Google announced today it would acquire mobile display ad serving platform AdMob for $750M in stock. AdMob is a 3-year-old San Mateo-based startup founded by Omar Hamoui. AdMob is a mobile advertising firm serveing ads on mobile websites and applications. It’s current clients include Ford Motors, Coca-Cola, Electronic Art, Procter & Gamble, MTV Europe, Adidas AG and Paramount Pictures.

This might turn out to be a risky gamble by Google as it tries to prevent competitor from entering the mobile advertising domain by overpaying for AdMob. It’s estimated that AdMob’s current revenue is $45 to $68 millions per year. However, Google currently already owns a major stake in mobile advertising with DoubleClick Mobile unit.

Both AdMob and Google have estimated that the volume and effectiveness of mobile advertising in constantly rising. In a recent report, AdMob said that the number of mobile ads it served had increased nearly 540% from September 2007, to 10.2 billion per month from 1.6 billion. Google confirmed that the number of searches performed by smartphone users has increased by a factor of five over the last two years. It estimates that the marketer spending on mobile advertising is growing at 30% annually.

The deal still need to be approved by regulatory agencies, but Google hopes it can be done within a month.

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Online advertising will continue to grow despite economic woes according to the latest analysis from eMarketer.

The majority of analyst firms expect to see spending growth for online advertising to continue to show double-digit increases in 2008 and 2009.

Globally, 91 percent of marketers are using online advertising, according to a McKinsey & Co survey of 340 senior marketing executives. Over half (55%) said they plan on cutting spending on traditional media in order to focus on Internet advertising.

A Forrester Research survey found that 25 percent of marketers would increase spending on online advertising due to an economic recession. In addition an Epsilon CMO survey from September revealed that 63 percent of marketers planned to increase their Internet advertising spending in 2008.

Some of the reasons online advertising is attractive to marketers is the ability to measure their campaigns and target their message more than other forms of media.

Online advertising also is more engaging to consumers and more young people are spending more time online per week they are watching television.

The Internet is the only channel that allows marketers to connect with consumers during the entire shopping process, from the research phase to the point of sale and post feedback.

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YouTube

For the first time, video downloads generated from Google’s YouTube site are no longer 100% free. Rather surprisingly, though, users have greeted the new links to fee-based music and content largely with positive comments, if any.

Google-owned YouTube yesterday abandoned its traditional business model of free content provider, adding links to paid video and audio in such a slick manner that most users either didn’t mind or didn’t even notice.

In a blog post Tuesday, “The YouTube Team” mapped out YouTube’s plans to ultimately evolve into sort of an online shopping mall for audio, video, and print entertainment.

“Today, we’re taking our first steps to providing YouTube users with [instant] gratification, by adding “click-to-buy” links to the watch pages of thousands of YouTube partner videos. Click-to-buy links are non-obtrusive retail links, placed on the watch page beneath the video with the other community features. Just as YouTube users can share, favorite, comment on, and respond to videos quickly and easily, now users can click-to-buy products — like songs, books, and movies — related to the content they’re watching on the site,” acknowledged YouTube.

The bloggers disclosed that YouTube will start by embedding iTunes and Amazon.com links on videos from companies like EMI Music, and providing Amazon.com product links to the newly released video game Spore on videos from Electronic Arts.

“[But] this is just the beginning of building a broad, viable eCommerce platform for users and partners on YouTube. Our vision is to help partners across all industries — from music, to film, to print, to TV — offer useful and relevant products to a large, yet targeted audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos. And those partners who use our content identification and management system can also enable these links on user-generated content, by using Content ID to claim videos and choose to leave them up on the site,” said The YouTube Team.

Judging from the YouTube home page alone, you might not notice much of a change, if at all. The first hint comes by way of the “What’s New” sidebar, which includes the following:

“Like What You See? Then Click-to-Buy on YouTube. When you view a YouTube video with a great soundtrack, you often see comments from YouTube users asking about the name of the song and where they can download it. Read more in our Blog.”

Of the untold number of users who have actually viewed YouTube’s blog entry, only about 25 had commented when Techachino looked at the site this evening.
“This is a really good idea,” read one typical comment.

A few users, though, weren’t at all pleased by the more commercial direction YouTube is now taking. “Maybe people will actually click on these ‘ads,’” another person wrote in sarcasm.

“Now how about the people posting the videos getting a referral fee? As it looks here, companies get to make money on the consumer once again while the consumer does most of the work to make the videos. (Great for Google, who owns YouTube). Not so good for the wallets of the rest of us,” said another, voicing the opinion that YouTube is now ripping off its long-time user base.

“At least with Amazon, I can create a page of books and get a cut of purchases made through my site. Let your creativity help everyone, not just the bottom line of the mega-corps.”

