Russell Buckley is the European managing director of AdMob, a mobile ad marketplace that has just received $15m in VC funding and says it is seeing  growing adoption in the US and Europe.

We asked him a few questions about the platform, its future plans, and to respond to the doubts we’ve raised at various points about mobile advertising’s effectiveness.


Can you summarise how AdMob works and give us an update of how things are going in Europe?

AdMob is a mobile advertising marketplace, bringing together publishers of mobile websites and advertisers who want to advertise on the mobile web. Our role is twofold. Firstly, we need to find these publishers and offer to earn them money by allowing ads on their sites. Then we go and find advertisers and provide the technology to serve the campaigns.

So far, our focus has been on PPC advertising and text-based links, although we’ll be launching banners shortly.

AdMob’s growth has been nothing short of explosive. We started in January 2006 and in our first six months, we served 30 million ads. Our second six months saw 1bn ads being served and we’re now (in our third six months) tracking around 1bn per quarter.

At the same time, our publishers have been keeping up with this growth and we now have over 600m pages a month globally to run ads on.

Europe has been at the heart of AdMob’s growth. We had a European presence from the beginning – actually before we recruited our commercial team in the US. So a huge proportion of both inventory and advertising is still accounted for here.


What does it offer to advertisers?

The first wave of advertisers have tended to be split into either sellers of mobile content (like ringtones and games) or those who want to promote mobile websites.

For the first category, advertising via the mobile channel makes perfect sense, as we’ve converted the mobile phone into a consistently effective marketing channel, as well as just a distribution channel for mobile content. A test campaign will prove the metrics and ROI beyond doubt and since our minimum campaign is $50, we’ve had many of these types of advertisers come on board.

As far as mobile websites are concerned, just as we saw most brand managers realising they needed websites around 10 years ago, many are coming to the same conclusion about mobile websites today. With around 29% of mobile owners in the UK using the mobile web, this is no longer a niche channel and one that most brands need to embrace.

However, once you have a mobile website, you need to build traffic and AdMob has proved to be really very good at that. A recent campaign saw us getting 0.4% of a campaign budget, yet delivering 40% of the traffic, as it’s far more effective than traditional media, like TV and press, at this particular job.

A second wave of advertisers, that’s just starting now, consists of more traditional brands, who are incorporating mobile into their media planning.


What are the costs, and what payment models do you offer?

Currently, we offer PPC text-links, which sell in the UK for around 20p to 25p per click. We operate a bidding model, so the cost of a click varies. Since this is a supply and demand model, different countries have different costs associated with them, with the UK being at the higher end.


How can the platform be used to market to cold prospects?

Essentially all prospects are “cold” in that they’re unknown to the advertiser. In that sense, AdMob is much more closely related to other forms of pull-media, such as TV, radio or the press, or indeed, web-based advertising.

However, we do know quite a lot about the consumer from the type of handset they have, where they are and indeed, from the type of site they are on when they see one of our ads.

Despite the “cold” nature of the channel, we still enjoy click through rates of 2% on average and as high as 8% in some cases. This is far higher than online and shows that consumers are finding the ads useful.


What impact do you see Google and Yahoo!’s mobile efforts having on your business, considering their recent deals with the big operators?

It’s hard to say at this point, although most of the activity seems to focus around search, as opposed to the kinds of advertising we specialise in.

However, we haven’t noticed any difference in our business yet, other than clients becoming more familiar with the concept of mobile advertising. If companies like this enter the market, many others should benefit as it persuades marketers to take the channel seriously.


What are the various formats available for mobile advertisers?

So far, it’s text-links only, but we will be making an announcement about banners soon.

We are reluctant to make other richer formats available right now, as most users are still paying data tariffs by the kilobyte. Until this changes, it’s going to be controversial to ask people to pay to download, say a video.


How measurable is mobile, especially with cookies not being available on mobile browsers?

Mobile is great for measuring results, although it is true that we can’t track unique users via cookies or anything similar. But our online, real time reporting metrics show the advertiser precisely how many times the ad has appeared (the impressions), the number of clicks generated and the cost of each click. From there it’s a simple matter to work out how effective the campaign was and the true ROI.

The other great aspect to mobile is that it lends itself very effectively to testing different advertising treatments – after all, you only pay when the ad is clicked. Once you have tested a few different ideas, you can look at your stats and see which is working best and focus your budget there.


How big a technical barrier are the networks, and the networks’ different systems and standards, to the development and testing of mobile ads?

AdMob is network agnostic in that we tend to work with off-portal publishers. We are talking with a number of operators too, but those conversations tend to take longer. However, the important point is that our ads work on all phones, irrespective of the network they’re seen on.


Do consumers really want to see ads on their mobiles, given that they have to pay for most mobile services?

There’s two aspects to this. Firstly, many people do find the ads useful, otherwise they wouldn’t be clicking on them. Our theory is that people are using advertising to discover new content and services they otherwise wouldn’t have found.

Secondly, most people accept advertising if the price is that they get cheaper, or free services and content in return. As an example, out of the 1.6bn ads we’ve served now, we have had only one complaint. In this case, a lady had created her own mobile home page on Peperonity, one of our publishing partners and wanted to know why we were running ads on “her” pages.

When we explained that the reason why Peperonity’s service was free was that it was funded by advertising, she actually turned out to be very supportive.

So while many are paying for mobile services today, most people are happy to see ads if they can get cheaper services in the future. And that’s the way the market seems to be going.


How can mobile ads not be intrusive when the screens are so small?

We spend a lot of time focussing on the user experience and certainly have shied away from more aggressive interruptive techniques like pop ups. So it’s about making sure that the ads can be seen, without interrupting the user flow un-necessarily, which I’d say we manage to achieve.


Are location-based ads, powered by mobile/local search the holy grail for advertisers?

I’d say that while location can be an important factor, it’s not the Holy Grail it’s often made out to be. That’s based on being involved in a company that did precisely this back in 2000. We ran over 1500 campaigns to over 85,000 consumers, so we learned a lot about this aspect.

However, we also leaned about a number of problems with the business model, especially the issues of building a scalable inventory. The complexities of matching ads with all UK locations, for instance, are very challenging, especially in the early days.

However, while this form of marketing is attractive to many retailers, in fact the majority of advertising doesn’t need a location element to it to be highly effective. So while I think we’re going to see some fascinating developments in this area, there’s a lot more to mobile advertising than the location aspect.