Yap Inc. Lands $6.5 Million in Financing

We expect to see some aggressive competition taking shape as mobile voice specialist Yap Inc. receives venture funding to fuel its application and market development efforts. It joins the likes of Nuance, Vlingo, V-Enable and Microsoft to build speech-based methods to enter information into wireless phones. Yap's funding is led by SunBridge Partners and the funders include Harbert Venture Partners and Pittco Capital Partners, as well as individual investors.

iPhone as Radio, eBook Reader and More

One of the things that will differentiate the various "platform" competitors in mobile are the third party applications built for the respective devices. That's why Blackberry has started its own version of the iFund and is seeking to cultivate a developer network.

The Android universe is totally open and should produce many interesting apps as well as some garbage. On the other end, Apple has to approve all the apps that show up in the Apps Store for the iPhone. Out of a reported 25,000 interested, only 4,000 were accepted by Apple.

But what's interesting is about the iPhone (and presumably this will occur with some of the other devices) is that third-party applications are extending or potentially will extend it well beyond its original, contemplated uses. Two cases in point:

  • AOL Radio (now "powered" by CBS's online radio division) has an iPhone application that's going to effectively turn the iPhone into a 21st Century transistor radio without the transistor. Other Internet/streaming radio providers will follow undoubtedly.
  • The second is the potential emergence of the iPhone as an ebook reader.

While the iPhone was always conceived of as an iPod, these cases and others start to push the device even further beyond its status as a phone. Along those lines, I'm hopeful that we'll start to see many other mobile consumer devices on the market that take this evolution farther and initiative and era of true mobile computing.

Coupons.com Inks Deal with Yahoo for Mobile Distribution

Coupons.com, which recently launched coupon syndication through a new service called Brandcaster, has just done a mobile coupons distribution deal with Yahoo!. According to a piece in MediaPost (registration required) this morning:

The initiative would create a national platform for large brand advertisers to distribute mobile coupons, which so far have mostly been tested only in local markets or niche categories . . . Quick-serve restaurants and retailers are the most likely to be early adopters because they potentially offer the most direct way for people to redeem mobile coupons.

As the article points out, redemption is the big challenge and obstacle. These are not printed so would have to offer a unique code (which can easily be done) and then that code would need to be recorded or captured at the point of sale, which is somewhat more difficult. Some smartphones have good enough screen resolution to allow conventional scanners to work with an image of a bar code.

What's interesting here is that the content could be served up in a potential variety of ad forms: banners, text ads, etc., all of which would allow tracking at the point of sale.

Cellfire has been the leader in mobile coupons to date, but Yahoo!'s distribution is so much greater that Yahoo! could quickly obscure it.

Google Pushes Mobile-Desktop Integration

Google has had iGoogle (its personal start page) availability in mobile for some time. However the company has recently made it easier to configure and use iGoogle in mobile and is tying the mobile experience more closely to the desktop.

Changes in iGoogle on the desktop are automatically reflected on the mobile version when users are signed in. The Google.com WAP page now also looks more like Google on the desktop. These changes are intended to leverage the desktop-mobile connection and translate Google loyalty there into mobile.

It's also philosophically reflective of Google's assumption that eventually the mobile Internet and the desktop will be more similar than they are different.
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In an interview this week with Ken Auletta of the New Yorker (reported by Reuters), Google CEO Eric Schmidt said a few things about mobile in the context of a broad discussion on a range of topics:

Schmidt said the vast majority of Google searches on mobile phones were done on Apple Inc's year-old iPhones, which prominently feature a Web browser.

"Mobile looks like it will ultimately be the highest of ad rates," because ads can be targeted by user location, he said.

Similarly, DoubleClick's Rob Victor (now part of Google) spoke at the MMA show about mobile being a "premium product," at the moment, which may keep many advertisers away until rates come down. Fifty dollar CPMs are not uncommon.

Mozilla Mobile Browser Coming Soon

Mozilla has been working for some time on a mobile browser. How will it be different from Safari, Opera, Skyfire and some future hypothetical "full HTML" IE browser?

