Will Acquisitions Cure Mobile Advertising?

In 2007, the online advertising market took a significant turn towards legitimacy when Google bought DoubleClick. That transaction wound up defining the marriage of display ads against search activity, and the online advertising space has not been the same since.

I believe we are witnessing a similar turning point in the mobile advertising space. Content producers and social network platforms are under increasing pressure to turn their traffic into revenues. And given that so much of that traffic occurs on mobile devices, turning to mobile advertising as one solution is a natural result.

In the recent past, all concerned have suffered from a bit of “analysis paralysis”—allowing their unfamiliarity of the mobile ad environment to delay their experimentation of it despite the relatively low costs of doing so. That’s starting to change, and in a very big way. But don’t take my word for it. It’s not just my opinion. As they say… just follow the money.

Most recently, Twitter acquired mobile advertising startup MoPub for a reported $350 million, giving Twitter access to a mobile ad exchange and real time bidding solution as it marches towards its IPO.  This comes on the heels of several other similarly telling deals. Extreme Reach acquired Digital Generation’s TV unit for $485 million, bringing TV programming to a multi-device advertising platform. Millennial Media spent $200 million to acquire Jumptap. And Yahoo is even moving in this direction with its second screen video app. And looking beyond mobile for a second, AOL’s purchase of Adap.tv for $405 million points to the increasing need for programmatic ad buying for any platform.

While all these deals differ in their details, valuations, and even target market, all point to a growing trend of merging content (and the traffic it brings) with advertising. The influence of technology in the ad buying/selling process cannot be overstated, particularly with deals being made at these valuations. It shows that mobile advertising is becoming more than just an interesting (if confusing) new trend, but rather the future of digital ad revenues. And it’s not just about making ad sales easier and more lucrative; but also the backend infrastructure to deliver and monitor results between multiple platforms, formats, and viewers.

The only reason we’re even seeing such focus on multiplatform ad sales is because it’s clear viewers are evolving beyond traditional, appointment-based TV viewing to any-device/any-time viewing. They see little difference between devices and formats, only that they want to watch what they want, when they want to, and on the device they want it on. Both ads and content distribution strategies are still catching up, and that means changing the way not only ads are served, but how the content (ads and otherwise) is presented to viewers. It’s a large reason why Google’s Chromcast product received such buzz.

According to a recent Deloitte report, 26% of the U.S. population over the age of 14 owns either a smartphone or a tablet. The same report states that tablet owners stream video 70% more than those who don’t. What’s more, mobile ads see greater engagement than traditional ads, both in terms of interaction and transactional capabilities. According to a recent report by Mediabrix, mobile ad clickthrough rates are 30-times higher than standard banner advertising campaigns. And music video site Vevo reports half of its total views take place on mobile devices.

So with these big-bets being made on mobile advertising, those advertisers still dipping a cautious toe at this stage of the game should be running—not shuffling—to get a piece of the action. The viewers are there now. The advertising infrastructure is there now. The data measurement is there now. And the cross-platform publishing capability is there now. What are you waiting for?

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