Ad Networks

Borrell: Mobile Marketing $57B by 2014

Borrell Associates put out its mobile ad forecast, which seeks to be comprehensive. The forecast includes mobile "advertising" and all forms of what the firm calls "mobile promotions," which include coupons, SMS and other spending that doesn't involve actually buying ad inventory in a traditional sense.

The report is highly bullish and the numbers are massive:

Last year online marketing captured about $44 billion in spending; mobile marketing reached $2.7 billion. We expect total online marketing to grow at about 13 percent compounded annually, to around $80 billion by 2014. Mobile, by contrast, will grow at 84 percent per year and hit $57 billion by then.

A subcategory of mobile marketing is mobile advertising – and local is where the action is. We foresee “local” growing at an unusually brisk pace – doubling every year for the next three. Local mobile advertising totaled $285 million in 2009; we’re expecting it to double this year to $586 million, then spike upward to $11.3 Billion by 2014.

Here are a couple of charts that illustrate the forecasts and the growth they envision in the mobile market: 

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Borrell is right to try and capture this broader universe of mobile spending because SMS, couponing and other mobile marketing will comprise a big chunk of the pie. However these numbers are really really big and the timeframe is aggressive. They're also US only figures and estimates.

I would potentially also quibble with the "national' vs. "local" distinction because many companies that are "national" will be sending mobile users into local outlets, stores and dealers. However it refers to the interest and category of the advertisers, not the "location" of the eventual consumer spending or action in response to the ad or offer. 

Indeed, many otherwise "national" campaigns will include a local component (e.g., find a dealer, find a store) to make them more "actionable." Fewer ads on mobile devices will be pure awareness campaigns, although there will be some of that. 

Most companies in the mobile space will welcome these aggressive numbers as validation of the mobile opportunity and fodder for their pitches to the market. Expect to see these data in a great many slide decks in the future. 

Report: Symbian Still the Most Clicktastic

Ad mediator Smaato has put out its march metrics report comparing click-through rates (CTRs) of the various handsets:

The performance of different operating systems in March shows Symbian’s lead decrease slightly, as Feature Phone handsets and Windows Phone make significant increases. The CTR Index (Click Through Rate) differs from 35 (Blackberry) to 156 (Symbian), compared to February where the spread was between 51 (Blackberry) and 147 (Symbian).

Android has suffered the most in the latest metrics, with a drop of almost 50% as its global CTR Index fell from 110 in February, to 58 in March. This has been the second consecutive month that Android has dropped. Feature Phone handsets have been building momentum since the first Smaato Metrics Report in December. Each month it has made consistent gains on the competition in the CTR Index, from 84 in December, to 91 in January, to 107 in February and now at 123 in March.

In most cases the CTRs are going down on smartphones while increasing on feature phones. There's no discussion or speculation as to why the numbers are as they are or why Symbian users seem to be clicking more. It's all very curious and in a certain way inexpliacable. Are smartphone clicks generally declining according to these data because the "novelty" of mobile ads are starting to wear off? 

And look at the roughly 60 point drop for Android from February to March. How can that be explained? Here are the data: 

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As I said last month, while these data are interesting, they don't necessarily correlate with actual purchase outcomes or brand influence on consumers from mobile display advertising. 

Fastmall: Indoor Navigator and Deals Platform

While much of the mobile world has focused on GPS and navigation systems (iTunes link) that get you from A to B across town there are a growing number of apps that offer some version of that same capability for more confined areas or indoors -- such as shopping malls. Among this latter category are Point Inside and Fastmall, which I spoke to this morning.

Fastmall has been written about and covered quite a bit and has also been called "Foursquare for malls," because it has check-ins and other social features. It's a fascinating mix of data and capabilities. The app, from Web developer Mindsmack, allows users to:

  • Find bathrooms
  • Remember where the car is parked
  • Make shopping lists
  • Find food and stores, generates "turn by turn" directions (w/o GPS, which often won't work indoors)
  • Receive promotions for stores in area malls (or while you're in the mall)
  • Communicate with friends via Twitter and Facebook after you've checked in at the mall or in a specific place or store

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NearbyNow historically had great success promoting specials and sales to shoppers within malls. In a different way that's also what Fastmall is doing and seeking to broaden. It's very clear that someone heading to the mall or at the mall is going to be a highly qualified prospect and open to promotions of various sorts. Over time it would also be possible to behaviorally (or perhaps demographically) target offers or at the very least enable people to sign up for offers from selected stores and brands. 

Here's an interesting scenario: everyone shopping at store X in the mall gets an offer for store Y also in the mall because their shoppers are from the same demographic segments. Fastmall could do this potentially (NearbyNow already is).

Fastmall can also push offers from stores along an indoor route mapped by someone going from, say, Crate and Barrel at one end of the mall to Macys at the other. Fastmall came out of CEO Sam Feuer and his wife's real world experience and frustration over trying to find a bathroom in an unfamiliar mall. The original idea was a bathroom finder for malls, which has developed well beyond that now. 

