Ad Networks

Out Come the 2010 Predictions

Predictions: they're unavoidable PR products this time of year, a ritual that is almost compulsory now. Mobile Marketer has rounded up a number of predictions in a new article. Some of those are from Millennial Media, which released its set independently.

Here's the Millennial Media list:

  1. The US mobile web will reach nearly 100 million unique per month in 2010
  2. Advertisers invest significantly in site and application mobile destinations
  3. New entrants to the mobile market emerge
  4. Location x relevancy x immediacy = mobile triple play in 2010
  5. Advertisers will increasingly buy audiences over buying media properties
  6. Mobile will be called to task on privacy
  7. Mobile retail activity and commerce proliferates
  8. Demand will exceed supply in some areas; supply will exceed demand in others
  9. Competition (vs. Apple) in the application space increases (Android, RIM)
  10. Agencies demand frequency capping & share of voice

Here's what we agree with among the above:

  • 100 million uniques at some point in 2010 -- yes
  • Advertisers spend more on mobile -- yes
  • Buying audiences vs. properties -- yes (this is increasingly true online too)
  • Retail is a big category for mobile marketing -- yes
  • More apps for non-Apple platforms -- clearly yes; Android has now reached 20K apps.  

Privacy may become a significant issue for mobile in 2010 as it has online this year. One of the predictions in the Mobile Marketer piece is that the carriers open up location this coming year to third parties. That's likely to be the case; increasingly cast in the "dumb pipe" role they need to find ways to make themselves relevant to advertisers, ad networks and consumers.

Stepping back, two broad things are important to point out:

  • 2009 was the long-awaited "year of mobile" for consumers. The mobile Internet became credible and visible this year; advertisers always lag consumer adoption
  • Mobile is going to be much more important than people now realize; it will become the primary Internet access vehicle for increasing numbers of people over time. But mobile and the PC Internet are joined and must be considered together. 

Along the lines of the latter point, as has been repeated many times before, mobile is not a stand-alone marketing strategy. It must be considered in the larger context of an overall campaign. And all publishers (and increasingly brands) must have a mobile strategy in 2010 -- but be thoughtful about it.

I would also argue that online and mobile media buying will become much more integrated in the coming year to reduce barriers to mobile advertising and provide combined reach to marketers. Mobclix's deal with Advertising.com is a leading indicator of what's to come.

The mobile handset is a "bridge" between the digital and physical worlds and location matters -- a lot. But "local" is not the alpha and omega of the mobile experience. People do all sorts of things on their handsets that have nothing to do with where they are right now. However to realize the "location x relevancy x immediacy" opportunity argued above, dynamic ad creative will need to become more widely used (see Google-Teracent). 

Social media and communication between people is also a central part of the mobile experience that wasn't really discussed in the predictions above. Local + mobile + social will be widespread in 2010. Voice search and voice control of handset functions will become more central to the user experience. 

Finally augmented reality; here's what the Mobile Marketer piece says:

Augmented reality will likely gain traction in 2010, but will remain a bell and whistle compared to list and map view.

1020 Placecast believes that 2010 will be the year that this exciting technology begins to be adopted on mobile phones . . .

Expect to see retailers and entertainment companies trying out ways of showcasing their brands with this niche, but exciting new technology. Although augmented reality will appear in more applications, consumers will still prefer the list and map versions to search results on a usage basis.

I would say something slightly different. It's not going to be the list or map vs. the floating Twitter posts. Augmented Reality's use cases have already started to emerge and the "more information about what's in front of me" scenario is what will stick for AR in the near term.

AR "browsers" won't replace conventional search or be widely adopted, but the ability to gain more information through the camera or by taking a picture of an object (e.g., Amazon-SnapTell, Google Goggles) will become more commonplace as part of a larger application or experience. I won't scan the street with my camera to get reviews about the restaurants in Times Square. But I will get more information about a painting, a building or a product using the camera. I might stand in front of a restaurant to see if there's a deal or discount via AR. (Related to this is QR codes, which may become more widespread in the US in 2010.)

Augmented reality in the form of "visual search" is right now the most provocative area for mobile development in my opinion. Voice is perhaps more mundane but very important for the advancement of the mobile user experience. 

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Update: Neglected to mention tablets will continue to proliferate but may not have an impact until 2011. 

