Consolidation in the mobile advertising market continues at breakneck pace. After Google’s proposed $750m acquisition of AdMob and Apple’s $275m bid for Quattro, Amobee is now buying RingRing Media of the UK for an unspecified – but probably much smaller – amount.
California-based Amobee said the deal would result in a combined company bigger than Quattro in terms of revenues and number of ads served each month. Analysts at IDC estimate Quattro has around $21m in mobile ad revenues, giving it around 7 per cent of the market. Both would still be dwarfed by the combined Google/Admob, which would have nearly a quarter of the market with revenues of $68m.
Amobee is interesting because, although smaller than AdMob and companies like Millennial Media ($51m revenues), it is backed by mobile operators Telefónica and Vodafone, which both have a stake in the company. It is the mobile operators’ bid to keep some of the power in the mobile advertising industry away from the likes of Google.
RingRing Media, founded in London in 2008, has built a thriving business of advising advertisers on where to buy their mobile ads for the greatest impact. Amobee is planning to build on this to create what it claims will be the world’s largest mobile advertising exchange, where mobile media owners, such as operators and apps stores, can sell advertising space to companies on a collective basis. With its contacts in the operator industry, it expects to shortly have 30 mobile companies around the world signed up to offer inventory.
Zohar Levkovitz, co-founder and CEO of Amobee, said big advertisers like Coca-Cola were not interested in small, piecemeal campaigns, but wanted something that would get coverage across many different countries and as many phones as possible.
“Now with an exchange they will be able to get bigger campaigns. Coca-Cola is not interested in writing cheques for less than E1m, and now they will be able to do that,” Mr Levkovitz said.
Mobile advertising has long been a tiny and experimental part of the advertising market but is now growing rapidly. Analysts at JPMorgan estimated that in the US last year, $320m was spent on mobile display and search ads, an 80 per cent jump from 2008.
“The days of trialing E1000 campaigns are well and truly over. We recently took a booking for E700,000 of advertising to spend in one month,” said Ben Tatton-Brown, one of the founders of RingRing Media.
“2010 will be the year of the over E1m campaign,” Mr Levkovitz agreed.
With the spending in the category going up, it is little wonder that the companies themselves are willing to spend on acquisitions too. This is unlikely to be the last consolidation in this market – many are betting that Yahoo and Microsoft, which bought into this market in 2007 could strengthen their positions further with purchases.