Fastmall aspires to a broader array of situations than just shopping malls. It wants to cover airports, outdoor shopping districts, theme parks, events and so on. In one sense it's very much like the maps one finds on outdoor kiosks of shopping districts, but with a range of interesting and dynamic capabilities for advertising and promotions. 

What to Make of Apple's iAd

What should we make of the Quattro-based iAd platform announced yesterday? There's been tons of commentary already about what this means for developers, for Google, for other ad networks, the ecosystem and for Apple. With Quattro and iAd, Apple now has an ad network that will compete with the various existing ad networks and exchanges serving the iPhone OS for developer adoption and loyalty. 

Apple will sell and host ads and keep 40% of the revenue. That is sure to be an area of third party competition: "developers, keep more ad revenue." 

But is this move about developer allegiance to the iPhone OS? Is it about maintaining free apps on the iPhone? Is it about competing with Google? Is it about "changing the quality of mobile advertising?" Or . . . all of the above?

Jobs spoke about combining the "emotion" of TV with the interactivity of online advertising:

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Jobs thinks that Apple can genuinely raise the bar on mobile ad creative, combining TV-like rich media and video with interactive and transactional elements associated with digital. 

All the mobile ad network competitors that posted about iAd's launch and its implications seemed have a near-uniform message: this validates the potential of mobile advertising, we're delivering tremendous value to advertisers already and there are a bunch of unasnwered questions here. 

I don't believe that Apple will unduly favor iAd over third party networks, although it's built into the OS -- an advantage that others don't share. If Apple were to use its leverage to bias developers that might represent an anti-trust issue.

I do believe the platform is built into OS 4 in an effort to make the user-experience of advertising on mobile devices better and more "app like." Indeed, Jobs showed ads during the keynote that looked and operated like apps, though they were launched from conventional mobile banners at the bottom of the screen. 

Apple's iAd, I believe, should help promote and encourage better ad creative for mobile, although there's some great work already being done. It will force competitors to "up their game." And it may thus actually help make mobile display advertising a more exciting place to play than online. 

Is FTC Preparing to Block Google AdMob Deal?

According to a story in the Wall Street Journal, the US FTC may be gearing up to fight the acquisition of AdMob by Google. Here's what the Journal is reporting:

The FTC has assembled an internal litigation team to prepare for a possible effort to block the deal, according to people familiar with the matter. It also sent letters to AdMob's competitors asking them to testify in sworn statements about the potential impact of the purchase, according to several other people with knowledge of the effort.

In addition, the agency has briefed Congress on its concerns about the deal, the people familiar with the matter said.

The FTC's staff hasn't made a final decision to try to halt the AdMob deal, and its five commissioners haven't yet voted on the issue. Google lawyers continue to meet with the agency's staff to argue in favor of the acquisition, and the two sides could yet come to an agreement that assuages the FTC and preserves the deal.

While the transaction would create a truly formidable competitor in mobile advertising (when you look across platforms) it doesn't diminish competition in mobile (in my view) and would be unlikely to affect ad prices. These are the two formal concerns of classical anti-trust analysis, as I understand it. 

The irony is that most of AdMob's competitors celebrated the deal as boosting the profile of mobile advertising and their own valuations. That's not typically the case in an anti-trust situation. 

There would appear, however, to be a general concern about Google's size and strength and the possibility that the company would come to rule an emerging ad market. In terms of the impact on competition and prices, the deal would be unlikely to damage the market. Yet there's no question that Google would be stronger in multiple ways in mobile with AdMob than without. 

As a related matter, Apple is supposed to reveal (among other things) details of its ad strategy tomorrow. Google has pointed to Apple-Quattro several times to indicate there's healthy competition in the mobile ad market. And indeed there is. 

It's going to be really interesting to see what the FTC does here because it has a potentially tough case if it chooses to block the deal. 

iPad 'Sells Out,' 'iAds' Coming April 7?

A couple of weeks ago when the iPad became available for pre-sale it was reported that iPad was selling at a very impressive 25K units per hour. Then the news came that unit sales had slowed, according to "back of the envelope" estimates. Perhaps the iPad wasn't going to be a hit and it was merely the hungry "fanboys" (and girls) buying the device.

But the initial shipment of iPads has apparently "sold out" according to several sources. The Apple website indicates that a pre-ordered iPad now won't be available for shipment until April 12. The first iPads arrive (also at BestBuy) on April 3. 

Current sales estimates see pre-orders closing in on 500K units. Availability at BestBuy will boost the iPad because the ability to touch and play with the device -- having one in your hand -- is likely to create demand and sales, as Newsweek's Daniel Lyons discovered (shifting from critic to booster).

