On Monday, Google announced their acquisition of leading mobile advertising network, AdMob, for $750 million. Currently, industry bankers and execs estimate mobile ad networks are worth up to six times of annual revenues. Given that benchmark, AdMob should be worth $240 million based on an annual revenue projection of $40 million by industry insiders. If you only look at it that way, AdMob just took Google to the bank. However, I’d be willing to bet that Google too, will have a laugh or two on the way to the bank. Either way you look at it, the deal, which is the third largest acquisition in Google’s history, solidifies mobile’s worth and validates mobile advertising as an effective marketing medium.
In the last quarter, Google’s mobile search queries grew 30% over the second quarter. Just as mobile search is one area of opportunity, mobile display advertising also yields huge promise. eMarkter predicts that mobile advertising spending (message, display, and search) will grow from $320 million last year to $416 million this year to more than $1.5 billion by 2013. AdMob will help Google in its efforts to expand beyond its traditional search advertising and take a giant leap into mobile display.
Founded in 2006, Admob has self-served over 10 billion mobile ads on their extensive list of publisher sites including CBS Mobile, AccuWeather, and BluePulse. In addition to graphic and text banner ad units, AdMob has been an innovator in the space developing rich media mobile ad units and integrated solutions on downloadable applications that run on both the iPhone and Google’s Anroid operating system. To AdMob, this acquisition means access to Google’s online expertise and partners and the ability to take what they’ve already built to another level.
The marriage between the two seems to be one that is mutually beneficial for them and advertisers. For advertisers, this deal ultimately offers more inventory, highly targeted placements, lower rates, and better ad performance. With competition, innovation, and mobile usage on the rise, it’s exciting news all around for the industry and money well invested.
By: Kyl Boggs, Mobile Strategist
