Are the mobile advertising upstarts out of control?

April 13, 2007 | Matt Marshall | Comments | |

millennialmedia.jpgServing ads on mobile phones is a lucrative business, forcing companies with a stake in the game to engage in aggressive marketing — perhaps too aggressive.

Millennial Media, one of a handful of Young Turks targeting this market, is a case in point. The company, which recently raised $6.3 million, has just launched a marketplace for advertisers and publishers that has a fake ad counter on its home page.

In its fervor to stay up with aggressive players like Admob and Third Screen Media, the company’s marketplace, called Decktrade, sports a counter (go to page here; see screenshot below) that gives the impression it is scrolling all the new ads being bid on within the marketplace. The counter (go to the page here; screenshot below) shows the bids, the click-through rate (CTR) and estimated cost per thousand impressions (CPM). The counter is moving rapidly.

decktrade2.jpg

You know it is fake because if you disconnect your computer from the Internet, the counter keeps ticking. A tipster pointed this out to us, after he’d done some analysis. The counter’s data is all hard-coded (download code as text); there’s only one phone for Turkey, the Nokia 6680, for example. What is odd, is how elaborate the scheme is. CPM values are set to be $8.5 + a randomly generated number, keeping ads at a nice high rate — all the better to get publishers eager to join. This is sketchy. If these sorts of randomized counters are being condoned by the industry and its insiders, we suggest people start calling companies on this; it’s misleading. We’ve requested comment from the company’s public relations firm, but have yet to hear back.

This sort of thing was bound to happen. The temptation to create the impression you are the market leader is great. EBay and Google showed the biggest marketplace wins. Mobile ad spending was only $871 million last year, but is expected to reach multi-billions in coming years. And the counter idea is a blatant copy of competitor Admob’s impressive counter. Three weeks ago, Admob raised $15 million from high-profile Silicon Valley investors Sequoia Capital and Accel Partners. Even then, we noted that companies appear to be getting carried away with their stats, and wondered aloud whether anyone is holding them accountable. Third Screen Media, for example, said on its Web site it served 175 million ads a month, after earlier telling the WSJ that it showed 350 million a month.

Here’s a copy of Millennial Media’s announcement about Decktrade. Millennial’s backing comes from Bessemer Venture Partners, Columbia Capital and Acta Wireless. The company is headed by Paul Palmieri, formerly with Verizon Wireless and Advertising.com.

(Update: Apologies for the earlier version. A switch in servers and move to a new version of Wordpress recently caused a glitch, causing a draft to be published instead of the final version.)

(Update: This morning, the company has changed its homepage, freezing the counter and saying it is only for “marketplace simulation.”)

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About the Author, Matt Marshall

Matt Marshall is editor and CEO of VentureBeat. Follow him on Twitter at @mmarshall, and follow VentureBeat on Twitter at @venturebeat.

  • Steven Rean
    So Decktrade as a service totally false? Is it the service or just that they falsified the numbers?
  • Harold
    I love the site and it's content; but, you must proof-read the work before publishing. There are many errors in the above work. Please do both grammar and spell checks.
  • M
    Matt... good article -- needs corrections. correct the piece. here are the ones I found in my quick read. all the best.

    "that gives the impression it is scroll all the new ads"

    "keeping ads a nice high rate"

    "If these sorts of randomized counter are being"

    market place

    is a blatant copycat

    Just two weeks Admob raised

    holding their feed to the fire
  • As the CMO of Third Screen Media, I applaud your call for “truth in advertising” and strongly agree that mobile advertising will never realize its full potential without the adoption of third party research that quantifies, validates and measures the market opportunity and its performance. To this end, Third Screen Media has been in the forefront of working with marketers and their agencies to support and integrate third party research providers into our mobile ad management and delivery platform.

    I’d also like to clarify the difference noted in your post between the 175 million available (sellable) US-based ad impressions in TSM|Network – our mobile ad network (which at the end of Q1 2007 has increased to 225 million) from the 350 million impressions that our servers register from our ad tags across all publishers, including not only the TSM|Network, but also the publishers and carriers who have licensed our MADX ad management and delivery software to sell and manage their own mobile ad inventory on a worldwide basis.