Here's a video demo from Mozilla reflecting the current thinking and current state of experience on its mobile browser. One of the potential competitive advantages for the company might be the ability to preserve the customization I've done on the desktop in mobile in some fashion. In other words, I set up bookmarkets, etc. on the desktop and I can automatically access those in mobile.

It appears that Mozilla is being pretty thoughtful about the user experience in mobile, especially around navigation with limited keypad entry.

While these browsers provide a richer experience than on WAP sites they create problems, generally speaking, for advertising, which is harder to see on the small screen.

Most people developing these browsers aren't thinking about those issues at this point; they're just thinking about improving the user experience and getting more people onto the mobile Internet.

Nielsen Mobile Shows Surprising Popularity for Mobile Payments

Ideally, local search results in discovery of the goods, services or merchants with whom a searcher wants to carry out business. It culminates in a purchase and payment transaction enabled by mobile phones. That's why it's reassuring to see a press release quoting research from Nielsen Mobile (formerly Telephia) showing that 9 million wireless subscribers have used their mobile phones to make purchases.

Here's the coverage:

  • As of Q1 2008, 3.6 percent (9.2 million) of US mobile subscribers use their phone to pay for goods or services
  • Men are more likely than women to use their phone for commerce: 4.5 percent (4.9 million) of men and 3.0 percent (4.3 million) of women say they have made a purchase using their phone
  • Adults ages 25-34 are the most likely to have made a purchase using their phone: 5.4 percent (3 million) of adults ages 25-34 have made a purchase, compared to 3.6 percent of all mobile subscribers
  • 49 percent of mobile data users, those subscribers who have used one or more data features on their phone such as text messaging or the mobile internet within the past 30 days, say that it is likely they will conduct mobile commerce in the future

Mobile websites are one popular way consumers make purchases over the mobile phone. Of the 40 million active US users of the mobile web in April 2008, 5 million accessed mobile shopping and auction websites -- up 73% from April 2007, when just 2.9 million mobile users did so. Auction site eBay.com is the most popular shopping or auction destination on the mobile web, with 3.4 million unique visitors in April.

Purchasing items via text messaging is another growing form of mobile commerce. Some services allow consumers to send text messages to a phone number or mobile shortcode in order to be charged for goods or services directly on their mobile phone bills. Already, 6.5 million US mobile consumers say they've used text messaging to purchase an item.

"For many of the millions of consumers who are already shopping online or over landline phones, mobile commerce is an obvious and useful extension of that opportunity," said Nic Covey, director of insights at Nielsen Mobile who presented the data at the Internet Retailer Conference and Exhibition today. "As more mobile commerce services become available and consumers develop a greater trust for phone-based transactions, we expect commerce to be an increasingly important part of the mobile experience next year and beyond."

The findings come from Nielsen Mobile's monthly Mobile Insights survey of more than 30,000 US wireless subscribers, with similar data available internationally.

Nielsen's study reveals that security is the number one concern among those mobile data users not yet participating in m-commerce:

  • 41 percent of data users who do not participate in mobile commerce say security is their biggest concern
  • 23 percent say they worry about being charged for the airtime
  • 21 percent say they don't trust that the transaction will be completed

"As with other forms of electronic commerce, US consumers need proof that mobile transactions will be a safe, affordable and efficient complement to other modes of shopping," said Covey. "As long as retailers continue to meet those expectations, more consumers will come to view mobile shopping as a compelling and viable option."

Motricity Conference Poll Finds Low Adoption for Mobile Ads

At the Mobile Marketing Association show that just ended yesterday, Motricity was polling people (n=129) in the exhibit area about mobile advertising and marketing. The audience/respondents were vendors, agencies and others.

