Ad Tech Companies Create Mobile Ad Exchange to Rival Google, Twitter

An Exchange Focused On Native Ads and International Markets

By Published on .

Mobile native ads from InMobi
Mobile native ads from InMobi

Two ad-tech companies are creating what they believe will be the third-largest mobile ad exchange behind Google and Twitter.

Rubicon Project, a technology company that helps publishers and advertisers buy and sell ads programmatically, is partnering with the mobile ad network InMobi to launch the exchange which will sell both native mobile ads appearing in-stream and banners.

InMobi, which is based in India, has carved out sizable chunks of the mobile-ad markets across Asia, Africa and the Middle East. For brand advertisers hoping to hit consumers in emerging markets, where mobile phones outnumber TVs, the new exchange may provide an easier reach.

"Large agencies have global footprints," said Naveen Tewari, the InMobi CEO. "When they work with us, that global footprint comes alive."

The "third-largest" claim is difficult to verify since Google doesn't break out mobile and Twitter hasn't disclosed numbers for its MoPub unit. InMobi delivers ads reaching 759 million active monthly mobile users, across 35 different countries and on 30,000 applications, according to the company. Its native ads, introduced last month, hit less than a third of mobile users and account for 20 billion impressions a month, out of a total 140 billion.

It plans to ramp up its native ad business in lieu of traditional banner ads, much like everyone else in the mobile ad industry. And, like everyone else, it's playing catch-up to the leaders.

The new exchange, Mr. Tewari said, will "democratize native advertising, which has been kept in the walls of large players, like Facebook, Twitter and Google."

Facebook has tapped the floodgates of mobile-ad dollars with its in-stream news feed product. Twitter's MoPub, which signed a $230 million deal with Omnicom on Tuesday, introduced native ads in April.

Frank Addante, the CEO of Rubicon, which is powering the InMobi exchange, said the new offering would "provide native ads at tremendous scale."

Ad-tech firms like his are increasingly moving into the mobile space. In 2012, Rubicon bought the mobile-ad platform Mobsmith. "It's a large market," Mr. Addante said. "And it's a market that's definitely very thirsty for automation."

On May 19th, PubMatic, a programmatic ad platform, acquired the mobile server Mocean for $15.5 million. Another Rubicon competitor, AppNexus, inked a deal with Millennial Media, an InMobi rival, for a mobile-ad exchange in the fall. Millennial Media's reach (around 650 million monthly active users) is shorter than InMobi's, but the network hits more mobile-applications and has a larger business in the U.S., where CPM rates are higher.

While the AppNexus mobile exchange does not offer native ad formats, a representative from Millennial Media said it plans to do so "later this year."

Most of InMobi's ad network's inventory now is devoted to direct response, although the company is attempting to strengthen its branding business. And it's trying to improve its presence in the U.S. -- what the company has called its "East to West" strategy -- but has struggled to get a foothold. Francisco Cordero McNamara, the VP-North American sales, recently departed.

The network partners with around 100 publishers, including the social messaging app Tango. Around half of InMobi's native ads land on mobile games. They reach thousands of eyeballs -- one of the publishers is 2048, the red-hot iPhone puzzle game now atop the download charts -- but appear on several lesser-known games and mobile-apps as well.

Brands may worry about their marketing appearing on these niche sites and apps, Mr. Addante admitted. But he claimed Rubicon, which went public earlier this year, will work to help brands on the exchange preserve "brand protection and security."

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