Whilst the news that Apple is launching its own ad platform in direct competition with Google is making headline news, the real story is that it represents yet another nail in the mobile operators’ coffin. It looks like Martin Creaner and I have crossed blogs, but he still displays some hope. I’m not so sure.
Google has been trying to acquire AdMob for some time now but every time it looks like a done deal another objection is raised and closure is forestalled. Google ‘pinched’ AdMob from under the very nose of Apple that was apparently already in advanced negotiation itself. For Google, this strategic acquisition would have given them a head start in the mobile advertising race and, combined with their current dominant position in the internet ad space, made it near impossible for anyone else to get a head in.
Apple did not waste time sitting around licking its wounds, it went straight out and acquired the fledgeling Quattro Wireless. Apple boss, Steve Jobs, made no bones about this in his Q&A at the announcement of a new iPhone OS and Apple’s iAd platform earlier this week. “Google came in and snatched them from us. We bought a much smaller, but good company Quattro,” he said. He added that the prime difference between iAd and other mobile ad networks is that iAd is built into the OS.
Jobs calculates that by summertime, the iPhone will be generating one billion ad impressions a day. On average, he said an iPhone user spends 30 minutes a day in applications. If they serve one ad every three minutes, and there’s 100 million iPhone and iTouches as of this summer, there will be one billion ad impressions a day. “It’s not the largest number but it’s a large number, and the demographics are one of the most desirable in all of advertising—not just in digital.”
Presuming Google eventually gets through the AdMob acquisition hurdles it looks like the much vaunted mobile ad market will have two dominant players, and formidable they will be. For those in the telecommunications industry the smell of fear must be pervasive. For nowhere in either of the megaliths’ announcements are they included.
The mobile advertising play is going to go just like the massive and growing content and apps market, predominantly ‘over the top’ or OTT. Those revenues that CSPs were hoping would subsidize going data traffic costs and customer purchases now look to be in jeopardy. Whilst the industry has pontificated for at least five years on the subject, Google and Apple, between them have not only grasped the opportunity but have the clout, brand, presence and existing relationships to keep it all to themselves.