AdGooroo, a division of Kantar Media, last week released data on the top mobile search advertisers in the US, UK and Australian markets. The data represent the month of January 2014 and are based on impressions triggered by the top 50,000 search keywords.
These data are drawn exclusively from Google and Google AdWords. The chart below reflects the top 20 mobile AdWords advertisers.
The list can be seen as a mix of telcos, financial institutions and retailers essentially. Compare the impression gap between Amazon and BestBuy and the rest of the group for that matter.
As part of its analysis AdGooroo compared mobile search rankings on the PC and smartphones. Amazon turns out to be the top paid-search advertiser on both platforms. But there were a number of gaps between PC and mobile rankings/performance. For example, WellsFargo "ranked #9 in Mobile Search, with 11.5 million impressions, but 137 in Desktop/Tablet Search, with 12 million impressions."
There were a few advertisers that saw more mobile than PC search impressions. But equally there were advertisers, such as Wal-Mart and JCPenney, that ranked well on the PC but not as well in mobile search results.
As of last year Google began compelling marketers to buy both PC and mobile search campaigns and set the PC bid as the floor, as a practical matter, for the campaign. Mobile bids can be adjusted up or down, depending on a number of variables including location. In other words marketers can specifiy a premium they're will to pay to get in front of smartphone users within a certain radius from a business location.
Informally this week a Google employee at a conference dropped a bomb, saying that mobile search was projected to exceed PC search traffic by the end of the year. This was a casual remark as I understand it and not necessarily an official Google statement. In addition, I heard it second hand so I don't have more context to share. It's not clear what's included in "mobile search" query volume here (i.e., Maps, mobile web, apps)? It's also unclear whether this is US only or global projection.
At 1pm Eastern/10 Pacific today we'll be hosting a new webinar: Indoor Location - Early Adopter Case Studies and Lessons Learned. It will feature Aisle411 co-founder Matthew Kulig and iInside EVP Jon Rosen. The emphasis is not on theoretical information but on what's actually occurring in the market -- today.
Rosen will be talking about B2B case studies from current in-market deployments. He's going to cover:
Kulig will be discussing B2C cases, including the following:
I'll be offering a general overview of the state of the market and offering attendees a free copy of our recent "Mapping the Indoor Marketing Opportunity" report (only available to real-time attendees).
The webinar will be eye-opening and instructive to indoor neophytes and those with even considerable knowledge of this emerging market. Register now and show up later today.
WhatsApp may cross the threshold of a billion users later this year. The first year is free, thereafter it costs $0.99 per year per user.
If we assume that every one of those hypothetical billion users starts paying $1 per year. The company would bring in an additional billion dollars in revenue to Facebook, which just purchased (subject to regulatory approvals) the company for $19 billion in cash and stock.
While many are arguing that WhatsApp was not expensive by some standards (cost per user), Facebook will over time be compelled to justify the acquisition by making money off of it. And that doesn't just mean fee-based revenue.
Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum have very different views about privacy and advertising. The Wall Street Journal sums those up nicely in an article today:
The men are divided by more than differing approaches to making money. A legacy of his childhood in Ukraine is Mr. Koum's emphasis on privacy: WhatsApp doesn't collect any personal information other than a mobile-phone number and address book, and it wipes out messages shortly after they are sent . . . Mr. Zuckerberg, by contrast, has riled users by changing Facebook's privacy settings in ways that some thought exposed more of their personal information more widely.
Koum doesn't trust or like advertising; Facebook lives and dies now by the growth of its ad revenue. Something's got to give then.
Either Koum and WhatsApp will bend on privacy, data mining and ads or there will need to be some accommodation to Koum's positions. That compromise could come in the form of opt-in SMS-style marketing.
Companies such as Placecast and other SMS-based mobile marketing firms use double and triple-opt-in systems to ensure that users consent to receive marketing messages from brands and retailers. This kind of permission-based (including loyalty) marketing could be a way around the conundrum for Facebook and WhatsApp.
