Well, Xyologic, a mobile app search firm, has come up with what it says is the first break down of mobile advertising on Android apps, showing that Google’s AdMob is well ahead of rival ad providers. Xyologic found that half of the top 1,000 apps in Android Market use an advertising SDK and 22 percent of all apps use more than one advertising SDK. Of those apps that use advertising, 89 percent of the apps use AdMob, well ahead of any other challenger. These apps also represented 89 percent of all downloads in October for the top apps with advertising.

That AdMob does well on Android may not sound too surprising considering Google owns both Android and AdMob. But I’ve been told before that AdMob sees Android as just another platform and doesn’t provide any special functionality for Android devs. And AdMob was the top mobile advertising network before it was purchased by Google.

The second most popular mobile advertising provider was Millennial Media, whose SDK was used in 34 percent of the top 1,000 apps, which represented 48 percent of all downloads in October among the top apps. It was followed by InMobi, which had presence in 22 percent of the top apps that use advertising. These apps represented 26 percent of all downloads of top apps with ads in October.

AdMob’s ad exchange AdWhirl was fourth with 19 percent presence on Android apps that utilize advertising followed by Mobclix with 15 percent. The overall numbers don’t add up to 100 percent because apps can work with more than one advertising company.

The rest of the market includes mobile ad exchange networks AdMarvel, Smaato, Burstly, Mopub, Nexage, Fiksu, and mobile ad network Jumptap who each make up less than 3 percent of the overall market share. They serve the remaining 15 percent of the top apps that use advertising. This group represented 26 percent of all downloads in October among the top downloaded apps with mobile advertising.

Xyologic said it came by its numbers by evaluating the top 1,000 most downloaded apps on Android for October and screening these apps for advertising SDKs. These apps have more than over 340 million downloads in total, representing 54 percent of the downloads in October.

It’s hard to know if these numbers are completely accurate. IDC tried to make some estimates in 2009 on the overall mobile ad market and who the biggest players were but it was criticized for its methodology. But the fact that AdMob is used in so many Android apps shows that the purchase of AdMob was worth it, especially now that mobile advertising is expected to grow to $20.6 billion by 2015, according to Gartner.

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What this means is that in the coming weeks when Google looks at how to decide which ads to feature, it will consider how well a site is tailored for mobile devices, things like whether it works well for touch, is made for smaller screens, has shorter load times and avoids Flash. To be sure, advertisers who adhere to these guidelines won’t be guaranteed better visibility. But connecting to mobile optimized landing pages that perform better in AdWords will now be a factor in determining ad placement. This will only affect advertisers who advertise on mobile and won’t affect ads served on PC browsers.

This is interesting because Google rarely talks about what affects keyword quality scores in AdWords. Advertisers bid on ad placement based on keywords, but Google looks at a range of factors like click-through rates and ad quality to determine what goes where. So ads that are considered to be beneficial to users can be featured higher than ads whose owners sometimes bid more in AdWords.

This isn’t the first time Google has pushed advertisers to optimize for mobile. Last November, it said it would limit ad serving to mobile devices if advertisers directed people to landing pages with a lot of Flash content. And it’s put out a string of blog posts on the topic and released a simple tool for businesses to build mobile sites. Now, it’s saying that good mobile landing pages aren’t just devoid of Flash but have other characteristics that appeal to mobile users. Those characteristics include prioritizing content and making layouts simpler. And it’s now putting some weight behind its suggestions.

Why does Google care about this? Well, it can encourage more people to click on ads if it can ensure that the landing pages look good on mobile devices. Google is, at its heart, about advertising, so it makes sense that it wants to improve the experience, which should ultimately benefit the bottom line. But it’s also a recognition that the web is different on mobile devices, and as people move toward smartphones and tablets, it requires some adjustment.

Google said it’s in the interest of advertisers and web publishers to embrace mobile optimization. Google has said early this year that 79 percent of top advertisers do not have a mobile optimized site. But a recent study found that 61 percent of users are unlikely to return to a mobile website that was hard to access from a phone. Mobile consultant Tomi Ahonen wrote today that jeweler Tiffany & Co. optimized its mobile website and found that sales of jewelry on its mobile website grew by 125 percent.

