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Sizing up Apple's and Google's Mobile Moves

  |  January 8, 2010   |  Comments

Two tech giants will automate, codify, and grow a marketplace of ad opportunities. Here's how.

It's only the first week of January and the mobile industry has awakened this winter like a hungry bear during the spring.

Consider the recent news:

These and other developments have set into motion major opportunities for brand marketers.

Understandably, a lot has been written about why fascinating companies like Google and Apple bought ad networks, but most coverage hasn't illuminated what this means for brands and their agents who toil every day to make shrewd marketing decisions. Here's a direct guide to why these developments are good (actually great!) for advertisers, brand marketers, and the ecosystem of mobile service businesses.

Competition Has Heated Up and Competition's Good for Us

Buying mobile media has been much more manual and less automated than online. The recent acquisitions by Apple and Google involve key technologies that present automated ad inventory and broader access to opportunities. Because these large entities are integrating these mobile platforms for planning, buying, and tracking their valuable inventory, they are competing fiercely. Pricing and innovation advantages will accrue to marketers looking for the best positions and ROI (define).

Ad Opportunities Are Now Catching up With Advances in Mobile

Google's Android operating system, Google's new Nexus One device, and the Apple iPhone are redefining the parameters of the mobile marketplace, drawing millions of new customers and establishing new businesses through things like paid and ad-supported apps and in-app commerce. Google's acquisition of AdMob and Apple's acquisition of Quattro Wireless will make developing, creating advertising, branding applications, and selling goods and services in these environments, easy, efficient, and highly visible for marketers. Until these acquisitions were made, the markets would have been fractionalized and we would have struggled to have tools to see what inventory and opportunities are available. Planning, buying, and tracking would have continued to be time consuming and mostly manual. These market developments now further consolidate and organize mobile display, search, local, and app advertising.

Applications Can Now Be Fully Realized as Advertising Vehicles

Advertising is crucial to the economics of applications and will continue to create more excellent opportunities for brands. Traditionally, app developers have fronted the costs of bringing their apps to the app stores (while paying fees to Apple) with the hope that they'll monetize their ventures through advertising. Most apps in the iTunes App Store are free (approximately 80 percent), and the process of selling, fulfilling, and maintaining in-app advertising is arduous and complicated for busy developers. These developers are not necessarily media and advertising experts and don't have sales forces. Now that Google and Apple will be integrating ad networks, app developers will go with the ad network that provides the best access to advertisers and the highest payouts. Both Google and Apple want the most and the best developer offerings, which in turn will provide us advertisers the best inventory, audiences, and opportunities. The new devices like Google's Nexus One and the coming Apple tablet both indicate that the marketplace of apps and advertising will be huge. We have been able to buy in-app ads from AdMob, Quattro Wireless, and others for a while, but now they will be better integrated with other vertical ad opportunities within their new parent portfolios.

Display Ads in Apps Are Just the Tip of the Iceberg

In-app ads are a great way to advertise. Audiences tend to be highly targeted, costs are competitive (especially low in many cases), and tracking data is very valuable. But advertising in and around applications is already evolving. The new tablet products quickly coming to market are going to support digital magazines, newspapers, and expanded video features that will generate increasingly sophisticated advertising units and opportunities. Those ad units will be available through the apps stores and ad networks that are at the heart of the AdMob and Quattro Wireless acquisitions.

What's Next?

The next big opportunity impacted by these marketplace developments is in-app payments for things like virtual goods. This will be a huge opportunity for marketers to direct sell branded items that serve as ads but are not specifically paid ad units.

Google and Apple may incorporate the ad network into the next-generation software developer kits and let developers incorporate ads themselves. They may also make the inventory available through outside ad networks and vendors in addition to their own (they'll take a cut of course), so we shouldn't expect these to necessarily operate as isolated buying environments.

Expect more connectivity with online (where Google obviously dominates), social networking, and environments like Apple TV. These moves are not about mobile in a vacuum, they're opening up the eventual seamless advertising opportunities across channels that will be extraordinarily valuable to brand advertisers, provided that the campaign command and control is highly automated, integrated, and efficient.

Don't forget that everyone else in the market has to continue to play competitive ball for ad dollars. Millennial Media and JumpTap will continue to offer opportunities for brands to get into mobile across display, search, long tail, local, and many other parameters crucial to successful mobile campaigns -- it's not only about AdMob and Quattro.

As advertisers, we should recognize that for our purposes, these recent market developments are not just wars of hubris between two huge, proud, and fierce competitors. These moves are automating, codifying, and growing a marketplace of ad opportunities that have suffered from over-complication, technical obstacles, fragmentation, and, frankly, a lack of innovation. In short order, we will see video, location-oriented, and highly personalized mobile advertising that is easy to plan, easy to buy, and provides superior tracking data, which is what advertisers need as mobile blasts onto the media scene.

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ABOUT THE AUTHOR

Eric Bader

Eric Bader is a partner in BrandInHand, a full-service mobile marketing and media company that serves global brand marketers, partners with agencies, and assists emerging media companies. BrandInHand's clients span the consumer goods, financial services, technology, and retail industries.

Prior to forming BrandInHand, Bader served as managing director of digital at MediaVest Worldwide. A new media veteran, he was formerly the head of online enterprises at CSTV Networks (now CBSSports) and, prior to that, executive director of interactive marketing at Ogilvy.

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