Oracle Takes Curious Approach to Wireless Advertising Distribution

Oracle shows a tin ear to privacy concerns with the introduction of a new mobile advertising management platform for communications service providers. Dubbed the Oracle Communications Marketing and Advertising Solution, this software is designed to provide wireless carriers with In an introductory presentation squarely aimed at showing how carriers can use the new platform to garner a share of the mobile advertising and promotional revenue streams by establishing position in the critical path between advertisers, ad agencies, ad network operators and targeted sets of mobile subscribers. Oracle claims to "put the network operator in control" of a wide variety of use cases and transactions by enabling them to operate a marketplace that manages marketing campaigns (primarily involving SMS, MMS and WAP push) which "leverages subscriber data" to support more accurate targeting. It also provides out-of-the-box portal software that supports self-service tools for flexible pricing of advertising options as well as the ability to monitor advertising performance.

In promotional literature and its Web site Oracle's overall message is that they can leverage the information they collect about their subscribers into the basis for delivering targeted ads. The special sauce is tight integration between the advertising delivery engine, with subscriber profiles and existing services to support Notification and Workflow, Bulk Messaging, Traffic Interceptor, Monitoring, Billing, and Data Abstraction. To Oracle, the Advertising & Marketing (A&M) platforms overcomes several technical challenges associated with real-time push marketing to mobile subscribers. The promotional literature makes it sound like it will be simple for carriers to leverage the tight coupling of subscriber data with service delivery into a a greater share of the revenue pie.

The unspoken term for the data that subscribers generate when they use public communications networks is CPNI (customer proprietary network information). If the Advertising & Marketing (A&M) Platform is a way to make this so-called "proprietary" data a component of a targeting scheme, it won't get very far. Yet, when one thinks of all the "network information" and activity flows that Google is able to embed in its algorithm for targeted delivery of ads, you can see why Oracle and its carrier clients might want to take a stab at it.

The very thought of using data from the existing CRM and ERP systems powered by Oracle for the purpose of targeting advertising will be a red flags among subscribers who may feel that the carriers are, in effect, selling access to their status information. With the tele-management aspects knocked, the challenges of productization and sales are just beginning. Entrenched ad networks, aggregators and other intermediaries may not be so happy to see Oracle as an arms merchant to the carriers in what's turning out to be a land grab. The red flag for wireless subscribers is red meat for privacy lobbyists who are unlikely to let the Communications A&M platform thrive unchallenged.

Twitter Gets More Mobile

Twitter has always been mobile and, in fact, was inspired by SMS character limits (160 vs. 140). But Twitter is making some powerful moves in mobile that may give it advantages vs its primary rival Facebook. Its geolocation API could have quite a dramatic impact on LBS content and services.

In addition Twitter and 4Info recently announced a new "Text to Twitter" service

4INFO, a leading mobile media company and pioneer of SMS advertising and publishing services, announced today the integration between the 4INFO ad network and Twitter to create an exclusive SMS ad unit and functionality. This new functionality allows users to follow a Twitter feed by simply texting a keyword. Both publishers and advertisers will use this feature to allow users to sign up for their favorite tweets via SMS directly from 4INFO, without having to text in to a new number.

The company also just launched a new mobile site (pictured). To some degree this may compete with the various mobile clients around but it makes Twitter even more mobile centric as the company plans to grow and monetize in 2010. 

Sizing Up the Mobile Ad Networks

Take it all the numbers with some caution (see below). MediaPost reports on IDC's estimates of the revenues of various mobile ad networks (some figures are global and some US only apparently).

IDC says that Google-AdMob's (GoogMob's) mobile ad revenues would be worth $68 million, or 24% of the overall market.

Here's the full list and their IDC-estimated revenues:

  • GoogMob: $68 million
  • Millennial Media: $51 million
  • Yahoo: $32 million
  • Microsoft: $23 million
  • Quattro Wireless: $21 million
  • JumpTap: $11 million
  • AOL: $7 million
  • Others (the largest single chunk): $73 million approx.

Update: I'm getting some feedback from a couple of reliable sources that these numbers may be close in a couple of cases but are otherwise inaccurate.