While Google has a stake in optimized mobile websites, it’s not a bad idea for publishers and advertisers to get on board. The world is going mobile and yet, it’s still surprising to see how many websites are not built with mobile users in mind. This is not just a lost opportunity to engage with a customer, but it’s potentially lost business as well.

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The move to HTML5 also enables more rich media opportunities for ads. Before, multimedia ads often redirected users to a landing site where rich media was displayed. But by incorporating HTML5 fully into the SDK, developers can do more rich integration in the ad itself, better transitions and full-screen interstitials on tablets. For instance, an ad can now incorporate more location information and direct people to nearby retail outlets right in the ad.

Mark Schaaf, engineering director for AdMob said the move to HTML5 also streamlines the amount of code that’s needed and can also mean less data is transferred, which is one concern about rich media ads. He said developers and publishers have been pushing for more rich media ads, which are more interactive and deliver more revenue from advertisers.

“The formats we have now are fine but we want to make mobile advertising great,” said Schaaf, one of AdMob’s first employees. “The way you do that is richer ads and giving users something they want to see and interact with.”

Schaaf said AdMob’s strength lies in its open platform, which allows developers to hit multiple operating systems easily. And that makes AdMob more attractive for advertisers because they can hit demographic groups across mobile platforms. Since its acquisition by Google, AdMob continues to roll and now boasts 50,000 apps on its network with 2 billion ad requests a day. Schaaf said hundreds of publishers are making more than $100,000 a month with AdMob.

Rich media ads are still a small part of the mobile ad mix but they’re capturing significant interest because they boast a lot of interactivity with users. A recent Volvo campaign by AdMob found multimedia ads led to almost a 10x improvement in click-through rates compared to traditional banner ads. Some of that may be the novelty of these ads but proponents like AdMob say that they represent a real opportunity to engage users and drive actions.

AdMob isn’t the only one working on rich media ads. Medialets also announced today that Adobe will integrate its mobile advertising platform software developer kit with Adobe’s Content Viewer in the Enterprise Edition of Digital Publishing Suite.  This will allow publishers to manage their targeted brand advertising inventory in digital publications on tablet devices. We’re still early in the rise of mobile rich media ads but it’s looking more like the ad units could be an important part of the revenue mix for mobile developers and publishers alongside traditional paid downloads and in-app purchases.

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The Volvo campaign on the iPhone touting the S60 sedan was led by Mobext, the mobile marketing arm of advertising agency Havas Digital. Mobile users who visited certain applications such as a CBS News app were greeted by a 30-second video of the S60 and given the option to view the car in 360 degrees, see a photo gallery or get information on local dealerships. Jared Hopfer, associate director of Mobext, told me users clicked through for more information 3.91 percent of the time, usually for a look at the 360 view of the car. He said that’s far ahead of their traditional mobile ads, which see click-through rates of 0.4 to 0.7 percent. Users who clicked through also spent an average of a minute in the ad, far better than traditional ads.

“Nearly a minute spent with a brand is about all you can ask for; that’s serious time exploring what a brand is all about,” Hopfer said. “We knew this tactic would be successful, but the performance went beyond our expectations for engagement and performance of click-through rates.”

Rich media ads are still an emerging product, but they’re poised to become an important way for large brands and companies to drive awareness and engagement on mobile devices. There’s some question, however, about how reliable click-through rates are on all mobile ads. A recent study by Harris Interactive found that about half of users accidentally clicked on mobile ads. But respondents also said they preferred ads like the Volvo rich media ad which kept them within the app they were using, instead of ads which click through to a mobile browser.

That’s one of the reasons why publishers are turning to rich media ads to drive engagement. Admob told me the number of publishers using interstitial video ads to monetize their apps has more than doubled from December 2009 to December 2010, with more than half of AdMob’s top 50 brand advertising campaigns in December using interstitial ads. The company said ad impressions grew more than 500 percent in the past year from the AdMob interstitial ad unit.

