Apple recently acquired Quattro Wireless, a mobile Web advertising firm — a space in which Google is the dominant player. Google, meanwhile, is selling its new smartphone, the Nexus One, on its Web site. This competes with Apple’s e-commerce dominance. Its online store ranked fifth in sales volume according to Internet Retailer’s 2009 Top 500 Guide.
“Apple had the [phone] hardware first and now is buying into monetization platforms,” says Kristine van Dillen, director of industry initiatives and partnerships at the Mobile Marketing Association (MMA). “Google had monetization of content first and now it is moving into hardware.”
“Mobile in 2010 will be defined by platform wars and a further migration away from carrier control. Android vs. the iPhone will be the big one of the year, with Adobe Flash, Symbian, Windows Mobile, PalmOS and RIM all in the mix,” Michael Chang, CEO of mobile ad network Greystripe, predicts. “Each platform owner has realized that they need to take responsibility for multiple revenue streams for content delivered through their platform, both the end-consumer paying and through advertising. Google gets this, Apple gets this and the other platform owners are figuring it out.”
Apple’s iPhone, which created a wide-ranging platform for mobile Web development that many marketers have seized, is challenged by Google’s NexusOne smartphone, which was released this month. Not only have the two companies upped the ante in the mobile advertising space; they are also going head to head in the mobile hardware department, and in turn, e-commerce, by selling their phones directly to consumers through their Web sites.
“More competition and more innovation can only help the industry as a whole,” says Patrick Moorhead, VP and director of mobile platforms at Draftfcb. “Additionally, to have arguably the two leaders, and their market-making devices, competing head-to-head against each other in direct sales raises the bar for all the other handset makers, and even the carriers.”
At this point, experts say they are not able to predict accurately what this competition will ultimately mean for the two companies.
“It is still a bit too early to tell how this will play out,” says Julie Ask, analyst at Forrester Research. “Right now, both of these devices are relatively small in terms of overall market share. So much money is going to be made by the content that is created and how relevant it is to consumer, which will drive consumer adoption.”
Experts are saying, however, that this investment in the mobile space will be a boon for mobile marketing. Their acquisitions mean two of the largest online companies have invested about a billion dollars into the space. Apple’s acquisition was reportedly $250 million, while Google laid down $750 for AdMob.
“We are seeing legitimate investment from these big companies that are looking to make money doing mobile marketing. You can’t have a more powerful one-two punch than Google and Apple,” says Peter Johnson, VP of market intelligence and strategy at the MMA. “They are adding it into their business model. There are going to be a lot more mobile marketers entering the space. In the past, a lot of brands have been sitting on the sidelines, and I don’t think you can do that anymore.”
Marketers should expect this investment to result in more ad impressions on the mobile phone, as well as growth in mobile analytics.
“I expect a proliferation of mobile ad units and more use and more trusted mobile analytics,” says van Dillen. “The more rich media ad units and different types of ad units that you can offer to advertisers gives you an advantage by providing marketers with a richer advertising experience.”
“The bottom line is: these moves by Google and Apple mean nothing but good things for marketers, the mobile media business, and ultimately consumers,” adds Moorhead.