Here's what the company found:

  • 40% of mobile marketing agency representatives said their agencies currently spend less than 2% on mobile marketing initiatives, however, one third of the same group expect to increase spend by more than 25% next year.
  • 71% of the content providers and 58% of technology providers polled said that advertisers aren't using mobile marketing and advertising because the mobile marketing channel has not developed enough.
  • 31% of wireless operators reported that they are looking for more clarity from the mobile ecosystem on the strategies and tactics used to execute mobile marketing campaigns.
  • Participants in the study responded with the need for greater visibility and transparency into the data in order to offer targeted content to subscribers at the right place at the right time:
  • 49% of content provider respondents and 36% of integrators/aggregators noted that targeting and demographics are most critical to effective mobile marketing campaign management.
  • 23% of wireless operators felt that content customization and personalization are the key drivers to increase mobile marketing.
  • 48% of agency respondents noted that opt-ins or registrations are most important in demonstrating the return-on-investment of mobile marketing campaigns.
  • 43% of respondents are clearly focused on technology that provides visibility and performance of the effectiveness mobile marketing campaigns.

Additional key findings include:

  • 46% of wireless operator respondents find transaction and financial technology to be the most important technology. 23% focus on scalability.
  • One-third of respondents across all groups would be willing to offer sponsored content to consumers in return for receiving advertisements.
  • 38% of wireless operators find that open APIs to the content providers to manage the campaigns would make mobile marketing initiatives more effective and generate more revenue.

This is a small survey but probably fairly representative of attitudes throughout the industry. The bottom line here is that people need more education and the industry needs to mature in terms of standards and best practices. Mobile "marketing" is established and growing but mobile "advertising" needs to develop greater reach (consumer adoption) for agencies to take notice.

The mobile marketplace, though numerous, is highly fragmented in ways that the Internet is not. Aggregating large audiences or very specialized, desirable audiences are keys to gaining adoption by marketers.

It's all coming of course and many of the agency attendees talked about how mobile ad spends/budgets were rapidly increasing -- and increasing at rates much faster than the historical ramp up of online advertising.

Multiplied Media Introduces Blackberry Client

Multiplied Media, which has been driving local search content into IM on the desktop, has just launched a Blackberry client (not connected with mobile IM). The end user doesn't need to have an IM client on the phone to use the product.

One of the interesting things that Multiplied is doing is expanding "local search" to include brands/products, which is a primary use case in mobile. Recently the company also launched movie search on the IM side. That's also especially relevant to mobile, given the prevalence of entertainment oriented searches.

Replace That 'Inefficient' Internet Spend with Mobile

At the MMA show yesterday one of the better panels was "Opportunities for Mobile Marketing & Advertising in the U.S. Market." It was a broad discussion about a range of issues, as the session title suggests.

Toward the end of the discussion there was a question about where mobile budgets come from. What was striking to me was that the panelists argued that marketers should take some of their "under-performing" Internet budget and allocate it to mobile. This was very much the same language and case being made for shifting budget from traditional media to the Internet.

Panelists were touting the better ROI, better targeting and improved response rates in mobile (vs. online). There was a tremendous irony in these arguments, which I've heard so many times about traditional media, now being applied to the Internet.

Google Goes Back to 'Opt-in' in Mobile

When Google first launched mobile AdWords it was an opt-in program: advertisers specifically had to choose to be in mobile sponsored search results. Then, in a fairly well publicized move, Google decided to make mobile an opt-out for AdWords advertisers:

Each ad’s eligibility will be determined by its landing page and only ads with landing pages that can be adapted for viewing on mobile browsers will be shown. You can monitor each ad’s performance via a special performance tracking page within your account called “Performance Data: Search Ads on Google Mobile Search.”

Again, you will not be charged for clicks on these ads until November 19, at which time we will begin charging the usual CPC prices. And as always, you may opt-out of this feature at any time.

The company informed me last week that it has gone back to an opt-in policy for mobile at the present time.

I also discussed with Google the degree to which the desktop and mobile might ultimate become more similar than different, in the context of "full HTML" browsers (Safari, Opera, Skyfire, Mozilla, Android). We'll see. As I've tried to argue in the past, while there are some advantages in that scenario for users there are considerable disadvantages for advertisers -- chiefly because online ads get lost and become very difficult to see.

The iPhone is probably the model of how smartphone browsing will evolve: native applications + full HTML browsing. But that still doesn't solve the problem for advertisers seeking to effectively reach mobile audiences.