Startups Chase Mobile Ads Biz

Google (Nasdaq: GOOG) doesn't scare the startups in the mobile advertising space. At least, that's what they were saying earlier this week at the Stanford Accel Symposium, an annual event put on by Stanford University and Accel Partners .

The topic this year was on "The Future of Advertising in Digital Media," which meant Google was hovering over every discussion. (Figuratively, that is. Google isn't that creepy.)

Google's AdSense and AdWorlds services have become giants in online advertising. But it's been proven that not every application can easily shift to the mobile world, and some executives think that's going to apply to advertising technologies, too.

"Mobile is a different environment" from the Internet, said Omar Hamoui, CEO of mobile-advertising network AdMob Inc. One likely stumbling block he cited was the reliance of Google's AdSense on Javascript, which doesn't work on all mobile devices. "This is going to be a re-engineering exercise for them."

Just in case, though, AdMob is also developing new technologies, hoping to become more than an ad syndicator and thus stay a step ahead of Google. Examples would include analytics on content-generation tools.

Moreover, the executives expect plenty of chances to arise for developing new applications and new business ideas just for the mobile industry. "Mobile is really so different that the opportunities for innovation are really a night and day difference," said Brian Lent, CEO of Medio Systems Inc., a mobile-search startup.

For now, without Google to punt them around, the mobile-ad startups at the conference reported seeing business surge. Particularly exciting is the prospect of large brands starting to tap mobile advertising.

"We're at this point where you see a lot of big brands realizing this is a medium they have to pay attention to," said Tim Jemison, CEO of Zoove, which has developed a way to connect to ads via a phone's dialpad. "There'll be a lot of experimenting in the next six to 12 months before you see it really take off."

"They're just increasingly experimenting with the medium," Hamoui said, admitting that it's possible this will just be a temporary thing.

Even the advertisers have to retool themselves for mobile, because the market is so spread out. The United States represents 20 percent of AdMob's sales, making it the startup's biggest geographic market. Second place -- admit it, you wouldn't have guessed this -- is South Africa.

That means the mobile market is one that has to focus on local companies -- or on clients that have some reason to advertise multinationally. The latter case is starting to emerge, Hamoui said: "The marketers in the U.S. are beginning to reach outside of the national borders."

Assuming the success continues, the next step would be to find out if the ads are actually working, a question that's getting serious consideration in the wireline Internet world. (See Internet Video & Ads Cautiously Mix.)

People are proposing ideas as complex as widgets embedded in the phone, tracking user data, Lent said. (For privacy reasons, this would be reported in aggregate, not user-by-user.)

— Craig Matsumoto, West Coast Editor, Light Reading

Be the first to post a comment regarding this story.
Sign In