Apple And Google Squaring Up For A Big Mobile Ad Face-Off. Is It An Opportunity For Independent Ad Nets?

There's a good overview piece of the mobile ad market by the Guardian today. The piece focuses on the impending battle between Google and Apple in the mobile ad space. Having gobbled up two well-sized mobile ad nets and now leveraging their respective platforms, both companies are looking to carve up this growing market. But the big Silicon Valley bruisers are implementing different strategies. Apple is more interested in brand spend. It has already attracted over $80 million in brand ad budget since launching its iAd offering a couple of months ago. That's an impressive number given the mobile display market is still only worth several hundred million globally. Apple will also be able to deliver some decent targeting for advertisers based on location, intent and demographics. All that proprietary data can be gleaned form iTunes, iPhone and iPad users. It's hard to argue against that kind of microtargeting.

Some analysts think that iAd revenue could balloon to $800 million dollars in the next 12-24 months. With Apple offering app developers around $10 CPM, iAd will have no problem scaling. Media buyers will throw money at the iAd proposition initially. But in time will become more demanding about site specific targeting as well as reporting. Once the media hysteria around the iAd platform has died down, I wonder how Apple's ad network will be viewed by a less excitable bunch of media buyers and advertisers?

Google is concentrating on performance media buys. Having acquired Admob, it is a good bet that Google will integrate mobile inventory into Adx, making it easier for media buyers to automate ad buys across the mobile and online display channels. It could also have an immediate advantage over Apple by integrating a mobile media buying functionality into DFA. That type of integration alone would make mobile media buying less opaque, and attract significant agency ad budget through the Google mobile channel.

The growing strength of Apple and Google in the mobile ad market is, in Kirwan's view, making big publishers a little uneasy. They don't want to be lumped in with long-tail app developers, and will look for more granular control. This will ultimately present opportunities for independent ad nets as they will be able to offer pubs better conditions in terms of pricing and inventory transparency. There is still a lot of opportunity outside the walled iPhone and iPad garden. There has been significant growth in mobile ad inventory from publisher's web properties over the past twelve months - and it will continue to outpace app ad traffic. This will lead to some convergence in the space. You are already seeing yield optimisers like Pubmatic and Admeld offering optimisation service for their publisher’s mobile inventory. But these are small advances, and full convergence remains some way off. Google and Apple might well go onto become market makers in the mobile ad space, but there will be plenty of business for independents so long as they can differentiate themselves from the big two and offer pubs and agency a strong service layer as well as greater transparency.