• by Moshe Vaknin , November 17, 2009

It's a great time to be a mobile ad network, but not for the reasons you think.

Like everyone else in the industry, I was excited by the potential for mobile display advertising following Google's acquisition of AdMob, but I'll resist using terms like 'industry validation.' From my vantage point as the CEO of a mobile display ad network and in my personal opinion, the rationale behind the acquisition has been clear for a while:

1. Mobile Social Networking: In the year that Facebook has achieved profitability, social networking is clearly a motivator for Google's acquisition. Mobile social networking is one of the fastest growing areas of mobile content, as users look to complement their social experience with location-specific information. And it actually makes sense -- if you want to meet friends for coffee, it helps to know in real-time while walking down the street who is available, who is in the area. With the growth of smart phones and the decrease in broadband fees, users in the US are migrating their social networking from the PC to the mobile phone (in many countries in Asia, social networking has long been primarily a mobile experience.)

Along with the growth of social networking comes the growth in social network advertising. Beyond user growth, mobile social network advertising is also delivering results. Among our social networking publishers, which include Mocospace and MobiLuck, we're seeing click-through rates between .5 - .8%, significantly greater than most advertisers are generating on social networks via PCs. And even performance-based campaigns are effective for our clients.

Google was clearly interested in monetization opportunities in the growing mobile social networking market.

2. Android: Q: What's the best and fastest way to optimize smartphone monetization potential for carriers, developers and other partners? A: Buy a display mobile ad network.

And that's exactly what Google did, buying the largest mobile display ad network in the market.

AdMob will provide Android with more display ad monetization opportunities immediately, and will enable scaling their mobile ad operations more quickly, both for Android and for non-Android display advertising initiatives.

It wouldn't surprise me if we see more mobile ad network acquisitions from all sorts of potential partners, including Internet companies and mobile carriers.

3. Real-Time Web: There has been a lot of talk about the real-time web lately. With mobile phones providing the best time and location-based ad opportunities among existing consumer electronic platforms, mobile ad networks are in the best position to capitalize on real-time ad opportunities.

We've all been waiting years for the promise of mobile advertising which would enable a local restaurant to offer promotions on food during slow hours. But we're closer than ever to this reality, made possible by smartphones which finally enable completing tasks like comparison shopping between nearby stores and easily coordinating an after work drink with a group of friends.

The onus of realizing the potential for mobile marketing is still squarely on the shoulders of leaders in the mobile marketing industry, but following Google's acquisition of AdMob, others will now begin to see what we in the industry have been seeing.