Apple Story
FTC OKs Google AdMob Acquisition: Look Out Apple
Google could rest easy this past weekend, as the FTC approved its $750 million acquisition of mobile ad service, AdMob, on Friday. The Federal Trade Commission ruling follows a six-month antitrust investigation that could have sidelined Google in the $600 million mobile ad market. The FTC gave Google the go-ahead, mainly because Apple’s iAd poses significant competition. The tech giants are now in the race, but have different strategies for winning.
Apple’s iAd, as demonstrated by Steve Jobs at the iPad unveiling in January, relies on a well-designed, “emotion-driven” interface to engage users. Jobs illustrated how an ad would look on an iPad with a Toy Story 3 banner ad mock-up (see below). Users can play a Toy Story-related game, find local movie theaters, download digital wall paper and buy the Toy Story 3 app without exiting the ad. It delivers the emotion of a TV ad and engagement of a fun video game.
<object classid=”clsid:d27cdb6e-ae6d-11cf-96b8-444553540000″ width=”513″ height=”309″ codebase=”http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0″>
<embed type=”application/x-shockwave-flash” width=”513″ height=”309″ src=”http://www.youtube.com/v/q7WVt63S49s&hl=en_US&fs=1&” allowscriptaccess=”always” allowfullscreen=”true”></embed>
</object>
We anticipate Google’s approach to be quite different. Google historically has relied on relevancy. AdWords places highly-targeted ads based on search queries or site content. The ad architecture on your mobile phone will likely mirror your desktop. For instance, if you’re searching for a restaurant, Google will provide ads based on your location. We estimate location to be key in Google’s targeting strategy.
Google’s incredible success in the ad market also gives it a home-team advantage. After all, much of its $23.65 billion in 2009 revenue can be attributed to advertising. Why has Google had such tremendous success in the ad market? In addition to its highly targeted ad placements and robust search engine, Google has a low barrier to entry for advertisers. AdWords makes it simple to create and easy to launch ad campaigns. Where Apple ads require a more graphical interface, Google’s mobile ads rely on text — making it easier for non-design savvy businesses to deploy mobile ad campaigns.
Further, Google already has a leadership position in the mobile ad market. Combined, Google and AdMob will have a 21 percent share of the U.S. mobile ad market followed by Millennial Media at 12 percent, according to the International Data Corp. Yahoo will have 10 percent followed by Microsoft at 8 percent and Apple’s Quattro Wireless at 7 percent.
We are only in the infant stages of the much anticipated, billion dollar mobile ad market. In 2010, the mobile ad spend is estimated at $600 million. By 2013, it will be $1.6 billion…
To read more about Google’s AdMob acquisition, go to Sparxoo, a digital marketing, branding and business development blog.
About the Author
Sparxoo is a business blog that inspires breakthrough by tomorrow’s leaders. We are a strategy consulting firm with a pulse on marketing, branding, and development.
The Buzz: How To Make It in America – Apple Store Event
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