With the $15.7 million raised in a third round of funding, AdMob, a fast-growing mobile advertising marketplace, has now pulled in a cool $34.7 million in two years and three financing rounds. Even more important for those waiting for the mobile advertising marketplace to prove itself, AdMob reports that it is cash flow positive. The funding round was led by Sequoia Capital's Growth Fund with Accel Partners participation.
AdMob plans to use the cash to beef up its worldwide operations by hiring local staff in growing markets and adding new language interfaces, particularly in Western Europe, India, South Africa and Japan. The company will also enhance its targeting, optimization and ad serving algorithms as well as expand offerings for publishers and advertisers.
All this is despite mobile advertising’s unproven potential and tiny current fraction of advertising total spending. Still just a baby, mobile advertising is only an $800 million business in the United States — adding up to only 0.4 percent of total advertising spending — and prices are relatively low, according to analyst Chetan Sharma.
Nonetheless, AdMob’s September 2008 Mobile Metrics Report indicates that potential is huge because of the rapid and global growth of mobile Web and application usage, sending more than 10 million ad requests to AdMob's network in September alone.
In the last year, AdMob's monthly ad requests tripled from 1.6 billion to 5.1 billion. Its network mobile sites and applications increased to more than 6000, with 4308 publishers requesting ads in September 2008.
Apparently, Sequoia Capital and Accel Partners agree with AdMob's optimism. Despite the recession, and Sequoia’s own recent advice to portfolio companies to cut spending, they’re backing AdMob big. It may be significant that Sequoia's support this time comes from a new nearly $1 billion "growth fund" earmarked for maintaining the growth of later-stage companies in a tumultuous economy.
The full AdMob Advertising Metrics Report is available at www.admob.com/metrics.