2009 November, 15th

Dan Kaplan

Google recently announced its acquisition of AdMob, one of the industry’s dominant mobile advertising networks, for $750 million in stock. While mobile advertising is still a fledgling part of the industry — accounting for only about $415 million in 2009 — the mad proliferation of iPhone apps and the coming Android explosion portends a lucrative future for the segment. So good for AdMob and good for Google. But good for you?

The answer depends on how you feel about behavioral targeting.

I’m among the very few people who is excited about the emergence of highly personalized advertising. I would love to see the internet’s high-quality content sites find business models that don’t revolve around showering me with irrelevant ads. Technologies that accurately personalize the ads we see when we land on a page could go a fair ways to achieving this goal.

Of course, the capability to target an ad with precision requires a powerful understanding of you. And despite what your psychic hotline operator tells you, there is no company in the world that has the potential to understand you better than Google. Sure, Facebook brags to advertisers that it knows more about you than its arch-rival does. After all, the social network giant knows your age, your sex, your cultural and political preferences — even the status of your love life.

But compared to the insights Google could derive from mining your search patterns and all the sites in the AdSense and DoubleClick networks that you’ve perused recently, Facebook’s capacities are shallow. For example, based on a spike in searches and clickthroughs for Hawaii vacations in your search history, Google could determine you’re in planning mode and show you a display ad from a Honolulu tour guide the next time you land on a site in the DoubleClick network. Let’s see Facebook try to do that.

This brings us to AdMob, the leader in the iPhone and Android app advertising space. While mobile advertising is a long way from becoming a great medium, behavioral targeting could significantly help it along. Google certainly has the data and technical expertise on hand to lead the way. Before buying AdMob, however, it didn’t have a large and rapidly expanding footprint in mobile apps. Now it does. But it has one large, looming problem: a number of important constituencies are not big fans of behavioral targeting. Privacy advocates passionately hate it. Politicians are considering regulating it. And though most consumers don’t know what it is, they tend to disapprove of it once they find out. So, acquiring Omar Hamou’s (left) wisdom and adding it to Google’s behavioral intellect, may prove easier than selling it.

If Google wants to turn its investment in AdMob into a cash cow, it will have to find a way to alter radically the perceptions of these groups. It’s unlikely that the radiance of the Google charm alone will do the trick.

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About the Author

Marketer, product manager and writer in possession of occasional wit, Dan Kaplan currently lives in Charlottesville, VA. You should follow Dan on Twitter.

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