Users may become annoyed by the insertion of new auto-play video ads into their Facebook news feeds. However brand marketers are going to love the new ad units. And Facebook's investors are going to love the revenue -- especially from mobile.
Facebook is promoting video in the news feed as a potential source of "high quality" ads for users. While that might be true in some cases, it's all about giving brand advertisers new ways to "tell stories" on Facebook -- and Facebook new ways to generate revenue across platforms with TV-style video advertising.
It will work on both the PC and, most importantly, in mobile. Here's how the ads will operate according to Facebook:
Facebook is carefully trying to balance advertiser and user interests here. Most notably there's no sound when the videos start to "auto-play." This is a key decision to minimize user backlash. In addition the "no data-plan impact" of mobile ads is also critical.
These ad units -- assuming that there's no sustained user uproar -- will bring significant new revenue to mobile for Facebook. They'll also give brand advertisers a potentially compelling and simple way to reach mobile users. The genius of these ads is that they automatically work across platforms and marketers won't need to change the creative to address the mobile audience.
The decision to keep the sound off is smart both to minimize the backlash, as I said, but also to indicate true engagement with the video units -- users will have to click to hear the sound. But these units will also likely have a "brand effect" and influence even if the sound is not engaged.
I've argued in the past that video is a key format for mobile ads. If I'm right, Facebook may have just created its "killer" mobile ad unit.
Startup Expect Labs has launched its MindMeld app after months of being in private beta. A crude but quick way to describe it is: Google Now meets Skype. Expect Labs, founded by Tim Tuttle, describes it as a "voice assistant." But that doesn't really do it justice.
Many bloggers and tech sites are reviewing MindMeld. In a way that misses the bigger picture. The app is really a "technology showcase" or demo for something larger and more forward looking. Expect Labs, which charges $4 for the app, doesn't see MindMeld as a money maker and isn't staking its future on the success (or failure) of the app.
First, here's what MindMeld does: it listens to your conversation, with one or several people, and in real time shows you pages and websites that are relevant to the discussion. The sites and data are coming from various APIs and the internet broadly. If you and your friends are talking about going to New York on vacation, for example, it will start showing hotels, restaurants and things to do based on the specifics of your conversation.
The key challenge here is filtering "signal" from "noise" and finding relevant pages and sites. Expect Labs' CEO Tim Tuttle says that the technology has significantly improved over time and the app has changed somewhat from its inception to its launch today. For example, it used to listen to the entire conversation. However now it will pause and users are required to initiate "searching" via an "OK MindMeld" wake up phrase.
The underlying technology seeks to deliver a better search and discovery experience on devices where the keyboard isn't particularly useful or there's no keyboard. There are myriad inputs into "search results" (anticipatory search results): time of day, location and "context" broadly speaking. If you sign in with Facebook it also grabs other information about you as another relevance input.
Expect Labs' technology, while imperfect, is really the fulfillment of the vision behind Google Now: real-time, useful information that dynamically changes based on context. MindMeld is the "1.0" expression of that vision. Speech recognition is from Nuance but the natural language understanding is Expect Labs' own technology.
There are a number of enterprise use cases in development; and one can see this technology being incorporated into a wide range of general and vertical applications. Google Ventures is an investor, as is Intel. Those are two potential buyers of the company.
The technology is impressive and the major practical question for Expect Labs will be where to focus and how to fully express what the technology can do in a commercial context.
Earlier this week ZenithOptimedia released a new global ad forecast that argued "Advertising is set to see the strongest sustained period of growth in ten years." The firm identified mobile as the "principle [sic] engine of this growth."
According to the agency mobile is expanding overall media consumption, "without cannibalising any of the other media platforms." That's not exactly true. Mobile and mobile video are fragmenting audiences, which makes it more complex for marketers to reach them as well as to track the efficacy of different channels and media.
Cross-platform and multi-device shopping is an example of this phenomenon.
ZenithOptimedia explained that notwithstanding its mobile ad growth figures, it only contributed 2.7% of global adspend in 2013. By 2016 that number will reach nearly 8% (7.7%) according to the forecast. If that indeed comes to pass mobile would become, according to Zenith, the "world’s fourth-largest [advertising] medium." It would then exceed traditional radio, magazines and outdoor advertising.
For purposes of the forecast "mobile advertising" is considered to be any ad shown on a mobile device whether or not the ad was specifically purchased for mobile distribution. Accordingly the sheer number and usage of smartphones and tablets -- and their anticipated growth -- is driving up ad revenue attributed to mobile.
I've argued a number of times in the past that had Nokia from the beginning embraced Android it wouldn't have had to sell to Microsoft. It turns out that Nokia had/has developed an Android handset, apparently code-named Normandy. It uses a customized or "forked" version of Android much like what Amazon has done with Kindle devices, taking them out of the realm of Google standards and control.
