Why Google's Acquisition of AdMob Isn't Just About Advertising.

In case you missed it, Google acquired mobile ad network AdMob for $750 million in stock.

There is a lot of speculation on why, but the obvious reason is that Google wants more direct access to what they are betting heavily on -- that mobile is the next great advertising medium. They've made a huge bet on mobile with Android -- which is an obvious move to own the mobile search ad market, but now they've got their hooks into the mobile display ad market as well.

But what many might be missing could be the biggest reason Google bought AdMob: the data.

With the acquisition of AdMob, Google now has access to usage data of many of the most popular mobile apps -- especially the apps in the iTunes App Store. For iPhones. If Google is taking on Apple for mobile OS market share, they just scored a huge competitive advantage. Google will know more details than ever about how people are using iPhone apps, how they are engaging with advertising within those apps, and users loyalty to those apps.

Dashboards like the above only provide a window into the beginning of the mining that Google is likely about to do on their mobile handset competition. There has already been lively conversation about just how much of our personal data Google has access to. Now, even if you don't own an Android phone, Google will be able to collect data.

Until there is enough mobile display advertising to sell to generate healthy-enough revenues (Shazam, anyone?), it may be the access to the data that generates the biggest return on Google's investment.

Comments

[Chad]

Great post Ian.

[Pramod Kashyap]

The whole world knows about the success of Google through its advertising and more so does Microsoft know abut the importance of advertising.

Microsoft simply had an advantage over Google through its Windows Mobile but never thought of doing anything in the advertising space. It intrigues me about their decision to completely ignore this.

Microsoft may be frantic now after this Google's announcement.

[Michael Chin]

I agree that data is a big play in this. No one processes data and delivers better against that than Google (right now anyway). Seems to me that in short run the data piece and AdMob's foot print in iPhone land makes this a huge buy. In the long run it's pretty powerful as a front (marketplace) and back end (data) makes it pretty clever.

[www.facebook.com/profile.php?id=636315401]

No question that Google would love to get their hands on user data, and as you note, it's causing concerns about privacy. But what I often find missing in blog posts like this is an understanding of the carrier networks, who know *everything* about the user, from device, to habits, to location, to connections etc. Why not consider a mobile ad model that matches the sponsor specs with an anonymous user profile that can be as finite as 1:1 -- and 100% relevant. User ID is fully protected by the trusted source -- the mobile operator. Check out the Comverse whitepaper on the operator role in mobile advertising: http://tinyurl.com/yzlvebk