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Posts Tagged ‘admob’

Mobile advertising is currently a billion dollar market and we’ve witnessed tech giants like Google and Apple move into the space with the acquisitions of mobile ad networks AdMob and Quattro Wireless, respectively. AdMob is now part of Google’s mobile advertising business and Apple is using Quattro to power its new ad format, iAds. But there is another player that has silently been growing its business under the radar to become a dominant network in mobile advertising: Millennial Media. Currently, Millenial has the largest U.S. reach out of all the networks in terms of audience size according to Nielsen; with ads reaching 63 million of a total of 77 million mobile web users in the U.S., or 81% of the U.S. mobile web.

Despite being one of the “big three” in the still-small mobile ad space, Millennial is relatively unknown, while its competitors have seen prominent coverage in the media. Besides its monthly reports on mobile ad traffic, Millennial has avoided some of the drama that has been taking place in the industry. I caught up with the company’s CEO and co-founder Paul Palmieri to talk about how Millennial catapulted from a bootstrapped Baltimore-based startup to the largest independent mobile advertising company.

Palmieri is a seasoned vet in the wireless and advertising industries.  He ran the consumer mobile data arm at Verizon and developed a fledgling mobile ad network at Advertising.com. Unfortunately, as the bubble burst, Advertising.com cut Palmieri’s group before it was eventually sold to AOL. But Palmieri always thought there was more potential in the mobile advertising industry, especially as mobile web usage grew. While iPhones and Android phones were nonexistent in 2004, Palmieri knew that the market would produce more technologically advanced phones than the current offering at the time, the Palm Treo. In 2006, he teamed up with another Advertising.com alum, engineer Chris Brandenburg to work on developing a company that could monetize mobile display advertising.

Fast forward another four years, and now Millennial Media, which Palmieri jokingly calls the “quiet giant,” is competing with the likes of Google and Apple in mobile advertising.  The company is still small with only 85 full-time employees. I was actually surprised that Millennial had less than 100 staff members considering it is one of the largest mobile advertising networks in the world. Palmieri counters that Millennial’s proprietary technologies have helped not only keep customers happy but also helped keep the company lean.

The company offers a mobile media planning platform, called MYDAS, that quickly creates and implements advertising plans; in fact, all sales reps carry iPads to meetings to demo the product and actually create campaigns on the technology. Umpire, another Millennial product, is a realtime ad serving platform that allows publishers to dynamically switch between ad networks based on impressions and performance.

Millennial also provides advertisers with highly optimized audience creation and retargeting technologies, which include preset anonymous audience segments that Millennial has identified through its own interactions. Ad viewers are enrolled in “Audiences” based on their observed behaviors on sites, survey participation, and click-stream data. Once enrolled, users can be specifically targeted in campaigns that Millennial’s advertisers purchase and leverage for future re-targeting purposes.  Millennial claims this ability to target ads to highly segmented audiences promises advertisers with a 5-times lift in interaction rates.  The  company also notes that it makes a clear disclosure of these techniques and provides a simple opt-out mechanism. Nevertheless, online ad targeting is a political hot potato, and when you add in location targeting, it could get tricky.

On the device side, Palmieri highlights that Millennial’s platform independence creates more diversification and thus reaches more mobile users. In a given month, 45% of the impressions on the network are from smartphones, roughly 39% from feature phones, and around 16% from connected devices such as tablets and gaming systems.

One of the little-known secrets of Millennial is that it’s more than just a mobile ad network. The company also operates and manages private mobile ad networks for large media companies and conglomerates that have multiple apps and sites, essentially powering a self-service ad network for these companies. Millennial also has a deal with a “prominent internet media company” (Palmieri declined to name the company) that has completely outsourced its mobile advertising to Millennial.

While Millennial may not generate the press hype that AdMob and Quattro have seen, the company has certainly attracted the attention of technology’s leading venture capital firms. The company has raised $38.3 million to date in venture funding from Charles River Ventures, New Enterprise Associates, Bessemer Venture Partners and Columbia Capital.

While Palmieri won’t disclose concrete revenue and sales numbers, he told me that revenue has been steadily growing and the company is well past its target revenue for the first half of the year. According to IDC research published last December, Millennial Media was on target to make $35 million in U.S. mobile advertising revenue for 2009. AdMob’s revenue was estimated at $31 million (we reported a $40 million run-rate at the end of last year) and Quattro Wireless was reported to have seen $20 million in revenue for the year. Palmieri says the company isn’t cash-flow positive yet but will hit that mark this year.

