Author: Peggy Anne Salz

When the avalanche of tweets about Google’s purchase of AdMob for $750 million in stock came through on November 9, it was clear that this acquisition would be read as a huge boost to mobile advertising. In the days that followed comments from companies across the ecosystem (and the world) stressed the acquisition was a much needed validation of mobile marketing. (A great post from Mobile Marketer has a good list of U.S. voices and this post from Mobile Marketing Magazine tells us what execs in the U.K. think.)

Perhaps Patrick Moorhead, Director of Emerging Media at Razorfish, put it best. He was quoted saying: “(T)his is a wake-up call to clients who say mobile is not a real opportunity, because it is. Google doesn’t get involved in anything it doesn’t think has scale.”

But mobile advertising is more than big business. The fact that Google had to buy AdMob is a clear confirmation that mobile is also different.

MOBILE IS MOBILE

Mobile is a new medium (the 7^th Mass Media, actually) and squeezing online ads onto a small screen – even if that screen is a smartphone/touchscreen device – short changes advertisers and the people they hope to reach with their marketing message. SMS and display banners have their place in the marketing mix. But my own research and a recent mobile marketing survey conducted by Netsize underline the growing interest in richer advertising formats, as well as in-application advertising (in-app ads).

Connect the dots, and brands/advertisers are exploring and executing strategies that make the most of the mobile device and the range of exciting formats available.

Paul Palmieri, Millennial Media CEO, picked up on this key aspect. His take (from an email statement): “Google validated what many companies including Millennial Media has known for years – that mobile is a different market with a huge potential for advertising, possibly a bigger opportunity than online media.”

Google, which introduced AdSense for Mobile in June, has also had to acknowledge that online and mobile are different. The program, a way to land display ads (from online advertisers) on mobile phones, ended up dumping ads on mobile devices, a modus operandi that doesn’t work if the ad landing pages are not optimized for mobile.

But don’t assume content adaptation alone solves the problem. As Rachel Pasqua, Director, Mobile Marketing, iCrossing, pointed out during a panel I moderated on SEO and mobile search: It’s not enough to optimize ads; advertisers also have to think through what people do after the click. In her view, mobile campaigns that drive results have mobile at their core.

ADMOB’S ADVANTAGE

AdMob, a company that has focused on innovative made-for-mobile advertising formats (and analytics) from the start, “gets it.”

From early 2007 (the company was founded in 2006) executives including founder Omar Hamoui caught up regularly with me to brief me on cool new ad formats and innovation coming out of the “Ad Lab” it had with Apple. This sharp focus on richer advertising formats plus the technology platform to monetize mobile inventory and the analytics capabilities to optimize the delivery, tracking and reporting of mobile ad campaigns (which I personally road tested in my mobile advertising how-to white paper) has clearly paid off.

A few other aces in AdMob’s hand:

A huge footprint in CPC (cost-per-click) performance marketing. We read in the September AdMob Mobile Metrics Report that AdMob serves ads for more than 15,000 Web sites and applications around the world. The number of monthly ad requests in the AdMob network hit 10.2 billion in September 2009 (up from 1.6 billion in 2007).  BTW: The premium space is wide open to players such as Millennial Media, the next company I profile in MSG’s Meet The Mobile Ad Networks series.

A deep understanding of the in-app advertising space. AdMob is the largest ad network for in-app ad inventory on the iPhone. AdMob kicked off 2009 with the launch of Download Tracking for iPhone applications (allowing advertisers to accurately monitor App Store conversion rates and measure their return from advertising on AdMob’s network). If quickly followed with an iPhone Advertising Exchange, a concept similar to the banner and link exchange services we know from the Internet. As Russell Buckley, AdMob VP Global Alliances, put in this MSG interview at the time: “The new-launch iPhone Download Exchange is about allowing developers with apps and ad space to serve ads that promote other apps within the Download exchange, and get traction for their own apps in the process by placing ads for free on other applications.” An excellent way to build relationships and good will in the developer community in my book.

A drive to innovate new ad formats. It’s beyond the scope of my analysis to list all the new interactive ad formats AdMob quietly and cleverly brought online in 2009. The highlights: the capability to blend graphical display (banners) with iPhone-specific actions, including maps, calls (initiating a voice call from an ad), iTunes (opening the iTunes store to purchase music or video content from the store), audio (listening to recorded or streaming audio content) and – most important – integration with the App Store to download apps. And let’s not forget the cool new iPhone ad units that went live in July.

I caught up with Thomas Schulz, Vice President & Managing Director, EMEA, at the time of the launch to talk through the nuts & bolts of these new formats, which include mobile social networking (as he put it: turning a brand message into a conversation by letting people click on the banner to access the advertiser’s content/updates on Twitter, Facebook etc…); mobile search (allowing people to search in a company’s mobile site by typing a keyword query directly into the banner); and a multi-panel banner (allowing people to answer multiple calls to action in a single rich media ad).

And the list goes on….

WAS THAT THE PRIZE?

