Research firm eMarketer estimates that $2.6 billion, or just 2% of all U.S. marketing budgets this year, will be spent on mobile advertising. But it’s clear that importance of mobile advertising is growing. StatCounter estimates that smartphone and tablet users now account for more than 10% of Internet traffic in the country. Recently the IAB Mobile Marketing Center of Excellence released mobile advertising report for the past year. According to their research, global mobile advertising was worth $5.3 billion last year, with 26% of the market belonging to Europe and 31% to North America. Asia Pacific markets contributed the largest share – 36% of the market. The emerging markets of Latin America and Middle East & Africa together accounted for nearly 7% of the global market.
One player focused on providing targeted mobile advertising is Jumptap. The Cambridge, Massachusetts–based player was founded in 2005. Jumptap offers technical solutions and partnerships with third-party data providers to help clients understand mobile audiences and provide more intelligent, targeted ads. Through its large network, it is able to provide efficient ROI for advertisers and high yields for publishers and developers. Today, Jumptap’s offerings reach 107 million mobile users in the U.S. and 156 million mobile users worldwide, with 20 billion mobile impressions averaged each month.
Jumptap is known for its professional network for its client base, which includes 70 of the Fortune 100 companies. Its ad targeting service works with several third-party data providers. It also works with other partners that provide data for its service and thus target ads better. These partnerships have helped Jumptap make progress into researching vertical markets. It owns 29 patents already and is working to get another 200.
Jumptap earns revenues through both self-service and auction-based ad campaigns. Analysts estimate that in 2011, it reported revenues of nearly $50 million. During the current year, revenues are expected to grow to as much as $75 million. To date, Jumptap has raised more than $122 million in venture funding from investors that include Summerhill Venture Partners, Redpoint Ventures, General Catalyst Partners, Valhalla Partners, AllianceBernstein, WPP, and Keating Capital.
Jumptap’s Potential Buyout
Rumors abound that e-tail giant Amazon may be eying a buyout of Jumptap at an expected $600 million. Amazon is looking to gain bigger ground within the mobile segment, and the purchase of a player like Jumptap will help it get a much-needed break within mobile ads for the Kindle Fire. My guess is that Marissa Mayer may also be looking at the company as a potential acquisition for Yahoo.
For now, though, Jumptap isn’t commenting. Its latest round of funding of $27.5 million was completed in July of this year. It proposes to use these newly raised funds to prepare for an IPO expected in the spring of 2013.