display advertising as something that will fall way behind search or make up only a small percentage of mobile ad revenues. I think this move clearly shows that Google believes display is equally important in mobile and a powerful complement to what it’s doing on the search side.