Google opens AdMob to hordes of AdSense ads to increase fill rates

by Giselle Tsirulnik  - November 9, 2010

Just a half-year after its $750 million acquisition of AdMob, Google is integrating AdSense advertising inventory into the ad network, which benefits publishers and advertisers.
The integration is a benefit to AdMob publishers because they get access to new inventory to make money on. Google advertisers can extend the reach of their campaigns.
"This to me in the overall sense is the first sign of integration between Google and AdMob," said Neil Strother, Kirkland, WA-based practice director of ABI Research. "And it is a good thing for advertisers.

"It is the first outward sign of what will come of this acquisition and how AdMob fits into Google's advertising business," he said. "It increases the fill-rate for publishers."
Filling ad rates for AdMob publishers
In the coming weeks, eligible iPhone and Android application developers in the AdMob network will be able to show Google AdSense ads when an AdMob ad is not available.
This will enable Google advertisers to extend the reach of their mobile campaigns to the thousands of mobile applications in AdMob's network. AdMob publishers get access to new inventory, which they obviously earn revenue from.
Publishers using a recent version of the AdMob software developer kit will not have to update their code.
Reporting will integrate directly into publishers' AdMob accounts. Publishers will continue to receive a single check from AdMob each month. 
"I think that this puts Google one step above Apple," Mr. Strother said. "The iAd system focuses on rich media and expensive ad inventory, while Google's announcement is focusing on click-to-call and text ads.
"Google is playing on its strength," he said. "I think it gives the advertiser and the app developer more choices and more opportunities to fill their space with this integration."
 
One leg up over Apple
Apple charging a minimum of $1 million for an iAd advertising campaign is definitely steep for a lot of brands.
So far, Unilever, State Farm, Liberty Mutual, McDonald's, Nissan, GEICO and JCPenney have launched iAds. But these advertisers certainly are not filling all the applications that are part of the iAd network in the App Store.
Another thing is Apple's advertisers have not been to open with the results they are seeing via their iAds. So, the industry has not received validation of the iAd platform through concrete results.
"IAd had a lot of hype out of the gate," said Gary Schwartz, president/CEO of Impact Mobile, New York. "But as the dust settles there is more than the PR piece that brands need to take into account in a media buy.
"The iAd promised an emotional connection, continuity and interactivity inside the app and [some] brands seem willing to pay the high CPM for this value," he said. "But if Apple is only 10-15 percent of the ad inventory fill and you need to throw out the creative that your $300,000 art director has designed for 85 percent of your campaign inventory and work with the Apple team, then many planners are going to think twice about investing too heavily in iAd units.
"IAd is designed for iRevenue and is not industry-agnostic. Mobile buying is hard enough without this complexity. Ask Adidas."
Adidas is one of the advertisers that had initially signed on with Apple, and then mysteriously dropped out. Chanel did as well.
T
hom Kennon, vice president of strategy at Wundermn, New York, believes that there are two reasons why most advertisers have not jumped on the iAd bandwagon.
The first is obvious: cost. 
"But the second and more important factor, I think, is really more fundamental, and it is about the rapidly evolving nature and role of digital marketing in a brand's advertising arsenal," Mr. Kennon said. "In the case of iAds, we have a very shiny execution format, which is a digital advertising format stretching to serve as engagement vehicle, an entertainment unit, even, if winning, some type of conversion media.
"But this isn't how marketing works, when and if you get it right," he said. "We don't brief the format in front of – or instead of – briefing the all-up program or campaign objective. That's backwards.
"First, you set the objective, and let's say for Brand A that objective is brand connection leading to purchase. Then we identify the triggers to creating the key behaviors we instigate amongst our targeted consumers once we engage. The last piece is how we tactically achieve those behavior changes and drive to our objectives."
Apple seems to forget this and has designed iAd in a way that goes against it.
Mr. Kennon said that in most cases brands realize that iAd is not the right vehicle for igniting and sustaining the targeted behavioral outcomes that marketers are trying to achieve with their marketing.
A lot of industry executives actually predicted this would happen.
"Not only is the total addressable audience limited to a small segment of consumers based on device ownership, and not only is the barrier to entry onerously high from a cost perspective, but the vehicle itself may simply not be the most appropriate tactic to help a brand marketer with her single most worried-about metric today: measurable return on her marketing investment," Mr. Kennon said. 
 
Taking advantage of a competitor's weakness
So when compared to Apple's fill rate and the way the company operates in general as it pertains to mobile advertising, Google is really on the ball and is taking advantage of its competitor's weaknesses.
But Google's news has a downside as well. Publishers will not be able to filter the types of AdSense ads that run in their application. 
As a result, publishers who have ad filters selected for their AdMob inventory need to opt-in to receive Google ads. 
Publishers can check their "App Settings" tab in the Sites & Apps section of their publisher account to see if they are eligible for Google ads and opt-in. 
Eligible iPhone and Android application publishers not utilizing ad filters will be opted into receiving Google ads as the feature is rolled out in phases over the next several weeks. 
All publishers who show AdSense ads must comply with the Google AdSense terms and conditions.
"Right now it is just text and click to call at this point," Mr. Strother said. "Looking at this from the app publisher standpoint, you can't do your own filtering and have to trust that Google AdSense will properly target the ads.
"Being that it is Google I expect the ads will be targeted," he said. "This is the first of many things to come of the Google/AdMob acquisition and it is an indication that mobile advertising continues to mature."

http://www.mobilemarketer.com/cms/news/ad-networks/8051.html