Here are some other numbers from an article that appeared in AdAge (by Rita Chang) on October 12, 2009. Estimates are based on inferences and interviews with a number of parties:

  • AdMob
    Estimated 2009 sales: $40 million (global)
    Total funding: $47 million; last round in Jan.
  • JumpTap
    Estimated 2009 sales: NA
    Total funding: $72 million; last round in Aug. 08
  • Millennial Media
    Estimated 2009 sales: NA, though CEO Paul Palmieri said $10 million was a "great quarterly goal."
    Total funding: $21 million; last round in 2007
  • Quattro Wireless
    Estimated 2009 sales: $20-25 million in revenue
    Total funding: $28 million; last round in March

Teracent + AdMob: Dynamic Mobile Display Ads

About an hour ago Google announced that it was buying a company called Teracent. Teracent provides display advertisers with the ability to create different versions of ads based on a range of creative elements and ad copy. The technology behind the platform appears pretty sophisticated.

Google gives an example of an ad online display showing different versions:

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Teracent not-so-obviously can also do this sort of thing in mobile. And one of its marquee partners is Yahoo! Assuming the acquisition goes through this would be a blow to Yahoo!'s mobile display program.

The combination of AdMob and Teracent makes for a formidable mobile display ad capability (not to mention online). And this kind of dynamic creative is what's required to truly realize the promise of "right ad, right time, right place."

Humans can't create the myriad ad units required to take advantage of all the variables in mobile: day parting, location, context, behavior, etc. As I wrote previously in a post called "The Paradox of Targeting and Reach," the machine/platform must provide the capability to do this. And Teracent does this for Google. 

Yahoo! needs to be quite concerned that Google will usurp its position in display advertising by creating a more powerful mobile capability and combining that with integrated ad buying across the PC and mobile platforms. 

AdMob: RIM, Droid Show Gains on Network

The October AdMob metrics report is out (based on behavior and traffic on its network, rather than the mobile Internet as a whole). Here are some highlights:

  • Worldwide requests from RIM devices increased 44% over the last six months in the AdMob network . . . The recently launched RIM devices that are gaining traction are the Tour and new versions of the Curve (8900 and 8520).  
  • Worldwide requests from Android devices increased 5.8 times since April 2009 in the AdMob network . . . In the US, the Motorola Droid launched on November 6 with a big marketing push from Verizon and two weeks after launch it already represented 24% of all Android requests in AdMob's network worldwide. The Motorola CLIQ has also seen fast pickup since its launch at T-Mobile in the US and generated 6% of Android traffic worldwide on November 18th.
  • In October 2009, 70 percent of iPhone OS requests came from the iPhone while the remaining 30 percent came from the iPod touch.
  • The top Symbian and Windows Mobile devices have not changed in 2009 and both platforms have lost smartphone share. One of Nokia's first touchscreen models, the 5800 XpressMusic, is the one of the few newcomers to the list of Top 20 Symbian devices in 2009.

(emphasis added)

Here are some charts from the report:

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AdMob Creates 'Pre-Roll for Apps'

Yesterday AdMob announced "interactive video ads" for the iPhone and iPod Touch devices. Here's what AdMob's Ali Diab said about the new units on the AdMob blog:

For the first time, mobile video is truly interactive as we’ve included customizable in-player action buttons enabling consumers to engage with Web content and more video content without leaving the video player. Advertisers can also include action buttons that open the app store and iTunes store to drive downloads of branded content. This ad unit helps advertisers and agencies extend their existing campaigns to mobile by using video assets created for other mediums and overlaying interactive elements in the highly measurable mobile environment. Advertisers can opt for action buttons that allow users to share video content with their friends or connect to social networking sites within the video player, making it easy to add a social media element to their campaigns.

There's a "click to play" option or an auto-play mode that can launch and run when an app is launched. The second type is effectively pre-roll for apps. The video below illustrates this latter presentation. 

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Video advertising can be very effective and AdMob has now brought that to apps. A brand could now hypothetically do a unified TV, online video and mobile video ad campaign (with some versioning perhaps) essentially at once -- and through Google, once the acquisition closes.

In addition expect marketers with branded apps to do "commercials" within the apps now: say, for example, Target promoting a holiday sale before its app loads. Alternatively imagine if Target were to sell pre-roll airtime on its app to a brand available at a local target store. Interesting possibilities.

