Earlier this week comScore reported that mobile devices (smartphones + PCs) were responsible for 60 percent of total digital media time in the US (chart at right). Traditional TV is still the king in the US in terms of overall consumer time spent.
More specifically, comScore said that US users spend 51% of all their digital media time in mobile apps. The firm reports roughly 83% of mobile media time is app-based (vs. the mobile web). Nielsen puts the number at 89%.
I spoke to comScore at some length about these numbers. We agreed that ad dollars would eventually follow the consumer traffic migration. The question is how long it might take. For the past few years mobile ad spending in the US has roughly doubled YoY (per the IAB):
Total digital ad revenue in the US for 2014 will probably be around $49 billion. If time spent and ad spend were aligned mobile would capture more than half of that number (and in-app advertising the bulk of that). Accordingly mobile ad revenue would be $29.4 billion and PC ad revenue would be $19.6 billion.
That would be radical.
There were early, hopeful rumors that Amazon's smartphone would be free. What a radical move that would have been.
That free rumor was quickly quashed by Amazon. Indeed, when it showed up last week the Fire phone was priced like an iPhone: $199 with a two year contract or $650 unlocked. I was very surprised by this "premium" pricing.
Amazon CEO Jeff Bezos feels he's developed a premium phone and that consumers will also see it that way. True, Fire does have a number of stand-out or innovative features:
Yet one can't escape the feeling that this device has been designed almost entirely to promote Amazon, its content and e-commerce. The user is somehow secondary or merely a vechicle for the realization of Amazon's broader mobile ambitions.
The early reviews have been very mixed. Consequently few iPhone buyers will switch and the same is probably true for those loyal to Samsung Android devices. Amazon's loyal customers are the likely buyers of this handset. While that's millions of people it's not enough to make the phone a true hit.
Had the phone been more aggressively priced, as the Kindle Fire tablet was when it launched, the story would be very different. In all but a very few cases price matters. An unlocked $199 Fire or, ideally, unlocked $149 Fire would generate significant sales. Then, I believe, Amazon would have had a massive potential hit on its hands.
Consider that Motorola sells the 4G Moto G Android phone for $179 -- unlocked. Between the Amazon phone and the less flashy but still well-equipped (and much cheaper) Moto G, the choice is obvious: Moto G.
As with the Fire, now destined for disappointing sales absent a price cut, the price of Apple's forthcoming iWatch matters. The device (or devices) will be released, according to reports in October.
Financial firm Piper Jaffray surveyed 100 people (too small a sample) and asked about interest in a $350 iWatch. Apparently only 14% (or 14 people) said they were willing to buy a $350 iWatch. The survey extrapolates limited demand from those findings.
The conclusion of that there's only limited interest in smartwatches is wrong. There's considerable interest in the market. Surveys by Opus Research, Nielsen and others suggest a potential market in the US of more than 100 million people. There are two key variables however: design and price.
The Samsung Galaxy Gear watches failed not because of price ($299) but because they were ugly and poorly designed. We can expect Apple's iWatch(es) to be well designed but the price is an issue.
If Apple can price these devices below $300, and preferably below $250, they're likely to see considerable sales volume. But above $300 the market will be more limited, as the Piper Jaffray data suggests.
Apple needs another hit product so it would do well to take a lower margin on the iWatch in favor of boosting sales and making it more accessible and affordable for a larger population.
Beacon marketing provider inMarket released some data drawn from its shopper/store base that show Beacons and associated content/offers can increase app usage, retention and brand engagement.
The company looked at a sample of 25,000 in-store shoppers across its app network during April-May of this year and found the following averages:
These findings reinforce others that already exist and highlight the potential to improve the in-store experience and boost sales both for retailers and brands.
We'll get a drill down and more in-depth look at in-store Beacon usage/engagement data from inMarket partner Hillshire Brands and its agency BPN Worldwide at the Place Conference coming up July 22 in New York.
This kind of data is a counterweight or argument against the notion that consumers are hostile to indoor location, which several surveys and media reports seek to portray.
This morning the IAB put out a press release that reported $11.6 billion in digital ad revenue for the first quarter of 2014. However the trade association did not indicate how the numbers were broken down by channel and category.
In 2012 mobile advertising represented 9% of total US digital ad spending. In real dollar terms that was roughly $3.3 billion. In 2013 mobile advertising grew to be 17% of total digital ad revenue or nearly $7.1 billion.
