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Smartphone apps driving mobile marketing

AdMob exec explains why advertising in mobile apps, especially on the iPhone and Android, is a smart move

CHICAGO, IL. – Smartphone applications are where the money is at for advertisers and brands. It is where mobile ad network AdMob is focusing most of its efforts today, more so than the mobile Web, following an explosion in both smartphone and mobile app usage, Charles Yim, part of the North American business development team for AdMob, told an audience of entrepreneurs, investors and developers at the Mobilex conference in Chicago today.

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AdMob, which was acquired by Google in November for $750 million, observed its own network traffic reach a crossover point at the end of 2009 when smartphones traffic surpassed feature phone traffic, Yim said. Now smartphones are experiencing explosive growth in use and mobile ad utilization. At the same time, WiFi usage is driving more mobile app usage, which Yim expects to continue with the introduction of new mobile computing platforms like Android-based computing tablets and Apple’s iPad, due out on April 3 according to reports today.

Currently, AdMob’s network has grown to include 36 million unique iPhone and iPod Touch devices worldwide with half of its traffic in the US. Towards the end of the third quarter of 2009, AdMob saw an explosion in the number of Android devices as well. AdMob’s current worldwide iPhone network is about 9,000 individual iPhone apps and iPhone optimized Web sites, but the number is growing quickly every day, Yim said. The Android network is still about half that size. Yim said AdMob is also evaluating other platforms, including RIM, Samsung Bada, Windows 7, Symbian and Ovi going forward.

“Now we are seeing a smartphone phenomenon, not just the iPhone, for mobile Web [browsing],” Yim said. In AdMob’s experience, iPhone users are more likely to regularly download paid apps than Android or WebOS users, but Android users download a greater number of apps than iPhone users, he added.

In addition to banner and video ads, AdMob focuses on ‘burst campaigns’ on the iPhone in which it uses advertising to drive as many downloads of an app on the iPhone as possible. By doing this, AdMob can drive an app into the top 10 or 25 list of most popular apps and avoid the problem of discoverability amongst 140,000 other app options.

“We try to drive a lot of downloads of your applications in addition to your organic traffic by running your app across your network in a very focused pattern and period of time,” Yim said, adding that an advertising push gets an ad in front of the consumers who are downloading apps.

Yim pointed to Backflip Studios as an example of an AdMob partner that has been successful integrating mobile advertising into its business model. Paid downloads generated more than $1.25 million in sales as of last November, driven by its advertisements in free versions of the app.

“They have achieved a level of success in the iPhone that most start-ups only dream of,” Yim said. Brands are also looking towards apps themselves to serve as the marketing vehicle, he added. AdMob calls these campaigns, used by companies like EBay and Target, ‘appvertising.’

Following its acquisition by Google, AdMob is becoming a key player in the battle over mobile advertising, dominated today by Google and Apple, through its acquisition of Quattro Wireless, but the success of those two companies is giving credence to the market for mobile ads in general. Overall, worldwide mobile ad spending increased 74% last year to $913.5 million, according to Entrepreneur magazine, as many brands that cut back their ad spend have reallocated their budgets to include mobile, a smart move according to panelists at Mobilex today.

“A lot of the more traditional online and media companies are beginning to embrace mobile,” Yim said. “It’s mature enough for them to understand, want to be a part of and spend money on.”

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© 2014 Penton Media Inc.

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