Admob’s progress reflects the growing acceptance of rich media ads in mobile. In 2009, IDC noted that mobile video ads accounted for just $12 million of the $220 million spent on mobile advertising in the U.S. By the end of last year, it was expected to have grown to $90 million, out of a total $498 million spent on mobile ads. By 2014, video ads are projected to represent $485 million out of $1.8 billion in mobile advertising.

Hopfer told me rich media ads are a win for both publishers and advertisers. That’s why Volvo is poised to begin a similar campaign on Android soon. “For publishers, serving up rich media ads are a much better way to monetize their ad inventory than pure text. And publishers can demand more for the audience and the advertiser is willing to pay more because they can get more engagement,” he said.

Rich media ads are going to be an important battleground for Admob, Apple, Medialets and others who are looking to power the mobile advertising market. The key is to find an ad unit that demands a higher price from advertisers than simple banner ads. So far, rich media is proving to be more engaging, and when paired with local data like business information and maps, it can prove to be a potent product. Expect to see a lot more of those video and animated mobile ads in the months and years to come.

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Opera today announced it’s entering into the mobile advertising market with the Open Mobile Ad Exchange, an advertising platform that takes advantage of the company’s large, global user-base. Opera lays claim to more than 66.5 million handset owners who use the Opera Mini browser, primarily on feature phones. The company has yet to detail financial terms between developers and publishers who wish to use the Open Mobile Ad Exchange, and is instead taking contact information from interested parties on the new advertising network website.

The Open Mobile Ad Exchange is a clear next step from Opera’s January purchase of AdMarvel: The URL for the network uses AdMarvel in the domain, for example. Opera reportedly paid $8 million in cash, and could add up to $15 million more to the purchase price, if certain targets are met by the AdMarvel team in San Mateo, Calif. On the client side, Opera says developers and publisher can use “easily-embedded JavaScript” for the ad service and will benefit from “near-real-time reporting and analytics.”

So why is Opera getting into mobile ads? The company provides a free web browser, so it needs to find new revenue opportunities. Leveraging its browser product for advertising makes sense now because the mobile ad market is still in its infancy. Recently, research firm IDC estimated that mobile advertising will generate $500 million in 2010. That isn’t much when you consider how many players are splitting those revenues, but as the world continues moving towards mobility, the future looks bright. Karsten Weide, research VP of media and entertainment for IDC, sums it up best:

Mobile advertising will not make or break a publisher or network over the next five years. It grows extremely fast but simply does not attract enough absolute dollars. But 10 years from now, will you be sad if you did not get into mobile advertising today? You sure will be.

It’s ironic that Opera chose today to launch the Open Mobile Ad Exchange. Just yesterday, I pondered about content providers and developers giving up on feature phones since comScore reported that more smartphone users in the U.S. were downloading apps and using the mobile web than feature phone users. It’s too early to simply abandon feature phones just yet, as they account for roughly 90 percent of all handsets sold in the world. Opera Mini is the most popular browser for this class of device, bringing a near-smartphone mobile web experience to low-end feature phones.

With the new advertising network, Opera is wisely panning for gold in a river that others have passed by. Competing networks such as iAds from Apple and Google’s AdMob effort can fight it out in the smartphone space while Opera leverages its vast user base on feature phones. But recent data from Smaato, a mobile ad measurement firm, shows that Opera’s feature phone strategy may not be far-fetched: Ad clicks on low end devices are growing and on pace to rule the roost. In light of the move toward tiered data plans, Opera’s new ad network could even gain some traction from smartphone users: Opera Mini compresses data throughput by up to 90 percent, making it appealing to smartphones tied to a small data package.

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Apple, “thankfully,” has not started enforcing the policy yet, said Hamoui, speaking at MobileBeat in San Francisco today. Getting shut off Apple devices would eliminate 30 percent of AdMob’s traffic today. But publishers and advertisers are already using more caution and “asking more questions” about AdMob as a result of the rules change, he said. Apple’s rule change is also being looked at by federal regulators.

