Report Benchmarks Mobile Video Ad Success

The Mobile Marketing Association (MMA) today released its first "Mobile Video Benchmark Study." The study looked at different categories of video ads through the lens of multiple variables: engagement, duration, OS and day part. CTRs were used as a proxy for engagement. 

A number networks and video technology platforms were involved: AdColony, BrightRoll, Brightcove, Hulu, Tremor Video and Videology. There were three types of video ads examined: linear, interstitial and "value exchange." 

Linear ads are essentially pre- and post- roll video advertising. Interstitial video ads are those that run during programming or content, and value exchange are ads that are user initiated for some reward or benefit. 

The study also evaluated the impact of engagement when ads were "skippable" vs. not-skippable. In total there were more than 500 million ad impressions tracked across mobile web and apps, on phones (by OS) and tablets. 

At the highest level the study found:

  • More than 75% of all advertising occurred in-app (vs. mobile web), the majority on phones (vs. tablets)
  • iOS activity accounted for more than 80% of ad volume
  • Skippable ads comprised a third of all ad impressions
  • Engagement for skippable video advertising is strong despite the skipping option
  • CTRs dropped for ads greater than 30 seconds
  • Mobile video ad performance, like other forms of advertising, declines with too much ad frequency

Value exchange ads generated the highest CTRs (2.7%), followed by non-skippable linear video (2.3%). Although skip rates are high, completion rates were also very high for those who did not skip ads. Ad completion rates were highest in the morning and late evening but flat throughout the day. 

Between 6 and 10 showings generated the highest CTRs (1.5%). After 10 showings of the ad CTRs declined. Finally ads between 15 and 30 seconds generated the highest CTRs. 

Video is going to be a major mobile ad format. The reason is that brand marketers don't need to generate separate creatives; and mobile users are already consuming huge amounts of video content on their devices. There's a natural fit. 

While rich media/video ads are just a small percentage of mobile advertising today I anticipate that will grow dramatically in the next two years. 

W Union Sqaure - New York to Host Place Conference 2014

Place 2014 -- the only conference bringing together indoor location, offline analytics and advanced mobile ad targeting in a single event -- will be held at the W Union Square - New York City on July 22, 2014.

Executives from Google, retailer Alex & Ani, MEC North America, the U.S. Federal Trade Commission, Factual, SK Telecom, IndoorAtlas, Thinknear, Sonic Notify, and Aisle411 will join a growing list of speakers to present case studies and explore how mobile marketing, offline tracking and indoor location will change the future of digital marketing and brand advertising,

Place 2014 will bring together the entire spectrum of companies building the indoor marketing ecosystem -- retailers, technology vendors, mobile developers, data providers, advertisers, agencies, and investors -- for the only event of its kind anywhere.

Please note New York City is hosting multiple citywide events in July 2014 and hotel rooms are expected to be scarce. Rooms held at the special Place 2014 rate are expected to sell out. Be sure to book your room now. And don't miss your chance at early-bird pricing ($499) -- Offer ends May 15th

Opus Research Report: "A Marketer’s Guide to iBeacons"

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Beacons (including Apple’s iBeacon) utilize short-range communication technology intended to improve the in-store consumer experience and market to smartphone owners on premises. While beacons are just one among several indoor location technologies, they’re cheap and easy to deploy so many retailers, museums, malls and venue owners are running tests or are in the early stages of larger rollouts. This report takes a look at beacon technology, current deployments and the opportunities for in-store marketing.

To see a preview of “A Marketer’s Guide to iBeacons,” an Opus Research report authored 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 (pheadrick@opusresearch.net).


Survey: Nearly 90% Use Smartphones in Retail Stores to Make Buying Decisions

New smartphone user survey data from Thrive Analytics and the Local Search Association (LSA) reinforce the now well-established idea that consumers will share location information in exchange for tangible rewards. We've seen this in our own survey work as well as that of other third parties (e.g., Swirl, OpinionLab). 

The LSA study involved just over 1,000 US smartphone users. It was conducted in January.   

Strinkingly the survey found that 97% of Gen Y, 91% of Gen X and 81% of "young Boomers" (under 53) used their smartphones at least sometimes while shopping in stores. Comparing prices and accessing coupons were the top two reasons.  

Large majorities of each demographic segement (85%+) said that using smartphones in stores makes them smarter shoppers and helps them make buying decisions accordingly. The top four apps used in stores were "mobile search," Amazon, Facebook (among younger users) and a barcode scanner such as RedLaser (eBay).  

