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5 Ideal Mobile Ad Formats for a Post-AdMob Google

Can Google Have the Money and the AdMob?

Monday, November 16, 2009 | Posted by Aaron Goldman

Posted In: Digital Marketing / Google / Press / Press Mentions

Last week Google announced that it was acquiring mobile ad firm AdMob for $750 million in stock. Google also set up one of its trusty microsites to provide more info about the deal and begin the proactive lobbying lest anyone accuse it of being anti-competitive.

As always, Laurie Sullivan at Media Post was on top of the news and had coverage of the deal published a scant four hours later. In it, she included my initial reaction to the news. Here's the excerpt. Stay tuned for more analysis and my top five recommended ad formats for mobile on the flipside...
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Aaron Goldman, managing partner at Connectual, tells Online Media Daily that Eric Schmidt has long touted the potential of mobile, admitting he believes the mobile Web will become bigger than the computer-based Web. "Google has already made investments on the back-end with Android, and is co-marketing the new Droid handset from Verizon," he says. "It's only logical the company would invest in the advertising side of the mobile business."

Goldman says AdMob fits the Google model of playing middleman between marketers and publishers. And it's likely that Google will succeed in mobile where it failed in radio and print largely due to the signal that exists with a two-way platform. In other words, Google can tell how people respond to marketing messages in this channel and optimize accordingly.
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Here's a link to the interview I cited with Eric Schmidt from back in May of 2008 featuring such quotes as:

"The most obvious large space of advertising is the mobile internet."

"The next big wave in advertising is the mobile internet."

"Mobile will be a larger business than the PC-Web."

There's no question that the mobile platform has tremendous advertising potential. But that potential was there a decade ago with every year since being heralded as the year of mobile.

I look at this move by Google as signaling the the time for mobile marketing is indeed upon us. That said, I'm not sure we'll see significant mobile ad revenues for a few more years. And it seems eMarketer agrees.

Just like with YouTube, it took time for Google and the rest of the industry to figure out what was the right way to monetize video with advertising. The same goes for mobile. And Google admitted it way overpaid to lock up YouTube and keep it away from competitors. The same goes for AdMob.

The only difference is that AdMob already has a decent revenue model. The problem, er... opportunity, IMHO, is that the current model does not represent the best application of mobile advertising. 

I'm not bullish at all on display ads on mobile websites and apps -- which are precisely the formats offered by AdMob today. In my mind, pre-roll ads are to video what banner ads are to mobile. While these units are very easy to plan and buy for marketers and agencies that are used to the traditional ways or procuring ad inventory, they don't take advantage of the unique features of the plaftorm nor the mindset of the person using it -- namely two-way communication and, in the case of mobile, location-based information and content. The bottom line with mobile is that the screen is just too damn small to waste space with banner ads.

That said, AdMob does boast some 15,000 publisher relationships so Google now has built-in distribution for any new ad format it conceives. However, I'm not sure the ideal mobile ad format has anything to do with 3rd party publishers. Just like on the PC-web. When people are engaged with other content, it's not a good time to try and sell something to them. Sure, contextual display advertising has its place (to the tune of 22% on online ad spend and 25% of mobile ad revenue in 2009) but we can do better.

And let's not forget that smartphone penetration is less than 20% in most countries so most people don't even venture off-deck on their cell phones much less see or respond to display ads on the mobile web.

As for what the ideal mobile ad format is, here are my top five:

1. SMS Search Ads - even on my Blackberry, I find it much faster and easier to text queries to Google than pull up my browser, navigate to Google.com and search. However, Google currently does not serve ads against SMS search queries. It should start. Just like on the PC-web, there's no better time or place to embed a relevant sponsored message than at the point of search.

2. Voice Search Ads - if I'm using free directory assistance, such as GOOG-411, I have no problem with an audio ad playing before my call is connected as long as it's relevant and short. This is a great opportunity for advertisers to build loyalty or conquest. For example, if I ask for the number to my local Lowe's, I wouldn't mind a quick ad from Lowe's telling me what's on sale or even from Home Depot with a special offer.

3. Image Search Ads - these days, most handsets have cameras. I've seen some cool recognition apps lately that can scan an image and tell you what it is. And Google Android phones have that fancy bar-code scanner. Wouldn't it be nice to be able to take a picture of something and find out what it is and where you can buy it? I see ads in this format taking similar shape to a search engine results page with paid and organic listings based on the selected image. Clearly, this is the least baked of my ideas but certainly leverages the difference in how people use their mobile handsets vs. PC's. And Google has already invested in Pixazza, a company that tags products in photos, so I suspect it's not long before it cracks this nut.

4. Bluetooth Opt-in Ads - ok, my first 3 proposed formats were all search-related. But what else would you expect from the guy who learned everything he knows about marketing from Google? Here's an example of a non-search ad format that still respects some of the golden rules I've outlined from Google and search -- Mindset Matters, Relevancy Rules, and Be Where Your Audience Is. We've all seen the scene in Minority Report where John Anderton is walking through the mall and the stores are soliciting him. And since the early 2000's we've been hearing about the killer mobile ad format that would hit you when you're within a block of a Starbucks with a coupon for a dollar off a cup of joe. While these haven't quite come to fruition yet and most people would say they're annoying, I think there's opportunity if done the right way. And the right way certainly means via opt-in. And bluetooth seems to be the right technology to enable this. Imagine walking through Times Square in NYC and having various advertisers ping you via Bluetooth with opt-in requests to get a special promotion. In fact, you don't have to imagine it. It's been going on for at least three years. Sure, this seems annoying at first but, if Google or some other arbiter was serving the ads and filtering out spam and non-relevant offers using some sort of quality score, the result would be targeted messaging that enhances your shopping experience. Not shopping? No problem. Just hit ignore. One specific advertiser bugging you? Click ignore permanently. Super annoyed by the whole thing? Make your bluetooth undiscoverable.

5. Sponsored Apps - while not technically an ad format, this is still one of the better ways for marketers to connect with their customers and prospects in the mobile environment. It's completely opt-in by virtue of the required app download install. And it gives companies a chance to wrap their brands around rich, interactive, and (hopefully) helpful content. Some cool ones I've seen recently are Zippo's Virtual Lighter and Kraft's iFood Assistant. For better or worse, I like to think of apps as the microsite of the mobile world. I could see Google helping organize all the app's out there and making them searchable with results personalized based on mobile handset usage. Right now, the iPhone app system feeds the head and largely skews -- dare I say screws? -- the long tail niche apps that don't benefit from tons of downloads and reviews and, thus, premium placement. Until Apple comes up with a Genius feature for Apps, Google is positioned well to create an elegant solution.

There's no doubt that mobile is "the next big wave in advertising." In fact, I've put my money where my mouth is through a newly-formed partnership with Tagga -- a start up out of Vancouver that's created a nifty platform for agencies to execute mobile ad campaigns quickly, easily, and effectively.

As many have said before me, more than anything, Google's acquisition of AdMob validates the mobile advertising space. I'm personally looking forward to being on the front lines as real value is created in the mobile channel. And, to be clear, by real value, I don't mean banner ads.

(If you liked this post, check out my other recent lists of proposed ad formats for alternative channels -- 4 Suggested Twitter Ad Formats and 5 Proposed Ad Formats for Google's Online Book Platform.)

Update 11/26: Speaking of interactive mobile ads in Times square, check out what Google and Verizon are planning for Black Friday.