But of course there’s a backstory: that Apple tried and failed to buy AdMob, and is openly bitter about it. Hamoui said his company “did seriously consider” the Apple deal. But he said he welcomed Apple’s entrance into the mobile advertising market with its competing iAd platform earlier this month. “The Apple sheen is an important thing,” Hamoui said. “Rich, pretty ads are at the highest level getting ad agencies and brands to think about what mobile means.”

But Hamoui’s allegiance is now with Google. Asked to predict when next year Android would surpass iOS, he said June.

At Google, Hamoui now oversees existing display ad products for mobile apps and content, as well as mobile search ads. He is working on projects such as automated scalable conversion metrics — an amped up version of what Apple is disallowing. Eventually, when it’s more certain privacy can be well maintained, Google will start integrating its various ad platforms on and off of mobile, Hamoui said.

But in terms of something more radical, like Google releasing an advertising-subsized phone? That’s a long way off, in Hamoui’s opinion. “Carriers are making trillions of dollars,” he said. “Mobile advertising is barely a billion. We’re not going to make $150 over the lifetime of a phone to subsidize it.”

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Report: The In-App Advertising Landscape

The trends captured by AdMob’s data reinforce my concerns about companies such as Nokia, which rely on a broad range of feature phones — with a particular focus on emerging countries, no less — to offset a lagging smartphone strategy. While smartphones currently account for a small percentage of overall worldwide handset sales, they show the most growth — 48 percent in the first quarter of 2010 over the same quarter a year prior, reports Gartner — and potential as hardware prices decline. The most worrisome example of a feature phone strategy in upcoming regions is evident in AdMob’s look at worldwide operating system share.

Nokia’s Symbian-powered devices were perennial powerhouses in the company’s backyard of Europe just a few years ago. Fast-forward to today and you see Western Europe dominated by two mobile platforms that didn’t even exist until mid-2007. AdMob’s data on Eastern Europe shows a similar, albeit not as dramatic, shift away from Symbian; meanwhile, Nokia barely has a presence in North America and Oceania. The bright spot is Africa, but if this were the board game RISK, Africa could also fall as iOS4 and the Android army march towards conquest. The only defense right now is the relatively limited data infrastructure in Africa — if that changes and smartphones continue to drop to feature phone price levels, it, too, will be overrun with smart, low-cost handsets.

Another takeaway from the AdMob report is increased Wi-Fi usage, with more than 24 percent of all mobile traffic in the U.S. coming through home networks and hotspots. Apple iOS4 devices take the lead in generating Wi-Fi traffic — likely speaking to the many iPod touch units that have no 3G connection as well as AT&T iPhone customers opting for faster and more stable wireless connections where available. More feature phones take advantage of Wi-Fi as well, generating almost as much wireless traffic as smartphones do, says AdMob.

Given the vast amount of data points compared over the prior two years, I recommend a download of the PDF report, which may be the last one for some time. AdMob, which was purchased by Google in November 2009, explains that it will be breaking from its monthly report schedule as it considers “how to re-invent the report to make it more useful and relevant.” I expect occasional data updates on the AdMob blog, but now that Google’s mobile ad platform is competing against Apple’s new iAd program on mobiles, Google may want to keep the juiciest bits for itself.

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UPDATED: When Google beat Apple to the punch by acquiring mobile ad provider AdMob, and then the computer company responded by snapping up competitor Quattro Wireless, it seemed obvious that the two giants were headed for a showdown. Apple recently fired the first volley in what is likely to be an ongoing battle over the mobile ad market, by changing the terms of its iAds service to make things more difficult for third-party advertising providers, including Google. AdMob CEO Omar Hamoui responded today with a blog post in which he says Apple’s decision will hurt developers of apps and in the long run will be “bad for consumers.”

Apple’s new terms for use of the iPhone OS (now called iOS4) don’t specifically mention Google, and they don’t say that third-party platforms or providers can’t provide advertising on the device. What they do, however, isrestrict who can use the analytical data from those ads. The agreement states that data must be either used internally or provided “to an independent advertising service provider whose primary business is serving mobile ads.” Apple goes on to specify that an ad platform or service that is “owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent.”