Still, Millennial is playing in a competitive space with two of the most powerful tech companies on the planet, Google, and Apple.  Either one could have bought Millennial, but they decided to go with its rivals instead.  Remember, Apple makes the iPhone and iPad—two devices that dominate the mobile advertising market. And Google is behind all the Android devices.

With the launch of iAds, Apple CEO Steve Jobs said that he expects 48% of spending on mobile advertising in the United States from July through December of 2010 to go to Apple’s iAd platform for the iPhone and iPad. But Palmieri says he isn’t worried. “We’ve been offering the same rich-media formats as iAds for years now,” says Palmieri. While there is certainly a novelty to iAds, Palmieri expects Millennial’s ads to perform as well if not better than Apple’s ads.

Millennial has also been making acquisitions to boost its offerings to advertisers and publishers. Earlier this year the company acquired startup Tap Metrics, a company that provides mobile analytics to developers. And the company is actively looking to make more purchases in the space, says Palmieri.

The looming question in everyone’s minds is whether Millennial will sell to a big technology company looking to take a piece of the mobile advertising pie, such as Microsoft. While Palmieri says that an acquisition isn’t something he’s totally against, his focus at the moment is on taking the company public in the next year or so.

George Zachary, a partner at Charles River Ventures and board member of Millennial, also feels confident that the startup can be a public company in the next year. Zachary credits the company’s success partly to the core ideals of the founders in not wanting to sacrifice quality, despite growing fast.

If mobile advertising is going to be as huge as everyone thinks, there is plenty of room for more than two players.  Millennial is proving that a non-Silicon Valley based startup with the right technology, talent and leadership can find success in a competitive field that includes both Google and Apple. And with a possible IPO in 2011, it looks like Millennial won’t be a “quiet giant” for much longer.

Short Version
If Charlie the Unicorn has taught us anything it’s that the road to success is fraught with setbacks and, if you’re not careful, your best friends will cut out your kidneys. It is with these life-lessons in mind that we examine the Dell Streak, a 5-inch Android 1.6 tablet that shows much promise but is hobbled by Android OS fracturing.

GoodData is rapidly becoming a key example of the technology innovation emerging from Central Europe - and laying a bet on Europe seems to be paying off for Fidelity Growth Partners Europe, the venture and growth equity investor, which backs European entrepreneurs exclusively. It’s invested $2 million in the startup, the second investment for the £100 million fund, leading an overall $6.5 million investment round. GoodData provides an on-demand business intelligence services. Other returning investors include General Catalyst, Andreessen Horowitz and Windcrest Partners.

Vodafone has launched Mobile Clicks 2010, a competition to identify and reward innovative mobile Internet startups. Now in its third year, the competition will be open to any fledgling mobile Web startup - provided your market is The Netherlands, Portugal or the UK.

Vodafone has set aside a prize fund of €150,000 (2/3 of which will go to the overall winner, the remaining €50,000 to the runner-up), based on these five criteria: originality, creativity and innovation; technical and operational feasibility; economic and financial viability; value to end-users; and the quality of the management team.

Startups can apply here until midnight, August 22nd, 2010.

Time, Inc. and Apple are going through a rough patch. Time wants to be able to sell digital subscriptions of its properties, including Sports Illustrated, via the iTunes Store, but Apple won’t let that happen. This puts Time in a weird spot: it can either sell its magazines like any company would sell any widget on the iTunes Store (giving Apple complete control in the process), it can negotiate a new situation with Apple so that it can take control of the selling of digital subscriptions, or it can try to strong-arm Apple into getting its way—perhaps by pulling all of its content off the iTunes Store.

Thanks to an SEC filing, another detail emerged today about Google’s acquisition of mobile ad network AdMob. We already knew the $750 million Google-AdMob acquisition was a cash and stock deal but we didn’t know the breakdown between the two. According to an SEC filing submitted by Google today, the search giant sold $530 million worth of stock as part of the deal, indicating that AdMob (and its investors) may have taken home the remainder, $220 million, in cash (because of some accounting issues, this number may not be exact).

So was AdMob happy with the split between cash and stock? I guess that depends on whether they think Google’s stock will keep going up. Google paid for the bulk of the deal with stock, and the deal will hardly make a dent in its huge cash reserves (the company has $26.5 billion in the bank).

The deal itself was drawn out due to concerns from the FTC over anti-trust issues. Over six months after announcing its plans to acquire AdMob, Google finally closed the deal at the end of May, a week after the FTC unanimously approved the deal.

When Jack Dorsey’s new startup, Square, was first unveiled in December, there was a lot of excitement about it. And rightly so. It looked like it could revolutionize the way individuals accept payments for their work using their smartphones. But the road to the revolution has been a bit rocky. Today, Dorsey sent an email to the early adopters of Square explaining some of the reasons for delays in getting the product up to speed — and announcing a new indefinite delay.