Reportedly it's a low-end device designed for emerging markets, where Nokia has had some success with its pseudo-smartphone Asha devices. Other details are scarce.
Microsoft bought Nokia's hardware business (for $7.2 billion) for multiple reasons. One of them was clearly defensive; it wasn't only about "bringing hardware and software together."
Nokia sells most (80% or more) of the Windows Phones on the market today. The continuing strength of the Nokia brand in Europe is responsible for Windows Phone's roughly 10% market share there now. Had Nokia embraced or "diversified" its lineup with Android devices Microsoft might have felt the potentially negative sales impact as Nokia split its focus and marketing.
The conventional wisdom is that Microsoft will kill the Normandy device when the acquisition formally closes -- it has been approved by regulators. Some are making the argument, however, that Microsoft might not immediately terminate the project because the version of Android being used is outside Google's control.
That remains to be seen. Yet the existence of Normandy lends further credibility to the theory that Microsoft bought Nokia's phone business to prevent it from turning to Android.
According to an article appearing in the Wall Street Journal, The Future of Privacy Forum has estimated that roughly 1,000 retailers are using some form of indoor location for analytics and/or customer experience purposes. That will only increase because the benefits to retailers and shoppers are too significant to ignore.
Companies mentioned in the WSJ article include:
More interesting is the discussion of some of the use cases in the article:
The article also contains the requisite discussion of privacy and concerns over "tracking." Those concerns can be managed through disclosures, opt-in apps and education that explains the benefits of indoor location to consumers. The virtual Santa queue is one such example that will immediately be understood and resonate with consumers looking to avoid lines.
Among many others, Forest City (and Path Intelligence) and Euclid Analytics were speakers at our Place Conference in October. See our recap and session videos.
Earlier this year Opus Research held the first conference dedicated to indoor location and its marketing implications: The Place Conference. The theme of that event was how indoor location technology and mapping would change online and mobile marketing across the board, bringing the digital and offline worlds closer together.
At the event we explored the technology, marketing scenarios, privacy considerations, analytics and customer experience improvements that flowed from use of indoor location technology. Three months later we're starting to see increasing momentum in the segment, with new deployments, announcements and some acquisitions (which will increase next year).
Indoor analytics provider RetailNext, one of the speakers at the Place Conference, recently announced the acquisition of Nearbuy Systems. And earlier today AP reported that Apple was now rolling out Bluetooth Low Energy (BLE) beacons to all of its 254 retail stores. That will pressure and/or embolden other retailers to follow Apple's lead.
Under the radar, most US retailers (and others) have to varying degrees been experimenting with indoor analytics and location. However they've been hush-hush about it, for fear of being criticized as Nordstrom was when it disclosed it was using indoor analytics. But greater public discussion and education around indoor location will change the tone of coverage from "spying" to focus on consumer and B2B benefits.
Apple's March 2013 acquisition of WiFiSlam helped raise the profile of indoor location. The company's new rollout of iBeacons across its retail network will further legitimize the segment.
Indoor location is one element of a larger "ecosystem" of proximity marketing that includes geotargeted mobile advertising, notifications, analytics and online to offline ROI tracking. Mobile payments are also in this mix (see PayPal Beacon). Next year will be an eventful and exciting one for indoor location and place-based marketing.
Place 2014 is coming soon.
Yesterday the Wall Street Journal reported that China Mobile and Apple had struck a long-anticipated deal to offer the iPhone to China Mobile's massive customer base (estimated by the publication at 7X Verizon Wireless). Neither company has confirmed the deal.
China Mobile is the largest carrier in the world's largest mobile and internet markets. The company has more than 750 million mobile subscribers. According to several estimates Apple has about 5% of the Chinese mobile market. Various flavors of Android are by far the dominant mobile platform in the country, with nearly 80% share.
Many financial analysts think that the iPhone 5s and 5c are too expensive for China. However there appears to be a meaningful appetite for Apple's devices there. Apple's "greater China" revenue this past quarter was $6.8 billion. That number could easily double through the China Mobile deal -- if it's confirmed.
Back in the US comScore released September smartphone market share data. The firm estimated that 149.2 million American adults now own smartphones. Comscore's figures put smartphone penetration at or just under 64%, generally in agreement with Nielsen's estimates.
Apple, Samsung and Motorola were the top three smartphone OEMs in the US. HTC and LG lost share and BlackBerry is out of the top five. Android is the top OS, gaining nearly half a point. Apple and Windows Phone also gained modestly.
I was surprised not to see more of a bump for the iPhone given all the discussion of iPhone sales momentum. However it hasn't really materialized in comScore's data.
