A few years ago companies like aisle411 or PointInside were mobile apps in search of an audience and a business model. In the past couple of years, however, everything has changed.
The proliferation of public WiFi, the adoption of smartphones (now 62% in the US) and the recognition among hospitals, malls, airports, stadiums, grocery and retail stores that indoor location could bring better customer experiences (and compelling data) has radically altered the landscape. The principal business model also went from being an ad/coupon-supported one to a technology licensing model, with indoor analytics leading the way.
Today aisle411 announced a $6.3 million Series A round (Cultivation Capital, Google’s Don Dodge, St. Louis Arch Angels, the Billiken Angels, and the Springfield Angel Network). The total the company has raised since being founded in 2008 is roughly $10 million.
Most major US retailers (e.g., HomeDepot, Macy's, Wal-Mart, Target, Nordstrom, etc.) and malls across the US are now adopting indoor location, to reap the "big data" and offer more personalized, locally relevant and engaing customer experiences. We're only just at the beginning of a huge wave of indoor innovation.
One of the featured sessions at the Place Conference will showcase aisle411. I'll also be "in conversation" with Google's Don Dodge on why he believes indoor location and marketing will be bigger than outdoor maps and GPS.
The conference will also present other in-venue and retail case studies from PointInside, ByteLight and Meridian (Aruba). If you haven't yet registered for the October 8, 2013 event do so today.
As expected today at the IFA conference in Berlin, Samsung announced its anticipated Galaxy Gear smartwatch. The device, which can make calls when connected to a phone via bluetooth, is currently only compatible with the new Galaxy Note 3 and Galaxy 10.1. Both were introduced today and both run Android 4.3, which is required.
More Galaxy phones will be updated to 4.3 in the near future, thus making them compatible with the Gear watch. Below are some of the relevant details and specs for the device:
The $299 price tag may be costly to some consumers, especially given the fact that you've got to have a Samsung smartphone to fully utilize it.
My first (entirely vicarious) impression of the watch, which comes in multiple colors, is that the UI and overall design are not as elegant as they might be. That's especially true of the UI. The camera is awkwardly positioned on the band as well.
It will be interesting to see how all this lines up with Apple's iWatch (especially pricing), which is expected to be announced on September 10. Google is also working on a smartwatch reportedly.
Apple's iPhone launch event is confirmed for September 10. It will take place at Apple's HQ in Cupertino, California. The company is expected to announce multiple devices at the event, including a new iPhone 5S, potentially an iPhone 5C and possibly an iWatch wearable device. There may also be new iPads.
The iPhone 5C is real and may come in a variety of colors (5 is the rumor) -- hence the colorful bubbles in the invitation. The forthcoming 5S is supposed to come in a champagne or gold in addition to traditional black and white. Pricing of these devices is uncertain, though the 5S will likely follow past pricing ($199 with 2-year contract, etc.).
Some reports have suggested the 5C will cost between $400 and $500 unlocked. Carrier subsidy pricing is TBD. The real question surrounding the 5C is how appealing will it be? How "good" wil it be?
Apple is walking a tightrope.
The 5C is intended to make Apple more competitive in developing markets and at the "lower end" of the market where there's more price sensitivity. If the phone is "good enough" and cheap enough -- does the "C" stand for "cheap" or "China" or "color"? -- it could potentially cannibalize sales of the 5S. But if the phone is not of sufficiently high quality it will fail and Apple's brand will suffer.
I suspect that Apple will include a previous-generation chip in the 5C (perhaps the current 5 chip), whereas the 5S will get a new more powerful processor. There may also be memory limitations with the 5C. However the apps and app ecosystem should be the same.
The primary differentiators will thus likely be price, color, materials (plastic) and processing power/speed. But how does Apple build an attractive product that is competitive but doesn't overshadow its more profitable flagship product? That's the dilemma.
Kantar Worldpanel ComTech reports that Windows Phone has made gains across major EU markets and now stands as the solid #3 platform behind Android and Apple. Windows Phone success in Europe is largely due to its association with Nokia, which remains a strong brand in Europe.