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Meanwhile there's a rumor that Apple is about to unveil a new mobile ad platform on April 7, built on its Quattro Wireless acquisition, called "iAd." A MediaPost report first captured the rumor:

Apple is preparing to announce its "next big thing" -- a new personalized, mobile advertising system that could well be called the "iAd" -- Online Media Daily has learned. The new ad platform, which will be officially unveiled to Madison Avenue on April 7th, has been described as "revolutionary" and "our next big thing" by Apple chief Steve Jobs, according to executives familiar with the plan. 

If the iPad is a success it will bolster an already formidable user base that will likely reach 100 million consumers on a global basis later this year. Depending on the capabilities of the hypothetical new ad platform/network it could prove very appealing to marketers. But we'll wait and see what appears, if anything.

Finally, here are some data from a recent NPD Group survey (n=2,000 US consumers) about iPad awareness and purchase intent:

  • iPad awareness is highest among current Apple owners, (82%), consumers with $100,000 or greater income (80%), and 18-34 year olds (78%).
  • Only 18% of all consumers surveyed expressed a real interest in owning an iPad while 27% of 18-34 year olds and 24% of Apple owners said they were extremely or very interested.
  • Among the 18-34 year old demographic, 57% cited price as the number one reason they aren’t ready to buy. Among Apple owners, 43% felt that the pricing was too expensive.
  • When asked what the likelihood of purchasing an iPad in the next six months was, 9% of all consumers surveyed said they were “extremely or very likely” to do so, as did 10% of 18-34 years olds and 9% of Apple owners.
  • 66% of both the all consumers surveyed and 18-34 year olds don’t foresee an iPad purchase in their future, and 60% of Apple owners felt the same way.

These pre-launch surveys have limited value except to provide a rough measure potential interest and awareness. Once the device is available to use in stores, demand will likely increase, as I've argued above. As the survey data indicate, however, the device must overcome a perception that it's unnecessary and it will also likely continue to be a toy for the affluent.

If Apple lowers the pricing, however, as it has indicated it may do and as it did with the iPhone, that will clearly stoke demand as well and may help push it "down market."  


Related: Boingo launches $1.99 per hour WiFi service for iPad & iPhone


CTIA Offers LBS Guidelines, Are They Needed?

In conjunction with its big Las Vegas trade show CTIA has come up with some new rules guidelines for use of location information in the delivery location-based content and advertising. The document is called "Best Practices and Guidelines for Location-Based Services." Below are a few excerpts:

The Guidelines primarily focus on the user whose location information is used or disclosed. It is the user whose privacy is most at risk if location information is misused or disclosed without authorization or knowledge.

The Guidelines apply whenever location information is linked by the LBS Provider to a specific device (e.g., linked by phone number, userID) or a specific person (e.g., linked by name or other unique identifier). 

The Guidelines do not apply to location information used or disclosed:

  • as authorized or required by applicable law (e.g., to respond to emergencies, E911, or legal process);
  • to protect the rights and property of LBS Providers, users or other providers of location information;
  • for testing or maintenance in the normal operation of any network or LBS; or in the form of aggregate or anonymous data.

The CTIA document goes on to discuss consent for the use of location and revocation of that consent by users, among other related issues. One thing it sidesteps is subject of illegal government survelliance of mobile subscribers. It says those involved with "legal process" don't implicate consumer notice or consent. (That implies warrants for surveillance, which the government hasn't felt it needs to obtain in the recent past re accessing telco records.)

The reason I wrote the headline above the way I did is that opt-in consent for LBS is already widely used on the dominant smartphone platforms, and in particular the iPhone. There are undoubtedly others that need this education and these guidelines (for the mobile Web) but best practices are arguably already pretty well established by existing systems and methods in use today.

For its part the MMA hasn't yet opined on the matter. In September of last year the trade group said:

The MMA recognizes the need to provide guidelines for location based advertising. However, models for using location currently vary, and do not allow identifying the most appropriate guidelines at this point in time. MMA’s mobile advertising committee has started exploring the opportunities of using location in advertising and plans to come up with guidelines for location based advertising. In the meantime, MMA encourages experimentation in this space and invites companies to share best practice with the MMA mobile advertising committee.

The MMA will feel some pressure to get its guidelines out now. Either they will mirror (or simply duplicate) those promulgated by CTIA or they'll vary. If they vary at all will that create confusion among marketers and publishers? Probably. But we'll have to wait and see what emerges.

AdMob Metrics Offer Preview of Market Future

AdMob put out its February data early this morning. Among the things its shows -- as an indication of future industry trends -- is:

  • The growth of smartphones as a percentage of the market
  • The growth of Android in particular
  • The growth of non-phone Internet devices (MIDs)

First it must be repeated that the data AdMob gathers is from its network and it does not represent an objective view of the mobile Internet as a whole. Still the trends are going to be broadly consistent with the mobile market and Internet more generally.

