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.
