It’s been a busy last few weeks for AdMob, a provider of a large and fast-growing mobile advertising marketplace. The company has made an impressive raft of announcements – ranging from new December stats (released last week) that underline the phenomenal growth of the iPod Touch on its network to the surprise launch of Download Tracking for iPhone Apps (allowing advertisers to monitor App Store conversion rates and cost-per-download). I caught up with Jason Spero, AdMob Vice President & Managing Director, North America, to discuss the news behind the news in an exclusive podcast for MSG. Our frank exchange focused on a number of key topics including, mobile Web trends, mobile ad inventory and pricing, and the phenomenal impact of the iPhone.

We also took the opportunity to discuss the state of supply and demand in the mobile advertising marketplace. In December AdAge reported (via MocoNews) the “onslaught of inventory” going mobile was bringing down prices. Prior to that, reporting in MocoNews left the impression that the inventory was not able to keep pace with demand. “Already, evidence is surfacing that big brands are cutting back on their mobile ad buys, which will make AdMob’s job more difficult since it already doesn’t have enough ad inventory to fill every request coming from publishers.” The truth usually lies somewhere in the middle, so I asked Jason for his take on the numbers and the reports circulating in the blogosphere.

His reply: AdMob has seen a “fairly flat market” with “supply outpacing demand just a bit.” Against this backdrop, AdMob continues to see “extremely strong demand for performance-based media.” With regards to the cost-per-thousand (CPMs) on the brand-based side of the business, “AdMob has dramatically grown in number of advertisers and the regularity of spend of those advertisers. At the same time, the number of users continues to grow, and the amount of media they’re consuming on their phones grows, there’s more and more inventory to serve to those advertisers.”

How is pricing? “We’ve had a fairly steady price plan. I think we were in the $10 to $15 rate card price range depending on how much targeting you were selecting for quite a while. We’ve seen that come under a little bit of sort of micro-economic pressure based on all of the supply in the market, but I would say the price [of] most of our brand-based media buys hasn’t changed more than 10 percent in the last year.”

Other highlights:

MOBILE METRICS: In a nutshell, smartphone operating system share and the rise of the iPod Tough are the main attractions in the new-release December AdMob Mobile Metrics Report. It reveals a significant increase in the number of ads it served up to iPod Touch users—from 86 million in November 2008 to 292 million in December 2008. The report noted requests doubled overnight on Christmas, and remained strong throughout the close of the month, leading BusinessWeek to question just how much of the device’s popularity is coming at the expense of the iPhone. Another surprise: A look at smartphone operating system (OS) share reveals the IPhone OS has already surpassed the RIM and Windows Mobile operating systems combined. (In the US, the iPhone OS generated 48 percent of smartphone requests in December, up from only 9 percent in May. The RIM OS and Windows Mobile follow with 19 percent and 15 percent share, respectively. Only two months after launch, Android has captured 2 percent OS share.) Overall, Symbian is the number one operating system with a 41 percent share and more than a 90 percent share in Africa and Asia. (Download the report here.) What was the impact of this shift on AdMob? “In November and December, we didn’t have enough … iPhone impressions to service all of the demand and we saw our price-point for iPhone inventory actually bid up.”

2009 TRENDS: More companies are planning to include mobile in their advertising campaigns and assigning budget to it now. “We’ve taken up-front buys from major agencies and advertisers for the first time in our history.” Other trends high on Jason’s radar: The arrival of the big players (Google, Yahoo Microsoft and AOL with Platform A) “spending a lot more attention on mobile, search and display in 2009.” Expect the “rapid maturation of the mobile advertising market as you get established players realizing that they have to play here and have to have a sophisticated solution in order to service the growth in demand.

FUTURE ROADMAP: Look for more granularity in both the mobile analytics tools and the monthly mobile metrics report. “We’ve seen a lot of interest seen a lot of interest on the part of advertisers in being able to benchmark against their competition. We’re seeing a lot of interest on the part of publishers to be able to understand where they stand relevant to their competition in their segment.”

Note: Jason and I spoke just prior to the Download Tracking announcement, so Jason couldn’t discuss the details of that particular announcement. But you can hear in the podcast that he was doing his best to drop clues, stressing that future innovation would focus on “helping advertisers track what’s going on with their ads at the point of the click after the click which is a place where AdMob’s been very vocal about the importance of measurement, as well as some important things at the user level that will allow advertiser’s to better reach the users that interest them most.” From the press release we know that the Download App (and the conversion tracking it provides) allows advertisers to drill down into conversion rates (by specific ad and for specific dates). We do have a view into the results of a limited test of the Download App and some interesting trends.

Among these:

· Free applications have an average conversion rate of 10 percent, significantly higher than the average 1 percent conversion rate for paid applications.

· Games generally have higher conversion rates than other categories of applications, up to a 100 percent improvement over non-game applications at similar price points.

· The App Store is an effective distribution platform for free applications. The average acquisition cost for free applications is under $1, significantly less than average application download costs on the PC Web.

I will reserve judgment until I test the tracking tool in a campaign. Regular readers will recall that my mobile advertising experiments – which provide the material for my continuing series of white papers – also analyze the mobile analytics tools provided by AdMob and Bango. Next in the series I look conduct mobile advertising campaigns across a range of mobile social networks. Judging from the excitement about advertising on the iPhone– it may well merit a separate white paper…

PODCAST: [16:33]

 

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Disclaimer: AdMob has been an MSG supporter.

Tags: AdMob, iPhone, Metrics, Mobile Advertising, mobile analytics, tracking

This entry was posted on Monday, January 12th, 2009 at 9:37 pm and is filed under Mobile Advertising, Mobile Research, Podcasts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.