To that end, I see several things that are interesting about where the market is headed. First: the overall traffic trends on the AdMob network; smartphone share growing (48%), so is the share of MIDs: 

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Smartphones are now approaching 20% of the installed user base in the US. Smartphones and quasi-smartphones will likely come to be dominant (51%) in 3-5 years. In terms of MIDs, here's what AdMob says:

The mobile Internet devices category experienced the strongest growth of the three, increasing to account for 17% of traffic in AdMob’s network in February 2010.  The iPod touch is responsible for 93% of this traffic; other devices include the Sony PSP and Nintendo DSi. In absolute terms, mobile Internet device category traffic increased 403%.

If the iPod Touch is the proof of concept, the iPad will spur growth in this category. There are probably going to be 10 relatively high profile tablet devices in the market. All of them will offer browsers (ultimately) and fall into this MID category. The iPad is likely to be the leader but we'll see.

The challenge with these tablets is how to count and account for them. Are they like laptops without the physical keyboard or are they more like smartphones? Do ads on the iPad, for example, count as "mobile" or will they be counted as Internet ads? It will probably depend on whether the ad is in-app or mobile Web. Even then there will be new ad units for these devices. The use cases for MIDs/tablets will be varied and interesting to watch develop. 

Here's market share data for February 2010 and immediate below AdMob data from a year ago:

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Here's the breakdown:

  • Nokia/Symbian global share: 43% (2/09) 18% (2/10)
  • iPhone OS: 33% (2/09) 50% (2/10)
  • Android:  02% (2/09) 24% (2/10)
  • RIM: 10% (2/09) 04% (2/10)

Among other things what these data show is a three or four way race for smartphone dominance among iPhone, Android, RIM (in the US) and Nokia (internationally). Look in particular at the traffic declines for Nokia, as a percentage of overall AdMob traffic. Palm is dead unless there's a miracle of some sort. And the new Windows (7) Phone isn't out so we can't assess its prospects yet.

Cardstar: Mobile Loyalty and Much More

Yesterday we met with Andy Miller, the founder/CEO of Cardstar. Until recently I hadn't heard of the company, although its iPhone app has had over a million downloads and has received some fairly extensive coverage in the NY Times and other tech blogs (where was I?). Miller is not the same Andy Miller who is the CEO of Quattro, in case you were wondering.

We had a long conversation about the app, some of the use cases and future scenarios and about the fascinating data being collected in the background. The data this company has is a retail gold mine. But that's a story for later.

The company started because Miller was carrying around too many loyalty cards in his wallet. This app, coming soon to Android and other platforms, allows users to enter their loyalty card account numbers and keep them all "on file" in a single place:

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Part of the "secret sauce" here is that the company can generate a scannable barcode for any loyalty program -- that we're told works with current scanning technology.

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The app, which Miller said has much more retention and usage than the majority of "lifestyle" apps in the iTunes store, also becomes a platform for push marketing to users and a way for SMBs to create loyalty programs in addition to the traditional big companies on the list above. As I mentioned, the data that Cardstar is collecting on usage (by demographics, location, etc) and engagement literally represents a treasure trove of "best practices" advice for grocery and retail marketers.

There's an intriguing and widening roadmap for this product, which began as a convenience for consumers. 

A novel element of the service, Cardstar allows users to create a physical "master card" that can carry up to six loyalty barcodes on a single piece of plastic, to minimize clutter (for people who don't have smartphones or want a backup for their most frequently used cards). You enter the account numbers on the Cardstar site and then receive a physical card in the mail. 

Cardstar is a fascinating company that sits at the intersection of offers and deals, which is fast-growing category online, and mobile loyalty marketing which is already very powerful. In terms of the latter category, we ran into Jay Highley, formerly of Tetherball360. We discussed some of the response rates to these mobile loyalty campaigns and he was sharing data from actual campaigns, which saw response rates of 20% to 40% in some cases. 

These numbers are amazing and show that "mobile marketing" and opt-in loyalty programs will be an increasingly important part of companies' mobile strategies -- or should be. 

Where Launches 'Hyper-Local' Ad Network

uLocate, which operates popular mobile site/app Where, has launched WHERE Ads, which it's positioning as a new "hyper-local" ad network. Last week I spoke to Where marketing kingpin Dan Gilmartin about it.

Gilmartin told me this initiative grew out of the company's (and it's users') frustration with conventional mobile display advertising and third party networks that too often supplied ad inventory wasn't very relevant, he said. The company has thus created its own solution and is going to make it available to third parties. As part of that Where also distributes local ads from other networks and sites (e.g., CityGrid).

The ads are geographically and usually contextually relevant. They appear at the bottom of pages, fairly unobtrusively -- one might even argue almost too unobtrusively:

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The release says that "Click Through Rates (CTR) on WHERE Ads has exceeded other mobile ads by as much as three times." Gilmartin discussed this better performance during the trial period with me fairly extensively during our earlier call.

I'm narrowly avoiding the cliche that relevant ads are "content" when I say these ads don't appear to be "ads" because of their immediate relevance to the category and location. Although they're not contextually relevant all the time. (I don't recall if there's behavioral targeting going on however.)

