The launch partners for the Android platform include AccuWeather, TapJoy, and Jirbo. According to AdMob, the new advertising units will also be able to use Android's GPS to deliver location based advertising.

What About Google?

Google has shown relatively little interest in doing advertising for mobile applications so far. It will be interesting to see if the advertising giant is going to hand this market over to other providers, or if Google will release its own solution in the near future. So far, Google only lets advertisers target AdWord ads on mobile sites for the iPhone and G1, but doesn't provide a solution for mobile apps yet.

It does look like Meebo is indeed trying to implement some of its earlier ideas about what advertising on the site would look like. Meebo already features a number of ads on its site and has estblished partnerships with various large content producers, but starting today, Meebo will also feature ads from the San Francisco-based advertising network VideoEgg. These new ads will range from "sponsored games to video trailers to product configurators." Some of the ads will be sharable, while others will come with associated wallpapers and buddy icons. Some ads will also automatically expand if a user hovers over them for more than 3 seconds.

Transparency in Advertising

When we first wrote about advertising on Meebo, we asked if ad agencies could make ads that don't suck. It does indeed look like Meebo has been putting a lot of thought into this process (the original partnership between Meebo and VideoEgg was announced almost a year ago) and is devoting quite a few resources to getting its advertising model right. It will be interesting to see how Meebo's user will react to these expanded monetization efforts.

In its decision (PDF), the FTC acknowledges these changes in the mobile advertising marketplace and notes that it "reached this decision based on important developments in the mobile advertising marketplace, particularly actions by Apple that should mitigate the anticompetitive effects of Google's AdMob acquisition." According to the FTC, the acquisition of AdMob isn't likely to result in a "substantial lessening of competition."]]> Discuss]]> http://www.readwriteweb.com/archives/ftc_clears_googles_acquisition_of_admob.php http://www.readwriteweb.com/archives/ftc_clears_googles_acquisition_of_admob.php Google Fri, 21 May 2010 09:42:13 -0800 Frederic Lardinois PricewaterhouseCoopers and the Interactive Advertising Bureau released their 3rd quarter numbers estimating total ad buys online today. Big growth continues, but take it with a giant grain of salt. Last quarter the number exceeded $5.2 billion according to the study, up 25% over Q3 last year.

According to the IAB, the glory days are here. "Marketers large and small have come to accept digital media as the fulcrum of any marketing strategy," says Randall Rothenberg, President and CEO of the IAB. That seems like a real exaggeration to me. In fact, Google reported Q3 revenues of $4.3 billion just by itself, that up 57% from Q3 2006. The vast majority of that is in advertising sales, so industry growth is based on Google growth, apparently. Either someone's numbers are off or we're all insane trying to make a living in this industry. All of us but Google, that is.

As time on the television continues to drop and time online rises, I think we've only seeing the beginning of the online advertising economy. It's hard to get too excited about the health of the industry, however, when one company's own growth makes up so much of the story.

There have always been privacy concerns around personalized advertising, though the topic only recently became more of a mainstream issue when the U.S. Congress started an inquiry into the implications of this. As part of this inquiry, Congress asked 33 online advertisers if they offered the option to opt out of these customized ads.

Yahoo goes to great length in its letter to defend customized advertising and explains why advertising on the net is so important, not just as a way for Yahoo to make money, but also because it allows Yahoo to offer free tools to consumers and small businesses.

In the letter, Yahoo also stresses that it does not customize advertising based on potentially "sensitive interest categories" and specifically mentions searches for adult sites and sexual health information.

Will Users Care?

For advertisers, customized ads are obviously a far more effective way of reaching potential customers than regular ads. However, the real question will be if users will indeed chose to opt out of customized advertising. Yahoo's letter mentions that only 75,000 people visited its current opt-out site in July, which is a very small number when compared to Yahoo's overall reach.

Most mainstream users probably don't worry about the privacy implications of these customized ads too much. And those who do worry about it probably already run some form of ad-blocking software and have opted out of online advertising altogether.