Apple changed its terms in part as a result of data that was being collected by an analytics company called Flurry, whose software is integrated into a number of apps. Jobs referred to this behavior in his keynote interview at the D8 conference, saying, “[W]e went through the roof. It’s violating our privacy policies, and it’s p***ing us off! So we said we’re only going to allow analytics that don’t give our device info — only for the purpose of advertising.”

The upshot of those changes, however, is that AdMob is effectively shut out of providing ads on the iPhone, since the data provided by users as they browse and interact with ads is one of the crucial parts of having a mobile ad platform in the first place. AdMob CEO Hamoui said in his post that Apple’s terms “if enforced as written, would prohibit app developers from using AdMob and Google’s advertising solutions on the iPhone.” The CEO went on to say that:

The terms hurt both large and small developers by severely limiting their choice of how best to make money. And because advertising funds a huge number of free and low cost apps, these terms are bad for consumers as well. Let’s be clear. This change is not in the best interests of users or developers. In the history of technology and innovation, it’s clear that competition delivers the best outcome. Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress.

What will be interesting to see is whether the federal government shows an interest in these complaints from AdMob. When Google said it wanted to acquire the company, the Federal Trade Commission reviewed the purchase because of concerns that the search giant already controlled a large proportion of the online advertising business. The regulator relented in part because Apple launched iAds, which would provide some competition. But if the company is seen as restraining its only significant competitor through licensing terms that seem to single Google out, that might not fly in Washington. Could Apple just have bought itself some anti-trust scrutiny?

Update: According to a report in the Financial Times, federal regulators in the U.S. are already looking at Apple’s behavior to see whether there is cause for concern about it being anti-competitive.

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Post and thumbnails courtesy of Flickr user Tambako the Jaguar

Though the agency said Google and AdMob being independent from each other has enriched the young mobile advertising market, it also determined that Apple’s plans to launch its own ad platform, iAd, would create a worthy competitor to Google and AdMob combined.

Google announced plans to buy AdMob for $750 million in November, an antitrust investigation was launched shortly after, and Apple announced iAd in April.

In the meantime, there were indications the FTC was leaning towards mounting a case against the deal, including mobile developers blogging that they had spoken with investigators who seemed to have their minds made up against Google.

In a blog post about the FTC decision, Google VP product management Susan Wojcicki said the AdMob acquisition should now close “in coming weeks.”

The puzzle pieces could have come together very differently. Apple had hoped to buy AdMob before Google snapped it up. Then Apple went and bought Quattro as an alternative. Google had a lot riding on the deal, with reports suggesting it had promised AdMob a $700 million “kill fee” it didn’t go through. Yesterday at Google’s developer conference the company introduced new mobile ad formats for both native apps and web apps that closely resemble iAd.

But the FTC statement noted that Apple has a few advantages of its own in the market:

“Apple can leverage its close relationships with application developers and users, its access to a large amount of proprietary user data, and its ownership of iPhone software development tools and control over the iPhone developers’ license agreement.”

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Why the FTC Should Approve the Google-AdMob Deal

Image courtesy Flickr user Mike Rowehl.

Given the state of the startup world, getting acquired by one of the web giants is viewed a preferred way to cash in on one’s labors, and there is none with a bigger wallet than Mountain View, Calif.-based search giant, Google. It seems that the company is looking to open its wallet even wider, and that is good news for web startups.

In its latest 10-Q filing with the Securities & Exchange Commission, Google said that during the first three months of 2010, it bought nine companies for a total of $145 million — a group that includes Docverse and Aardvark. In addition to these nine companies, Google paid $123 million in stock and cash for On2 Technologies and is still awaiting approval for its $750 million offer for mobile ad network, AdMob. But that’s old news. What should matter to startups is this bit buried deep inside the filing:

We expect to increase the number of acquisitions we make in the remainder of 2010 compared to 2009. These acquisitions generally enhance the breadth and depth of our expertise in engineering and other functional areas, our technologies, and our product offerings.