The more relevant the ads the more consumers will respond; it's pretty simple.

The general challenge has been getting the LBS inventory to provide enough fill. Now, networks such as CityGrid, V-Enable and Where are providing more specific LBS ("hyper-local") ad inventory, beyond the more conventional geotargeted inventory from traditional mobile ad networks. 

Dan Gilmartin will be on my panel on LBS monetization at Where 2.0 on April 1. Also on the panel will be Google, Placecast, de Carta, and Citysearch

Rivals Argue They Perform Better than AdMob

Two recent studies by Mobclix and SmartReply contend that each network performs better than AdMob. Because the data are self-serving one must receive them with some caution. However here are the results . . . 

Mobclix ran "The Mobclix Challenge" in December to directly compare itself to AdMob, claiming that its platform/network would provide app developers with greater revenue. Mobclix said it "outperformed AdMob by 83%. Overall, Mobclix was able to ensure higher eCPM, significantly more revenue and 100% fill rates for all participating apps."

The company highlighted two case studies that cast Mobclix in an especially favorable light vs. AdMob: 

  • Jokes Free earned 135% more ad revenue and received 2.27x higher eCPM via Mobclix in comparison to AdMob. If they had integrated Mobclix exclusively in December, their app could have earned $5K more in revenue.
  • Spazzle Free earned 25% more ad revenue and received as much as 175% higher eCPMs using Mobclix. If they had integrated Mobclix exclusively in December, they could have earned $6K more in revenue.

Independently SmartReply, which works with retailers, conducted a study comparing its own SMS network to AdMob's. The company said that in "multiple comparative tests run between in Q4 2009 and January 2010 across the AdMob and SmartReply networks," the results were as follows:

  • For every $100 spent in mobile advertising, the SmartReply network delivered 7.7 new customers while AdMob delivered only 4 new customers.
  • SmartReply’s ad network delivered a 2.17% click-through rate while AdMob’s delivered only a 0.13% click-through rate.
  • To receive 100 responses, SmartReply circulated 65,000 impressions whereas AdMob needed to circulate 5 Million impressions.
  • For every 12 Million impressions served by SmartReply, AdMob needed to serve 1 Billion to achieve the same results.

This is a little bit "apples to oranges" because one would expect an opt-in SMS platform to have better success than a pure display network such as AdMob's. However SmartReply contends that it is both more efficient and offers broader potential reach than AdMob (SMS vs. apps/mobile Web). 

Separately Mobclix just acquired analytics provider Hearbeat to broaden what it can offer developers in terms of tracking app performance. This is similar to the recent acquistion of TapMetrics by Millennial Media, to broaden its analytics capabilities. 

How Broad Is Google's Location Patent?

VentureBeat surfaced a patent that Google was awarded last week: "Determining and/or using location information in an ad system." The original application was filed in early 2004. The patent appears to cover using location as a primary factor in determining the relevancy of advertising served.

It's not specific to the PC or mobile and would presumably cover both areas. My non-technical reading of the patent suggests that this covers ranking ads based on the location of the user and/or proximity of the user to the desired object/site/product. 

Here's some of the mind-numbing discussion in the application itself:

Different geolocation information may have different scope, and some geolocation information may contain other geolocation information. Generally, for purposes of determining ad relevancy, a match of more specific geolocation information (e.g., town) may be weighted more heavily than a match of less specific geolocation information (e.g., country). Generally, for purposes of ad scoring, the most specific geolocation price and/or performance information that matches will be used. That is, if an ad has price and performance information for both San Diego and California, if the request geolocation information indicates an end user in San Diego, the San Diego price and performance information will be used. If on the other hand, the request geolocation information indicates an end user in Sacramento, the California price and performance information will be used. If the request geolocation information indicates an end user in Omaha, Nebr., neither will be used.

There are many different ways to score ads. Some examples include (a) using a distance between a presence of the advertiser and the end user, (b) using a local availability of an item sought by the end user, (c) using an advertiser attributes (e.g. a location of the advertiser's closest retail outlet), etc. Ads can be ordered and/or priced using language criteria (e.g., query/display language, information derived about user or advertiser's language such as location of user in Japantown).

Although some examples above used geolocation information as a current location of the user, the geolocation information may be a location that the user is interested in. For example, if a search query includes a zip code, it may be inferred that the user is interested in a location defined by the zip code, or located within in the zip code. If the search query includes a city name, region name, and/or a state name, it may be inferred that the user is interested in a location defined by such a name(s). Thus, for example, a user may be interested in an area which may be the same as, or different from, the current area of the user. The targeting, scoring, content, and/or performance tracking of ads may be affected using a location of interest. 

There are a number of location-oriented patents that have been awarded online for consumer search and in mobile. Companies such as Microsoft, Geomas (patent troll), and JumpTap, among a couple others, all hold local or local-mobile patents of one sort or another. One day some of these folks will be compelled to duke it out in court to determine whose patents trump the others. 

