Interview: AdMob CEO Reveals Stats & Plans For An "Ad Lab" With Apple; Provides Sure-Fire Cheat Sheet For Novice Publishers

[The Msearchgroove exclusive mobile advertising podcast series in close cooperation with VisionMobile continues with AdMob CEO & Founder Omar Hamoui. Special thanks to Paul Nash, creative director at fifty50, for designing the cheat sheet for mobile publishers based on input from AdMob’s best & brightest. Paul, together with his colleague matt Harper, is also driving our new design, and a long list of innovations in navigation and site usability that really rock!]

AdMob has gained some serious traction since it broke on the scene just two years ago, building up the scale and the clout to take on major league players including Google, Microsoft and Yahoo. In fact, AdMob effectively enables the world’s largest mobile advertising marketplace, having just reached its mega-milestone of delivering over 5 billion ads in the last 20 months one billion of those in the last month. (We covered it here and calculated AdMob generally serves more than 370 ads per second.) Since then the company has quietly and cleverly launched a new advertising unit focused on the iPhone. In plain text, AdMob ad servers will recognize iPhone users and serve up iPhone-specific advertisements, paving the way for the company’s network of 2,000+ publishers to monetize their iPhone traffic and develop iPhone-specific content.

And speaking of reach, AdMob has sewn up a slew of deals most notably a tie-up with CBS Mobile, which made AdMob one of its “gang of four” advertising-enabling companies to provide clients ad options ranging from text and banner ads to video interstitials. More recently, AdMob struck a deal with Contec Innovations to deliver ads via Contec’s BUZmob mobile publishing service. Of course, enabling mobile advertisers to place more ads with more publishers creates inventory for all and solves the bottleneck of having more ads to serve than sites to show them on

I caught up with Omar Hamoui, AdMob CEO & Founder, to talk about the stellar stats, the competitive landscape and pose the all-important question: When are you going to be acquired and by whom?! The answer: AdMob will stay an independent company for now, but would consider the option more seriously if and when it runs out of steam. (Not likely to happen any time soon since Omar told me off-line that he predicts “on a revenue basis [by next year] we’ll make 6x what we did this year. If I annualize our revenue last year, the year was probably 10x of what we did last year.”)

Listen to the podcast here. [23:51]
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And a special feature for novice mobile publishers: AdMob agreed to share the secrets of site optimization with our readers. It’s free and fact-packed and you can download it here.

Numbers that matter: First, AdMob has hit a new high, serving up 1.5 billion ads per month, and AdMob does not deal in adult period. What are the stats beyond ads served? “Anywhere from 1 to 3 percent are clicking on the ads. There are ads that perform less than that, and there are ads that perform better than that. But I would say that’s a good middle-ground in terms of what click-through rates are.” Beyond that “anywhere from 5 to 10 percent engage with the advertiser or make a phone call In many cases, if the content is free or you’re signing up [users] for free services, then it’s higher than that.” AdMob also collects reams of information on usage, everything from the user’s geography to the device type. It’s great stuff, and Omar is mulling over how to dice and slice it for us all to peruse. In the meantime, here are a few surprises:

The U.S. accounts for 40 percent of AdMob’s network; South Africa is also upbeat on mobile advertising a phenomenon that likely benefits from flat rate data plans and aggressive mobile operator mobile data promotions
U.S. carriers that pack them in are Boost and Metro PCS – as Omar puts it: They “highly over-index in terms of the percent of users that we re seeing from them.”
40-60 percent of devices on the AdMob network can do mobile video and could therefore receive video ads (probably one reason delivering them is high on AdMob’s agenda )

Partners that pay off: Granted, AdMob’s model doesn’t give operators a cut of the action (or revenues), but Omar can imagine how the shift to off-portal could change all that. “Operators have a unique advantage over anybody. They have data, and that data for demographic information, as well as just user behavior, can be used by advertisers. Even if it s not uniquely identifiable, it can be used by an advertising company such as ourselves to better target our ads. We could increase our CPMs, we could increase our CPCs, and they would rightfully, or should rightfully, be able to charge us for that. If there was some sort of cross-operator standard for providing non-uniquely verifiable data to trusted partners, we would absolutely participate in that and we d be willing to provide a significant amount of the uptick in revenue to the parties that are providing the data. I think that s a really easy example of how we might be able to work with them.”

Mobile search that delivers:
AdMob bumps up against Yahoo so they are competition for ad dollars. But all mobile search companies could be a boost to AdMob it’s a mechanism that points people to new and interesting sites. Nothing specific at this time, but interest is high. “We don t really have any sort of explorations going at this point but there s certainly an opportunity there for us.” Content discovery is a different matter. AdMob will likely announce a tie-up with an on-device portal company in “the next 3 to 6 months.”

Inventory that counts: “We ve gotten to the point where there s a lot of traffic, a lot of page using and more than you can fill with brand advertisers at this point, but what s important to the brand advertisers is not just the volume but the actual content, and I would agree that if you re looking at sort of the high-end sites like the CNN s or ESPN s, or anything like that, then there is certainly not yet a viable amount of content for advertisers to spend a huge amount of money.” He continues: “It s not the fact that it s not available for them to run decent sized campaigns, but what everybody s interested in is just much more content and a lot more standardization so that they know that if they really want to turn up the dials and go up to a huge spend, they d be able to do that without encountering some sort of ceiling on inventory. I wouldn t say we re at the point where demand for advertisers for inventory is so high that their bidding price is up to crazy levels or anything like that. I think it s at a decent point where pricing is still reasonable and advertisers are getting most of what they want, although everybody would want it to be more, if possible.”

R&D that rocks (!): So what’s the deal behind the cryptic iPhone announcement? The new AdMob unit “definitely falls more into the R&D category for us.” He adds: “It also allows us to do some really interesting data analysis and we ll probably be talking about that more in the next month or two, but there s a little bit of an ‘AdLab’ going on with the iPhone right now for us and so it s more than just kind of the overall reach because there s a number of devices out there relative to everything else that s still small. It s not a huge revenue driving issue right now; it s more of a learning as well as a R&D issue for us.” The bottomline: Omar can’t go into detail right now but basically it’s about “learning things that are going to help our ads on all the other phones.” Count on Andreas and me to keep a close watch

Next week we continue the series with Marc Henri Magdelenat, Screentonic CEO, who will discuss the mix that makes for a successful mobile advertising campaign, the tie-up with Microsoft and the role of mobile advertising.

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