The market will expect Facebook to monetize WhatsApp usage at some point in the future. Subscription revenue will probably not satisfy investors because of the perceived, larger marketing opportunity. Less intrusive, permission-based SMS-style opt-in marketing could be a way forward for the two companies.
Location technology provider TruePosition has acquired Skyhook Wireless for an undisclosed sum. Skyhook Wireless provides location positioning and gathers contextual data on consumer mobile behavior. The company has also been involved in multiple lawsuits accusing Google of patent infringement and unfair competitive practices.
Skyhook was founded in 2003 by Ted Morgan and Mike Shean to map wireless access points but has since expanded solution offerings focusing on mobile consumer behavior and associated analytics. Recently, Jeff Glass, formerly with mQube and Bain Capital Ventures, was named CEO.
Cellular location company TruePosition, a subsidiary of Liberty Media, is mainly focused on public safety applications for indoor location technologies including locating emergency callers and protecting borders and infrastructure. The acquisition bolsters the product portfolio of both companies by leveraging their complementary technologies, according to the press release about the acquisition.
“Skyhook's commercial focus balances TruePosition's safety and security strengths, and their location technology further strengthens TruePosition's ability to accurately locate mobile phones indoors,” said Steve Stuut, CEO of TruePosition, in the statement.
Skyhook's lawsuits against Google, the first of which was filed in 2010, claims Google interfered with its relationships with two hardware manufacturers, Motorola and “Company X” (Samsung). Google has consistently insisted it has done nothing improper; the legal battle is expected to go to trial sometime this year.
Very soon thereafter, if not simultaneously with mobile ordering, will come in-app mobile payments. Later we'll have in-store mobile payments as well.
All QSR (and Fast Casual) restaurants will eventually offer mobile ordering and payments. OpenTable is in the process of trialing mobile payments in its fine-dining oriented app. That will represent a radically improved customer experience and improved security as well (unless these databases get hacked).
A mobile ordering and payments-enabled app makes sense for QSR for many reasons. Adoption by chains will be driven in part by competitor rollouts of these capabilities. But another compelling reason will be consumer loyalty. App users will generally become more loyal and frequent customers; app-based ordering and payments will form the core of loyalty promotions. The data can also be used for mobile advertising and retargeting purposes.
A recent report from JiWire showed how mobile (and apps in particular) were more influential than the PC internet in driving consumer purchase decisions in the QSR and fast-casual dining segments.
Within three years we're likely to see the US QSR industry transformed by mobile ordering, payments and mobile loyalty marketing. In general all this will mean a better experience for customers.
The "dark side" of these developments, however, will be the inevitable elimination of thousands or even millions of low-paying cashier jobs. That trend will later come in mainstream retail as well.
According to the US Bureau of Labor Statistics cashiers and retail salespeople constitute just under 6 percent of total US employment. But it's the largest single jobs category. Indeed the "bottom of the market" will be automated in the near future -- largely through smartphone apps. Only legacy software systems and perhaps union resistance will delay the trend.
When customers in QSR restaurants can order or pay more quickly and efficiently through their phones (with stored credit cards) fewer cashiers and related employees will be required. This will also be true in Fast Casual restaurants. Where once you needed four wait staff perhaps now you'll need two or even one person.
There are two themes running through most of the coverage of indoor location: gee-whiz technology and NSA-style "surveillance." While both approaches have generally been good for the sector, which has gained visibility accordingly, the "surveillance meme" is both unfair and largely inaccurate.
In the general debate over consumer behavior tracking and data-centric targeting the "offline world" has largely been ignored. The practices and data-mining in use there are longer-established, more aggressive and much more shadowy than the online/digital media world. Yet the media devote almost zero attention to that arena because we have lived with it for so long.
By the same token video cameras have been watching people in retail (and other) environments in the US something like 40 years. That fact is rarely if ever "remembered" or raised in the public discussion of indoor positioning and location. Why, because we're all "used to it"?