This one is quite broad however. 

Millennial Media: iPhone Continues to Gain Share

Millennial Media released its January SMART report, which offers a range of data about activity and ad campaigns on its network. Here are a few of the top-level datapoints and findings:

  • Smartphones represented 58% of our network’s U.S. Smartphone impressions in January – a 20% increase month over month.
  • The iPhone’s OS represented 56.6% of our network’s U.S. Smartphone impressions in January. iPhone has held the leading OS on our network over the last five months.
  • RIM’s OS experienced a 5% decrease in January but still held the second largest share of U.S. Smartphone impressions on our network with a 20% share

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The January report also republishes InsightExpress data about the greater efficacy of mobile marketing and advertising (vs. online):

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According to Millennial's discussion of the InsightExpress data:

Mobile campaigns in the Retail Vertical showed the largest differences between online norms in three of the five categories, Aided Awareness, Purchase Intent, and Unaided Awareness, with index scores of 14, 7.9 and 5.7 respectively, according to InsightExpress.

The Travel, Automotive and Technology campaigns had similar increases above online norms in the Mobile Ad Awareness category with index scores of 4.8, 4.7 and 4.6. For advertisers, this is a potential positive indicator that consumers are more aware of advertising in these verticals. CPG campaigns indexed high in the Brand Favorability category with a 11.3 index score. The second best index was 7.0 for Automotive campaigns. In our Q4 Top 10 Mobile Ad Verticals, CPG ranked seventh while Automotive ranked tenth.

This better performance of mobile (vs. online) makes sense because of reduced ad clutter in mobile, the greater share of voice and the greater novelty of mobile advertising (so people notice). As mobile becomes mature some of these metrics may decline -- but that remains to be seen.  

Report: Facebook Looking at Loopt

Loopt has been scrambling to reinvent itself and gain traction -- despite its longevity in LBS -- in order to not be made totally irrelevant by more visible competitors: Facebook, Yelp, Foursquare and mobile couponers. While it's still possible that Loopt would find the right mix of offerings or the right formula to succeed as an independent company that train has probably left the station.

TechCrunch, which loves to report rumors and tech gossip that also often turn out to be correct, is saying that Facebook is doing due diligence on Loopt. Facebook is the dominant mobile social network and a general force to be reckoned with. I recently speculated that it was only a matter of time before the company became a mobile ad network or platform. 

I had previously predicted that Facebook would buy Foursquare but that looks less likely now because of Foursquare's deals with large media companies. It still could happen. But if Facebook were to buy Loopt what exactly would it be buying? It would be potentially getting some mobile development expertise and some technolgy as well as some carrier relationships (but it already has those). 

It wouldn't be getting and doesn't need mobile users, with 100 million active mobile users of the site. Thus the price is likely to be a big sticking point. Loopt has raised just under $20 million. Loopt's investors will likely want something approaching or exceeding $100 million. My guess is that what Facebook gets from Loopt won't be valued at that level. We'll see. 

Loopt will ultimately have to sell itself because I think its time has come and gone. I could always be wrong of course. 

Placecast Launches Geo-SMS 'ShopAlerts'

Placecast was recently featured in a piece in the NY Times about "geo-fencing" and retailer The North Face. The company was using Placecast's system to send SMS alerts and marketing messages to users (already opted-in) who were within a certain proximity to a North Face retail outlet.

Today the company is broadly announcing the availability of this capability, which has been in trials with a number of US retailers:

Placecast's ShopAlerts service is a retailer marketing solution. Retailers leverage the technology to create their own version of the service; then consumers choose the brands they love, and may opt-in through many ways - at the store, online, via text-message, mobile website, or social network (like Facebook). Once ShopAlerts is activated, consumers go about their day and the service automatically alerts them when they are near a location that they are interested in or when the brand is offering sales and specials.

Unlike many new mobile advertising innovations available only as applications on smartphones, ShopAlerts works on any phone, which is a benefit for retailers who wish to reach the 196 million Americans who do not own smartphones but are interested in such shopping deals . . .

Four retailers are on board at launch: SONIC, American Eagle Outfitters, and REI. Here's a video that explains and demonstrates the service: 

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This is the "Starbucks coupon" scenario that people have been talking about for years. The difference here is that people opt-in to receive these alerts so they're not mysterious spam. But they are transmitted when you're within a certain distance from a store. As a result they're relevant in at least two ways:

  • These alerts represent content (deals/offers) that people are interested in -- they opt-in so response will be much higher
  • They're locally relevant because you're within a reasonable distance (that can vary) from a store 

This is location-based marketing but it's not "advertising" in the sense that nobody's bought an ad placement on a network or website. This is the blind spot in most of the mobile ad forecasts out there. SMS and direct marketing services delivered to your phone are often not considered in the major mobile ad forecasts in the market. However this will be a huge area for both retailers and other local businesses as well as consumers.

