Google raises stakes in mobile ad game

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Kai Ryssdal: With the billions and trillions of dollars that are being thrown around in the macro-economy, a relatively modest acquisition of just $750 million managed to slip under the radar yesterday.

Google said it's buying a company called AdMob. It specializes in placing display ads on mobile devices. We've been hearing for a while now that smart phones and the like are the new frontier for marketers. And with Google in the game, the stakes just got higher, as Joel Rose reports.


JOEL ROSE: There's an old joke in the marketing industry.

NOAH Elkin: That next year is the year of mobile. People have been saying that every year for the past 10 years, and it's never quite been the year of mobile.

Noah Elkin is an analyst at eMarketer. With so many consumers now accessing the Internet through smart phones, Elkin says next year may have finally arrived.

Elkin: We're in a situation where marketers and advertisers are playing catch-up with consumers.

Which is why Google was willing to spend three quarters of a billion dollars on AdMob and its mobile advertising know-how.

Andrew Frank is an analyst at Gartner Research.

ANDREW Frank: What's particularly new and different now is the revolution in smart phones, particularly driven by the iPhone. I think that really has changed a lot of the way that consumers are using phones. And I think that's going to drive a lot of growth in mobile advertising as a result.

What's a lot? Predictions range from $1.2 billion to $13 billion a year by 2013. Right now mobile advertising is worth about $400 million a year, and that's just a fraction of what gets spent on online advertising.

Neil Strother is an analyst at Forrester Research. He says one thing marketers like about all those iPhones and Blackberrys is that they're so personal.

NEIL Strother: A mobile device is not a shared television, or a shared experience maybe on a family PC, or something like that. The platform is on a person just about 24/7, except when they're asleep. But it's usually by their bed or nearby.

Strother says Google just bought itself first place in mobile advertising. But as usual, he thinks competitors like Microsoft and Yahoo will be doing their best to catch up.

I'm Joel Rose for Marketplace.

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