Google woos marketers to repel Apple mobile-ad attack

Spending on mobile advertisements in the US is expected to reach almost $500m this year, from $220m in 2009

New York: #Google Inc executive Mike Steib is courting customers such as Progressive Corp and touting tools that let marketers create the snazzy, interactive ads that rival #Apple Inc. has been using to snatch mobile-ad business.

“We have a significant investment in mobile and competition is going to push us to be really, really good,” Steib said in an interview the day #Google closed its $750 million acquisition of AdMob, which places ads on mobile programs and internet pages.

As #Google’s head of mobile advertising, Steib leads the effort to build his company’s next $1 billion business from sales of ads on wireless devices — and lessen its dependence on Web-search ads. With a team located in an old cookie factory in Manhattan’s Chelsea neighborhood, Steib is striving to persuade advertisers they will win over more consumers by working with Mountain View, California-based #Google than with #Apple.

“#Google will respond to iAd and respond very strongly,” said Michael Collins, chief executive officer at Joule, a mobile-ad agency that’s part of WPP Plc. “They have too many assets to pull from, too many arrows in their quiver.”

Staying ahead may not be easy, now that #Apple is luring advertisers to iAd, a service that places ads inside applications that run on its ##iPhone and other mobile devices. #Apple has sold more than $60 million in advertising on iAd since it was announced in April, CEO Steve Jobs said at a June 7 conference. That represents about half of the mobile display-ad market, according to JPMorgan Chase & Co.

Blocking ads?

Tension between the companies escalated yesterday when AdMob accused #Apple of barring developers from using #Google ad services to create ads for the #iPhone — a move that may threaten AdMob’s ability to get revenue from the device.

This year, AdMob and #Google together may generate more than $100 million in US mobile-ad sales, according to IDC in Framingham, Massachusetts.

#Apple won business as #Google awaited a green light from the Federal Trade Commission for its $750 million AdMob acquisition, announced in November, Joule’s Collins said.

Introducing iAd “gave #Apple the opportunity to suck all the oxygen out of the room,” he said. “#Apple is on a tear these days with the #iPhone, iAd, the iPad.”

As sales of smartphones rise, more users are viewing ads on handheld devices in addition to — and sometimes instead of —computers or televisions. Spending on mobile ads in the US is expected to reach almost $500 million this year, from $220 million in 2009, according to IDC.

#Google rose $12.99 to $487.01 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has lost 21 percent this year. #Apple, based in Cupertino, California, climbed $7.31 to $250.51.

In the next three years, as much as one-third of global digital ad spending will be devoted to mobile, according to Alexandre Mars, who oversees mobile ads for Publicis Groupe SA.

Shift to devices

“You’re seeing advertisers who see mobile marketing as a significant business driver,” said Steib, who joined #Google in 2007 from NBC Universal. “This isn’t slide 22 in a deck of all the things we could do together. This is a big part of the conversation.”

#Google’s strategy includes creating tools that help developers embed videos and make ads more interactive, similar to what #Apple’s iAd can do. #Google also wants to sell more ads tied to a user’s location and deliver coupons for nearby deals, said Steib, #Google’s director of emerging platforms.

The company is keen to make money from delivering coupons for nearby businesses and selling ads alongside a tool that lets customers take photos of an item and search for it on the Web, said Steib, a graduate of the University of Pennsylvania.

That way, a bistro could offer free appetizers to a nearby customer who’s searching for a place to eat, and the user could later see where to buy a bottle of the wine paired with dinner. The restaurant and wine seller would pay #Google for the ads.

#Google and AdMob together had 21 per cent of the US mobile ad market in 2009, said IDC analyst Karsten Weide. Quattro Wireless, which #Apple acquired in January after losing out on AdMob to #Google, had 7 per cent.

Steib says iAd may create “short-term disruption.” Still, #Google can contain the fallout in part because it has experience letting customers manage campaigns on multiple websites and it can change ads on the fly based on performance, said Steib, who himself is an avid user of #Apple products.

[Source: Gulf News]


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