WHAT ADMOB ACQUISITION MEANS FOR GOOGLE
Google and mobile advertising marketplace AdMob both announced today that AdMob had agreed to be acquired by Google for US$750 million.
AdMob are a mobile advertising marketplace and platform, connecting mobile site and application owners with mobile advertisers – theoretically the same as Google’s AdSense and Content Network work on the traditional internet. AdMob has served more than 100 billion ads since launching in January 2006, and over 10 million in September alone.
For each ad served, AdMob leverages handset and operator data, which enable demographic, device, and operator targeting for advertisers. They also offer cost-per-click buying options that fit into Google’s traditional performance & relevance oriented auction model.
Until recently, Google has concentrated it’s mobile efforts on two fronts: growing mobile web usage (via distributing its Android mobile operating system amongst as many phones/carriers that Google can convince) and mobile search. But by adding the AdMob platform to their offering they now have a huge inventory and distribution that now gives Google undisputed ownership of the total global mobile ad market. By Google’s own account, they now have a dominant position in three of the four pillars of mobile advertising (see below).
Strategically, the acquisition gives Google an indirect revenue stream from Apple iPhone and iPod touch applications, a previous strategic difficulty for Google, via a share of app ads. More importantly it tackles the handset distribution and analytics challenge that will face any up and coming mobile ad network aggregator by adopting AdMob’s established infrastructure. The number of different handsets and operating systems is very numerous. Even the top 20 handset models visiting sites/apps that use AdMob to advertising account for only 48% of their inventory (see below).
The breakdown of operating systems, however, is more clear of who is using the mobile web (Symbian in the chart below is the main OS for Nokia phones).
Ultimately this acquisition is a bellwether event that the mobile advertising is about to experience several years of large growth in expenditure. Google is putting its money where its mouth is and cornering the industry on four fronts: search (Google on your mobile), applications & experiences (Android), network ad distribution (AdMob) and voice (see their Gizmo5 acquisition today for further evidence).
Perhaps 2010 will be the year of the mobile.. you know.. the one that 2008 failed to deliver.
2 Comments
Scott Middleton said: (on May 28th, 2010 at 12:19 pm)
Hey Sam, I think 2010 could be becoming the year of the mobile. Great summary of the acquisition.
I agree that it definitely gives mobile advertising a lot of “presence” and pushes it to the front of people’s minds.
I think it also shows mobile is a bit different in terms of how you advertise and reach people when compared to Google’s traditional internet.
Sam said: (on May 31st, 2010 at 11:31 am)
Thanks for your comment Scott.
I think ‘The Year of Mobile’ was about 5 years ago when a majority of Australians owned a mobile phone. Sure, this phrase is usually linked with mobile advertising / media. But trying to pigeon-hole mobile into a traditional advertising medium only misses the point.
Also – the mobile industry as a whole has been a high-revenue, high-profit one for many years, so again, ‘The Year of Mobile’ misses the point.
Perhaps what is finally happening this year, is marketers and communications folk realising en masse realistic, creative and practical ways to use the mobile medium (paid advertising, leverage, carrier partnerships, content or otherwise). And yes, as this starts to happen it is quite exciting to be part of it if you have been barking up the tree for a few years already