The top three motivations (in order) given for being willing to share location with retailers were the following:

  1. To gain loyalty points or rewards
  2. To receive an offer or deal
  3. To receive exclusive or personalized content

 

Cortana Reportedly Closes 'Assistant Gap' with Siri, Google

Windows Phone OS 8.1 has received some early favorable reviews. One of the standout features is Microsoft's virtual assistant Cortana

Two early side-by-side comparisons of Cortana with Siri and Google's Voice Search/Now contend (and demonstrate) that the Microsoft assistant achieved comparable performance: 

It thus appears that Microsoft has taken away Siri or Google's assistant capabilities as competitive differentiators vs. Windows Phone. Indeed in the Gizmodo test Siri lagged in a few cases.

Neither review says that Cortana has exceeded the other assistants at this point. But the fact that Microsoft is out of the gate with a comparable capability is impressive. The only major thing that now stands in Windows Phone's way is its more limited app selection. 

Let's hope that Cortana now puts pressure on Apple to further upgrade Siri. Since its dramatic introduction nearly four years ago Siri has not lived up to its potential, though it has continued to improve incrementally. 

Google Voice Search performs adequately. It's speech recognition for dictation is consistently not as good as Apple's (Nuance's). Google Now's "anticipatory search" and related features are much more interesting. However Google Now also hasn't evolved significantly in the past 12 to 18 months. 

Mobile-Centric Households Now Outnumber Those with Landlines in US

According to the latest data from the US Center for Disease Control (CDC), roughly 133 million US adults rely exclusively or primarily on their mobile phones at home. That means they either don't have a telephone landline at all or have one but rarely use it. 

The most recent data available are for the first six months of 2013. The CDC reported, "Approximately 38% of all adults (about 90 million adults) lived in households with only wireless telephones; 45.4% of all children (approximately 33 million children) lived in households with only wireless telephones." The CDC explained that younger people, adults with roomates and no kids and those in lower income groups were more likely than others to be wireless only.

The related “wireless-mostly” category is defined as "households with both landline and cellular telephones in which all families receive all or almost all calls on cell phones." According to the report, roughly 43 million US adults (17.7%) live in these wireless-mostly households.

Unlike the wireless-only group, however, wireless-mostly demographics feature better educated and more affulent individuals and families. They can afford to maintain a landline but choose generally not to use it. Most of the people reading this probably fall into that latter group.

Together these two groups represent about 55% of all US adults. This now means that landline users are in the minority.  

Following Facebook and Twitter, Google Starts Tracking Offline Purchases

Internet-influenced offline consumer spending is roughly 10X the value of e-commerce but no one has been able to clearly see or track this phenomenon until recently. Most marketers have focused on online clicks and conversions because they have been much easier to track and measure.

There are now a range of methodologies to track online-to-offline conversions. Some involve tracking smartphones. However some involve CRM or sales data and the matching of that data to online or mobile ad exposures. This methodology is utilized by Facebook, Twitter -- and now apparently Google. 

The Wall Street Journal reports that Google is involved in a "pilot program" with six advertisers that matches online cookies to store sales data and other information provided by Acxiom Corp. and DataLogix. Facebook and Twitter both work with DataLogix as well. 

Apparently the Google pilot involves search ads for the time being (but I'm sure it contemplates display as well). According to the WSJ, the in-store tracking pilot "adds a new column that shows in-store sales spurred by the ads."

Google is also in beta with a program called "estimated total conversions," which measures cross-device visits and extrapolates conversion rates from a subset of signed-in Google Chrome browser users. The company is planning on extending the program to offline store visits (tracking Android users exposed to ads into physical retail stores). 

IAB biggest ad categories  

Retail is the largest spending category of online advertisers according to the IAB. In 2013 total digital retail advertising was worth roughly $9 billion out of a total of nearly $43 billion. Retailers are also major mobile advertisers.  

As indicated, there are a variety of methodologies that can now be used to track online-to-offline conversions:

  • Media-mix modeling 
  • Conversion "proxy" metrics: call tracking, map look-ups
  • Coupons
  • Check-ins, scanning QR codes in-store
  • Mobile payments and matching of CRM + online databases
  • Geofencing and indoor location
  • User surveys 

DataLogix and similar vendors have data on trillions of dollars of consumer purchase behavior. The internet-influenced product and services market is worth more than $2 trillion, while e-commerce in the US is worth between $210 and $260 billion. 

Online to offline ad tracking and its impact on the larger digital media world will also be one of the themes of Place 2014.  

Mobile Revs in US Double to $7 Billion, Now 17% of All Digital Revs

No more "year of mobile jokes." Thank God.

The IAB just reported that in the US mobile advertising revenues (all formats) essentially doubled from 2012 when they were just under $3.4 billion to $7.08 billion in 2013. The IAB breaks out "online" ad revenue by format, but no longer for mobile.

However search is the largest mobile ad format or category. It's probably safe to assume that mobile search revenues were between 45% and 50% of total mobile revenue for 2013. If that's accurate, it would mean roughly $3.5 billion in 2013 mobile search revenue. 

