Mobile advertising market leader AdMob on Wednesday announced it got $15.7 million from two of its venture capital investors and that it's profitable.
The cash injection pushes the San Mateo, California, company’s investment total to $34.3 million, making it one of the most heavily funded among more than a dozen U.S.-based mobile ad network specialists backed by VCs.
“This is a very real business today with big media publishers spending real money to build out their mobile properties because they believe there is a solid business model today,” said Jason Spero, vice president of marketing for AdMob.
AdMob, backed by Sequoia Capital and Accel Partners, is the world’s largest independent mobile advertising marketplace. The company acts as a commercial meeting place for mobile web sites owners and advertisers. It offers web site publishers a way to make money from advertising and advertisers a way to reach customers via mobile devices.
The two-year-old company competes either directly or indirectly with other VC-backed mobile ad market specialists such as Millennial Media, Ringleader Digital, and Quattro Wireless, among other startups.
It also competes with established online ad firms such as Google, MSN, Yahoo, and AOL’s Platform A. To date, the big players have moved at glacial pace in the nascent mobile ad market.
Mobile ad metrics vary. eMarketer has said the market generated $4.5 billion in ad spending in 2008. But it's $1 billion if you ask Strategy Analytics.
Analysts can agree on one thing: eMarketer’s John Du Pre Gauntt, IBB Consulting’s Sameer Mithal, and Strategy Analytics’ David MacQueen all project big growth for the mobile ad market.
Today mobile commands in the very low single digits as a percentage of the overall amount of money spent on advertising, but Strategy Analytics expects that percentage to grow to 10 percent, or $10 billion in four years.
eMarketer expects the market to reach $19 billion in the same time period.
Advertisers have ramped up their mobile ad spending from between $30,000 and $40,000 to $100,000 and more over the last year, he said.
“Mobile advertising is producing measurable brand impact today and it scales,” Mr. Spero said. “Today you can reach 48 million Americans every month via the mobile web, and AdMob has 40 percent reach within that.”