Mobile advertising could double again in 2014 and reach between $14 billion and $15 billion. If so, by my calculation, it would represent nearly 30% of total US digital ad revenue -- assuming a full year 2014 projection of roughly $49 billion.
In Q1 mobile ad revenues were probably in excess of 20% of the total. In Q4 2013 they were 19% (though 17% for the full year). At 20% mobile ad revenue would represent $2.3 billion of the Q1 2014 $11.6 billion.
App retention is getting better, according to Localytics. The company said that only "20% of apps are used only once, an improvement of 6% over four years." The data in the report were collected from 1.5 billion devices and 25,000 apps using the Localytics platform.
Localytics attributes increased retention to better developer-publisher "understanding of and focus on user engagement that has enabled developers to create more useful and personalized apps." Here are the aggregated topline data:
In a worrying development for iOS developers, Localytics says that iOS showed weaker app retention than Android:
In 2013, both Android and iOS had the same percentage of apps (34%) with 11 or more sessions. Now, Android has surpassed iOS in app engagement by increasing to 45%; nearly half of Android apps are opened 11 or more times, whereas only a third (34%) of iOS apps are.
The company speculates that "iOS users may be suffering from app overload. With the relatively larger number of apps installed on iOS devices, competition for an iOs user’s time increases and can weaken retention."
As indicated, weather and social apps showed the highest retention while sports and games had the highest percentage of one-time usage. Localytics observes that social networks are filled with personalized and highly dynamic content.
Yet sports apps have dynamic, changing content (e.g., scores) too. Perhaps personalization is a missing element or, alternatively, sports content may be highly "generic" and widely available, making any individual app less compelling.
Technologies for indoor location and offline analytics differ substantially in their costs, capabilities, accuracy and longevity. But these technologies remain largely undifferentiated in the minds of many brands, retailers and venue owners who’ve had limited exposure to them in the real-world. In this report, Opus Research delves deeply into one such technology, magnetic positioning, to understand how it differs from its competitors in offering precision accuracy without any hardware requirements and a relatively low total cost of ownership.
To see a preview of “Magnetic Positioning: The Arrival of Indoor GPS,” an Opus Research report written by Senior Analyst Greg Sterling, click here
To see a preview of “Magnetic Positioning: The Arrival of Indoor GPS,” an Opus Research report written by Senior Analyst Greg Sterling, click here
Featured Research is available to registered users only.
For more information on becoming an I2G client, please contact Pete Headrick (firstname.lastname@example.org).
A new report from eMarketer argues that Google is leaking mobile search revenue to apps. The forecast in the document says that US mobile advertising in total will reach $17.73 billion this year and search revenue will constitute just over $9 billion of that total.
Last year the IAB reported $7.1 billion in US mobile ad revenue, roughly double the year before. If mobile ad spending were to double again it would reach between $14 and $15 billion. Getting to nearly $18 billion is a stretch. However eMarketer casts a very broad net around mobile advertising, including email and services like "site optimization" that don't involve any media spending.
Regardless of definitions, the consumer tendency to use apps rather than the mobile web is apparently taking a toll on Google’s mobile ad dominance. According to the forecast, Google's mobile search ad share was 83% in 2012, dropping to 68.5% last year. These numbers are somewhat deceptive because Google's mobile revenues are still growing and the company continues to have the largest individual share of global mobile ad spending.
What's happened, however, is that more money is flowing into mobile generally (and mobile search advertising) and some of that money is being spread around to places other than Google. Among them, YP and Yelp are called out in the report.
YP has been one of the (surprise) top five mobile ad companies in the US. However eMarketer projects that YP will lose share (though potentially grow overall revenue), going from 7.6% of total US mobile search revenues in 2013 to 4.1% in 2016. By comparison Yelp will grow from 1% in 2013 to 1.9% of search ad revenue in 2016.
Among other, anticipated product announcements at Apple's WWDC conference today (iPhone, smart home, iOS 8) the company may make some new iBeacon announcements. According to the Wall Street Journal, Apple has placed iBeacons around the conference hall where WWDC is taking place to demonstrate the BLE technology to developers.
The WSJ article gets a number of things wrong about the technology however. For example Bluetooth beacons/iBeacon cannot currently enable precise indoor location indoors so it's definitely not "indoor GPS." Indeed, this is a potential advantage because users cannot be accurately "tracked" by merchants, allieviating some privacy concerns.