Overall, this seems like a great publicity move by Yahoo, even if most users won't make use of the opt-out feature.

As we argued when Facebook took over Microsoft's share of onsite advertising, this all seems to be part of Facebook's larger advertising strategy. Not two weeks after giving Microsoft the boot, Facebook began accepting PayPal, making advertising for its 400 million users a much simpler reality. The company's press release on its relationship with PayPal directly spoke to this goal, saying that "the option to pay with PayPal makes it even easier for advertisers, particularly small international companies, to run campaigns on Facebook".

These efforts appear to have paid off, as Facebook has delivered 176.3 billion display ads in the first quarter of 2010, pulling well ahead of Yahoo's 131.6 billion banner ads and Microsoft's 60.2 billion ads. As the Journal points out, however, the revenue from these ads falls far behind Yahoo and Microsoft. Facebook earned $500 million in 2009 and is expected to earn more than $1 billion in 2010, while Yahoo earned $6.5 billion in 2009, mostly from advertising revenue.

Facebook is still growing, however, and we can only wonder what advertising moves the company has in store regarding its controversial Open Graph. Already, it must be making some interesting deals, such as its "Instant Personalization" connections with Yelp, Pandora and CNN. While display advertising may be an easy way to compare Facebook with giants like Yahoo and Microsoft, it might be only a fraction of what Facebook has in store for us.

The program will implement practices in support of the Self Regulatory Principles for Online Behavioral Advertising, which the industry released a year ago. These principles address questions of choice, security, and accountability and are meant to address the Federal Trade Commission's call for more transparent practices around consumers and behavioral advertising.

The program promotes the use of the "Advertising Option Icon," meant to be displayed within or near online advertisements or on Web pages where data is collected and used for behavioral advertising. The icon will indicate a company's use of online behavioral advertising and its adherence to the principles that guide the program. Clicking on it will provide customers with a disclosure statement about the data collection as well as the ability to easily opt-out.

"Our ability to deliver advertising messages to consumers that speak only to their interests must surely be one of the great benefits of the media revolution that we're living through," says Nancy Hill, President and CEO of the American Association of Advertising Agencies. "We fully understand that this advance in targeting will be lost if the public comes to believe that we are not responsible stewards of the data on which it is built."

Consumer groups have been increasingly vocal about questions of online privacy, and this move is an industry attempt to stay ahead of both negative public sentiment, as well as FTC calls for more regulation.

On the other hand there are now two online advertising companies in the top 10 in the 2006 list - ValueClick (#5) and aQuantive (#7). Digitas comes in at #54 and two Chinese online advertising companies - Sohu.com (#32) and Sina (#52) - are in the top 100.

BusinessWeek notes that the Internet ad market grew to $12.5 billion last year, a 30 percent increase from 2004. All other reports I've been reading indicate that there is much more growth to come. 

Digitas is currently the market leader in online advertising. It creates online ad campaigns for big clients like American Express and GM, "which together accounted for nearly half of '05 sales". The second biggest player in this market is aQuantive.

The Chinese market is obviously one to watch - "Web advertising is growing three times faster in China than in the States; Sohu is the top seller, with rights to represent the '08 Olympics in Beijing."

Unlike the standard full page ads, though, the AdBriteunits aren't passive Flash commercials - they are like an iframe or a redirect directly to the advertiser's live, interactive website. Advertising pays the bills, and thank goodness for it, but I usually find these kinds of ads cause to feel pity for the website owner running them; do they have to hit me over the head with it? It's certainly a better ad type than those wretched double underline link ads.

You can test out the unit and see how it works at www.adbrite.com/fullpagead.

Winksite Launches Mobile Ads with 100% Rev Share

In related advertising news, mobile page publishing service Winksite has launched an advertising feature that lets publishers retain 100% of ad revenue for either AdSense or AdMob mobile ads. That's a formula also being used by Facebook ad network Lookery, a new company founded by serial entrepreneur Scott Rafer. Rafer is the chairman of Winksite.

