Has mobile advertising already peaked?
- January 30, 2009
After AdMob announced it?s most recent $12.5 million in funding, mobile advertising and mobile ad-funding were really on my mind. And I?m wondering if ad-funding is being pushed too hard as the fix-all for mobile funding.
All the major players have announced a Q4 loss (or slow down). Yahoo, T-Mobile, AT&T - they were all glum about the last quarter. Yahoo, the mobile ad display leader, announced that ad sales were down. If Yahoo is having troubles with mobile ad sales, then no one is safe. I can?t help thinking - does this mean the mobile advertising bubble is ready to burst?
After all, what have we got here? AdMob has gotten a great chunk of funding - but it?s by no means the only big advertiser in the space. After sitting in on a preview of a new advertising platform with Bena (this is still under wraps, unfortunately), it?s likely that any competitor with enough cash and a good user-interface can compete in this market. AdMob has tended to be a great innovator in mobile ads, but that also means it?s the first company to get its boots dirty. It might turn out to be a Motorola situation, where early innovation is capitalized on later by new businesses. Being there first is no guarantee of success.
But what about the competition? Google, Yahoo, Microsoft and others are striving hard to have the same success as AdMob. Microsoft especially is throwing itself into mobile this year, with mobile ads being pushed heavily, and it?s new gomobile initiative. I can only imagine that any of them will have to spend a lot more than $12.5 million to compete with AdMob? but if even AdMob isn?t guaranteed to last all that long, then what?s the point? While Google is moving into the mobile web space heavily with Android and the G-phone, it?s really not doing much in the way of mobile ads. It prefers to leave that up to companies like AdMob (who are now selling units on Android), instead of risking investment itself.
I?m rambling a bit here, but I?m trying to cover a lot of ground. I?ll try to boil it down. First, AdMob is the mobile advertising leader, but there?s no guarantee of success there. Second, there?s a staggering amount of competition in the field. Third, the amount of investment required is huge. And finally, there?s still no real proof that ad-funding is really going to work. If mobile advertising doesn?t turn out to be the massive cash-cow everyone hopes it will be, what?s going to happen? The results could be catastrophic. There are, simply, too many ad-funded apps and services out there at the moment. Everything from social networking and gaming to mobile video and couponing are ad-supported. If that bubbles suddenly bursts, there will be massive repercussions in the mobile space.
Just a thought.
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