The mobile advertising business is the place to be these days. AdMob, a mobile ads specialist, is about to serve its 100 billionth impression — you can watch the numbers tick up on the firm’s home page. To be sure, the number on its own is a bit meaningless, but it reminds us that while much of the advertising industry continues to struggle — in 2009, according to Veronis Suhler estimates, newspaper ad revenue will be down 18.7 percent to $35.5 billion, radio down 11.7 percent to $15.8 billion, and broadcast TV down 10.1 percent to $43 billion — mobile is a bright light on a dark night, and it’s going to keep exploding. The firm expects mobile ad revenue to surge 18.1 percent this year, to $1.3 billion.
Indeed, with worldwide smartphone shipments expected to grow 13 percent in 2009, ads are going mobile. Google has been releasing new mobile products at a swift pace, even launching its own mobile operating system, Android, to grab users and, eventually, show them ads. In an interview with CNBC’s Maria Bartiromo, Google CEO Eric Schmidt said that while mobile ads can be difficult to target and deliver, mobile — particularly location-based mobile — is the holy grail of advertising — and this is just the beginning. From the interview:
What are the biggest challenges the mobile Web presents?
Let’s start with the fact that the phones are not fast, the networks are not as capable, the ad formats are not standardized. But on the other hand it’s very, very important to solve those problems because a phone is very personal. And so if we know a fair amount about a person, with their permission we can target a useful ad—you know, “It’s Eric. You had a hamburger yesterday, do you want pizza today? There’s a pizza store on the right.” That kind of ad is likely worth a lot of money to an advertiser because it will generate a sale.
In other words, you send a message to the person’s cell phone, saying: “Look, we know you had a burger yesterday. If you want pizza today, just go around the block”?
Right. It may sound creepy, but it might also be quite valuable. People could use advice as to what to eat and where the food is—and of course you can turn it off. So the important thing here is advertising that has value to the person is advertising that is a valuable business. That’s the business we’re in.