The bad side of Google’s AdMob purchase

Google’s obviously made big plays in the mobile space recently to get more deeply integrated into the mobile space. They’ve made massive investments in R&D and application development from the Android and Chrome operating systems to Google Voice and Maps navigation/street applications.  Now they’re spending another USD 750 million to purchase AdMob and buy a direct channel to Google’s core revenue stream of advertising. Which is great … for Google… but not for everyone.

Google has set up a web page discussing their AdMob purchase and it also includes an FAQ and Benefits page. One thing that is clear from the FAQ page is that at some point its extremely likely Google will integrate the AdMob network and technology with their Google Adsense product:

“When can I expect to see AdMob's ads integrated with Google ads? I currently use both AdMob and Google; should I expect to see one consolidated payment?
Unfortunately, we won't have answers to those and other detailed operations questions until the deal is formally closed and we can begin integrating AdMob into Google.

When can I expect to see AdMob's ads and features integrated with Google ads?
Unfortunately, we won't have answers to those and other detailed operations questions until the deal is formally closed and we can begin integrating AdMob into Google.”

If its not a matter of “if” but “when”, then lets think about possible affects for developers and end users when Google AdMobs and Adsense are integrated.

The Good: More websites will consider the ad revenue possibilities for mobile and adjust their content and format accordingly.

The Bad: Mobile websites will be using Google advertising infrastructure which has been criticized over the years for not clearly showing how they calculate ad revenues. It’s a blind situation to the website developers making very difficult to estimate or calculate your advertising revenues.

I’m not an AdMob customer but it appears AdMob “was” giving more access to that data if I understand their set up instructions below:

Reporting
To see how your site is performing, login and click "Reporting" to view real-time data on your revenue, inventory, impressions, fill rate, click-through-rate and more. You can also download a .csv file for Microsoft Excel, highlighting additional metrics. The GeoStats tab will give you additional visibility into performance metrics of your site by the geographic location of your traffic.

The Same Bad: This same situation will likely then also apply the same issues to in game advertising for App developers as well. It means before they might have known if they sold X amount of apps they could predict X% of a click through rate to equal X amount of revenue. Essentially it gave them some guidelines on how much money and effort to spend on developing and promoting their apps that relied on ad revenue as part of the pay off.

With Google behind the scenes of your advertising network that’s not so easy to do. They make at their leisure, timing and need, changes to what they charge their advertisers and the rates it pays out to their advertising network/developers. Without any transparency from that side of the game you can never make any reasonable predictions on your revenue.

Google on their benefits page thinks that the ads will be better targeted because of the Google AdMob partnership but we’ll just have to take them at the word since we’ll never really know if they are doing their end well, or if they have changed their rate of payout to you.

Finally
From the Google AdMob hook up “Benefits” page:

Benefits for users
The deal will provide users with more free mobile applications, in some cases as an alternative to pay-to-download apps, since it will allow developers to subsidize their products through effective mobile advertising.

Wow… how wonderful… sort of. While this sounds great and all, I suspect the truth of the matter is that many apps that you might have been able to pick up for 99 cents will now be free but chock full of advertising to get more customers exposed to the ads that obscure click through rates per person might ad up to a dollar.

It’s a volume/numbers game I suppose and perhaps the biggest in-game purchase will likely end up being the ability to turn off the ads.

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Articles - Op-Ed