2013 IAB digital revenues

Based on last year's numbers and first half growth we had expected that that US mobile ad revenues would come in just under $7 billion. But a big Q4 bumped them over the $7 billion threshold.

According to the IAB, in Q4 2013, mobile ad revenue was 19% of total digital revenue or $2.3 billion, essentially double Q4 2012's $1.2 billion. Remarkably "mobile" captured the same percentage of total US digital advertising as online display in Q4: 19%.

IAB biggest ad categories

For the full year 2013 mobile grabbed a still-impressive 17%. In addition mobile was the fastest growing digital ad segment, which makes sense. 

Retail was the largest-spending advertiser category, followed by financial services and automotive. The IAB didn't break out advertiser spending by format. However retail is one of the top mobile-ad spending sectors , seeking to drive foot traffic to physical stores.

IAB industry ad revenue

Study: Smartphone Users Ready to Buy -- Offline

This morning I received a message in my in-box with the subject line: "Mobile commerce has really arrived." In the associated article a range of data were cited to argue that consumers were doing more and more e-commerce on their smartphones.

While it's true that e-commerce over tablets and smartphones is growing we should be clear about what's really going on out in the real world. Smartphones are widely used by consumers as part of their shopping and purchase research -- between 60% and 80% (or more) use them in stores for product and price lookups.

Marketers routinely undervalue and misunderstand the now critical role of mobile in consumer purchase activity. Part of the reason is tracking/attribution: smartphone owners overwhelmingly convert offline (or on PCs) and much of that behavior is simply not captured. 

New research from comScore, Neustar and 15 Miles reinforces this basic point. The data are based on a December survey and behavioral observation of users. The sample size was just under 5,000 US adults. 

comScore Local Search Study

Source: comScore, Neustar Localeze, 15 Miles

The study found that 78% of local searches conducted on smartphones resulted in a purchase vs. 64% on tablets and 61% on PCs. 

The majority of those purchases (76%) happened the same day and most within "a few hours" of the lookup. This reflects the immediacy of the mobile search user's need. But here's the critical point: Almost 90 percent of those purchases happened offline, in a physical store (73 percent) or on the phone (16 percent). Eleven percent were e-commerce transactions. 

Actual transaction data (as opposed to self-reported survey data) from e-commerce software provider ShopVisible found that 85% of e-commerce transactions in 2013 were PC based, only 4% came from smartphones.

Marketers need to recognize that most smartphone users are going to consult their mobile devices throughout the purchase cycle but largely aren't going to complete a transaction on that device. If they don't understand this behavior and account for it they're going to fundamentally misunderstand the role of mobile and undervalue it significantly.

This is partly why online-to-offline analytics/tracking is such an important development -- and one that we'll be exploring in depth at Place 2014.  

Wearables: After High Interest, High Abandonment

There's a strong belief among tech insiders that "wearables" are an emerging hardware category that's here to stay and perhaps even a new marketing channel in the making. Nielsen consumer research asserts that 70% of US consumers are aware of “wearables" and roughly 15% currently own some form of the technology: 

  • Fitness wristbands -- 61%
  • Smartwatches -- 45%
  • Health tracking devices -- 17%

Nielsen also found that roughly half of its survey respondents were interested in the category: "Nearly half of Americans surveyed expressed their interest in purchasing wearable tech in the near future." Our survey data similarly found a fairly high level of interest: roughly 40% of smartphone owners said they were interested in smartwatches (generally of the same brand as their smartphones). 

A report by Endeavor Partners, published in January (based on Q3 survey data), throws some cold water on all the excitement. The firm says that an online survey of "thousands of Americans" found that 10% of US adults owned or had used an "activity tracker" (e.g., Fitbit, Fuel Band). It didn't address smartwatches as a stand-alone category. 

 

The study also reported high abandonment rates of activity trackers/fitness wristbands. Roughly a third of owners stopped using them within six months of initial ownership and half were no longer using them: 

Endeavour Partners’ research reveals that more than half of U.S. consumers who have owned a modern activity tracker no longer use it. A third of U.S. consumers who have owned one stopped using the device within six months of receiving it. 

This first Samsung smartwatch reportedly experienced 30% return rates. But that's probably a function of the poor design and usability of that device rather than a broad statement about the prospects for the smartwatch category. The Pebble smartwatch is apparently selling well. 

It's still early in the development of wearables and there will be a range of new products of increasing quality and refinement. Hopefully we'll see some "next generation" watches coming out of the Android Wear effort. Apple is also expected to introduce its rumored "iWatch" at some point.  

Yet the Endeavor data offer a sobering counterpoint to all the hype about the category and widespread perception that wearables are an inevitable boom in waiting.