There has been some interesting discussion making its way around the blogosphere on our present and our future, so I figured I’d take the opportunity to comment.
It started with a venturebeat article with a hypothesis on how we are doing and how we will be doing soon. (that is not the part I wanted to comment on)
This led to a number of postings which more or less call out the iPhone as particularly dangerous to our business, and I’ve included links to a few just for reference:
http://yardley.ca/2008/07/07/there-is-no-mobile/
http://www.seriouslytech.com/2008/07/07/is-the-mobile-ad-market-poised-to-break-out-or-to-disappear/
The question around the iPhone is certainly not new to us… actually a search on our blog for iPhone turns up a number of interesting things:
Our thoughts on what the first iPhone meant for AdMob
Our discussion of our iPhone ad units
Some of the neat things we learned from the iPhone
A prediction that iPhone (and similar class) devices will have a dramatic impact on mobile browsing
As a last point, I figured I’d post a (really long) comment I just left on Silicon Alley Insider in response to this article.
See you next iPhone 
Dan, very interesting post. You asked for some AdMob folks to chime in, so I figured I’d oblige you. We’ve been spending a great deal of time thinking about and working with the iPhone. We share your view that it is only a matter of time (and not a long matter of time) until the majority of mobile browsing is done on devices that have full featured browsers. To that end we have been working with iPhones since they launched and have been allowing advertisers to reach iPhone users for quite some time (you can see a few of our campaigns here - http://www.admob.com/s/solutions/iphone_ad). To put some numbers around this, we served 52 million impressions on the iPhone and iPod Touch in June up from 39m in May (32% month on month increase).
Although your analysis makes sense on the surface, I would take issue with a number of the underlying points you made. The first is that our sole differentiator is based on the installation and serving of advertising. Although it is a different process than online ad installation, the fact is that this does not differentiate us from any of our competitors in the mobile advertising space (Google, Yahoo!, AOL, etc…). All of them have similar installation procedures. Also, considering the fact that the install code is publicly available it would be very difficult to build a defensible business around installation. The reality is that our differentiator comes from scale of mobile specific advertisers and some fairly sophisticated engineering and optimization built around which ad to serve and when.
Now to another central contention you make: You essentially assume that simply because “regular” ads can be served, they will inherently be optimal. The reality is that the value of an ad is based on three parties: the publisher, the advertiser, and the user. In the case of the publisher, they would like to see advertising that is relevant, plays well with their content both visually and thematically, and obviously, maximizes monetization for them. In the case of the advertiser, they are interested in making sure they have reached the most interested audience they can, in the right place at the right time (and now on the right device), and that they are paying a fair rate. In the case of the user, if you can show them a relevant ad that is respectful of both their experience and privacy, you will have a win.
The reality is that in all three cases, ads designed for the web as viewed from a PC are not and will not be optimal. Let’s think about advertisers for a moment. Let’s say you run an ecommerce site and are willing to pay 50 cents a click to get someone to come to your site and buy a product. The fact is that they are much less likely to go through your shopping cart on a phone, regardless of the browser. The same holds true for a lead gen advertiser who is expecting users to fill out a long form. In these (and many other) cases, the advertiser will actually be upset if a publisher or ad network recklessly shows their ad regardless of device. If they bought assuming it would show on a PC, it’s simply not fair to show it on a phone. On the flip side, there are plenty of advertisers who would pay significantly more to show up in the context of a smart phone with all of its unique advantages (multimedia, phone calls, etc…), as long as they know that’s where the ad will appear. As a publisher, you will be getting much more relevant (and higher paying) ads if you work with someone to sell specifically for the device.
Although the idea of a unified web where everything is exactly the same (including advertising) is intriguing, the reality is that all the recent advancements in digital advertising (search, behavioral, demographic, and psychographic targeting, etc…) have been about differentiation of audiences rather than amalgamation. In the context of advertising, there is significant value locked up in even subtle differences and we know from experience that the device you are browsing on is no subtle difference.
In short, we are well aware of the impact that the iPhone and smartphones in general are going to have on mobile browsing. The capabilities they make available both in browser and in app will further accelerate mobile data usage, and mobile advertising along with it. We view these developments as the future of our company, rather than some impending doom, and if we could magically wish their adoption to happen faster, we would.
