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Kathleen comes to ADOTAS with almost a decade of writing experience at consumer and business publications. Most recently, she was an editor at First Magazine. Before that, she was an editor at The New York Sun and Thomson Financial’s Investment Management Weekly.

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Spotlight

AdMob: Google’s Move Into Mobile Fray Helps Us

Written on
August 21st 2008
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by Kathleen  |
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images.jpgADOTAS EXCLUSIVE – AdMob offers the biggest mobile advertising marketplace on the planet — and the company was founded just two years ago. Adotas sat down with Tony Nethercutt, AdMob’s vice president of sales, to see how they got – and plan to stay – at the top of their game.

ADOTAS: AdMob was founded in 2006 by Omar Hamoui and it’s now the world’s largest mobile advertising marketplace; it serves about 3 billion targeted ads per month. How did the company get to the top of the game so quickly?

TONY NETHERCUTT: AdMob met a need. The mobile market was severely limited in ways to reach the end user and in ways to monetize a mobile website. If you didn’t have the relationships or resources to do a deal with a mobile Operator, you were unlikely to be able to drive traffic to your site, application or brand.

AdMob delivered a simple solution that helped both advertisers and site publishers. That solution was strikingly easy to use and worked across Operators and devices. Over time, we have built technology to support the growth in sophistication of the mobile advertising marketplace. The short answer to your question is that we’ve helped our customers, both publishers and advertisers achieve their goals.

ADOTAS: How does AdMob go about targeting its ads?

NETHERCUTT: The Mobile web is similar, yet has some pretty important differences from the PC web. Advertisers want to reach the same audiences, but delivering those users is a different challenge in the mobile world. AdMob has invested to solve targeting and relevance specifically for the mobile ecosystem.

AdMob provides sites in our network with a small bit of code. Every time a user requests a page, that code calls AdMob’s servers to request an ad. We have built the code to pass a broad range of parameters and context that help us target each ad as effectively as possible. We expose all of this to advertisers, allowing them to target by:

Site Verticals:
Entertainment, Portals, News, Sports, Portals, etc.

Mobile Context:
Country, Operator, Device Manufacturer, Device Model and Device capabilities (example: US Smartphones with video capabilities)

Demographic Segments:
AdMob has conducted primary research on our network of sites. This allows us to build a demographic profile of each of our sites. From this demographic data, we can construct bundles that target combinations of age, gender, household income, ethnicity and more.

In many cases, we use a combination of these targeting approaches to reach the desired audience.

ADOTAS: In September of 2007, Google entered the mobile advertising fray with AdSense for Mobile, posing a potential threat to AdMob’s dominance. You’ve said that you’re happy that Google, AOL, Microsoft and others have joined the mobile ad game. Why?

NETHERCUTT: Awareness. We have hundreds of advertisers any particular week, but for every advertiser spending there are many that are not. We invest a great deal of time working with advertisers and agencies to understand the opportunity in mobile.

The big media companies’ arrival validates the space and lends some deep pockets to marketing and education.

ADOTAS: Tony, you’ve worked in several sectors of the advertising world — from television to DoubleClick to YouTube – how does your background prepare you to execute AdMob’s revenue strategy, run its sales team and manage agency relationships?

NETHERCUTT: Revenue will come if we do a good job of helping advertisers and agencies understand what is possible in mobile web advertising, and how they can best reach their audience. This is similar to what most members of my sales team did in the early days of advertising on the PC web. It is similar to what TV and other “traditional” advertising sales people do everyday… the added element is the need to put education first.

ADOTAS: What made you jump from traditional advertising to interactive?

NETHERCUTT: I saw that interactive was a growing and more accountable way of doing what I loved doing. Working in advertising. I would like to think I knew it would grow this big this fast, but I’m not sure I did. I certainly did not know I would end up in mobile. But it seems logical looking back.

ADOTAS: You’ve said that one of the fastest-growing segments of the mobile ad market is high-end autos – probably because people who sport $500 smart-phones would also be interested in Jaguars and Land Rovers. Do you think the mobile ad market will change as the prices for smart-phones plummet?

NETHERCUTT: The spread of advanced devices will drive use of the mobile web, yes. But the mobile web is pretty compelling right now. Yesterday’s $400 device is today’s $99 or promotional device. People are surfing the web in ever increasing numbers. We watched the mobile web grow to 40MM unique users in the U.S. in February according to Nielsen. As we see a $200 price point for a device like the iPhone we expect this growth to continue.

ADOTAS: Land Rover spends about one-third of their digital budget on mobile – and they’ve ended up with something like a nine times higher ROI than they had with other forms of interactive advertising. Can you explain why the campaign was such a success?

NETHERCUTT: People engage with their mobile phones. It is a highly personal device and we interact with it differently than we do our desktops and our laptops. We see click through rates around 10x those on the PC web. We see extremely high engagement rates on landing pages. LandRover’s goals included calls to dealers to schedule test drives…that is much more logical to do from a cell phone.

Mobile ads are prominent but not overwhelming. If you get the targeting right, users will respond. For the Range Rover Sport (RRS) campaign, we worked with Land Rover’s agency to determine the right audience and media to reach that audience. We spent a great deal of time with them on the Landing Page and continued to change it after the campaign launched. We were able to entertain users and provide them valuable information and they responded.

ADOTAS: Has AdMob run any mobile campaigns (you don’t have to name names) that have had less than stellar returns, forcing the company change tacks in a certain sector?

NETHERCUTT: Yes. Some of this is certain segments and some may have been execution.

We’ve learned a great deal about what works in mobile. The value proposition and the landing page can not achieve the complexity of a PC web site. You should not try to get users to fill out long forms – short forms seem ok.

If you are directing traffic to a call center via click-to-call, the staff should have a script specific to users acquired via mobile ads. These users have not had the opportunity to view deep websites before calling and the scripts should address this.

We have not given up on any categories, though some have performed better than others.

ADOTAS: Right now, 40 million people are surfing the mobile Web. Currently, most mobile ads take up about 30% of the real estate on a phone screen – can you walk me through the difference in click-through rates on phones and computers and explain how the relative size of the ad may contribute to the difference?

NETHERCUTT: Well executed banner ads on mobile can show click rates from 1% to as high or 3% or 4%. We have had a few heavily targeted campaigns show CTRs approach 6%. The average banner ads should see 1-2% CTR which is 10x what you would expect on a PC.

The response rates are the result of a bunch of factors. You are correct to identify that Banners take up a healthy amount of the screen. This certainly contributes to CTRs. We’re working with sites in our network to keep the page clean – meaning to minimize the number of ads on the page. This protects the user experience and CTRs. There are a number of other factors at work as well.

What’s most exciting is that CTRs and Brand studies (we work with Dynamic Logic and Insight Express) show that users are engaging with media and the value propositions on the mobile phone.

ADOTAS: As more people begin to use the mobile Web as their go-to surfing device, do you think click-through rates will diminish as they did with traditional online ads?

NETHERCUTT: We can probably expect some contraction, yes. How much depends on sites’ respect for user experience and on the industry’s ability to deliver well targeted ads and compelling ad units.

ADOTAS: What does the near future hold for AdMob? Any changes afoot?

NETHERCUTT: We are excited to be working with so many fantastic publishers and advertisers. We will continue to scale, grow, and create many more success stories.

We’re very excited for the launch of our mobile web analytics offering. We’re in beta now and this should be widely available in July. This will provide advertisers visibility into activity after the click. This is an important step as marketers measure ROI and make decisions about ramping their mobile ad budgets.

We’ve got our platform in a state where we can do some exciting things for advertisers. I think you will see some news from us around iPhone ad units and more.



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