Of note, he admits that, “we’ve let our excitement get the best of us and have released parts of Square before they were fully baked.” Square had hoped to have the service ready to roll in “early 2010,” but it’s already the middle of the year now and many users are still without units. Dorsey says that while initial hardware shortage issues have been resolved (by sending co-founder Jim McKelvey to China where the devices are made), now a credit processing issue is hampering the service.

As such, Square has decided to halt the mass shipment of Square readers (the little hardware dongle required to read credit cards). They are now “rethinking and expanding our underwriting infrastructure,” Dorsey notes. The main problem now is that to ensure credit fraud doesn’t run wild on Square, they limit transactions numbers — but customers are complaining those limits are too low. Square agrees, so they’re trying to figure out a new way to handle things.

So when might this problem be resolved? “We’re working on the ETA for mass shipments,” Dorsey tells us via email. “We want to make sure the underwriting is solid to manage the fraud and risk,” he continues.

Below, find the full email Dorsey sent to Square users:

Dear Square user,

We announced Square with the phrase: “0 to $60 in under 10 seconds.”

Square’s goal is to enable people to accept payments immediately, everywhere. We realize the amount of time we’ve taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions. When we announced the company last December, we estimated Square would be ready in the U.S. sometime in early 2010. Since then, we’ve let our excitement get the best of us and have released parts of Square before they were fully baked.

A recent email from our support team to a Square user sums up where we are:

Until recently, we were facing a big hardware shortage, but that is now resolved (we sent our co-founder Jim to China for a couple weeks to arrange better manufacturing, and that did the trick). The problem has transitioned to something we’ve been working on simultaneously, a credit processing and risk issue. We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage the risk of chargebacks and fraud. This is the last thing preventing us from shipping readers as fast as we’d like, and we have pretty much the entire team working on it.

The way we are handling the risk of chargebacks and fraud is through transaction limits, but we have received feedback that those limits are too low. We are rethinking and expanding our underwriting infrastructure to address this issue. As soon as we finish, we will send you an email to confirm that you would like us to run a credit check (or you can cancel your request to process cards with Square which will securely remove your personal information). We will then ship your free card reader and activate your account to accept card payments.

We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right.

Jack Dorsey
Square CEO

A look at Apple’s new developer licensing agreement a few days ago revealed that the Cupertino-based company may have just completely blocked Google’s AdMob from serving ads on the iPhone and iPad. According to the new terms of the agreement, only “independent” ad-serving companies will be able to serve ads. AdMob, because it’s “an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple” (i.e. Google), would be restricted from serving ads on apps for the iPhone. AdMob CEO Omar Hamoui confirmed this on Wednesday in an official response from AdMob. Apple has yet to issue a public statement on this issue, but the true winners in terms of ad networks appear to be independent ad networks such as Millennial Media, Greystripe, Medialets and others who can all continue to serve ads on the immensely popular mobile platform.

Some independent networks have been quick to commend Apple. Yesterday, Greystripe issued a statement on its blog expressing its pleasure at the turn of events. “We are pleased that Apple’s new terms and conditions explicitly allow independent ad networks, like Greystripe, to operate on the iPhone and iPad platforms,” writes marketing director Dane Holewinski. “It confirms the value of 3rd party ad networks that enable developers to earn great revenue with their applications.” Greystripe CEO Michael Chang commented to us, “the new terms and conditions provide an advantage for independent mobile ad networks to secure their share of the rapidly expanding market.”

In the long run, however, the picture may not be all rosy for these independent ad networks. Following Google’s whopping $750 million acquisition of competitor AdMob and Apple’s $275 million pickup of Quattro Wireless, Greystripe, Millennial, Jumptap and others must have been salivating at the thought of similarly huge exits.

But the new terms put these networks in an awkward position. If they are acquired by a company, the acquirer can’t be a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple. So that rules out Microsoft, any telecommunications company (AT&T, Sprint, Verizon), Nokia, HP (because of the Palm acquisition), and RIM. So what does this leave? Yahoo, AOL and media companies, including News Corp, Comcast and others. The clause essentially limits the pool of giants who can actually buy one of the remaining mobile ad networks and still serve ads on iPhones, iPods, and iPads.

This is all assuming that Apple enforces the rules uniformly and makes no exceptions. Ultimately Apple can decide to let whoever they want serve ads on their devices. But if they do make an exception, the likelihood that Apple would allow a Microsoft-owned company to serve ads is small if Google isn’t allowed to do the same.

