The Time Warner portal, which already owes much of its ad-related growth to its purchase of the largest online advertising network, Advertising.com, has made good on the rumors that it was buying Third Screen Media.
The move anticipates rapid growth in mobile advertising and comes two weeks after Microsoft acquired European mobile advertising firm ScreenTonic, which it said it hopes to import to the U.S. Microsoft had also flirted with Third Screen.
Third Screen Media is a mobile-ad network that has relationships with many mobile carriers and websites. Such mobile networks have become a valuable tool for advertisers; they simplify the process of buying mobile ads by re-aggregating the fragmented audience of the small but growing mobile web. Third Screen will continue to be based in Boston, although it will become part of AOL's Ad.com division, which is headquartered in Baltimore.
In the announcement, Randy Falco, CEO of AOL, touted the acquisition as an important addition to AOL's already large-scale network. But Third Screen Media, while growing quickly, doesn't yet have scale anywhere close to what advertisers have begun to expect from online ad networks. According to its recent numbers, it represents 225 million mobile impressions per month, up from 50 million in the last quarter of 2006.
While the medium is clearly still in its infancy -- mostly because of its relatively small scale and high cost -- bullish projections are fueling big-time buzz: According to eMarketer, U.S. mobile advertising is expected to grow from $421 million in 2006 to $4.7 billion by 2011 and globally it will be a $11.3 billion business.
'Very tangled mess'
Mobile advertising, said Mark Beccue, a mobile marketing consultant, "is a very tangled mess, it's not easy." When it comes to mobile, wireless carriers are like closed portals and networks, and for marketers to buy an ad across the mobile population, they could be dealing with a half-dozen entities. "Third Screen said 'We're going to make this easier for people and easier for the ad community to think how they typically think.' [With them], you can buy across properties."
Third Screen primarily sells mobile banner ads and is likely well-positioned for video, although it says it can also manage and deliver ads in downloadable applications, SMS/text messaging and MMS/multimedia messaging.