FORTUNE -- Kamakshi Sivaramakrishnan never planned to go into advertising, much less run a startup. But when the 37-year-old Stanford graduate, with a Ph.D. in Information Theory, met AdMob founder Omar Hamoui, she turned her back on Wall Street and joined AdMob as a research scientist in 2007. There, she developed large, sweeping strings of math to help improve things like making ads more relevant to users.
"It was the era of feature phones," Sivarakmakrishnan remembers. Though the iPhone launched that year, Sivaramakrishnan still owned an old-school cell with a small screen and skeleton web browser. "Who browsed the Internet on their phones then? We just used them to talk. It was a voice communication device -- not a data communication device."
Two years later, Google (GOOG), itself the long-reigning Internet ad king, scooped up AdMob for $750 million, one of the largest acquisitions the company ever made. Sivrakmakrishnan stayed with Google for a brief six-month stint before striking out on her own to finish what AdMob started.
"If there is an unfinished legacy of AdMob that needs to be solved, it's mobile advertising in this next generation," she explains. Now the 36-strong San Mateo-based startup, with $20.5 million in funding from backers like Kleiner Perkins and Sequoia Capital, argues that today's $7.29 billion U.S. mobile ad industry is broken. Many marketers continue to treat mobile and desktop behavior as separate sets of data, a flawed philosophy given how many consumers own multiple devices now. They may start surfing the web on the desktop, for instance, but continue doing so on their tablet or smartphone.
Last fall, Drawbridge debuted ad products that know better. Say a smartphone user searches for flat screen TVs, and they see a Best Buy (BBY) sales ad. They click on it, but realize they'd rather browse and buy on BestBuy.com from their desktop instead of scrolling on their phone's comparatively smaller screen. "Best Buy doesn't know that was the same person who clicked on their mobile app, and Google doesn't either," explains Eric Rosenblum, another Google alum and Drawbridge's VP of product. All Best Buy knows is that it paid Google for an ad someone clicked on, but they did not buy a television, and that later, a different person came to BestBuy.com and bought a TV."
Devices that all belong to the same person normally send off similar ad requests or requests made through the device by way of a digital exchange or marketplace. Drawbridge is able to sit on the sidelines of this digital exchange and observe these requests. Over several weeks, Drawbridge's tech recognizes a user's behavioral patterns across different devices and with 70%-plus accuracy, matches them up. In the case of Best Buy and Google, the value of Drawbridge is obvious: BestBuy (BBY) would know its ad directly contributed to a purchase, and Google could potentially charge more for that ad.
The startup has paired over 471 million devices so far, yielding complete desktop and mobile user profiles that number in the hundreds of millions. Travel booking site Expedia (EXPE) is already testing Drawbridge's ad solutions. Drawbridge's next step? Drilling deeper into user data and being able to tell marketers things like how often someone comes back to a web site and once they return, whether they're viewing or clicking from mobile or desktop. Already, Sivaramakrishnan estimates their current ad solutions can offer marketing campaigns as much as 300% in boost.
Given its founder's dedication, the Drawbridge crew should get there quickly. When she first started, the committed Sivaramakrishnan encouraged people to come into the office on weekends and even wondered whether it was OK to give employees Christmas Day off. Indeed, it was only after her beat-up 1990 Toyota Corolla got totaled in an accident did Sivaramakrishnan finally get a new car. "She was so busy she couldn't buy one," chuckles Matt Murphy, a Kleiner Perkins partner and Drawbridge investor, who offered to purchase one for her. (He ultimately didn't.)
To Murphy however, that would have been a small price to pay so Sivaramakrishnan could continue her work. Explains Murphy: "She's going after a big problem that frankly, is going to be extraordinarily hard for others replicate."
An eye-opening comparison of Android's income statement with Apple's
FORTUNE -- As part of an extended look at what he calls Google's (GOOG) "Android economics," Asymco's Horace Dediu on Monday published what may be the first independent estimate of the company's Android income statement.
