Apple vaulting to the top of the mobile ad marketplace was the most notable shift in the new ranking of mobile ad networks by technology research firm IDC, reported by Businessweek earlier this week.
On the strength of its reported $60 million in upfront commitments for the launch of iAd, Apple surged into a tie with Google, with a category-leading 21% share of U.S. mobile ad sales. The two companies' places atop the mobile ad business bear out predictions Google and Apple would dominate the space following the former's acquisition of AdMob last year and Apple's pick-up of Quattro Wireless in January.
That may be the case. But the latest IDC figures also show how fluid things still are in the emerging mobile ad world. With the introduction of iAd, Apple essentially tripled Quattro's 7% share of the ad market in a matter of months. The big question is whether the $60 million Apple collected from the initial group of 17 brands salivating over iAd was a one-off, rather than a harbinger of higher spending to come.
Given the dissatisfaction among launch advertisers and slower-than-expected rollout of iAd campaigns, the early enthusiasm and buzz around the format Apple CEO Steve Jobs called "revolutionary" has clearly dissipated. A panel of mobile ad experts at OMMA Global this week, including agency execs and mobile ad vendors competing with Apple, predicted iAd pricing will come back to earth as demand softens and the novelty wears off.
So there's a good chance Apple's mobile ad revenue has been artificially inflated at the outset by the minimum $1 million commitments from brands that won't be sustainable over time. What's more, Apple for now is only focusing on advertising within apps, while Google and other ad networks are serving ads across both apps and the mobile Web. That broader reach, plus the proliferation of Android phones, could help propel Google past Apple in mobile ad share in the next year and after.
To that end, Google this week unveiled a new "hyperlocal" mobile ad feature that shows users exactly how far they are from a nearby business and lets them connect directly with a business by clicking on the phone number listed in the ad.
Beyond Apple and Google, it's likely there will be further consolidation, as smaller players like Millennial Media, JumpTap, Mojiva and Greystripe get snapped up by big Internet or phone makers. The latest rumor had BlackBerry-maker Research in Motion ready to buy Millennial before balking at the $400 million to $500 million asking price put on the mobile ad network.
RIM this week went on this to launch its own in-app ad platform to compete with iAd. Of course, that doesn't rule out a future acquisition that would help make it an instant player in the mobile ad game. With new leadership and plans to expand its presence in the U.S. , Nokia is another manufacturer that might be eyeing a mobile ad network, not to mention Microsoft's rumored interest.
From the target side, JumpTap's hiring of former Excite CEO George Bell, a managing partner at JumpTap investor General Catalyst, raises the prospect the company will accelerate efforts to find a buyer. But any way you look at it, things are hardly settled in the battle for mobile ad share.