In the US Windows Phone share is 3.2%, growing but very small. By contrast, in Europe, Windows Phones now enjoy a 10% share across the EU5 (driven by UK, France and Italy) according to Kantar survey data.
Windows Phone's success in Europe is due almost entirely to Nokia and it's continued brand strength, which doesn't equally exist in North America. Nokia sells the overwhelming majority of Windows Phones globally, which is why Microsoft bought the company -- also to prevent it from starting to make Android handsets.
That largely defensive acquisition has now been approved by US regulators, with European regulatory authorities likely to follow and permit the transaction.
There has been a near avalanche of shopping data released over the past several days, much of it documenting the rise of mobile devices in driving traffic and e-commerce purchases. Various estimates ranged from 23% to nearly 40% of traffic coming from mobile over the course of the weekend.
One of the clear winners of the Black Friday weekend shopping bonanza was the iPad. Apple and other retailers offered gift cards as incentives to buy the devices. In combination with general consumer demand that strategy seems to have paid off for Apple.
According to Localytics, which looked at over one million devices before and after Black Friday weekend, the iPad Air in particular saw very strong growth: 51% vs. the week before. So did the Mini and iPhone 5c. Admittedly the iPad Air is growing from a smaller base, although the device had a very strong launch.
The data in the chart above also don't reflect iPads purchased as holiday gifts and not yet opened/activated. So there are probably many more that were purchased than what's represented on this chart.
The top Android tablet was the Kindle Fire, which saw its own aggressive $50 discount from Amazon. The only other Android tablet to show growth is the Galaxy Tab 2, which was heavily discounted online and at several retail stores.
In October Apple announced that 170 million iPads had been sold to date. Given the momentum being reported, it's very likely that Apple will sell 20 million iPads (collectively) in the holiday quarter.
Roughly three years ago Steve Jobs opined that search wasn't as central to the mobile user experience as it is on the PC. That sentiment elicited dismissals as naive or self-serving and was generally disputed. This is what Jobs said verbatim:
On the desktop search is where it’s at; that’s where the money is. But on a mobile device search hasn’t happened. Search is not where it’s at, people are not searching on a mobile device like they do on the desktop.
It turns out that when you consider what he actually said, Jobs was exactly right.
Various surveys have found that search is widely used on smartphones. But it's not used as often or as centrally as on the PC. Indeed, search is a more occasional or peripheral experience on smartphones (especially the iPhone), whereas people search many times daily on the PC.
Earlier today Consumer Intelligence Research Partners (CIRP) released survey data about most frequently used mobile apps among US smartphone owners. The survey measured frequency not reach. This is very important to understand about the data. The firm asked mobile users to identify their "three most frequently used [mobile] apps."
CIRP found that Facebook was the leading and most frequently used mobile app. That was followed by Twitter, Candy Crush and Instagram. The surprise is how low Google Search and Google Maps rank on the list.
Google Maps is #12 and Google (the search engine) is #10. We don't get an analysis of usage by platform (i.e., iOS vs. Android). However I suspect we'd see different rankings on the two platforms, with Google doing better among Android users given search's prominence on the Android OS.
It's unclear how large the sample in this survey was and so we can't tell how reliable these data are. In addition these are self-reported data and not behavioral or traffic data. People often report one thing and do something else.
Having said all that, these data strongly argue that what Jobs said is accurate: "People are not searching on a mobile device like they do on the desktop." Although this has been written about at length in the past, if accurate, this more modest mobile search frequency represents an obvious problem for Google as migration from PCs to tablets and smartphones continues.
It makes sense that traditional retailers would handily beat their online only counterparts (save Amazon) this past weekend. That's according to data from Adobe.
We now live in a multi-platform, multi-device world. People move between PCs, tablets and smartphones just as they move from online to stores and back. They also generally prefer the tactile and social experience of shopping offline. Roughly 95% of retail spending happens in physical stores according to the US Census Bureau.
According to Adobe's data, "Traditional brick-and-click retailers are outselling their online-only competitors so far this year at nearly a 3-to-1 ratio." That's because they offer more trusted brands, and online shopping experience and a way to physically examine and immediately buy products and gifts offline.
Location analytics company Placed offered the following data on the most-visited offline stores on Black Friday:
Consistent with others, Adobe reported that 24% of online sales this past weekend took place on mobile devices. The iPad was the preferred "shopping companion device, representing nearly half a billion dollars ($417 million) in sales during these past two days, followed by the iPhone and Android phones at $126 million and $106 million, respectively."
Adobe estimated that Thanksgiving and Black Friday saw just under $3 billion in online spending, which was an increase of 30% over last year. The company projects that e-commerce sales today, "Cyber Monday," will exceed $2 billion ($2.27 billion).