Google today announced that they have signed an agreement to acquire AdMob, a mobile display advertising company, for $750 million. To date, San Mateo-based AdMob has raised about $47 million and recently ad network aggregator Adwhirl that fills requests from a number of competing ad networks.
Google already operates DoubleClick Mobile that allows publishers to sell mobile ads directly to advertisers through a variety of ad networks, including AdMob’s. What it doesn’t have is its own display ad network, explains C/Net. AdMob is now cash positive and the future looks bright with iPhone and Android users contributing to Google’s 5x mobile search growth over the past two years. A quarter of these same iPhone and Android users spend nearly 90 minutes per day using applications on their devices, according to AdMob.
Android has been a big hit in the US, according to AdMob, and accounted for 17% of smartphone traffic in AdMob’s network in September 2009, up from 13% in August (pdf).
In June, the active mobile Web audience in the United States surpassed 55 million unique visitors. According to Nielsen, the top five mobile ad networks in the U.S. in terms of potential monthly reach are Millennial Media with 45.6 million monthly unique visitors, AOL/Platform-A’s Third Screen Media with 28.6 million, AdMob with 25.7 million, Microsoft’sMSN Ad Network with 25.4 million and Jumptap with 23.4 million.
Mobile advertising is still in its infancy, notes Paid Content. Currently in the U.S., it only amounts to an $800 million industry, which works out to be just about .4 percent of the entire advertising pie, according to analyst Chetan Sharma.
For publishers of mobile websites and applications, Google says this deal will mean better products and tools and more effective monetization of their content. For advertisers Google says this deal will bring better, more relevant ads and greater reach along with more interesting, engaging ad formats.
The Kelsey Group projects the U.S. mobile ad market will reach $3.1 billion in 2013, up from $160 million in 2008. But, as Henry Blodget recently wrote, there are many unanswered questions about the viability of mobile ads.
Industry associations such as the Association for Interactive Media & Entertainment (AIME), the Mobile Entertainment Forum (MEF), the Mobile Data Association (MDA) and the Mobile Marketing Association (MMA) track industry news.
