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.

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 It seems like everybody is scrambling to secure a piece of the mobile advertising market these days. Google is still sorting out the details of its AdMob acquisition, but barring any regulatory snafus, the acquisition should go through in the next few months. Apple acquired the relatively unknown mobile advertising network Quattro earlier this month. Today, Opera announced that it has acquired AdMarvel, a San Mateo-based mobile advertising company.

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.

On InMobi's blog, Surag Patel said, "This growth was largely driven by the continued growing trend towards smartphone adoption in these markets."

Nigeria led the pack in terms of growth, at +8.4%. Nokia remained the leader among devices, with 37.9% of phones on the Nokia OS and 61% of impressions registered on Nokia handsets.

Please note the chart below covers only April.

During the same period, mobile advertising grew by 10% in Asia, reaching 18 billion monthly impressions.

Mobile phone photo by David Dennis

Of course, all this data is only based on AdMob's network of advertisers, but it correlates well with the overall trends in mobile web use we have seen this year, including a recent study (PDF) by Nielsen Mobile, which saw the number of mobile Internet user in the U.S. grow from 30 million in May 2007 to 40 million in 2008.

One other interesting data point in AdMob's report is that in June, 24.3% of its ads were served to smartphones, up 22.4% since May. While Apple's iPhone is not the leading phone for mobile Internet use by far, it definitely has made a lot more people aware of the possibilities of the mobile web and encouraged them to consider buying smartphones over regular phones. For now, though, the most popular device for accessing the mobile web in the U.S. is still the Motorola RAZR.

Overall, these are encouraging numbers for anybody who is developing for the mobile web. While there used to be regular discussions if the mobile web could ever become a mainstream phenomenon, the last year has clearly shown that users are becoming increasingly interested in using the Internet on their mobile devices and as more users are shifting towards smartphones, this trend will surely continue for the foreseeable future.

So the mobile web is likely going to be a significant part of our future, which is good news for advertisers because there's one other thing we've been learning about the mobile web: people using the web on mobile devices are much more likely to interact with advertising. According to one publisher average click through rates are 2-8% for banner and text ads. But more creative ads are seeing response rates as high as 29% on average.

Even though full web content is now 77% of that accessed on mobile (as opposed to under a quarter of mobile content via WAP), it seems clear that the type of traditional advertising that works on the web, isn't the best fit for the mobile platform. Which brings me back to my original point: to beat Google, you have to beat Google at its own game. No, not search -- well, okay, maybe search too -- you have to beat Google at advertising. With so much advertising projected to shift to the mobile web over the next few years, the company that can corner the mobile web ad market is going to be able to go toe-to-toe with Google. Right now, it's still wide open.

Do you use the mobile web? Remember to vote in our poll below.

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.

"Mark has an evangelical approach to advertising," Martin Sorrell, chief executive of WPP Plc, the world's largest advertising agency told Reuters. "He sees Facebook as a vehicle to open up communication, not to monetize." Facebook's attitude toward advertising is finally changing. Users have started to notice, too. Today Facebook took that first step, claiming that sponsored stories for mobile will be coming "within weeks."

As soon as early March 2012, Facebook will soon start dropping "featured stories" into users' mobile news feeds. Currently Facebook has 425 million mobile users. HTML5 app buttons have started popping up on Facebook's mobile site. A Facebook spokesperson confirmed with Reuters that Facebook will not work with an agency to create paid ads on the mobile platform.

Facebook started integrating sponsored stories into the news ticker and the news feed. It was only a matter of time before Facebook decided to move forward with ads in the mobile space.

When it comes to Facebook ads that are built around a user's data, questions about privacy laws come up. In fact, in its S-1 filing, Facebook noted the "evolving nature" of privacy and data protection laws as two major risk factors - not to mention the fact that Facebook doesn't have a mobile advertising platform. At least, not yet.

How will Facebook's mobile ad strategy evolve? Take the poll on ReadWriteMobile.

As the number of mobile users in these countries growths in the next few years (from 65 million by the end of this year to - according to some estimates - 160 million in 2015), the mobile advertising industry will obviously continue to grow as well. While mobile Internet usage is dominated by social networking today, Lane thinks that the percentage of social networking traffic will fall over the next few years, "as users vary their browsing experience as their understanding of the mobile Internet increases."

Lane estimates that a majority of the increased spending will come from banner ads, but also from publishers who will try to monetize their growing mobile traffic. He also assumes that the arrival of more geotargeted advertising solutions will generate premium returns for publishers.

