Facts about Google's acquisition of AdMob

Competition

The mobile advertising space is rapidly evolving and highly competitive.

Promoting competition

AdMob is just one of more than a dozen mobile ad networks in the U.S. that have proliferated in recent years, competing against networks like Millennial, JumpTap, Mojiva, Quattro Wireless, and AOL's Advertising.com mobile network. Most of the other big players in online advertising have made similar acquisitions in the mobile ad space over the past few years – showing how competitive and vibrant this space is:

• In May 2007, AOL acquired Third Screen Media, which it operates today as a mobile ad subsidiary of its Advertising.com network.
• In May 2007, Microsoft acquired ScreenTonic, a French mobile ad firm that provides mobile ad solutions for advertisers and publishers.
• In August 2007, Yahoo acquired Actionality, a company that inserts ads in content for mobile devices, such as mobile phone games.

After this deal closes, both advertisers and publishers will continue to have many viable choices in mobile advertising.

Mobile advertising is a small but growing and competitive space

• Mobile advertising is a growing space, but remains small in comparison to other forms of advertising. eMarketer estimates that mobile ad spending will reach $416 million in 2009, compared with the nearly $24 billion that will be spent overall for online advertising, $51 billion on TV ads, and $38 billion on newspaper ads.

• Mobile ad spending is growing in excess of 30% annually, with lots of players and tremendous capital investment. AdMob itself was founded only a few years ago. The continued active investment in this space is a sign that investors believe there is still plenty of room for competition.

• Advertisers and analysts do not view mobile advertising – which will account for only 0.4% of all ad spending in 2009 – as a distinct piece of ad spending. Instead, mobile advertising is seen by industry leaders as competing for dollars against other forms of advertising.
  • eMarketer Senior Analyst Noah Elkin: "Marketers with mobile-specific budgets constitute a minority – at least for now."
  • Eric Bader, President of mobile marketing agency Brand in Hand: “For all intents and purposes, there’s no such thing as a mobile budget.”
  • David Katz, Yahoo!: "Mobile advertising is generally 'hitchhiking onto the digital budget.'"
  • JumpTap Chief Marketing Officer Paran Johar: "More experienced marketers initially pull funds from part of a digital budget. But more and more as the digital budget grows, it’s cannibalizing traditional media. So one could argue mobile is cannibalizing traditional media as well.”
  Source for all quotes: eMarketer

• According to a survey of advertisers and agencies by eMarketer, only 11% of advertisers have a separate line item in their budget for mobile advertising, and more than a third of all advertisers (36%) said that mobile advertising was not currently part of their advertising plans at all.