AdWeek Says 'Wait 'Til Next Year' on Mobile

AdWeek's Brian Morrissey writes a contrarian piece on mobile advertising: Mobile Ads: Wait Until Next Year. In it he catalogs the reasons why mobile isn't ready for most marketers:

  • For all the big numbers bandied about in mobile, the opportunities today are quite small . . . In fact, fewer than one in five Americans has a smartphone, according to most estimates. That knocks out the most advanced ads like applications -- and greatly cuts into the opportunity to reach mobile consumers.
  • AdMob is an example of an early iteration of mobile advertising. Most of the ad impressions it serves are tiny static billboards.
  • Targeting ads to mobile phone users is still in its infancy. The carriers sit on a trove of user information and location data that is largely unavailable to marketers. 
  • BIGresearch concluded in a study released last week that two-thirds of users objected to mobile text ads. Over half said all mobile advertising was an invasion of privacy.
  • The mobile Web is much like the Internet in its early days: a small market without standardized methods and simple ways to run and measure campaigns. There's one other glaring factor missing from mobile that holds it back: an easy transaction option.
  • For one, it isn't easy to track campaigns alongside Web display pushes in third-party media planning tools.

I'm not going to try and refute any of these points, which are generally valid; although in terms of reach AdWeek doesn't really address SMS, which is nearly universal and has the potential to reach Internet-sized audiences. The article does acknowledge rapid consumer adoption, which is part of the point -- marketers need to address these audiences or miss out on an opportunity.

Yes, mobile is relatively new and complex. But in some ways that's what's interesting: the new options and opportunity to figure out the best way to engage consumers on these very "intimate" devices. What's already clear is that eventually mobile will be a more effective medium than almost any other. It may not offer the same "spray and pray" opportunities for direct marketers but it is already proving very successful across a range of use cases and scenarios. (See some of the case studies in our Mobile Marketing Summit.)

Now is the time for marketers and advertisers to test and experiment. Those that do will reap rewards later on as those that waited struggle to figure out how to best integrate and leverage mobile as part of their overall media mix. 

Millennial Media Gains $16M in New Funding

It probably wasn't as a direct result of the recent announcement of Google's intended acquisition of AdMob, but that probably didn't hurt. Millennial Media just announced a new funding round of $16 million:

Today we announced the closing of our Series C round of financing.  The round was $16MM in growth capital, led by new investor, NEA.  Our existing investors, Columbia Capital, Charles River Ventures, and Bessemer Venture Partners also invested in the round of financing.  This capital is the second of two big deals in the industry in less than one week, and is a great indication of how vast the market for mobile media networks will be.

Baltimore-based Millennial has raised just over $37 million, including the $16 million, since it launched in 2006. According to Nielsen Millennial is the mobile ad network with the greatest reach. The company intends to expand its European efforts, among other uses of the new funding. 

We're now in a kind of race to greater scale among the various mobile networks. While there may be over 400 display "ad networks" online, the mobile universe will not support -- at least right now -- more than 10 or so competitors. That's because most display advertisers are going to want access to the largest audiences possible. 

GoogMob Is a Big Deal for Both Companies

By now even your grandmother probably knows that Google has acquired mobile ad network AdMob for $750 million in stock. Here's an excerpt from a post on the acquisition put out by AdMob CEO Omar Hamoui:

The best part of all this is what's next. We are not going away. After our deal with Google closes, we will work together to accelerate the pace of innovation in this area. Our product and engineering teams will keep building great products for all of our customers. Our business development team will keep working to maximize ad revenue for the more than 15,000 mobile Web sites and applications that make up AdMob's publisher network. Our sales teams will keep working with our thousands advertisers to deliver successful campaigns and our marketing group will keep pushing to get the word out about mobile. It's just that now we will be able to do an even better job for all of our customers.

I have one important thank you left and it is for Google. We've been blown away by their entrepreneurial attitude, their speed, and their insight. My management team and I have been lucky enough to spend time with some key people at Google, and we've always walked away excited about our shared values and similar cultures. In all of our interactions we've felt their passion for innovation and new ideas. Obviously this transaction represents only a part of their overall interest in mobile but all of us at AdMob are looking forward to working with them to make sure that the future of mobile is no longer so far away.

"We've been blown away by their entrepreneurial attitude, their speed, and their insight."