As a loyal BlackBerry user, I am the first to side with executives such as Boris Fridman, Crisp Wireless CEO, who correctly remind us that iPhone is not the only game in town. (More in this post.)

So, did Google snap up AdMob for its impressive reach, its innovation, its grasp of iPhone/in-app ads or its mobile analytics?

Or was it — as Ian Schafer, CEO of Deep Focus, an interactive marketing agency suggests – AdMob’s stockpile of data that clinched the deal.

As he put it in this must-read post:

“With the acquisition of AdMob, Google now has access to usage data of many of the most popular mobile apps — especially the apps in the iTunes App Store. For iPhones. If Google is taking on Apple for mobile OS market share, they just scored a huge competitive advantage. Google will know more details than ever about how people are using iPhone apps, how they are engaging with advertising within those apps, and users loyalty to those apps.”

I am intrigued by Ian’s take – so much so that I have scheduled a straight-talk podcast with him next week to discuss this in more depth.

So, is it all about giving Google a leg up on understanding and segmenting app users based on how they interact with in-app ads?

Eric Schmidt, Google CEO, sure leaves that impression. As he put it in this interview with Bloomberg: “One the key success points for the iPhone was this enormous development of apps, and particularly free apps, which are advertising supported. Now that we have our Android platform coming out, and really with some serious partners behind it, it will also be important to have that be true for Android as well as the others.”

The takeaway: As I have pointed out in many posts on MSG and throughout my ongoing research into content discovery, mobile search and personalization: context matters. Contextual information (what mobile operators have, by the way) is what Google lacks. The AdMob purchase covers all the bases to close this gap, paving the way for the delivery of mobile advertising everywhere – particularly on the Android platform.

TOUCH WEB RULES (?)

But what we should be asking ourselves is how this new realization that mobile is indeed different will likely impact the wider mobile Web. The advance of touchscreen devices, app stores and new advertising approaches/formats are all coming together in a new kind of interactive mobile Internet, a brave new place where new content, new experiences and even new mobile search services will set the bar.

In a September blog post AdMob referred to this Internet (the one we experience on iPhones and other touchscreen devices) as the “Middle Web.” This “space that lies between the full Web experience you find on a PC and the ad-less Web experience you remember from the first Web-enabled mobile phones.”

This new Web throws up as many issues as it does opportunities.

• What does it do to usability?
• What does it mean for mobile advertising and how do we make it easy and inviting for people to interact with company sites and ads?
• And one AdMob didn’t ask: What is the impact on mobile search?

Tough questions, but Taptu, a mobile search provider, has some of the answers in its series of white papers. Like AdMob and Google, Taptu shares the view that the advance of touchscreen devices, app stores and new advertising approaches/formats changes all the rules.

In this new Web – which Taptu calls the Touch Web – people demand optimized sites (for touchscreen devices) and specialized mobile advertising that makes the most of device functionality and all the features that make the Touch Web more interactive and potentially more exciting than the mobile Web. During my last trip to London, I caught up with Taptu CEO Steve Ives and Bob Last, Taptu SVP Business Development, to talk about the impact of everything in the middle of the Web on the future of the Internet.

This is serious business.

Taptu has crawled, indexed and graded websites (assessing factors such as their suitability for touch devices and their page weights –key since it impacts the speed of browsing on mobile network and the end-user experience) to create an index of Touch Web-friendly sites.  (Taptu counts 120,000 to date.)

To make sure Touch Web-friendly sites also figure highly in mobile search results Taptu has also fine-tuned its algorithms to “decide whether to return results from the Touch Web, the mobile Web or the wider Web” depending on factors such as the searcher’s device and what thy would likely appreciate.

To round out the experience Taptu is exploring innovative new ad formats for touch devices. In an MSG exclusive with Andreas Bernstrom, Taptu COO, treated me to a glimpse of how people might interact with ads on a touch device, a fascinating briefing I captured in this detailed post.

A highlight: Search results are displayed in a card format optimized for presentation on a touch device. I watched as Andreas not only breezed through the card results (depicting images and information in an easy-to-browse format); he could actually flip the cards over to see more details (say, the discography of a particular band or the tour dates of a group). And if you like what you see, then share it (!)  – Twitter it, post it to your personal site or just send it via email to your friends.

The bottom line: if mobile is different, then the Touch Web is a brave new world. Google (with AdMob) is well-prepared for the challenges and opportunities this new Web brings. At the other end of the spectrum, Taptu will most certainly be out of the gates first with a mobile search service (and advertising approach) that makes the most out of the Touch Web. Now the pressure is on companies across the ecosystem to do more than develop a strategy for mobile; they should also brainstorm on tactics to address/harness the unique characteristics of the Touch Web.

Look for more news from Taptu soon- Steve and Bob assure me there are some amazing things in the pipeline.

Disclaimer: Millennial Media sits on the advisory board MSG has chosen to guide the editorial content of MobileAd World Focus; MSG has contributed comments to the Taptu Touch Web white paper.

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