Placecast conducted a survey among consumers who participated in the ShopAlerts trials and found the following:

  • 60% of participants found the location-triggered messages to be cool & innovative
  • 79% said it increased their likelihood to visit a store
  • 65% made a purchase as a result of a ShopAlerts message
  • 73% of participants would definitely or probably use the service in the future

AdMob: iPod Touch Owners Apps 'Super-users'

This month's AdMob mobile metrics report compares downloads and application usage across the various smartphone platforms. The company hightlights app downloads by platform/device, satisfaction levels and other metrics. Much of the data this month comes from a survey taken by users on their device:

Respondents were sourced by responding to mobile ads throughout AdMob's iPhone OS, Android and webOS networks. There was no incentive offered to participate in the survey.

There were 963 total respondents: 318 Android, 244 iPhone, 356 iPod touch and 45 webOS. The survey was run from February 5th - February 16th.

Below are a few of the charts from the report, which can be downloaded here.

Survey respondents by gender and age, by platform: 

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The things that are striking in the two graphs above are:

  • Concentration of younger users among iPod Touch owners (young and gaming centric)
  • The fact that Android is male dominated. This is largely a function of the testosterone infused ad campaign by Verizon for Droid.  

Average and paid downloads on a monthly basis:

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The iPod Touch owners are the so-called "super-users" because of the greater number of apps they download. In the second graphic, there are many more paid app downloaders in the iPhone OS camp. This is because iTunes is very easy to use ("frictionless") compared with the other platforms. As an anecdotal case-in-point, I currently have two Android phones and have never downloaded a single paid app. 

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There are also some interesting data in the report about non-phone smart devices:

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Here's AdMob's discussion of the data represented in the two charts above:

  • 16% of iPhone users said they intend to purchase an iPad, compared to 11% of webOS users and only 6% of Android users.
  • Approximately the same percentage of Android users were interested in purchasing the Amazon Kindle as were interested in purchasing the iPad.
  • iPod touches are popular devices among consumers already using smartphones. 1 in every 4 iPhone users currently owns or intends to purchase an iPod touch in the next six months. More than 1 in every 5 webOS users currently owns or intends to purchase an iPod touch within the next 6 months.
  • 91% of iPhone users and 88% of iPod touch users would recommend their device, compared to 84% of Android users and 69% of webOS users. webOS users are 3.4x more likely to not recommend their device relative to iPhone OS users.

This last data point -- webOS users are 3.4x more likely to not recommend their device relative to iPhone OS users -- is really telling (re the Pre/Pixi). I'm a Palm Pre owner and have lived with the phone now almost a year. My dislike for the device has grown over time. I actually like the form factor of the Pixi better; however the Pixi is underpowered compared to the Pre, compromising its appeal.

Palm has been completely overshadowed in the market by the iPhone, RIM and Android. I don't think that Palm is going to be able to come back and will have to sell itself to someone (or come out with new devices that are more competitive, which is harder for the company).

While the Pixi may appeal as a "transitional" device (from feature phones to smartphones) the Pre is now effectively dead. It's simply not going to sell very well anywhere. Palm made some bad choices and strategic mistakes with it. And it's really now too late to correct them. 

Finally, all the data about app downloads again raises the question about the long-term "viability" of apps vs. HTML5 and "Web apps." To the extent that Adobe, Rhomobile, Appcelerator and others develop or refine tools that truly allow developers to "write once" for multiple platforms, then we will see apps survive across a range of smartphone platforms.

Otherwise, we'll continue to see apps written for the iPhone and maybe one or two others. But everything else will be HTML5 otherwise. 

Millennial Acquires Analytics Provider TapMetrics

Yesterday Millennial Media announced it is buying analytics provider TapMetrics. Millennial has itself offered analytics since its inception so I asked CEO Paul Palmieri about the rationale behind the acquisition. He told me late yesterday afternoon that TapMetrics offers "general business analytics" and that it would complement and round out the mobile campaign analytics that the company already offers.

Here's what Millennial will be able now to deliver to clients with the addition of TapMetrics:

  • Real-Time, Highly Detailed Analytics
  • User Interaction Information
  • Feature and Version Adoption
  • Device Types
  • Crash Reporting
  • Buzz Tracker & Reviews
  • Competitive Ratings System

Palmieri and I went on to discuss the state of mobile advertising in general and a wide range of related issues. In particular we talked about advertiser demand for mobile, ad exchanges and "mediators" as well as mobile CPMs and whether then were stable or in still in decline.

On the third point he said that he believed mobile CPMs had stabilized after some price competition that saw them decline in Q2 and Q3 of last year. He also made the point however that there are too many consumer impressions chasing not enough advertiser spending and this is a contributing factor as well. In other words, consumers are adopting and using the mobile Internet at rates that are much greater than advertisers, many of whom are still stymied by confusion about what to do in mobile and its apparent fragmentation.

