What does the iPhone mean for AdMob?

On the off chance that you currently live under a rock and your only connection to the outside world is a web browser that will not navigate to any page other than this blog, I should tell you that Apple just launched the iPhone. Needless to say, it looks like a very impressive device. I couldn’t be more excited about it and several people on both our product and engineering teams have already decided that it will be critical for us to get several for “testing” just as soon as they come out.

In fact... I was excited about it in late 2004 when in true mobile geek fashion I put together this fake commercial for it (they clearly did a better job with the device than I would have)

The iPhone does, however, beg the question: What does this mean for AdMob and mobile advertising in general? It can’t be good, right? The argument goes like this: The iPhone has a full featured web browser. If people are experiencing the full featured web, they’ll be experiencing full featured web ads. Therefore specialized mobile ad networks will no longer be relevant. Even if Apple only achieves their stated goal of 1% market share, other handset manufacturers will quickly begin to include similar functionality on their devices and soon enough the need for mobile ad networks will disappear.

It’s a worthwhile argument, and one that I thought about for some time even before AdMob was launched. Of course, I get paid to be biased, so here are a couple of reasons why I believe this argument to be false:

1. This is not the first phone to browse full HTML

I love Steve Jobs (in a totally platonic way) as much as anyone, but once I finished watching his presentation and exited his famous reality distortion field I remembered that this is not the first device to support full HTML browsing. Plenty of Windows, Symbian, and other smart-phones (as well as Sidekicks) ship with “full-featured” HTML browsers while Opera opens up this type of browsing to an even broader range of devices.

2. Mobile UIs are still mobile UIs

Just because a device can browse the web, it doesn’t mean that users will ultimately find this to be the optimal experience. It’s important to note that when Steve Jobs showed off both Yahoo! email as well as the Google Maps, in neither case did he go to Safari and type in the URL for those services. He showed off specialized apps, with specialized UI’s. In addition, the up-down-left-right type of panning required to actually read a web page on these types of devices will prove to be cumbersome over time. In more advanced markets, such as Japan, where a number of devices are capable of full HTML browsing, the mobile sites that people actually use are those sites that have been specially developed for mobile. HTML/cHTML/WAP is not really the point… no matter the technology, in order for a service/site to succeed on mobile, some consideration must be given to the UI (and quite frankly, the ads that sit in that UI).

3. Mobile advertisers still want to reach mobile devices

There are a whole set of advertisers that benefit greatly from the ability to reach people specifically on their mobile device. Using services like AdMob, these advertisers have been able to reach a user-base that was previously inaccessible. Full featured browser or not, there will continue to be a distinct and real value for advertisers in reaching consumers directly on their device. If they are once again limited to simply advertising on “the web”, this advantage will be lost.

4. Web based advertisers may NOT want to reach mobile devices

When you advertise online, you expect to reach a set of users sitting in front a PC, with all that that entails. In some cases, you may simply want to provide them with information regarding your product or service, but in many cases you will be intending to sell them something or be seeking more direct action on their part. It is likely that a user on their phone won’t be willing to go through the same type of browsing-shopping cart-checkout process that they would be willing to go through on their PC. If it begins to happen en-masse, ultimately you may be rather upset that you’re paying for clicks or impressions that in some cases aren’t showing up in an environment where they are the most actionable.

5. It is one more device

This is probably the most important reason of all. The entire reason mobile ad networks are needed is that there are so many devices, and carriers, and formats of content, etc… that it is difficult for an advertiser to reach consumers in a consistent fashion, or for publishers to reach out to the advertiser community effectively. The fragmentation of the market is the essential stumbling block that we seek to address. The iPhone and other devices like it are going to push us to scale our technology in new ways, as well as provide us with some powerful new ways to keep our ads relevant and user friendly.

So, ultimately, if the iPhone and other devices like it become prevalent, it’s going to be a very good thing for us… and we’ll definitely make sure to pick up a few for “testing” just to be certain.

- Omar