Investors See Opportunity In Mobile Advertising Startups, Despite Softer Outlook
Mobile advertising is hitting its stride. A year ago, ads on cellphones were pricey and considered experimental, and while they still may not be mainstream, there’s some rationalization going on. Prices are dropping, inventory is increasing, and the value of placing an ad on the cellphone is better understood. The maturing and stabilizing of the market isn’t escaping opportunists, like venture capitalists. Start-ups that count on wireless ad sales are still getting their fair share of venture funding, reports Investor’s Business Daily (via Cellular-News).
For instance, the article says Blyk, which offers mobile-phone subscribers free calls and text messages if they agree to receive ads on their phones, has recently raised more than $50 million from private investors, while AdMob, which operates a mobile ad network, has raised $15.7 million. But there are others, too. Other mobile advertising companies that have recently announced rounds include: Transpera, the Santa Monica, Calif.-based mobile video platform company that allows for an ad-supported model, raised $8.25 million; MoVoxx, also based in Santa Monica, raised an undisclosed round to help brands integrate ads into SMS campaigns; and Chicago-based Vibes Media, a mobile marketing company, raised $15 million.
Still, there’s a lot to be proven, and now more than ever it may be difficult with advertisers and agencies cutting budgets. Investor’s Business Daily reported hat research firm eMarketer likely will soon lower its mobile ad forecast. eMarketer’s spokesman Samson Adepoju said: “(Our) projections will almost certainly be trimmed,” he said. “How much remains to be seen.” The firm’s most recent forecast dates back to March, when it said U.S. revenue from mobile display ads would rise to $541 million in 2012 from $85 million in 2008, and search ads would rise to $1.48 billion from just $107 million.