Indeed, Google is now at the forefront of mobile display advertising and seemingly moving much faster than its competitors on several fronts. Here are some mobile ad network reach numbers (monthly uniques) compiled by Mobile Marketer from Nielsen data:

  1. Millennial Media: 45.6 million
  2. Yahoo!: 36.1 million
  3. Google: 31.9 million
  4. AOL/Platform-A’s Third Screen Media: 28.6 million
  5. AdMob: 25.7 million
  6. Microsoft: 25.4 million (doesn’t include the new Verizon deal)
  7. Jumptap: 23.4 million
  8. Quattro Wireless: 23 million

Assuming the accuracy of the numbers, if we combine the Google and AdMob figures it would make Google the ad network with the greatest reach in mobile. Google came late to display advertising online but is now charging ahead in mobile just as the market is picking up. Much of AdMob's inventory is now in apps on the iPhone and Android devices. But that's where the action is from a usage standpoint and that's where the best mobile ad creative is to be displayed -- although mobile Web is getting much better.

One of the reasons Google personnel said they acquired AdMob was to get the team, which has been thinking about mobile and operating in the segment for more than four years. This provides sales, creative and other mobile expertise that plugs a hole for Google.  

The acquisition could trigger a wave of M&A activity as nervous others try to build more scale or as larger players try to add mobile display assets that they believe they will now need to have to compete in the near and medium term. 

Jumptap's CMO Paran Johar said not long ago to me on the phone that they were seeing two and three times the number of RFPs of only a few months ago. It's clear that mobile advertising is gaining steam and crebility and that this acquisition will only further that development. Indeed, Johar said this morning in an email statement:

The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising. We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google. The industry front runner will be determined by who can deliver the most advanced targeting capabilities for better ROI for advertisers and publishers.

Another interesting angle here is Google's potential to create a unified PC-mobile ad buying platform for brands and large advertisers. Mobclix just did something like that in a deal with Advertising.com and Traffic Marketplace. Google has the potential to do it on a much larger scale. 

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Update: Here are some additional Nielsen (September) traffic numbers (minus Google & Yahoo!) provided to me by Quattro:

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Tetherball and ViVOtech Promote RFID Mobile Loyalty Programs

Mobile loyalty firm Tetherball and "contactless" payment services provider ViVOtech have joined forces to promote NFC/RFID-based mobile loyalty marketing programs. Tetherball is currently running one such program with QSR chain Dairy Queen. It works as follows: the Dairy Queen customer, who has previously opted-in to receive communication or offers via SMS (and has placed an RFID tag/sticker on her phone), takes that phone to a small in-store kiosk and swipes it to receive a paper version of the offer (coupon) and redeem it. The kiosk prints out the right coupon for the customer, controlling for fraud and making redemption easier at the register. 

The new partnership combines this RFID based mobile loyalty program approach with ViVOtech’s installed base of contactless readers (and their customers). Here's how the press release explains it: 

Integrating traditional marketing methods such as in-store advertising, customers are engaged to sign up for mobile loyalty rewards programs offering promotional discounts and rewards points for purchases or visits. Upon joining, customers are given a Tetherball Tag™ powered by ViVOtech technology, a tiny RFID chip that is easily affixed to their current mobile phones, which uniquely identifies them through Tetherball’s sophisticated technology platform. Tetherball clients are then able to send offers to their customers via standard text messaging. Offers are redeemed electronically using existing in-store Contactless point-of-sale terminals or stand-alone Contactless kiosks provided by Tetherball. 

One of the challenges of the old system that Tetherball was using was the need to install the kiosk/readers at the POS. Now through this partnership they've got access to an existing infrastructure. 

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You can listen to a webinar featuring Tetherball President Jay Highley discuss mobile loyalty with SmartReply's Mike Roman from our recent Mobile Marketing Summit.

Verve, AP Offer "White Label" Mobile App

Verve Wireless and AP have joined forces to offer a mobile app for newspaper and other local media publishers. It's also an effort to build an ad network, which Verve has been doing since its inception as a platform for newspaper publishers and other media companies to mobilize their content. The white label app works across the major smartphone platforms. 

According to the press release from yesterday:

The new white label service is based off the award winning AP Mobile news network application developed for the iPhone, BlackBerry, Android, Palm Pre, Windows Mobile, and Nokia N series devices. To date, it has been downloaded by more than 2.4 million people and has more than 55 million page views a month. The application provides readers with features such as rich graphics, audio and video as well as breaking news alerts.