As the chart at right shows, Android generates revenue for Google through three kinds of ad sales (Google's Search, AdSense and AdMob). After costs and revenue sharing are MOREPhilip Elmer-DeWitt - May 15, 2012 9:10 AM ET
Taking another crack at the $1.23 billion market for ads on tablets and mobile phones
According to several sources, Apple has hired Adobe vice president Todd Teresi to head its iAd mobile advertising service, a position that has been vacant since last summer.
iAd was one of those projects Steve Jobs launched with great fanfare but which hasn't quite panned out -- at least not yet.
He pitched it in April 2010 as MOREPhilip Elmer-DeWitt - Jan 4, 2012 6:31 PM ET
And 43% spend more time on their tablet computer than on their laptop or desktop PC
This chart is from a survey of more than 1,400 tablet computer users conducted by AdMob, the online advertising company that Google (GOOG) snatched away from Apple (AAPL) in 2009. I missed the report when it was released last week. The extent to which tablets have cut into PC use is surprising.
"I think this trend MOREPhilip Elmer-DeWitt - Apr 12, 2011 6:39 PM ET
Keeping it all in the Google ad family...
Today, Google (GOOG) is sending some of its Admob mobile app developers some good news. The search giant will start placing Adsense ads inside of apps that use Google's Admob advertising. That means fill rate will skyrocket toward 100% and developers will get paid much more, across the board.
The move may also pull some of Apple's (AAPL) iAds user-developers away, especially those who MORESeth Weintraub - Mar 11, 2011 3:57 PM ET
Big media companies are grousing about Apple's 30% app tax. OnSwipe wants to convince readers—and publishers—there's another, better way.
By Chadwick Matlin, contributor
Last week, after a year of luring big media organizations onto the iPad, Apple sent out a press release, but they would have done just as well sending copies of the old board game Mouse Trap. The release said that publishers, like all app developers, would have to pay what MOREFeb 25, 2011 10:33 AM ET
Wedbush Morgan analyst Lou Kerner raised his rating on Google to Outperform from Neutral
Google's (GOOG) efforts in Mobile and OS/Browser markets will start to pay off, according to Wedbush Morgan analyst Lou Kerner.
In a research note today, Kerner wrote:
We are raising our rating and price target on Google based on our belief that mobile and social secular trends are accelerating the growth of time spent online and the growth of global MORESeth Weintraub - Dec 14, 2010 12:35 PM ET
Mobile ads are going to be a big business.
Yesterday, ooVoo CEO Philippe Schwartz came into the Fortune offices to demonstrate his company's excellent new mobile video conferencing software (more on that next week) on Android and soon on iOS.
On the desktop, ooVoo has two revenue models. One is a subscription service, mostly sold to businesses who want to do multiple-window video conferencing without advertising. On the consumer side, they run Google MORESeth Weintraub - Dec 9, 2010 2:19 PM ET
The terms of Apple's iOS 4 developer license prohibit data collection from competitors.
At the MobileBeat 2010 conference today, Google's Admob division head Omar Hamoui told reporters that Apple hadn't yet started blocking Admob on its iOS devices.
Apple (AAPL), last month changed the terms of its iOS developer license to prohibit mobile advertising networks owned by competitors (and who rhyme with Noogle) to collect analytics data on their users for the purposes of MORESeth Weintraub - Jul 13, 2010 6:08 PM ET
According to today's report, Apple's iOS fell to 40% while Google's Android is headed towards 30%.
The latest analytics reports done by Google's new Admob subsidiary show that Android continues to draw market share from Apple's iOS. A year ago, the iPhone owned almost 50% of the smartphone market by web traffic while Android had only 5%.
June saw the annual release of Apple's new iPhone. Apple said it had sold MORESeth Weintraub - Jun 30, 2010 11:21 AM ET
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