A recent Bloomberg article about location-analytics provider Placed is a case-in-point. The headline emphasizes the more sensational aspects of what the company does (for impact) and the lede ties the project to the NSA scandal: "Tracking Every Move You Make—for a $5 Gift Card . . . Here’s something the National Security Agency might try to ease resistance to surveillance: gift cards."
I certainly understand the journalistic "logic" behind these choices but they're misleading. Placed has what amounts to a triple opt-in process. Its users, who are offered incentives to share their location, are very clear on what they're doing. It's totally voluntary. But the article only mentions that in passing, "Placed asks users for permission and scrubs personally identifying information before companies see the data." It's more concerned with the data and inferences Placed can discern and deliver.
That's all fine. But in neglecting to fully describe the opt-in enrollment process, the article fails to adequately represent what's going on with consumers.
The implication still is that people don't fully understand what's happening or what information is being compiled about their behavior. The article suggests, with its lead, that Placed users, despite their voluntary participation, are still being somehow duped: they're giving up their sensitive behavioral and location information for "a five dollar gift card."
Why it matters is because people will voluntarily participate in these systems and services when they understand the benefits and how their data are being used. It goes to questions of transparency and consent. Many articles operate under the deeply held assumption that if people understood truly what was happening with their information they would never share it with companies. (That's certainly true in many of the "offline" cases.)
But when it comes to location and indoor location specifically people will trade their information for tangible benefits or a better experience. This has been shown repeatedly and Placed's panel is just one more example.
Writing about the mechanics of disclosure and opting-in gets tedius and boring. So does the idea that people will willingly share location for improved in-store experiences or incentives. That's why we're likely to continue to see these "us vs. them" articles for the foresseable future.
Make no mistake consumer privacy is a critical issue. Indoor location providers, retailers and others need to be highly respectful of that. And there are some who want to make the default consumer experience of indoor location opt-out. But most of the entrepreneurs and companies I've spoken to are very sensitive to and respectful of privacy.
The questions going forward should concern what sorts of experiences and disclosures must be presented to consumers to engage and educate them and gain their informed consent. Indeed, we'll be having this very discussion in much more nuanced and concrete detail at the next Place conference in New York in a panel lead by Jules Polonetsky.
Bluetooth iBeacons are definitely the indoor positioning technology with the buzz and momentum (though it's only part of the indoor location story). Today jewelry and accessories retailer Alex and Ani announced that it's deploying iBeacons in all its 40 US retail locations in partnership with Swirl.
Previously American Eagle announced it would also introduce iBeacons into its stores with ShopKick. However the Alex and Ani rollout is already complete.
Swirl offers a consumer-facing app that adapts or changes depending on the store the customer visits. Swirl is also working with Timberland and Kenneth Cole. Alex and Ani doesn't yet have its own app but later plans to develop one using the Swirl SDK. Swirl installed the hardware in all the Alex and Ani stores.
I was able to speak yesterday with Ryan Bonifacino, vice president of digital strategy for Alex and Ani. He comes from a venture capital background and is very focused on innovation and data usage. While most retailers and venue owners are still sniffing around the edges of indoor location Bonifacino said that Alex and Ani began testing iBeacons with Swirl in Q1 of last year in its New York and Boston stores.
That's well before most people had heard of iBeacon.
The data and insights the company gained during its two-store trial convinced Bonifacino that a full rollout was justified. Bonifacino said he was pleased with Swirl's ability to drive new customers into the company's stores, especially at times when regular foot traffic was generally lower.
He explained that the new Swirl-driven customers actually spent more time in the store but purchased at levels that were comparable to Alex and Ani's regular customers. Indoor location was also able to provide greater visibility into who these new customers were.
One of the things that Bonifacino is looking forward to most is the ability to collect data about in-store behavior and to test and optimize merchandising and displays. Beyond this, Bonifacino wants to provide a better in-store customer experience and believes that indoor location can help accomplish this.
We spoke at some length about Alex and Ani's use of data in its marketing efforts and how data captured in stores would contribute to improving or refining those efforts. Bonifacino, however, was quick to say that the company is highly respectful of privacy and looking only at aggregate customer behavior.