This "consumers lead, advertisers lag" pattern is also present to this day on the PC Internet where time spend with the medium is not commensurate with ad spending. However the patterns of consumer and advertiser adoption of the PC Internet are all accelerated (post iPhone debut) in mobile. Palmieri was ambivalent about mobile ad "mediators" or exchanges. He recognized that they brought some value to publishers and advertisers but raised a version of the premium-remnant argument that exists on the PC side. Palmieri said he wouldn't serve a high value branded campaign against impressions that weren't in his mind worthy of the advertiser. Still he acknowledged that exchanges do in some circumstances benefit publishers by providing more advertiser fill and benefit advertisers by providing some enhanced reach in an easy to buy fashion.

TapMetrics is based in San Francisco. Millennial Media, based in Baltimore, is arguably the largest of the existing independent mobile ad networks and thus, as I suggested to Palmieri yesterday, "on deck" -- in a manner of speaking.

Profile of North Face Local-Mobile Ad Campaign

The New York Times offers a really interesting piece about how the outdoor equipment retailer North Face intends to use proximity based marketing (via SMS) or "geo-fencing" to promote sales and products to consumers within a particular neighborhood area.

According to the story in the Times:

For now, the North Face will send texts about promotions, like a free water bottle with a purchase, and new arrivals, because the company’s gear is heavily seasonal. A text message would say, for example, “TNF: The new spring running apparel has hit the stores! Check it out @ TNF Downtown Seattle.”

1020 Placecast is the platform/enabler behind the campaign: 

Placecast created 1,000 geo-fences in and around New York, San Francisco, Seattle and Boston, cities where the North Face has many stores and areas that get a lot of snow or rain, so the company can tailor its messages to the weather. In urban areas, the fences are up to half a mile around stores, and in suburban areas they are up to a mile around stores.

The North Face campaign is an opt-in SMS campaign, which are relatively common today. The novel element is the fact that location will trigger delivery of the message when people enter one of the zones that Placecast has set up. 

These types of campaigns will be highly successful by their nature: people have opted-in and the highly local aspect will very likely drive people into stores. Placecast has an even more sophisticated notion of how to combine geography, demographics, context and time of day. But as you do more targeting you narrow your audience -- greater precision and response but smaller reach. 

Mobile marketing and advertising is a potentially much more precise and specific instrument than online (from a push standpoint). It will be very interesting to see how this campaign turns out (if North Face will allow Placecast to share that with the world). 

How Long Before FB Is a Mobile Ad Network?

There's a nice summary (and video) of Facebook VP Chamath Palihapitiya's speech at the Mobile World Congress (via TechCrunch) in which he discusses Facebook mobile growth and engagement and makes a pitch to work with carriers. Facebook says it already has relationships with 200 carriers globally (compare to Yahoo, which says it works with roughly 80 but with the potential reach of 800 million).

Here are some quick facts from the talk:

 Palihapitiya pitched carriers on the idea that Facebook would help them grow data revenues. 

Picture 40

Facebook's mobile usage and growth are nothing short of amazing. But let's talk about what may be coming sooner rather than later: Facebook as a mobile ad network and one that offers location (and potentially demographics) as part of that proposition. 

There are currently no ads on Facebook's apps, mobile websites or SMS. I would almost bet my life that's going to change in the near-to-medium term. Facebook will be clever and careful about integrating advertising into mobile, mindful of the potential to alienate mobile users. However the mobile ad opportunity may be at least as big for Facebook as it is on the PC. 

Facebook is about to make $1 billion in ads on the PC; however neither I nor anyone I know pays attention to and/or clicks on them. However I do hear from marketers anecdotally that Facebook ad targeting does work. But offers and mobile advertising from SMBs and brands tied to location is a potentially huge opportunity for the company. 

I think it's just a matter of time before we see Facebook start to roll out an offering. And, on arrival, the company would be as large or larger than any existing mobile ad network. 

Loopt Does Deal with Coupons Provider

Loopt has done a deal with mobile couponer Mobile Spinach to provide location-based offers to Loopt users. It's San Francisco only at this point.

On the one hand this is smart because it's a another way to monetize location but one that is largely welcome by most consumers, compared to other types of mobile ads. (We detailed in our mobile coupons webinar the value and success metrics of mobile coupons and offers.)

TechCrunch and VentureBeat both cover the "mechanics" of the deal and discuss FourSquare, etc. What's more interesting to me is to see Loopt struggle to define and redefine itself under pressure from Facebook, Yelp and LBS "games" such as FourSquare. The company started as a friend-finder/social network and then morphed into Yelp. Now it's adding coupons and local deals. 

But there are a bazillion coupon providers in mobile even at this early stage of the market's development. 

Beyond this there's a more fundamental issue about Loopt's identity and answering the question: Why should I use the service? Unless/until the company can convincingly answer that question -- and I'm not sure it can surrounded by all these larger brands and providers -- it won't have a sustainable business.