The Mobile Ad Market Continues To Froth, As RIM Goes After Millenial Media
by Ciaran O'Kane on 20th Aug 2010 in News
The mobile market continues to produce a lot of froth in terms of exaggerated exits. First, there was Admob, then Quattro and now there’s talk of Millennial Media pocketing several hundred million in exchange for its global ad network. And the rumours about an imminent Millennial Media acquisition are being fuelled by RIM’s desire to get into the mobile ad market. Not a bad strategic move from RIM. After all, its two biggest smartphone rivals, namely Google and Apple, have splashed out in the past twelve months to get a slice of the mobile ad market.
Will RIM really pay $500 million dollars for a company barely making a tenth of that? Granted the number of global mobile ad nets is finite. But half a billion dollars for an intermediary who operates in a market worth a couple of hundred million? Millennial Media also get a fair chunk of its inventory from Apple App developers. If RIM swallows up the Canadian ad net, you’d expect Apple to play tough, shutting Millennial out form all location-based targeting on app inventory. Apart from the price tag, this is another sobering reason to re-consider the move.
Could RIM not build out an ad net proposition of its own? For a couple of million quid you could hire top-tier publisher acquisition people, sales staff and of course an exceptional ad ops team. Go out to the market, and offer guarantees to publishers with good inventory to get them on board. Build out the proposition globally. Then build a mobile ad exchange, and ready yourself for automation and convergence in the ad market. It’s easier said than done, I guess. I think there are better deals on the market than the $500 million Millennial Media though.
Don’t be surprised to see other networks, like InMobi or Mojiva, come into the frame. For $500 million quid you could buy a string of ad nets and aggregators in different markets. Smaato and Adfonic would be solid acquisitions for the EMEA region - while Zest-Adz and Buzz City would be perfect entry points for the Asian markets. RIM needs to go knocking on some more doors – before taking the plunge into mobile ad space.