    Jeff Janer
    jjaner@thirdscreenmedia.com
  • Thanks for calling me on all the errors. Big apologies. The glitch was caused by switch to a new version of wordpress -- which published a draft version before I was able to do a more complete fact check!
  • M
    no worries. love your post. keep up the solid work.
  • kenny
    Admob is an incredibly classy company - see this post on their ceo's blog calling for more clarity about this exact issue: http://admob.blogspot.com/2007/04/lies-damn-lie.... I have been a customer for 5 months now and have been consistently impressed with their quality and clarity. Their network is very real and gives me an excellent ROI, much better than google or third screen!!! I encourage any interested advertisers or publishers to check them out. Now, if they would only let me have a commission :)
  • kenny
    whoops, delete the last period in the link above to view that blogposting from admob. My mistake!!
  • Eric Eller
    As the SVP of Marketing for Millennial Media I also want to ring in support for truth and transparency in advertising. As mobile advertising is still in its early stages we think third party validation and delivery of objective metrics will be key to the industry’s growth.

    Transparency is as important a pillar of our offerings as reach and relevance, so we also thought we should clarify that we posted the illustration of our Marketplace on our site to simply show how our Marketplace works, not to mislead. After the confusion was brought to our attention we updated the page immediately to clarify it as a simulation. Our Marketplace operates differently than other offerings so it is important to demonstrate it visually.
  • Steven Rean
    Eric, since transparency is such as a pillar of importance -- what do you mean my a simulation, were the numbers posted there previously TRUE or FALSE?
  • kenny
    Steven, good question! Judging from what I've seen, they seem too impressive to be real! Eric, can you clarify how your marketplace "operates differently"?!!
  • steve campel
    i use www.create-ringtone.com to create and send FREE custom ringtones, wallpaper, mp3 and video files to cell phones around the world
  • Another Tip Off
    While we are on the topic of behing honest...

    Try capturing the headers from a country targeted admob campaign. Cross reference the IP address or X_UP_SUBNO. You will find that many of the targeted ad's are not actually targeted(i.e. French targeted campaign will on occasion give Verizon wireless header). We saw a 10% discrepency. I am not sure if that is good/bad for a mobile ad network but we were surely still paying the targeting fee. I see a problem if people are selling premium content and their ad gets served to places they cannot deliver or bill. I also saw a good amount of 'web' requests which meant either someone was using a web browser and clicking the mobile link or they were surfing wap with WiFi..
  • Thanks, Matt. Interesting read and I hope this is a wake up call for all of us in the mobile marketing space. It should be!

    After spending over a decade in the wireless data world and witnessing the promise of network speeds and user adoption finally meeting expectations, the last thing we need in the nascent market of mobile marketing is false proof points. We all need to act responsibly to ensure success for all stakeholders and most importantly, the end customer receiving content we are creating and sending.
  • Still don't get it how all this stuff about Are the mobile advertising upstarts out of control? can affect it...
  • Ramon
    Wasen't gmail counter fake as well in the beginning? I remember leaving the page open for a week and my storage didn't grow.
  • Guest
    Excuse me, just popped in to have a momentary temper tantrum over the increasing use of interactive advertising in iPhone apps (especially pop-ups that block further use of the application until give input). Just so you know, on principle, I NEVER give such input, but instead delete the application. Goodbye app, and good riddance to it's ads.

    Advertisers and business/entrepreneurs carrying bags of money and promises are playing a nice little game of musical chairs with each other, while we (the consumers) sit on the sidelines, annoyed and eagerly waiting for someone to trip and break their neck. We (yes, I speak for everyone on Earth) are sick of advertising. It's so prolific as to make it meaningless. I wonder if those ads on the floor (yes, on the floor; you can't even shoe-gaze anymore) of my local big-box home center actually result in sales, or are they there because some ad sales team snickeringly sold it to some big-box exec who actually thought it was a clever idea.

    Here's my clever marketing idea: ads on the insides of eye-glasses. Isn't it the ultimate goal that wherever we look, we'll see an ad? What an even more messed-up world it will be when some soulless marketing upstart takes that suggestion seriously.