Alex and Ani also sells its jewelry and accessories through major retailers such as Bloomingdales and Nordstrom. Even though those retailers are separately examining indoor location Alex and Ani is helping educate them, says Bonifacino. The company hopes to use indoor location to promote its products and attract customers to its displays in those larger retail partner stores later this year.
Live Webcast: Tuesday, February 25, 2014 - 1:00pm ET / 10:00 am PT
There’s a great deal of hype surrounding iBeacon right now. But that technology is just one part of a much larger story about indoor location.
Using a range of technologies, major retailers, malls, airports and others are testing or rolling out indoor location in their venues and stores. We’ve come a great distance since last year when few people understood the benefits of indoor positioning and real-world analytics.
Join aisle411, iInside and Opus Research’s Greg Sterling for a webinar and discussion about the current state of indoor location. The webinar will feature existing, in-market B2B and B2C case studies.
What you’ll learn:
Square announced a deal with Whole Foods Markets that involves Square Register and Square Wallet. Some outlets are reporting this as another big enterprise deal for Square, after Starbucks. And it is. But what's more interesting is the consumer experience that it will enable in stores.
Square will power payments for in-store food venues, such as the deli counter:
These in-store venues -- including sandwich counters, juice and coffee bars, pizzerias, and beer and wine bars -- will use Square Register and Square Stand, Square’s suite of simple and affordable software and hardware tools for businesses. By bridging the digital and in-store retail spaces at these venues, Whole Foods Market shoppers can skip the main checkout lines, reducing wait times for all customers.
In other words, consumers with Square Wallet (with a stored credit card) will not have to stand in line to pay for their purchases. This will both create a more convenient experience for consumers and greater efficiency for in-store staff. (Ultimately mobile payments will reduce the number of cashier jobs across the US but that's another discussion.)
Whole Foods will gain additional customer data (purchase histories). That in turn will likely enable new promotions and marketing opportunities for Whole Foods.
The companies also said, "Several Whole Foods Market locations will serve as 'lab stores,' testing additional innovations designed to enhance customer service and cater to the changing needs of shoppers," before those services are rolled out more broadly.
Earlier today I wrote that mobile payments can become a competitive advantage, promoting consumer convenience and loyalty and differentiating a product or service experience. Whole Foods has a very strong and generally differentiated brand already.
This development will further contribute to that brand strength and may generate additional shopper frequency at those in-store food venues that are mobile-payment enabled. It will probably also lead to more adoption for Square Wallet.
I have been arguing for the past two years that despite security concerns and an apparent lack of interest in mobile payments at the "national" level, consumers immediately "get it" when they find mobile payments embedded in a context whose value is self-evident. One such context is transportation.
There's been a great deal written about the disruptive impact of services such as Uber and Lyft on traditional taxis and transportation. The cheaper Uber X service, utilizing part-time drivers, is on average less expensive than conventional cabs. But I had an interesting experience recently that clearly reflected the power and value of mobile payments (convenience rather than cost) as a competitive differentiator.
The other day I got off a train from San Francisco to the East Bay where I live. At the bottom of the escalators were three taxis lined up and waiting for fares. I could have taken one immediately. Instead I pulled out my phone and called Uber X -- because I knew I wouldn't have to pay with cash or do a credit card transaction when I got out of the cab. (Uber stores credit card information and provides receipts via email.) I also appreciate the fact that I don't have to calculate and include an additional amount for a tip with Uber X.
The convience of not having to engage in a payment transaction was the consideration that made me wait five minutes rather than just get in a cab at the station. My own experience showed me the power of mobile payments as a differentiator and loyalty feature. The same will likely prove true for OpenTable as it rolls out mobile payments, giving consumers an additional reason to use the service, along with loyalty points and online reservations.
Eventually mobile payments in the form of stored credit cards will make their way into most apps -- especially if Apple enables "pay with iTunes." For now, developers and publishers that integrate early will reap competitive advantages over those that do not.