In your browser or on your phone - the ads are coming. Cynicism aside, it's a good thing for publishers to be able to make a living. We'll see if all the rhetoric about new advertising models is just hot air.

AdMarvel, Opera and the iPhone

It's interesting to note that AdMarvel also offers an iPhone SDK for developers. At the time of the launch of the iPhone SDK, AdMarvel CEO described the iPhone as "an amazingly innovative platform." Opera hasn't announced any plans to bring its browser to the iPhone. When we talked to Opera's former CEO Jon von Tetzchner in December, he noted that the company wasn't averse to launching a browser on the iPhone, but Apple's App Store approval process was holding the company back from even trying to get an app into the store for the time being. It is worth noting, though, that Opera does offer an Android app.

Augmenting Revenue Streams Through Mobile Advertising

There can be little doubt that mobile advertising is one of the fastest growing markets in the mobile ecosystem. Google obviously wants a piece of this market through the AdMob acquisition. The company's own AdSense and AdWords programs offers mobile solutions, but the popularity of AdSense and AdWords hasn't really translated into success in the mobile space yet. Apple's acquisition of Quattro is a curious move, as advertising isn't exactly one of Apple's core competencies.

For Opera this move makes sense, though. Just like Apple hopes to profit directly from the iPhone apps and mobile sites that use Quattro, Opera will be able to profit from sites that use AdMarvel. Neither Apple nor Opera are traditional advertising companies, but both clearly believe that the mobile advertising market is poised for growth and that they can augment their current revenue streams by dipping their toes into this business.

The company has just announced the change, insisting that, "the Skype experience is our first priority." The move to bring advertising to the Skype environment comes as the telephony company makes its move for a planned IPO this year. While Skype has an estimated 177 million active users, only around 8.1 million are paying subscribers. The addition of advertising will give the company another revenue stream.

Currently, the advertising is set to only appear in the Home tab in Skype for Windows, although the company says it might experiment with ads in other areas and with other clients eventually. The ads won't interrupt your VOIP experience - no "annoying pop-up ads or flashy banner ads in middle of conversations," insists Skype. Skype says the ads will only appear occasionally, and the initial plan is to show one ad from one brand per day. Ads are rolling out in the U.S., U.K., and German markets first.

The advertising may use non-personally identifiable demographic data - your location, gender and age - in order to target ads and deliver relevant content. But you will be able to opt out of allowing Skype to share this data with advertisers.

Skype has become immensely popular, in no small part because it's offered its services for free. As Skype moves towards its initial public offering, ads appear to be one path to monetize those users.

For smaller widget creators or those whose widgets are strictly content-based, selling in widget advertising may be a good way to monetize widgets, especially if ads are kept unobtrusive. But many of Clearspring's largest widget publishers are using widgets as ads already. That is, widgets are mainly being used as marketing tools to promote a specific product or service (such as a movie). Will consumers really stand for advertising inside advertising?

The in widget advertising can be delivered via flash animated "peels" or "flips" (which essentially replace the widget's content with that of the ad after being triggered by a user action), or via video (pre-, mid-, or post-roll) or text. The flash animated ads aren't particularly intrusive, but all of the formats take up some widget real estate, which is at a premium given the limited size widget designers already have to work with.

In a separate, related announcement, Clearspring is hooking up with Pointroll, to offer widget distribution from within IAB standard ads. Though Pointroll is responsible for some of the most annoying ads on the web (i.e., the kind that automatically expand to cover or move content you're trying to read if you so much as slide you mouse over an ad), this announcement makes a lot of sense.

As previously mentioned, many advertisers are already using widgets are part of their marketing efforts, and allowing users to install widgets from within the other pieces of their advertising campaigns is a good idea. These "SnaggableAds," as Clearspring is calling them, put widget distribution on any page that accepts Pointroll's ad formats and lets advertisers have more control over their widget marketing campaigns. There are demos of "SnaggableAds" at this link.

