Question: If a powerful new rival barged into your core market, why would you admit publicly that it is offering something “new and different”?
Answer: Because the intended audience for your comment is in Washington DC.
Apple’s announcement of its iAd mobile advertising network (see also the blog post below) could, paradoxically, have come at just the right moment for Google and AdMob. With anti-trust regulators laying the groundwork for a potential challenge to their merger, it really helps to have a nasty new competitor on the scene.The “new and different” admission was from someone close to the Google/Admob deal who did not want to be named. But for the record, both companies were quick to point out the significance of Apple’s arrival.
This is from AdMob: “They’re leveraging the acquisition of Quattro [purchased earlier this year] and entering the advertising market in a big way.”
And Google: “This is more evidence of how quickly mobile advertising is evolving and growing.”
The key to iAd is Apple’s control of the iPhone operating system. As Steve Jobs pointed out, Apple will be able to offer advertisers functionality inside apps that other ad networks can’t match. For instance, an advertiser looking to promote its own downloadable app is limited at present to posting a link to a separate Web page which users have to follow to get the app. But with iAd the download can take place from inside the original app. Result: higher conversion rates and happier developers.
In the words of Nigel Morris, CEO of Aegis Media North America, who was talking to FT media editor Andrew Edgecliffe-Johnson, this creates “the feeling of being in an app inside of an app”:
It’s a major leap forward from the majority of in-app iPhone advertising formats that have existed to date, which were just simple slabs of text with a logo and a call to action. Many of these ads would drive you to a .com site that was not even optimised for mobile…
Jobs was right in saying the current in-app formats pretty much sucked. The ads inside apps were of a lower quality and experience than what we can do on the iPhone mobile web browser, which was a bit ironic…
The Google/ AdMob deal is still in question, but there is no doubt that it puts Google behind Apple now because Google can’t do anything with their acquisition until it’s approved.
To some extent the Federal Trade Commission must already have allowed for some of this in its study of competition in mobile advertising. After all, the Quattro acquisition came at the start of this year, so Apple’s intentions were hardly hidden.
But at the same time, such a strong declaration that it plans to become a key player has to have some effect, particularly at just the moment the FTC review is coming to a conclusion. It adds to the impression that mobile in-app advertising is still a nascent market at a formative stage, and it raises the risks for FTC chairman Jon Leibowitz if he decides to challenge the AdMob deal. The odds on Google completing its deal have just gone up.