Germany, UK, France and Italy are Windows Phones' strongest markets. Gains in those countries helped elevate the Microsoft OS's share of the smartphone market in the "EU5" to 8.2%, up from 4.9% a year ago. That's an impressive gain. Mexico and Australia are also big markets for Windows Phones, according to Kantar.
Here are a comparison of the Kantar smartphone market-share data for the US, China and EU5 markets:
As indicated above, Kantar says that Windows Phone has a 3.5% share in the US. However, comScore shows a smaller gain and share (as of June 2013):
The Kantar data show a significant loss of share in the US for Android -- nearly 8%. Given this I'm skeptical that the data are truly reflective of the broader US market. However Kantar boasts that its panel is the largest and its data are the most accurate in the industry.
In Europe, BlackBerry and Symbian have lost a combined 7.4%. That's more than the gains enjoyed by Windows Phones. Accordingly the question arises: to what extent are those defecting BlackBerry, Symbian and "other" adopting Windows Phones? The Kantar data strongly imply that's where Windows Phones' EU gains are coming from.
On October 8 in San Francisco, Opus Research will host Place 2013: The Indoor Marketing Summit. The first event of its kind devoted to the implications of indoor location, it's shaping up to be one of the most interesting events of the year.
The Place Conference will feature Keynotes from Google and Dick's Sporting Goods (+ aisle411), as well as multiple indoor location case studies and demos (existing deployments). Panels will take on consumer privacy, in-store analytics, the implications of indoor location for ROI measurement, online-to-offline ad tracking, in-store marketing to consumers and a range of other topics of interest to all digital marketers, agencies and merchants.
If you haven't already registered, do so today. The early bird rate is gone but if you attend our upcoming webinar, Beyond CTR: Tracking Mobile Ad Impact on Store Visits, you can get access to a new discount code that will save you money off the full rate.
If you're not already convinced, here are 26 additional reasons to attend the event:
Last year Google brought in ad revenues of $43.7 billion. This year, thus far, the company has made roughly $24 billion. For the full year 2013 Google is likely to earn $50 billion in advertising revenue. That may be a low projection, however.
EMarketer today released some estimates on the breakdown of PC vs. mobile and search vs. display revenues for Google. According to the estimates, search will generate 82% of Google's overall revenue this year with just under 20% of search revenue coming from mobile.
By comparison 2% of display ad revenue will come from mobile.
Over time the data aggregator sees more than 40% of Google's total ad revenues coming from mobile (search + display).
Let's look at what these breakdowns (if accurate) would mean in real terms, assuming $50 billion in total projected ad revenue for 2013:
The other way to view those revenues is the following:
If the standard US (45%) vs. international (55%) ad revenue distribution holds for mobile then the following will be the rough figures for Google mobile ad revenue by geography (approximately):
Despite the above, Google's US mobile ad revenue is likely to be somewhat stronger than its mobile revenues from outside the US. Accordingly I would probably flip those percentage figures when it came to mobile.
Last year the IAB reported that mobile ad revenue in the US was $3.4 billion. This year it's likely to hit $7 billion according to our estimates. If that's correct then the Google figure above is too aggressive.
In roughly two years, Facebook has rapidly become the second most successful ad "network" (after Google) both in terms of overall revenue and mobile advertising specifically. According to its most recent quarterly data 41% of Facebook ad revenues were attributable to mobile ($656 million). It's not unreasonable to assume that by the end of Q4 nearly half of Facebook's ad revenue will come from mobile.
Facebook's overall ad revenue in 2013 is likely to be somewhere between $6.2 and $6.5 billion (not all Facebook's revenue is from advertising). Assuming 48% of Facebook's ad revenues are from mobile that would mean between $2.9 and $3.1 billion in mobile revenue for 2013.
Data aggregator eMarketer projects that Facebook overall ad revenue will come in at $6.36 billion this year. By contrast, Google will control more than 50% of global ad revenue in 2013 ($39 billion). Google will capture 53% of total mobile ad revenue, whereas Facebook will grab roughly 16% of the global mobile market according to eMarketer's projection.
What's striking is how a handful of companies (publishers) are dominating mobile advertising, while dozens of others capture relatively small shares of the mobile market (which still may be over $100 million annually).
Emarketer also projects that by 2017 mobile will be nearly half of all US display ad revenue.