The new service was built to directly address expense and time constraints that publishers would face in building, hosting, maintaining and upgrading their own cross-platform mobile application. This allows publishers to streamline operations under one vendor and standardize content presentation, usage metrics and advertising delivery . . .

Verve Dashboard provides publishers with a means to manage mobile executions in one place. It offers controls for use by editors, advertising, marketing, sales, and content creators. Publishing options include mobile Web, and client applications (all platforms), as well as video. Advertising options include display, messages, interstitial, video, and national geo-targeting, with the ability to manage one campaign across all properties utilizing the national network. Reporting and analytics are also provided through the dashboard. 

Publishers are increasingly looking to mobile as a critical platform for distribution and potentially revenue, but most local media companies are probably not able to put out competitive apps and mobile properties, let alone monetize them themselves. 

Data from Quattro's Q2 Mobile ROI Report

I'm finally getting to this a couple of days late, but ad network Quattro released some very interesting mobile advertising trend data about mobile ad performance, device specific patterns and CTRs. Like AdMob's reports these data are from its network and not necessarily an absolute reflection of the market; however, like AdMob, it's going to be directionally consistent with the broader market.

Here are a few of the data points and charts released by Quattro:

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There's much more data where that came from. A few things are interesting from the charts above:

  • iPhone/iPod Touch as top devices mirrors the AdMob data
  • iPhone users as most engaged with and responsive to ads directly contracts this study from Chitika, which claimed iPhone users had the lowest CTRs. 
  • The ads that people appear to be responding to (index of CTR) is not entirely intuitive: travel, food, retail (presumptive mobile categories) are low, while CPG, finance and autos are high.  

It's great to get these reports from companies like Quattro because they show actual behavior rather than attitudinal data from consumer surveys. These data should also convince people that display and brand advertising will have a very healthy future on the mobile handset and will not be totally marginalized by search.

Free 411 Uses Contest to Boost Call Volumes

Free, ad-supported directory assistance has gone from the hypothetical growth engine for mobile ad revenue in some analysts' forecasts to a marginal segment in the mobile ecosystem. The largest and most visible provider historically has been Jingle Networks' 1-800-Free-411. However I suspect that call volume growth has stalled there.

That's what I surmise is behind a new contest to attract usage:

The nation’s leading provider of free directory assistance, 1-800-FREE411, announced today the launch of a “30 Days of FREE411” sweepstakes. Beginning November 1, 2009, every person who requests a phone number from 1-800-FREE411 has a chance to win $411 on the spot, with two randomly selected callers awarded the cash prize daily. In addition, every caller in November will be entered into a drawing for a chance to win a trip to Boston and a shot at the grand prize of $411,000.

At the beginning of December, one lucky caller will win an all-expense trip to Boston for two. During their two nights in Boston, the winner will play a game where they choose one cell phone from 411 available phones. Each phone is awarded a value and the winner will walk away with a minimum cash prize of $4,100, with one of the 411 phones valued at $411,000!

The major carriers initially announced free, ad-supported initiatives (i.e., Verizon, AT&T) but they've been neglected because ad-supported DA hasn't taken off and their traditional paid businesses are cash cows -- though with declining volumes. 

The chart below reflects that despite having access to the Internet on a mobile device, a large number of people see 411 as a resource they'll continue to use. However smartphone users tended to agree with the statement in larger numbers. 

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AdMob's September Metrics: Android Rising

AdMob's latest monthly metrics report shows that Android-based handsets are growing as a percentage of overall requests. This month's report also shows the rise and fall of various handsets over a period of nearly three years. AdMob also takes pains to counter criticism it has received by being very explicit about what its data do and do not reflect:

The report is based on the ad requests we receive from our network of more than 15,000 mobile Web sites and iPhone and Android applications. The data contained in the report is a measure of mobile data usage and does not represent the traditional view of market share based on the number of handsets sold.

And now for the data:

  • In September 2009, the list of the top 10 devices in the US included five with touchscreens, six with Wi-Fi capabilities, and six with application stores.  These devices are responsible for a much higher percentage of mobile usage than their share of handsets sold.
  • In September 2009 42% of requests in the US were made from Wi-Fi capable devices. 18% of actual US requests were made over a Wi-Fi connection in September 2009 compared to only 5% in September 2008.
  • Devices running on Android accounted for 17% of smartphone traffic in the US in September 2009, up from 13% in August 2009. The HTC Dream (G1) was the number three device and the
  • HTC Magic was the number 10 device in September 2009 in the US. As with the iPhone OS, much of the Android traffic in AdMob’s network came from applications.

