Mobile Advertising is definitely becoming big business. In 2012 eMarketer reported that the global mobile advertising spend managed to reach a whopping $8.8 billion with Google providing around $4.6 billion of that total alone. eMarketer has also predicted that by the end of 2013 that total will reach an impressive $15.8 billion.
In recent news, Millennial Media seems to be quickly climbing to the top of that table now they’ve acquired Jumptap, another rather large mobile advertising network, in what’s been described as a predominantly stock transaction.
What this means is that Millennial Media has almost doubled the size of their business without having to spend a penny. According to its press release under the terms of the agreement, Jumptap shareholders will receive approximately 24.6 million shares of Millennial Media, which translates to around 22.5 percent of Millennial Media has gone to Jumptaps shareholders.
Shortly after this acquisition, Millennial Media’s stocks fell slightly due to investors reacting to the fact that MM is issuing around 24.6 million new shares of stock to Jumptap holders which essentially shows an increase of business but lack of profits. What investors have overlooked, however; is that Millennial Media hasn’t spent a single dime in this transaction and has acquired a substantial amount of tools which in turn creates more powerful and comprehensive opportunities to monetize their inventory more efficiently and effectively.
Advertisers looking to dive into the world of mobile advertising will have more opportunities to get a better return on their investments. This includes both the reach of their campaign, the tools used to provide a more relevant and rich advert for consumers, and the ability to display their ads on a larger range of devices.
“Millennial Media already runs one of the largest third-party digital media businesses, despite mobile being in its early stages. Jumptap’s expertise in performance, cross-screen, real-time bidding and third-party data fit well with, and provide incremental scale to Millennial Media’s existing platform,” said Paul Palmieri, President and CEO, Millennial Media. “We are thrilled to add Jumptap’s capabilities, their solution set and strong team as part of our mobile advertising business, and look forward to partnering with the team.”
But what does this mean for Jumptap and its employees? It seems that Jumptap CEO George Bell will be joining Millennial Media’s board of directors and most if not all of Jumptap’s staff will be joining Millennial Media. This in turn will help Millennial spread its workload amongst staff, cutting duplicate jobs and functions in hopes to gather up to $25 million in annual savings by 2015.
Millennial Media has been in the business of mobile advertising for roughly seven years. Since their humble beginnings, MM has quickly become one of the leading independent mobile advertising and data platforms by offering the technology, tools and services to help mobile app and game developers as well as mobile website publishers maximize their advertising revenue, acquire users and gain audience insights.
Jumptap on the other hand, has been in the business almost as long but began with a focus on mobile-search products, until the introduction of CEO George Bell who then joined Jumptap as COO and shifted the focus more onto targeted mobile advertising. Before the acquisition, Jumptap had a global reach of 439 million unique users with 218 million of those being in the United States.
With the two companies combined, Millennial Media can now add Jumptap’s 10.7 percent of the US market share to their already existing 18 percent, for a complete total of 28.7 percent of the 2012 market share of mobile advertising in the United States — bringing them almost on par with Google, who has 29 percent of the overall share.
Mobile advertising alone is becoming an ideal way for advertisers to reach more and more people using relevant and eye-catching campaigns. In the last five to six years alone, the adoption of smartphone and tablet devices have boomed, and now almost everyone has either a smartphone or tablet or even both in their possession.
Mobile advertising has the ability to not only target consumers based on their browsing habits, but also takes into account the smartphone or tablet’s location to serve relevant adverts based on their proximity to certain stores or retailers. That being said, It’s not all about the advertiser either, mobile advertising is a perfect way for mobile app developers to monetize their game or app as well as advertise their own product in an attempt to drive more downloads which brings more users that would perhaps make use of the in app advertising.
Aaron Richardson is a 24-year-old techno nerd, musician, and aspiring tech writer. He is the editor of n3rdabl3.co.uk and author of Mobile Ad Comparison.