Microsoft could very well buy an independent network, and sacrifice the ability to advertise on the iPhone. Similar to Google, Microsoft has their own OS, and can work to build up that product and serve ads. But Ad networks also have to consider the financial risk of being excluded from the ad ecosystem for iPhone apps. In terms of usage, Apple has about 28 percent of the U.S. smartphone market, according to recent stats from Nielsen. While Android ad impressions are on the rise, the Apple OS is the dominant platform. According to Millennial’s April stats, the Apple OS took a 62% share of Smartphone impressions. And the mobile advertising market is a billion dollar market and is only expected to grow by leaps and bounds over the next few years.

The other twist to this is the FTC’s rumored interest in the debacle. Apple’s policy seems to block specifically Google-AdMob, but of course the excluded list could grow longer if Microsoft or another tech company bought an independent ad network.

In the end, it looks like Apple’s policy could hurt both Google and the independent ad networks at the same time.

Photo credit/Flickr/Brian Hillegras

Our buddy Jack Deneut of Nelso looked at some of the AdMob mobile metrics reporting and came away with an interesting look at the penetration of iPhone/Touch/iPad (iOS) around the world. The biggest user of iPhones by population? You’ll never guess.

Jack looked at the total numbers and compared it to population. For example, China has .05% penetration with 922,138 iPhones and Touches in a population of 1,338,612,968 while the US has 18 million devices in a population of 309 million for 3.45% penetration.

The Federal Trade Commission just announced its approval of the $750 million acquisition of mobile ad network by Google. From the release which is embedded below: “The Federal Trade Commission has closed its investigation of Google’s proposed acquisition of mobile advertising network company AdMob after thoroughly reviewing the deal and concluding that it is unlikely to harm competition in the emerging market for mobile advertising networks.” Google was quick to put up a blog post of their own, praising the FTC’s decision. You can also read AdMob’s statement here.

The FTC has taken a particularly close look at the deal on antitrust grounds and even extended the timeline for the investigation. Google on the other hand, has made a significant lobbying effort for approval.

In its statement, the FTC says that the recent acquisition of mobile ad network Quattro Wireless by Apple shows that the AdMob deal wouldn’t completely eliminate competitors in the space, stating that “Apple is poised to become a strong competitor in the mobile advertising market.” We made this exact same argument a few weeks ago.

As part of its investigation, the FTC reached out to developers of mobile applications to get their thoughts. These developers and even some Admob competitors, publicly said that they support the deal, and some of them believed that the people involved in the investigation were either unqualified or had an anti-Google agenda.

Clearly the process has shown that the FTC seems to have a bone to pick with Google. If anything, Google is on notice that the FTC is willing to challenge any large deals the search giant proposes.

The Federal Trade Commission has closed its investigation of Google’s proposed acquisition of mobile advertising network company AdMob after thoroughly reviewing the deal and concluding that it is unlikely to harm competition in the emerging market for mobile advertising networks.

In a statement issued today, the Commission said that although the combination of the two leading mobile advertising networks raised serious antitrust issues, the agency’s concerns ultimately were overshadowed by recent developments in the market, most notably a move by Apple Computer Inc. – the maker of the iPhone – to launch its own, competing mobile ad network. In addition, a number of firms appear to be developing or acquiring smartphone platforms to better compete against Apple’s iPhone and Google’s Android, and these firms would have a strong incentive to facilitate competition among mobile advertising networks.

“As a result of Apple’s entry (into the market), AdMob’s success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob’s competitive significance going forward, whether AdMob is owned by Google or not,” the Commission’s statement explains.

The Commission stressed that mergers in fast-growing new markets like mobile advertising should get the same level of antitrust scrutiny as those in other markets. The statement goes on to note that, “Though we have determined not to take action today, the Commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers.”

Mobile ad networks, such as those provided by Google and AdMob, sell advertising space for mobile publishers, who create applications and content for websites configured for mobile devices, primarily Apple’s iPhone and devices that run Google’s Android operating system. By “monetizing” mobile publishers’ content through the sale of advertising space, mobile ad networks play a vital role in fueling the rapid expansion of mobile applications and Internet content.

According to the FTC’s statement, evidence gathered by the agency raised important questions about the transaction. Google and AdMob have competed head-to-head for the past few years, with a notable increase in intensity during the past year. This competition has spurred innovation and allowed mobile publishers to keep a large share of the revenue generated from the sale of their ad space. The companies also have economies of scale that give them a major advantage over smaller rivals in the business, the statement says.

These concerns, however, were outweighed by recent evidence that Apple is poised to become a strong competitor in the mobile advertising market, the FTC’s statement says. Apple recently acquired Quattro Wireless and used it to launch its own iAd service. In addition, 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.

The Commission vote to close the investigation was 5-0.