By the end of the year total US mobile ad revenue (search + display) could reach $7 billion according to our estimates. The mobile display revenue figure in the chart above ($3.81 billion) is thus probably a bit aggressive. Search continues to dominate mobile advertising (55% to 60%) and nearly all of that revenue belongs to Google.
Google's enhanced campaigns is a wild card that could boost mobile search revenue -- it's mandatory -- and raise overall US mobile ad revenues to over $7 bilion.
E-commerce hosting and services provider MarketLive released a mid-year benchmarketing report yesterday, covering digital marketing and commerce trends through the lens of its many clients. There are many interesting findings. I'll focus however on the mobile aspects of the report, which appear to directly contradict a comScore m-commerce report released today.
The comScore data argue that there are many more e-commerce transactions happening on smartphones vs. tablets. This was something of a surprise to me. Accordingly, comScore puts the total value of US mobile-drive e-commerce at $10.6 billion for 1H 2013; 6% is from smartphones and 3.5% is from tablets.
These numbers contradict everything I've seen about conversions and commerce on smartphones and tablets. One potential explanation may be that there are nearly 2X the number of smartphones as tablets in the US market.
However the MarketLive data, as mentioned, show something much more consistent with earlier findings I've seen from many sources: tablet e-commerce conversions are higher and tablets are driving a greater percentage of overall revenue than smartphones.
According to the very busy MarkeLive slide below, smartphones drive more overall traffic but tablets generate considerably more revenue. MarketLive says that roughly 12% of e-commerce revenue for its clients are coming from tablets, whereas only 2.7% is coming from smartphones. However 19% of traffic comes from smartphones vs. 13% of visits from tablets.
Tablet conversions are 3X conversions on smartphones.
Given that Jumptap has now sold itself to Millennial Media it's not clear whether we'll get many more of the company's monthly Mobile STAT reports. The August report focuses on device market share by traffic on the Jumptap network.
It's interesting to contrast the Jumptap traffic figures with survey based market-share data from comScore. First the Jumptap numbers:
Jumptap sees Apple devices (iPhone + iPod Touch) generating 56.8% of smartphone traffic on its network. Collectively Android devices are responsible for roughly 35% of traffic according to the slide above.
By comparison comScore (based on consumer survey data) says that Android has a US smartphone market share of 52% vs 40% for Apple -- almost the reverse of the Jumptap numbers. Millennial ad network data are more consistent with the comScore figures below.
The tablet traffic data provided by Jumptap show the iPad remains well ahead of other competing devices, though the Galaxy Tab and Nexus 7 have grown since last year. The "headline" from the chart below is the dramatic decline in Amazon Kindle traffic in the past 12 months.
Compare tablet traffic data from Chitika, another mobile ad network. It shows an even greater margin (June 2013) between the iPad and its rivals.
Finally Jumptap reflects the relative traffic split between the mobile web and apps. The Jumptap data show that ad requests from apps now generate 84% of the traffic it sees vs. 16% from the mobile web. This is consistent with data from both Nielsen and comScore that show a roughly 80-20 split between apps and mobile web traffic in favor of apps.
However 2012 survey data from Nielsen, xAd, Telmetrics reflect differing levels of app usage by category. And in retail the mobile web is used more than apps as a general matter. So despite app dominance in the aggregate, in particular verticals the story may be quite different and much more nuanced.
Pandora is now essentially a mobile company. Although its users listen on multiple platforms, mobile is the driver of the company's growth and revenue. It's iPhone app arguably saved the company from going under in 2008.
Last week Pandora released revenue numbers for Q2. The company had earnings of $162 million. Ad revenue was $128 million and subscription and "other" revenue was more than $33 million.
The company also said that $116 million of that revenue was attributable to mobile. That works out to almost 72% of overall ($162 million) quarterly revenue coming from mobile devices. By comparison Facebook said that 41% of its Q2 2013 revenue came from mobile.
The company didn't break out mobile revenue in more detail so it's not clear whether the $116 million is all advertising or whether some of the subscription and "other" revenue is being attributed to mobile. My guess is that subscription revenue would not attributed to mobile.
Potentially then if the $116 is all ad revenue it would mean that essentially 90% of Pandora's ad revenue was being generated by mobile users.