This post originally appeared on the ZenithOptimedia AU blog last week.
Much has been written in the past two weeks in the local marketing media about Apple’s foray into mobile advertising. Most pieces were barely more than transcripts of Steve Jobs keynote presentation (see video at bottom of post) instead of comparing the upcoming release of iAds against the current market offering. Note For the discussion below, I am only comparing advertising in-applications and not mobile websites, SMS/MMS, mobile search or carrier-based offerings.
Some background information: There are many mobile ad networks that provide advertising inside smart-phone applications (in-app ads), the largest of these is AdMob which agreed to be acquired by Google late last year for USD $750 million in a strategic move by Google that gave it global leadership on mobile search and banner advertising on mobile web and applications. It also fitted in nicely with their ever growing and improving Android mobile operating system (currently on over 35 different mobile phones, with another 18 soon to be released).
Not to be outdone Apple Inc announced on January 4 this year that they had acquired another American mobile ad network – Quattro Wireless – for a rumoured USD $275 million, in an escalating game of one-up-man-ship.
In Australia, AdMob currently dominates the in-app advertising landscape with reach of over 66% of all iPhone users (whether they have apps that carry advertising or not). Whilst they claim reach of 50 million mobile users worldwide, Quattro’s reach in Australia is not currently disclosed, and is estimated to be very small.
So, how do they stack up against each other?
With the announcement of their new iAds, Apple is effectively activating a superior ad format on an existing network – with the aim to increase the networks reach (get developers preference over AdMob/Google) and increase their advertising revenue yield (charging advertisers more per ad for a superior format and user experience). It is a bold and welcome move.
On the other side, AdMob has a much larger network reach across different phones, flexible buy models (i.e. cost per click) and will likely have Google’s global sales team if they get FCC approval of the acquisition. But rumours persist that Apple might restrict developers choice of ad partners, and exclude AdMob, which a real possibility if their past efforts of setting up a closed network against Google’s open approach continue.
Would this have a big affect the industry in Australia it it happens? Yes.
93% of all in-app advertising occurs on an iPhone in Australia. And though Android, Ovi (Nokia), Blackberry and Samsung are making some inroads on the app market abroad, most applications consumed, used and developed in Australia occur on an iPhone. AdMob/Google would still own mobile search and a significant portion of mobile web advertising, but the richer and more brand friendly in-app advertising would be dominated by Apple.
Thus, it is important, despite the hype, that local marketers and media interesting in engaging mobile consumers watch this two horse race play out.
Also – if you haven’t yet watched the video demonstration of the iAds it is well worth seeing what possibilities will soon exist.