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U.S. Internet advertising revenues for the first half of 2008 were $11.5 billion, reaching another half -year record that represents a 15.2 percent increase over the first half of 2007, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

The second quarter of ‘08 was up 12.8 percent over the same period in 2007 and showed a small decline of 0.3 percent from the first quarter.

Search and Display-related advertising continue to set records. Search revenues totaled almost $5.1 billion for the first half of the year, an increase of 24 percent from the $4.1 billion for the same period in 2007.

Display-related advertising totaled close to $3.8 billion for the first six months of 2008, compared to the $3.2 billion reported for the same period in 2007, up 19 percent. Display-related advertising covers Display Banner ads, Rich Media, Digital Video, and Sponsorship.

“Interactive advertising continues to demonstrate year over year growth as marketers and consumers increase their embrace of digital media,” said Randall Rothenberg, president and CEO of the IAB.

“The essentially flat performance we see quarter to quarter reflects in part cyclical advertising trends. Compared to the trajectory in other media and in the general economy, interactive has outperformed because it delivers a level of accountability unmatched by any other advertising medium.”

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Google is no longer suggesting that you should be listed in relevant directories. In fact, they’ve even removed the suggestion from their webmaster guidelines, as Brian Ussery noticed. The page used to have bullet points for:

- Have other relevant sites link to yours.

- Submit your site to relevant directories such as the Open Directory Project and Yahoo!, as well as to other industry-specific expert sites.

Those points are now gone in what would appear to be a slap in the face of directories, but SEO folks are the ones really irritated. Google doesn’t appear to see it as a slap in the face so much, but more of simply a non-needed guideline.

Barry Schwartz points to a quote from Google’s John Mueller in a Google Groups thread:

“I wouldn’t necessarily assume that we’re devaluing Yahoo’s links, I just think it’s not one of the things we really need to recommend,” said Mueller. “If people think that a directory is going to bring them lots of visitors (I had a visitor from the DMOZ once), then it’s obviously fine to get listed there. It’s not something that people have to do though :-).”

Mueller also asks for feedback, “What do you think - does it make sense? What else should we change / add / remove?”

Regardless of what guidelines are on the page, a relevant link is a relevant link. There are still directories that don’t offer paid links, and keep the listings quality without getting flooded by spammy and irrelevant ones by using a strict human-edited approval process.

There is going to be a lot of outrage over this, but is it really necessary? Perhaps too much focus has been put on directories like DMOZ anyway.

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Sony Computer Entertainment America and Europe have announced another partnership in the PlayStation’s growing advertising platform.

In October, Sony Computer Entertainment America announced it had formed a division strictly for developing in-game advertisements for all of the PlayStation platforms, including the PlayStation Network.

Early in June, Sony announced its first dynamic advertising partner would be IGA Worldwide to provide in-game advertisements, with a special focus on Home.

This week, both SCEA and SCEE announced a partnership with Double Fusion, the same company that yesterday announced a deal with Yahoo for its upcoming free ad-supported games.

Unlike the pre-, post-, and mid-roll ads that Yahoo said it will put in its free games, Sony looks to provide more “contextually relevant and well-crafted” advertising in its games. Some of Double Fusion’s projects thus far have included creating in-game content for Dodge, Jeep, and Chrysler, which have ranged from simple environmental advertisements (a billboard in a city scene) to genuine product placement (the product itself appears in the game).

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Playing a little bit of catch-up to rival Google, Microsoft announced the acquisition of Navic Networks on Wednesday, giving it a foothold in the television advertising business.

The interactive TV advertising market has been considered a “new and burgeoning” industry for well over a decade now, and for perhaps all of that time, Microsoft has been working to gain a competitive position there. But this morning’s announced acquisition of interactive ad platform provider Navic Networks is being perceived as a catch-up play with Google, whose recent deal with Dish Network has been the talk of the industry.

With all television going digital soon, many TVs and HDTVs will be using new, next-generation set-top boxes, and some displays will already have STB technology built-in. Those STBs will be the interactive channel-changers, some with built-in TV Guide, and many with on-demand movie and show selection functionality.It’s Navic’s Admira advertising platform that plays to these STBs, with the capability of delivering highly targeted ads, similar in concept to behavioral targeting platforms on the Internet now, but directed toward TV viewers. For years, Microsoft has wanted to build a similar platform; today, it announced it has decided to buy a fully established one instead.

Navic’s technology works much like the popups that TiVo customers have recently become accustomed to when seeing some ads. Targeting by ZIP code — and perhaps deeper — allows advertisers using the functionality to micro-target consumers, enabling them to click on an overlay to see additional information on the product.

One thing that is missing from Navic’s offering is any kind of tie-in to Web advertising. Microsoft may seek to leverage its adCenter program to make Navic’s services more attractive to potential clients.

That seems like it is what the two companies plan to do. “While our current business relationships will continue to grow, we look forward to extending our technology into a vast array of new markets and software solutions,” CEO Chet Kanojia said.

