More Mobile Ad Consolidation?

The long-awaited year of mobile has seemingly finally arrived, but the market is probably in line for a wave of mergers and acquisitions to make it easier to buy and execute campaigns.

ValueClick’s $70 million acquisition for Greystripe is a sign that the buyers of mobile networks and technology providers won’t just come from the large-scale digital ad platforms. Old-line ad networks like Valueclick are under pressure to expand their businesses to offer advertisers ways to reach consumers across devices.

“We saw a wave of consolidation a year ago,” said Noah Elkin, an analyst with eMarketer. “We’ll probably see more again in the next twelve to eighteen month.” Elkin views the consolidation as necessary to make purchasing ad inventory easier. Rich media and smartphone tailored solutions will be the focus, he said.

Google made the first serious move in the mobile game when it beat out Apple for the $750 million acquisition of Admob. Apple quickly followed by buying Quattro Wireless for $300 million. Greystripe wasn’t a network of comparable size or scope. It served rich media ads to about 3,500 apps and mobile sites.

The deal leaves just a few big independent networks, including Millennial Media and Jumptap. Millennial was rumored to be a target of a Microsoft interest a year ago, but nothing materialized. Other mobile ad companies that would fill out mobile portfolios include Crisp Media and Medialets.

“PC advertisers are realizing they need the specialty of mobile,” said Paran Johar, CMO of Jumptap. “Buying is much more efficient than building when you look at the rate of consumer adoption.”

Johar pointed out that if we consider the iPhone launch to really be the start of mobile advertising, then advertisers are investing at a much faster rate on mobile than they were online. Much of this, he attributes, to the fact that they already learned the basics that carry over.

“There are a lot of companies from different backgrounds trying to get into the mobile media space,” said Johar. “Apple, before they acquired Quattro, was not a media company. Now they’re a media company. What you’ve got is many other companies like Apple that see the potential of mobile advertising that want to be a part of it. It depends on the type of company that acquires a mobile advertising company.”