This is in keeping with what Google CEO Eric Schmidt said in late September 2009: that the company will buy at least one company a month. From a Reuters article at the time:

“Acquisitions are turned on again at Google and we are doing our normal maneuvers, which is small companies…My estimate would be one-a-month acquisitions and these are largely in lieu of hiring,” he said. “There may be larger acquisitions, but they really are unpredictable.”

Now what kind of startups would Google be interested in? I would narrow the focus down to two — mobile and social. The company has made it abundantly clear that its mobile ecosystem is its next big opportunity. See, for instance, its acquisitions of Toronto-based Bumptop that was announced over the weekend, Israeli games company LabPixies and mobile app maker Plink. Similarly, Google will do whatever it takes to keep enhancing the Android platform.

Whether it’s mobile location or some other core mobile technology, if it makes Android better than Apple, Google is going to find a way to buy it. If I was a betting man, I would wager that Google will spend lavishly on startups and technologies that help establish the Google payment platform and bolster the feeble Google Checkout efforts.

Social is where I expect Google to spend a lot of its acquisition energy. As Facebook starts to increase its social dominance over the web, Google is going to respond by buying what it can’t build. Innovative social services, especially those with an infrastructure twist, will be likely candidates for Google.

Now play fair Google, and share your likely acquisition candidates with rest of us.

Photo: Eric Schmidt at the Annual Meeting 2007 of the World Economic Forum in Davos, Switzerland, January 26, 2007. Copyright World Economic Forum. Photo by Severin Nowacki via Flickr / CC BY-SA 2.0.

This article also appeared on BusinessWeek.com

The FTC’s wariness regarding Google is understandable: Google owns Internet search around the world and last year posted a staggering net income of $6.52 billion. AdMob, too, has effectively leveraged its position as a first-mover in mobile Web advertising to become the dominant player in its space, according to figures released late last year from IDC. The market research firm said Google and AdMob together would claim a 24 percent share among U.S. mobile ad networks based on estimated 2009 revenues.

But, as I discuss in my weekly column over at GigaOM Pro (sub req’d) today, mobile advertising is still in its infancy, and it’s far from clear who will emerge as long-term winners in the space. Apple, which last week took direct aim at Google and AdMob with its iAd platform, is gearing up to become a major player in mobile ads as well. And Apple isn’t the only other major player on the field.

Millennial Media — should the AdMob acquisition go through — would be the largest independent firm in the space, with 18 percent of the market according to IDC’s figures. Other contenders include Yahoo, Microsoft and JumpTap, not to mention AOL and Nokia. It’s also worth noting that countless smaller players, such as ChaCha, WHERE, Goldspot and 4INFO, are gaining traction in segments other than display ads, which are AdMob’s bread and butter. And mobile carriers, who have yet to make much of an impact in the space, may yet leverage the user data and demographic information that remain the most potentially effective tools in mobile advertising.

All of which goes to say that AdMob’s position as a leader could change relatively quickly. So while the FTC is right to look closely at the deal, it would be short-sighted to block the acquisition. After all, Third Screen Media was once a leader in mobile marketing too.

Read the full article here.

Photo courtesy Flickr user Mike Rowehl

What I found more interesting was that the iPhone OS share rose to 50 percent of all requests vs. 33 percent in February 2009. Android increased its share from 2 percent in February 2009 to 24 percent in February 2010. In comparison, Symbian’s share of smartphone requests fell from 43 percent in February 2009 to 18 percent in February 2010. The boost in Android and iPhone’s traffic can be attributed to two things: full-featured browsers and mobile apps.

While in New York, I’m currently using the iPhone with Sprint’s Overdrive MiFi and BlackBerry to stay connected with everyone back in San Francisco. I open the laptop only in the morning and late at night when I want to write out longer posts. I am betting my behavior is not unique as more people are spending time on their smartphones.