The main catalyst for mobile advertising growth in Europe in the next few years will likely be the 2012 London Olympics. While less than 3% of brands are currently active on mobile, this should change considerably over the next two years, as these advertisers gear up for the Olympics. By 2012, Europe's five largest economies will already have more than 100 million mobile users and Smaato expects that the investments of Europe's largest brands will "fuel revenue growth over the forecast period."

Bonus: As we are heading to 2012, Smaato's latest statistics show that are are still some differences between the U.S. advertising market and its European counterpart. In the U.S., for example, Windows Phone users leading the pack with regards to click-through rates, followed by Apple users, while in Europe, BlackBerry users are more likely to click on ads (also followed by iPhone users). In terms of fill rates, Europe is lagging slightly behind the U.S., though the numbers are growing in both markets.

International Expansion

While its focus has been mostly on the U.K. and the U.S., AdMob has also seen a lot of growth in India, Europe, and a number of African countries, including South Africa. As Jason Spero, AdMob's VP of Marketing pointed out to us today, this international growth has been driven largely by AdMob's self-service advertising platform. However, the company is also planning to invest most of its newly raised money to establish and expand its staff and services in Western Europe, India, and South Africa. The company already has offices in London and Mumbai.

Downturn is Not Affecting Mobile Advertising (Yet?)

While speaking to Spero this morning, we also talked a bit about AdMob's reaction to the current economic downturn. Spero pointed out, that AdMob is not seeing any major cutbacks in mobile advertising spending so far, and that a number of companies are actually planning to expand their mobile advertising budget in 2009.

Android

AdMob is also quite bullish about Google's Android platform, though Spero also noted that any phone with a good user-experience for the mobile web is going to be a positive for the mobile advertising market. One handset Spero highlighted is Samsung's Instinct, which did not get a lot of hype from the tech press, but is doing very well on AdMob's advertising network.

The Right Time to Grow

While Sequoia has been quite downbeat about the economic downturn, this new round is drawn from its Growth Fund, which is geared towards later-stage companies. As Jason Spero pointed out to us, AdMob's partners think this is the right time to grow the company aggressively and tackle the international market more directly.

The company's U.S. team is currently compromised of roughly 80 people. InMobi targets brand advertisers and also offers a self-serve tools for smaller advertisers. The company offers services for advertising on feature phones and on modern smartphone platforms.

When we talked to Ann Frisbie, InMobi's , VP and managing director for North America last week, she argued that so far, most players in the U.S. market treated the mobile Web as just an extension of the desktop Web. The company hopes to be able to differentiate itself from other players in the U.S., as its international experience has already taught the company where mobile advertising is heading in the near future. Abroad, Friebie said, the mobile phone was always seen more as an entertainment device, while users in the U.S. are only now starting to regard their phones in the same way (in no small part thanks to the iPhone). We should note, however, that AdMob also has a major global presence, and that it will likely profit from Google's own international expertise as well.

InMobi also hopes to differentiate itself through its analytics tools and its adROIt product, which allows advertisers to track and optimize their buys in real time.

Lest you think the entire endeavor is completely altruistic on AOL's part, the Open Mobile Platform is also the unified "software module" that AOL hinted at last September, which the company hopes will push its services and APIs onto as many mobile devices as possible. The platform is designed to play nice with third-party APIs, as well as those from AOL including AIM, AOL Mail, AOL Video, MapQuest, Userplane, Truveo, and Winamp. AOL is counting on developers to create mobile applications that lean on AOL services and can be deployed across multiple mobile device operating systems.

The platform is also about pushing AOL advertising services onto the mobile web, as well. "The AOL Open Mobile Platform will also give developers the ability to monetize their mobile applications by utilizing advertising resources, such as clickable banner ads, provided by AOL's Platform-A," wrote the company in a press release.

Some have suggested that the real battle for online supremacy will be fought on mobile devices, and that Microsoft's recently rebuffed bid for Yahoo! has as much to do with mobile as with competing on search or text advertising. With AOL's name dragged into the fray as a possible alternative for Yahoo!, their mobile efforts become that much more interesting.

On Smaato's network, which handled about 16 billion ad requests last month, click-through rates for the iOS platform saw strong growth last month. The reason for this change in user behavior is not clear, but maybe the arrival of more interactive ads on the iOS platform (and the iPad in particular) tempted more users to click on ads than before.

Of course, besides the different user experiences on these platforms, user demographics also play an important role here as well. In general, the more highly educated your users are, the less likely they are to click on ads, and this is clearly represented in Smaato's CTR data for the top mobile platforms.

Bonus: A Mobile Advertising Primer

Smaato also just published a new whitepaper that provides both publishers and advertisers with a good overview of the mobile advertising ecosystem and the role that ad optimizers like Smaato play in this business.