Financial terms of the deal were not disclosed, although news reports indicate Microsoft may have paid anywhere between $200 and 300 million for Navic. The company will become a wholly-owned subsidiary of the Redmond company, and will be folded into the Advertiser and Publisher Solutions Group, which is lead by Brian McAndrews.

Microsoft is still trailing behind Google when it comes to advertising. In the most recent quarter, Google’s advertising revenues totaled $5.1 billion: The Redmond company managed to generate $843 million in revenue from its Online services business, which includes its advertising endeavors.

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Blog-focused advertising networks are all the rage right now, with both Federated Media and Glam pulling down big valuation financing rounds in the last few months based very early growth metrics. Other startups, like Six Apart, have launched their own blog advertising networks as well.

As we predicted, Technorati now joins them with the launch of Technorati Media later this morning (the site will be password protected until 9 am PST today), their own blog advertising network. This comes just a couple of days after news leaked of their new round of financing.

The company has been testing the new sales product with a number of partners, including BlogTalkRadio, BlogCritics, BlogCatalog, BlogTV, Technabob, GPSMagazine, GeekAlerts and NerdApproved. CEO Richard Jalichandra says these blogs reach a combined audience of approximately 17 million unique monthly visitors.

Early advertisers on the network include Honda, Acura, Toyota, t-mobile, Adobe, HP, Sandisk, MSFT, Verizon, Sun, Sony, Visa, Nike, Scion, Chevrolet, Paramount, Universal Pictures, 20th Century Fox and Best Buy.

Technorati has explored selling ads for third party sites for some time, but this is the first time they’ve opened the service up to anyone. Unlike Glam and Federated Media, they will take all comers, and say they expect blogs, from the large players on down through the long tail, will find they do a better job monetizing sites than the current options.

Ads are sold on a CPM basis. They will not make revenue guarantees, says Jalichandra, but the split between parties is negotiable. He declined to state what rates have been negotiated with beta partners. This is similar to what Six Apart promises, which is also targeting the long tail of blogs.

Jalichandra also says Technorati is uniquely positioned to sell ads at premium rates, even through small blogs, because they will be able to use descriptive tags/keywords, along with their existing blog indexing technology, to better match ads with content.

Technorati’s has seven sales professionals, led by VP Sales Tony Pribyl, a new hire. They also hired a new marketing lead, Jennifer McLean, away from Glam recently.

For now Technorati is only working with larger blogs, although it will be open to all comers in 2-3 months.

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One of the great things about digital TV and a personal video recorder (PVR) is the ease with which you as a viewer can wholly control what you watch.

With the exception of the news, I rarely watch TV as it’s broadcast. Instead, I programme the PVR to record things that I might want to watch, and then watch it when I have time.

Of course, one thing I always do when watching a recorded programme is skip through the ads.

That behaviour is pretty consistent among everyone I know who uses a PVR.

It’s often got me thinking that sooner or later, we might see a big shift from paid advertising spots on TV to more product placement, so that advertisers can still expose passive viewers to brand messaging.

Not in the UK, though, according to the FT:

The UK is to ban product placement, a blow to the advertising industry and commercial broadcasters.

Andy Burnham, culture secretary, said the government had an economic interest in protecting standards in UK broadcasting because they were “part of Britain’s brand when it comes to world markets”.

“Here and now, I do want to signal that I think there are some lines that we should not cross - one of which is that you can buy the space between the programmes on commercial channels, but not the space within them,” Mr Burnham told a media seminar in London.

No worries, you might think, there’s always the internet. But they’ve got that covered, too:

[...] And in comments that may alarm the digital media industry, he suggested that the government should have a role in ensuring the same standards were met on the internet as on television and radio.

“If a clip on YouTube gets a million hits, it is akin to broadcasting and it doesn’t seem to me to be too difficult to have an alert on that clip, an alert for violence or for sex,” Mr Burnham said.

I would have thought that trying to control or restrict what people want to do with content they choose to watch - where that content transcends geographical boundaries, and where you have so many other choices - is a venture doomed to eventual failure.

In any event, at a time when overall TV audience numbers are falling, advertisers ought to be more concerned about how to engage with people more effectively rather than worry about ‘analogue world’ restrictions.

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Warner Bros. TV has announced that it has signed deals to have its content distributed on WB-branded channels on Dailymotion, Joost, Sling Media, TiVo and Veoh Networks.

Each channel will include content from TheWB.com and KidsWB.com as well as other series that are currently not distributed online. The studio did not reveal the series as of yet however.

The new channels will launch in mid-September and will join current studio channels on AOL and Comcast’s Fancast. The company noted that popular social networking site Facebook has an application for WB content as well.

TheWB.com, currently in beta, has hit shows such as “Gilmore Girls”, “Smallville”, “Friends,” “The O.C.” and “Veronica Mars.”

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