According to the report, the share of feature phone traffic in AdMob’s network declined from 58 percent to 35 percent year-over-year, even though the absolute traffic from feature phones still went up 31 percent. Mobile Internet devices experienced the strongest growth of the three categories, increasing to account for 17 percent of traffic in AdMob’s network in February 2010, the report said. Of course, this category was led by the iPod touch.

Kvamme, whose experience in advertising dates back to the 1980s, when he led advertising agency CKS Group, justified his argument using Neil Borden’s “Marketing Mix” theory. He said Borden’s elements of promotion — advertising, direct marketing, PR, point of sale and word of mouth — are still valid for marketers today, just in different ways.

The biggest difference can be found in the word of mouth category, said Kvamme, who subsequently called it a tremendous — and cheap — opportunity. “If you take what’s going on on Facebook, on LinkedIn, on Twitter, on Digg, the masses are starting to make their own media, and it’s basically free,” he noted. “So if you can figure out how to work in this world, you can get your message out very quickly.”

Funny or Die’s (one of Kvamme’s Sequoia investments) recent Presidential Reunion, which brought together actors who’d portrayed U.S. presidents throughout the years on “Saturday Night Live” at a cost of $20,000 (primarily flying all the participants in), according to Kvamme, yielded some 3 million views.

Presidential Reunion was a bit of a passion project for Funny or Die co-founder Will Ferrell, but Kvamme also pointed to last summer’s relatively unsuccessful movie “The Goods” starring Jeremy Piven (and produced by Funny or Die co-founder Adam McKay), the expected box office returns for which were lifted 15 percent through a Funny or Die campaign including prizes for retweets on Twitter (which led to the movie becoming a Twitter trending topic), featuring on the front page of Funny or Die and its Facebook fan page, two appearances on the front-page of Digg for custom Funny or Die content, live-tweeting from the premiere and a live conversation with McKay on Ustream. It generated “several million dollars in sales for something [the studio] probably didn’t pay Funny or Die enough for,” said Kvamme.

But the next big opportunity is in mobile, said Kvamme, using AdMob to illustrate (again, another Sequoia company, but at least one that’s had a successful exit, with Google beating out Apple to buy it for $750 million). With more than twice the global penetration of the Internet, mobile — especially smartphones — represent an opportunity to harken back to that “Marketing Mix” theory, because they can encapsulate all the elements of promotion from one single screen that’s attached to its owner at all times. An AdMob campaign for the movie “Wolfman” had ads on mobile media sites ad within applications that users could click on in order to get more information, share it with their friends, buy tickets directly and set up a mobile calendar alert.

Sure, Kvamme is pitching his own investments here, but to his credit he said that one of his favorite and most-visited sites is search.twitter.com, for keeping up with what people are talking about online. He also talked about Facebook’s opportunity to become the new mass media — with half its 400 million users logging in every day, “that’s almost like what broadcast television was 20 or 30 years ago” — and to dominate and grow the market if it ever does launch its own payment platform inside its trusted environment, just as PayPal revolutionized eBay.

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Why 2010 Still Won’t Be the Year of Mobile Advertising

The Sunnyvale, Calif.-based startup launched in 2006 with an eye to delivering ads within streaming video, but that opportunity fizzled as broadcast companies like Qualcomm’s FLO TV failed to gain traction with mobile users. So it turned its technology to applications, creating a drag-and-drop offering called miApp that enables publishers and ad agencies to add various types of video ads to their apps and deploy them across app stores and devices. The offering is the foundation of an interactive ad network that will launch “pretty soon,” according to co-founder and CEO Srini Dharmaji.

GoldSpot pocketed $3 million in a Series A round of funding two years ago from Exa Ventures and hopes to close a second round in the third quarter of this year. While mobile video advertising is still a very small space, established players like AdMob, which was purchased by Google, and Millennial Media already loom large on the field. But Dharmaji claims a key differentiator for GoldSpot is how it delivers ads: while the bigger ad networks stream video ads from the network, GoldSpot uses what he calls “opportunistic downloads” to download campaigns in ways that minimally weigh down cellular networks.