But there are plenty of potential hangups. Take the deal that CBS announced this morning with mobile social network Loopt. CBS plans to use Loopt's GPS technology to deliver location based ads to CBS mobile users. These aren't exactly like the scenario I announced above, since CBS will be displaying location-aware ads on top of mobile content rather than deliver them via text message. That actually highlights the first problem with location based advertising.

It would take a perfect confluence of events in order for many ads to make sense. Not only do you have to be near the thing that is being advertised, but you also need to be viewing the CBS mobile site. For entities like Starbucks that exist on every street corner, that might not be an issue, but in practice how often do you think you'll be in the proximity of one of CBS' advertisers while you're viewing the site? It'll happen, sure, but it drastically cuts down on the number of opportunities to deliver location aware mobile ads when you have to be viewing a specific mobile web page at just the right time to receive an ad.

CBS can, of course, deliver more general ads fixed to your location -- but is that really taking advantage of the GPS capabilities that Loopt offers? Yeah, it's neat to see ads for things in the city I am traveling in, but not as neat as seeing ads for the businesses on the street I'm walking down.

The fix for that, of course, is to deliver the ads by text message, triggered by proximity to the advertiser's storefront. We questioned in December whether mobile ad startup Fluc would be able to fill inventory for a similar type of ad scheme (though is isn't clear if Fluc is actually targeting ads by GPS or if they're just asking users where they are located). "If the GAP knows you're near a mall where they have an anchor store, and they know from your Fluc account that you fit their consumer profile, then they might pay to send you an ad," we wrote. "That's a lot of 'ifs,' though."

Further, ads like this have to be opt-in. Not only is there a privacy issue involved, but text message ads are also the least likely to be trusted by consumers, according to a Nielsen Internet survey. The CBS-Loopt ads are opt-in.

Another hangup with the idea of location-based ads is reach. Right now the CBS ads are only available to customers using a GPS-enabled phone on a network that Loopt has a partnership with -- so far that means just people on Sprint Nextel or Boost Mobile. Loopt's CEO predicts that by the end of 2008 there could be 50 million mobile phones in the United States equipped to receive this type of advertising, but for now the audience remains relatively small.

Even so, location based advertising is a tantalizing vision for the industry. Google CEO Eric Schmidt said last week that location based ads are the future and will lead a revolution in mobile advertising. Last year Google launched a mobile version of AdSense and their own mobile OS. I think we can expect location aware ads from them in the near future. And whatever Google does in the world of advertising, you can bet others will follow suit.

The ad scenario I described above is possible (and it can get even spookier and more finely targeted when mashed up with other data -- say, your social networking profiles), but it's probably not quite here yet. At least, I haven't seen it. The question is -- do we even want that? Should we potentially trade more of our privacy for more relevant advertising? What does a dollar off a latte mean to you?

A related deal could put Windows Mobile in places that Google Android could be, as well, and the decision will come down to money more than it will quality of service for users. We like a lot of what Microsoft is doing these days, but we prefer the Google search experience and are hopeful for Android-driven innovation. Thus we hope that Microsoft can't pay its way into the center of hundreds of millions of more phones.

Mobile Search

Dan Frommer reported this summer that Google was working on a deal that would put their search bar on the top of Verizon mobile screens and he reported again this fall on a study that showed Google already has huge dominance in the mobile search market. (Yahoo is a distant second, Microsoft is nowhere to be seen in that study.)

Now the Wall St. Journal says that Microsoft may win a Verizon deal because "the software giant is offering significantly better financial incentives" than Google. As users, we prefer using Google for mobile search.

Mobile OS - Paying to Lock Out Android?

Microsoft is also negotiating a deal to put Windows Mobile software on more Verizon devices, according to the same reports. We like Windows Mobile but would love to see the even more open Google Android get a fair chance on Verizon phones. Of course there are huge sums of money on the line, but it's just one more part of the twisted picture of mobile carrier control to think of what a deal like this could do to the open mobile web that Android is aiming to create.

Get Ready for More Mobile Ads!

Mobile advertising is already big and is only going to get bigger. According to a recent study from mobile social networking company Limbo and GfK Technology:

40 percent of mobile phone users in the U.S., about 100 million people, recalled seeing an advertisement on their phone during 3Q08 (about two-thirds of the ads were text messages; the other one-third were display ads).

We're sure those numbers are only going to increase, and while we could care less who's serving up those ads - ad deals are intimately tied to search deals and in this case would presumably influence mobile Operating System deals as well.

While we honestly admire many of the things that Microsoft is doing of late and have serious concerns about Google's control over the general information universe - we're hoping from an innovation and quality of service perspective to see more Google and less Microsoft on hundreds of millions of phones.