Apparently, the market is still strong for selling ads based on future press coverage about your ad sales. Livingston has already scored press at TheStreet.com, Young Money Magazine, and The National Association of Student Financial Aid Administrators, and lined up sponsors through May. (He's also gotten press on this blog -- yes, I realize the irony here.)

There appears to be such a market for wacky ads, that a site like Body Billboardz, a marketplace for people willing to sell ad space on their bodies, currently has nearly 50 people willing to sell themselves to corporations.

I'm somewhat amazed that these advertising schemes keep working. And it's hard for me to believe that the ads really garner any sort of return for the companies that place them -- this is about as untargeted as you can get in advertising, and the people visiting these sites are really more interested in marveling at the tremendous luck of the people behind them then at checking out the companies willing to put up the cash for advertising. But as Livingston says in his press release, "Hey, it's worth a shot, right?"

The social networking site will give at least $50 to up to 200,000 small business in a partnership with the U.S. Chamber of Commerce and the National Federation of Independent Business.

Facebook already makes an estimated $4.05 billion in global advertising revenue.

Facebook will start the advertising push with a roadshow and a series of webinars that teach small business owners how to use the site and social media. Facebook has set up a page for more information.

Currently, brands and business are not be able to operate like a person when the Timeline feature rolls out on Thursday. But the site is making changes to how businesses represent themselves.

Contextual advertising on the site has been increasing in quality. It used to be spotty, but the amount of social sharing going on is making it easier for people to pinpoint how to deliver ads,improving conversion rates.

This trend may have moved Facebook to change how it allows consumers to interact with brands. Right before the launch, Facebook took away the "Like" requirement for brands. Fans no longer had to "Like" a brand page in order to comment on it. This news came in the wake of an infographic that showed over 40% of fans don't care about the page or interacting with the brand, if they are not given a reason to do so.

As social sharing becomes more prevalent, it's likely that display advertising will continue to be the most efficient source of revenue for the company.

"Today, we're starting to understand that the Internet is going to fundamentally alter the way businesses promote their wares to prospective customers. So the entire online ad business is getting snapped up at (literally) any price. Even though the buyers have no clue what it is they're trying to buy. All they know is that if they don't buy it, someone else will.

What they're really trying to buy into is the webification of advertising."

Phil rightly notes that before the Web came along, advertising was a totally disconnected activity. But now, the Web enables personalization of marketing messages and the ability to track the success of that. The companies that are being snapped up - DoubleClick, aQuantive and others - have built online advertising solutions that have achieved a certain amount of network effects. But Phil argues that they won't scale as much as the "over-inflated" prices that Google, Microsoft et al paid for them indicate.

"There's value in interpreting the information, but to realize that value they have to share the information rather than walling it in. There was an insightful article on Read/WriteWeb the other day, discussing the potential to build an open ad network on the Web.

This is not only Google's vulnerability, it's the prick that is set to burst all the over-inflated deals of the past few weeks."

I think Phil has a point there. The Web has always been good at cutting out the middleman - and the likes of DoubleClick and aQuantive are quintessential middlemen, of the online advertising age. An open advertising network, such as Sean Ammirati suggested, is one way of routing around the middlemen.

Also let's not forget that online advertising is so far the only proven business model for most startups. That's no doubt fueled some of the recent feeding frenzy between Internet bigcos over online advertising companies. But the Web has yet to fully embrace alternative business models - subscriptions, micropayments, etc.

As for the big question, is the recent acquisition fever a sign of a bubble? There's definitely a whiff of panic about the recent deals - or more accurately, fear of Google (who started the feeding frenzy by buying DoubleClick last month). It also seems like a game of Follow The Leader, which is of course Google. As Sean suggested and Phil backed up, there is potential for an open network to disrupt the online advertising industry. And I wouldn't discount the rise of alternative online business models either, even though they haven't been successful so far. What do you think?