Mobile Ad Firms Continue to Attract Investment and Expand

As mobile advertising gains momentum, companies in the space are continuing to attract investment. Today, mobile rich media ad platform and analytics firm Medialets announced it has secured series B funding worth $6 million, while mobile ad network InMobi announced last month it had received $8 million to help fuel further expansion of its business in the U.S. market.

The announcement of Apple’s iAd mobile advertising product and Google’s $700 million acquisition of AdMob earlier this year has helped accelerate advertiser interest in the medium, and appears to be having a similar effect on investors.

Medialets CEO Eric Litman told ClickZ News in an interview recently the company plans to use its capital to continue to grow its ad platform, attract more publisher partners, and to develop additional tools for advertisers. Though the firm started as an ad network, Medialets now acts as a mobile ad platform provider, helping premium mobile publishers and advertisers run rich media campaigns, many with similar functionality to Apple’s iAd product. Current publisher clients include Bing, CBS, CNN, CondeNast, The New York Times, Pandora, and Yahoo, among others, though its technology is also integrated with a range of ad networks and ad mediation platforms.

InMobi, meanwhile, said it plans to focus its new funding on technology investments, a Japanese market launch, and on the expansion of its network into the U.S. market. The firm officially announced the launch of its U.S. operation in June, with ambitions of competing with major networks such as AdMob and Apple’s iAd product.

Mobile ad firms have already reported a substantial boost to their businesses following Apple’s entry into the market, and though companies such as Medialets could end up competing for the same ad dollars, Litman said the iAd is a welcome addition to the landscape.

Medialets’ clients currently sell the majority of their ad inventory direct to advertisers, rather than through networks such as Apple’s, but Litman believes the two channels can help each other develop. “The iAd is absolutely going to grow, but with the right model it will be complementary to direct publisher sales. The presence of Apple has given the industry a huge boost, and it’s definitely helping to convince the brand community to spend on mobile,” he said.

Despite the recent buzz around mobile, the fact remains that advertisers have been reluctant to commit relatively substantial budgets to the medium. Litman said that is starting to change, though. “Some brands are well beyond experimental testing and on to repeat buys,” he said, citing brands such as Toyota, General Motors, and Capital One. Movie and entertainment advertisers have also been making increased use of the medium, thanks largely to video ad formats, Litman said.

Mobile ad network Greystripe recently reported it too has been selling inventory more successfully in recent months. The company said it has sold out its premium campaigns for the past three months, compared with a fill rate of around 50 percent from premium campaigns for most of 2009. “[It’s] indicative of the increasing interest in immersive mobile advertising from both brands and consumers,” Greystripe CEO Michael Chang said.

Like Medialets, Greystripe offers a range of mobile ad formats not dissimilar to Apple’s, but sells inventory on a network basis, rather than working directly with publishers, as Medialets does. Both companies enable ads on iPhone and iPad devices, as well as Google’s emerging Android platform.