Mergers & Acquisitions: Mobile Marketing Firms Losing Ground To Social Networking

Is mobile marketing already passé?

There are some indications VCs may think mobile marketing is yesterday's news - or not quite ready for prime time.

MediaPost is reporting today that in the first half of 2008, VC firms and investors pumped nearly $1.5 billion into social media companies (including those involved with social networking) and almost $760 million into advertising networks and exchanges, according to New York-based Petsky Prunier.

LinkedIn alone saw traffic jump nearly 150% from May 2007 to May 2008 - helping to spark interest in the social media sector. And Cox Communications' $300 million acquisition of ad network Adify was the largest interactive advertising deal of the first half.

Compare this with mobile, which has slowed significantly - accounting for just $80 million in investments, compared to $291 million last year.

"(Mobile) was the largest recipient just two years ago," Scott Wiggins, managing director at Petsky Prunier, tells the pub. "As investors were perhaps hoping that 'if you build it, they will come.' But the infrastructure hasn't facilitated its use."

Will iPhone 3G help out? Don't count on it. Wiggins tells MediaPost that even the new iPhone won't spur investments in mobile marketing concerns in the short term.

It may come as a surprise, but I applaud the news. Look: Most investments would involve mobile advertising networks or technologies - which bring the brrr to borrring.

As I write in BRANDING UNBOUND the book, true mobile marketing - the kind that involves using mobile as a interaction mechanism to commercial messages in other media (print, broadcast, outdoor, direct mail, online and so on), aka, the exciting stuff, doesn't cost much at all, and can be implemented by just about any brand.

Which means there's no real reason for VCs to get involved - except maybe in forms that distribute content or maybe something like branded apps.

Let's see what first half 2009 brings to that.

Read more here.

Quick links:

BRANDING UNBOUND The Blog
BRANDING UNBOUND The Book
ADWEEK Magazines Excerpt
Rick Mathieson.com

Comments

[scott kline]

It is very clear that consumers are driven by promotions in the physical world to use the mobile device as a RESPONSE MECHANISM TO INTERACT WITH BRANDS!

At Adheadz.com, we continue to see Mobile Response rates higher than 15% when Brands run radio, TV and traditional advertising with their Mobile Tag like 'Text Adheadz to 51684 for More Information".

The increase of Mobile Tagging, where marketers add their brands’ Keyword and Short Code (like 'Text Adheadz to 51684 for More Information") onto their brochures, collateral and marketing outreach, is similar to the use of URL tagging which happened at the onset of the Internet.

All the best - Scott

Scott Kline
scott@adheadz.com

[Mike Thompson]

We have noticed some smaller companies are coming up with some great stuff when it comes to fun interactive Mobile Marketing that both the consumer and advertiser will enjoy. Absolutely no need for VCs in these cases either.