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Summary:

When Microsoft said it will buy mobile ad startup ScreenTonic last week, the first thing a lot of us wondered was who’s next? Mobile ad startups like Third Screen Media and AdMob have been building successful businesses while Internet companies are looking for an easy way […]

When Microsoft said it will buy mobile ad startup ScreenTonic last week, the first thing a lot of us wondered was who’s next? Mobile ad startups like Third Screen Media and AdMob have been building successful businesses while Internet companies are looking for an easy way into the mobile ad market.

Given Third Screen Media was rumored to be in acquisition talks with Microsoft last year, and more recently AOL, we thought we’d get on the horn with CEO Thomas Burgess and see where he thinks the market is headed. Here’s an edited version of his thoughts:

Q. How do you think the ScreenTonic/Microsoft deal will affect your position and the industry?

A. They do a similar business as us, but are located in Europe — we have a light touch in Europe right now. ScreenTonic is smaller, maybe a third of our size, less expensive, has smaller accounts.

I think the entire interactive ad industry is in a consolidation mode right now. Large interactive media are interested in mobile as a vertical. It’s all about inventory. It’s all the same buyers and the same ad dollars. . . There will be more consolidation and possibly acquisitions for smaller companies too.

Q. We have read about AOL being a prospective buyer of your company? Are those talks happening?

A. AOL is a customer and at times a partner of ours. This is a rumor.

Q. Is there a growing interest in mobile advertising this year? Are carriers showing more interest as well?

A. Carriers are showing a lot more interest and activity. Sprint launched a mobile ad program with Enpocket. Verizon launched mobile ads with us. We have 5 other wireless operators in the U.S. that we will announce soon. Carriers are making a concentrated, if cautious effort.

Advertisers are making a bigger push too. In 2006 advertisers were exploring the market, and campaigns with $75,000 to $100,000 were a big deal. In 2007 there are campaigns with over $1 million.

  1. At blueapple.mobi we use both AdMob and MobilePlay alongside our video clips. The issue is indeed inventory – click through rates decline if inventory goes stale. The market is fixing this, but it is still early.

    The really interesting point is that it is pretty easy to put up a WAP site and run ads now – without carrier involvement. As a result you can now run a site without selling ringtones, wallpaper, or porn. So I expect a flood of content over the next 12 months, and it will be completely outside the carrier channel…

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