It's really only one-way opt-in communication from a retailer to a consumer. However beacons require the download of an app to work. Provided the case is made (i.e., offers, better in-store experience) consumers will be receptive.
Among a range of indoor location technologies, iBeacon has the most visibility right now. Apple has deployed iBeacons in all of its 250+ retail stores globally.
In addition several NBA teams and Major League Baseball are using iBeacons to enhance the fan experience. For example, the Golden State Warriors basketball team sold better seats and offered welcome messages and discounts on team merchandise to fans in the arena using the Bluetooth Beacons. The team says the experience was very positive and intends a broader range of use cases next season.
In addition, retailer Alex and Ani is rolling out iBeacons in all 40 of its retail locations. American Eagle Outfitters, in partnership with retail loyalty app Shopkick, said it would install iBeacons in its more than 100 U.S. retail stores this year. And British retail giant Tesco is testing how beacons can be used to improve the in-store experience.
For those who want more information, we provide a broad overview and discussion of iBeacons and Bluetooth based in-store marketing in our report "A Marketer's Guide to iBeacons." You can also listen to our recent webinar on BLE Beacons: Everything You Always Wanted to Know about Beacons (but were afraid to ask) featuring Steve Hegenderfer, director of developer programs at Bluetooth SIG.
But for the most comprehensive look at indoor location, offline analytics and proximity marketing register for Place 2014 in New York on July 22. Be sure to take a look at the session and speaker lineup.
GE Lighting is partnering with ByteLight in effort to help retailers communicate with customers in-store through networked LED fixtures. The joint solution is intended to determine the precise location of shoppers who “opt-in” through a retailer’s app.
ByteLight and GE will showcase a networked LED fixture next week at LIGHTFAIR 2014 that combines Visible Light Communication (VLC), Bluetooth Low Energy (BLE) and inertial device sensors. The combined approach will be able to communicate with any shopper who has a mobile device with a camera and/or Bluetooth Smart technology.
The partnership is significant with GE, an iconic lighting manufacturer, entering the market for indoor location services. Not to be outdone, another lighting hardware stalwart, Philips, recently announced an indoor location opportunity of its own.
Also telling is the announced "comprehensive approach" with visible light and BLE technology. With many retailers still trying to understand the myriad indoor location technologies in the market (e.g. WiFi, proximity beacons, magnetic positioning, video cameras, as well as ByteLight’s LED offering), integrating different solutions is a likely approach for retailers as they navigate how to deploy indoor location technologies.
Finnish company IndoorAtlas offers something that sounds almost too good to be true: accurate indoor mapping without the installation of hardware. In addition, its approach can be accomplished very quickly -- even crowdsourced.
The company, founded in Finland with offices in Mountain View, has been around for several years but has had some difficulty convincing people that its approach to indoor location and mapping actually works. One reason is that, unlike Bluetooth Beacons, nobody else is promoting this approach to indoor location.
People are thus largely unfamiliar with it and how it works. Some people who learn of IndoorAtlas' "magnetic positioning" argue that all the building materials (i.e., steel, concrete) must distort magnetic fields inside structures. However this is precisely what IndoorAtlas says it relies upon: structural elements that give each building or indoor area a unique "magnetic fingerprint."
This weekend the NY Times offered a brief overview of the company and its approach. We've been writing a report on the company's technology, which will be out shortly. IndoorAtlas will also be attending and presenting at our upcoming Place Conference in New York on July 22.
We are among a small handful of individuals who've actually seen the technology working live in a store environment. About a month ago we got an in-store demonstration in a major retail store. Throughout the demo and our tour of the store the IndoorAtlas app accurately maintained our real-time location (exactly or within a couple of feet) as we moved throughout the store.
It was consistently accurate. While this was an isolated situation -- though it wasn't controlled; it was a real "big box" retailer -- we have no reason to believe that it wouldn't perform the same way in other indoor environments.
As we've argued in the past no single indoor location technology is perfect or complete. Multiple technologies will need to be combined to do the different types of things that retailers and venue owners seek to accomplish with indoor location (analytics, marketing). For example, RetailNext combines video, Wi-Fi and increasingly beacons in its analytics solution.
But the impressive and relatively amazing thing (hence the skepticism) that IndoorAltlas does is deliver indoor-location accuracy without the installation of any hardware whatsoever.