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Why is Apple buying mobile ad network Quattro Wireless?

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Posted by mobiThinking - 06 Jan 2010
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Apple is the fifth heavyweight to snap up a mobile ad network with the acquisition of Quattro Wireless (according to the Quattro blog on Tuesday). That's right: fifth. It's another huge endorsement of mobile advertising. Though what's significant about Apple is that, up to now, it hasn't shown any interest in advertising, mobile or otherwise.

2+2=5

Coming so soon after Google announced in November 2009 its plan to acquire AdMob (note: it's believed Apple was also bidding for AdMob) and surfacing (note: Apple didn't announce it) on the day that Google launched its first (much-hyped) own-brand smartphone - the Nexus One – it was inevitable that the pundits will conclude Apple is buying Quattro to compete with Google. Some go so far as to claim it's all out war between Google and Apple. Really?

Anything is possible, but mobiThinking wagers that those drawing the conclusions don't know or haven't considered the following:

  1. AdMob and Quattro are just two of many mobile ad networks.
    There are at least 10 mobile ad networks in the US alone (the majority of Quattro's business in the US). And while all networks serve the same function: they help marketers place adverts on mobile sites and, more recently, within downloadable mobile applications without having to deal direct with each publisher; they are often quite different animals.
    While they all networks compete for mobile advertising dollars, astute media buyers and mobile publishers wouldn't consider AdMob, Quattro and Microsoft, for example, as interchangeable.
    (Please see the The mobiThinking guide to mobile advertising networks for definitions and full profiles of all leading networks including AdMob, Quattro, AOL, Microsoft and Nokia.
  2. Google and Apple aren't the first companies to buy mobile ad networks – in fact they aren't even the first industry heavyweights.
    In the past three years, Microsoft, AOL and Nokia also bought mobile ad networks: Screen Tonic, Third Screen Media and Enpocket (while other networks have been acquisitions by smaller companies, such as YOC). While it's generally accepted that at $750 million Google/AdMob is the largest acquisition to date (assuming the FTC passes it), we may get a better insight into Apple's plan by considering the motives for the previous acquisitions – Nokia's particularly.
  3. What is Apple?
    Apple is a computer manufacturer that has successfully branched out into media players and then smartphones, that adds value/brings in some additional revenue from downloadable music via iTunes and third-party applications from the App Store. Ad networks now offer in-application advertising (led by AdMob initially, but offered by all), which must be one of Quattro's key attractions to Apple (though in-app advertising will only be a small part of Quattro's or any other networks' business).
    If Apple is a serious contender in smartphones shouldn't the pundits be looking for inspiration to Nokia rather than Google? When you look at sales, rather than media hype Nokia is still the dominant smartphone manufacturer, selling more smartphones than RIM (No2) and Apple (No3) put together (while Google with it's Android operating system is still a minor player) and that is just a fraction of the Internet-ready phones Nokia sells.
    Nokia phones ship with bookmarks to Nokia's mobile portals such as Ovi.mobi and download sites, as well as pre-installed apps. Nokia Interactive Advertising (formerly Enpocket) sells display advertising for these sites and within apps along side other top-tier publishers and mobile carriers.
  4. Does Apple want the same thing as Google? Does Apple really want a war? Is Google really bothered?
    Google (along with Microsoft and AOL) is replicating its online strategy on the mobile Web. First, it has a mobile version of Google search, against which it sells search advertising; second, it has mobile equivalent of its online destinations such as Google News, for which it sells mobile display ads; and third, it wants to replicate its online ad network (DoubleClick, purchased in 2007/8) that serves ads at third-party sites – this is where AdMob comes in. Google (like Microsoft and AOL) wants to sell advertisers the full package of online, mobile and search.
    Apple has no online ad network or search, and hasn't invested in mobile Web destinations in the same way as Google, Microsoft, AOL or Nokia, focusing instead on downloads (see below). Not only is Apple incomparable with Google, but it's difficult to see why Apple would want to take the battle to Google armed only with a mobile ad network.

Of course no one except Apple knows what the plans are for Quattro. Perhaps more will be revealed as Apple launches a much-hyped tablet computer (a portal Internet device) sometime soon. Though we hope the network of premium mobile sites will not be neglected in favour of Apple's store of third-party apps.

As to the war…
Apple and Google should be enjoying every minute. After all it's excellent free publicity for them both and their newly acquired mobile ad networks. And it will surely help to propagate the myth that both Google and Apple are the two heavyweights in mobile.

So far the only comment from Google has been a positive one – so much for war. company blog. Apple's acquisition helps Google's argument to the FTC that AdMob won't make Google the dominant player in mobile ads as claimed by many pundits. (mobiThinking is also quietly flattered that Google quotes our point that no one really knows how big any network is as all refuse to reveal revenue figures.)

Do you really think Apple is going to war with Google? Comment below or email editor (at) mobiThinking.com.



Also see:

  • 10 tips: Using location to know and serve your mobile customer better
  • How to create an award-winning mobile campaign
  • MMA Global Awards: the winners, with all the links
  • Conferences & awards for mobile marketers’ diaries with offers
  • The mobiThinking interview: Ilicco Elia, Reuters Mobile
  • The insider’s guide to mobile Web marketing in the UK
  • The mobile Web is dead… Long live the mobile Internet
  • Mobile Web: latest mobile stats forecast a rosy outlook
  • The Starting 11 – the essential mobile-marketing guide for the 2010 FIFA World Cup
  • The Top Ten mobiThinkers 2009 – each profiled in full
  • mobiThinking’s page of essential links

  • Posted by mobiThinking - 06 Jan 2010

    mobiThinking's picture

    mobiThinking focuses on everything you need to know on the business of mobile and web. With an exhaustive compendium of mobile statistics, practical guides to mobile agencies, ad networks, top mobile markets and more; interviews and analysis, industry events and awards.

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