“We detect when a device is connected to Wi-Fi, for example, and opportunistically download the campaigns that are running for the month, so we don’t tax the 3G network in the process,” Dharmaji told me. Meanwhile, an app running on the cell network could receive the ad in the background and cache it on the phone to be presented later. “The app is released into the app store and is downloaded by the user. He starts the app and doesn’t see any ads in the first run, so the next time the user comes back he sees it.”

The technology also delivers content during off-peak times, “waking up” devices to cache ads overnight or during other periods when network congestion isn’t an issue. That strategy enables GoldSpot to deliver higher-quality video, according to Dharmaji, and to play ads quickly once they’re cached. The technology supports a variety of video ads including split-screen and interstitials, giving advertisers and publishers the freedom to choose the best type for their apps and pitches.

At this point, just how much opportunity exists in mobile video advertising is far from clear. In-app advertising is very much a new space where revenues can be hard to come by, and ads can be intrusive and off-putting. That’s especially true of video ads that can seem out of place and even jolting in non-video applications. And GoldSpot has its work cut out for in competing with entrenched, deep-pocketed players like Millennial and AdMob. If GoldSpot can present higher quality video ads, though — and if it can help carriers address increasingly important congestion concerns — it may be able to compete with the Goliaths in the space.

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Why Android Could Fuel Mobile Advertising

Image courtesy GoldSpot Media

At a GigaOM  Bunker Session (GigaOM Pro, sub. req’d) in our offices on Wednesday, Artur Bergman, VP of engineering and operations at Wikia, said that folks visiting the site from an iPhone using slower 3G networks spend about four minutes there vs. the five to five-and-a-half minutes spent by iPod touch users coming in with (generally) faster Wi-Fi connections — a difference of as much as 38 percent.

Slow load times are also why I plan to dump my BlackBerry the second the Nexus One comes out on Verizon. I don’t even try to load web pages on that thing anymore, as I don’t have time to wait. I’d rather turn on my Mi-Fi and use my iPod touch. Yup, I carry three devices with me to sate my web addiction and make phone calls.

I’m apparently not the only one who’s impatient. Data from AdMob shows that folks using an iPod touch and Wi-Fi to connect to the web spend 100 minutes a day on their devices using apps, while those using 3G on the iPhone spend just 79 minutes. For other 3G handsets, that number rises to 80 minutes for Android phone users and 87 minutes for those on Palm devices.

I’m inferring from that data, my own experience and Bergman’s comments that if it ain’t fast, then users go home. The speed of a mobile application can be a result of the connection, the phone hardware and the application’s design (which can also involve the web browser instead of an app). Which is why faster processors for handsets and new WiMAX and LTE networks will not only appease current web users with a need for speed, but will drive demand ever higher.

Image courtesy of Flickr user zenera

Symbian devices accounted for 69 percent of smartphone ad requests in Asia through AdMob’s network in the fourth quarter of 2009, down substantially from its share in the third quarter. Meanwhile, the iPhone nearly doubled its share of traffic from Asia quarter-over-quarter. And while Symbian maintained a dominant share among users in Africa, its lead was erased in Eastern Europe for the first time as the iPhone generated 51 percent of AdMob’s smartphone activity.

The iPhone OS also accounted for an overwhelming majority of smartphone requests in Western Europe as Symbian activity fell to a mere 10 percent, and Apple gadgets maintained a substantial lead in North America. In the meantime, Android is beginning to emerge as a force, generating more than one-fourth of AdMob’s smartphone activity in North America and 8 percent in Western Europe. Android is beginning to find an audience in Eastern Europe, too, primarily at Symbian’s expense.

Nokia’s strong traction in emerging markets is nothing new, of course, and the company has opted not to focus on North America with its ambitious Ovi service. While that may be a sound strategy, it will require the company to ramp up Symbian traffic on the mobile web and maintain the leads it’s built in the African and Asian markets that have become its focus. If AdMob’s figures are any indication, that simply isn’t happening.

Image courtesy Flickr user Jeffrey Simms Photography.

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• Report: The In-App Advertising Landscape