Emerging M&A Trend: Data Analytics Role in Mobile Advertising
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The mobile marketing sector has been a very active area for M&A over the past nine months. The acquisitions capturing the headlines include Google’s purchase of AdMob and Apple acquiring Quattro Wireless for lofty valuations. Both AdMob and Quattro Wireless are primarily mobile advertising networks, matching advertisers with available advertising inventory (space to display the advertisement or marketing message). As we’ve highlighted in our M&A Alert for these two deals, the core strategic rationale underlying these transactions is that Google and Apple want to help mobile application developers derive revenues not just from selling their software but also via advertising. Google and Apple will bring the advertiser relationships and technology necessary to allow application developers to sell “screen space” within their application to advertisers.
While other mobile advertising network transactions are still quite likely, a new complementary M&A theme is beginning to develop, the use of data and the analysis of data to better understand an individual end-user. This involves capturing and analyzing data associated with how an end-user interacts with a mobile application and importantly integrating any available demographic and behavioral data to better determine the end-users individual characteristics. The promise is a better application experience for the end user and high quality targeting information to allow advertisers to place appropriate ads where they would be most effective. The idea is that the more you know about the end user, the better the targeting of the advertising, driving better results for the advertiser, a happier end-user and an advertiser willing to pay more for advertising inventory. This is of course nothing new, but it’s becoming increasingly sophisticated in mobile marketing and the promise of targeting a very specific individual end-user via their mobile phone is quite intriguing to marketers. E-marketer recently published a report highlighting the types of targeting that on-line advertisers frequently utilize to target their advertising placement. While this research is on-line marketing focused, it has direct applicability to mobile efforts as well.
While small, there have been several notable acquisitions in the past couple of months which highlight this trend. Most recently, Millenial Media, a direct and substantial competitor to AdMob and Quattro Wireless, acquired TapMetrics, a young mobile applications analytics company. Also in March 2010 private company Mobclix, a mobile advertising network, acquired Heartbeat, a competitor to Tap Metrics. Finally, in December 2009, private vendors Flurry and Pinch Media, two iPhone application analytic vendors, merged. While acquisitions will be part of the solutions, business partnerships will also be frequently utilized. For example, Mobclix recently announced a partnership with Nielsen to refine its targeting abilities by using Nielsen’s demographic data.
We expect to see a continued effort by mobile marketing vendors to integrate mobile application analytics, and very importantly behavioral and demographic data, into their offerings. In fact, we believe the ability to gather, analyze and package data to advertisers and marketers promises to be the crown jewel of mobile marketing.
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Interesting perspective on the future here. Thanks for posting.
March 10, 20101:49 pm