The following tables reflect handsets responsible for mobile Web and app views on the AdMob network (US and UK). Note the shifts from 2007 to 2009: The rise of Apple, HTC, RIM and Samsung in the UK; and the fall of Motorola (and to some degree RIM) in the US. 

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The following compares US smartphone OS share on AdMob's network in Decemberr 2008 vs. September 2009 (bottom):

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  • iPhone -- 2008: 48%, 2009: 48%
  • Android -- 2008: 2%, 2009: 17%
  • Windows Mobile -- 2008: 15%, 2009: 5%
  • RIM -- 2008: 18%. 2009: 14% 
  • Symbian: 2008: 2%, 2009: gone
  • Palm/WebOS: 2008: 9%, 2009: 10%

None of these are market share numbers per se, as AdMob is now careful to point out. But they do reflect directional trends in the broader market.

Mobclix Announces Deals to Enable Online-Mobile Crossover Display Buys

Google and Yahoo! are both making their paid-search advertisers' online campaigns available in mobile search results, at least on smartphones. As a general matter this simplifies the process for advertisers, who can make one ad buy and get distribution across platforms. That's not truly been possible for display advertising to date (unless you count Google's content network's automated banner creation from text ads).

However in a move that will have significant implications for online ad networks and potentially display advertising as a whole, mobile ad exchange Mobclix has announced a deal this morning with AOL's Advertising.com and Trafffic Marketplace. The deal will facilitate cross-platform display ad buying. The idea is that the two online networks now become a place that advertisers can buy mobile display inventory, as well as online, via Mobclix. 

Mobclix says that it's the largest mobile ad exchange and works with more than 20 leading mobile ad networks. Mobclix's rise has been very rapid. Founded in September, 2008 the company promises "100% fill rates" for publishers and app developers. 

As mobile gains momentum -- Jumptap told me last Friday that it has seen a big increase in RFPs from advertisers in the past few months -- this sort of cross-platform capability becomes highly desirable and will help accelerate that momentum. It creates a kind of "instant reach" to mobile audiences.

One of the historical inhibitors of mobile ad buying for agencies and large advertisers has been the fragmentation of the market. This deal (and others that will likely emulate it in the future) overcome the problem of fragmentation by creating a "one-stop-shop" opportunity.  AOL's Third Screen Media was part of its former "Platform A" initiative that was supposed to be that sort of "one-stop shop" for display ad buying; however the promise of that concept was never truly fulfilled.

Recently AdMob acquired ad "mediator"/exchange AdWhirl. Arguably the most visible mobile ad network, this announcement may put some pressure on that company and other mobile ad networks to make similar cross-platform deals. Accordingly we're probably entering a time of increased deal-making and even consolidation in the mobile ad network space as the economy improves. 

Mobile Display to Yield to Search? Guess Again

There are a number of ad forecasts that assume mobile display will constitute a very small portion of mobile ad revenue over time. While search is a compelling form of advertising on mobile devices the argument that display will be marginalized or insignificant is misguided and incorrect.

Search and display complement each other online and while search often gets credit for conversions (the "last click") and is perceived as the most effective form of online advertising the reality is more nuanced and complex. People are stimulated to search by traditional media, by conversations and by other online ads or promotions.

Search does have a role to play in "brand" advertising and increasingly search is evolving to allow for richer branding displays in results -- take Google and Yahoo!'s experiments with video in search results and brand icons, as well as Yahoo! Search Monkey, for example.

But a short survey of mobile display ads from the Yahoo! site yesterday should illustrate why display will continue to have an important role in mobile advertising: 

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If I'm looking for a Lexus dealer the search ad works well. However in that context I've already formed a clear interest. How does Lexus stimulate my interest? The answer is traditional media, online display or  . . . mobile display advertising. 

The above ads for Clarion and Lexus are much richer and more interactive that the simple text ad in search. In a way they're like mini apps. Indeed, many branded apps are like uber-display ads that offer rich functionality. The issue with display ads is targeting and relevance. That's generally the place from which the anti-display prognosticators assume mobile display ads will wither: "nobody wants to see irrelevant display advertising on their handsets." 

True.

That's why all the flavors of targeting are being employed in mobile. There may be some regulatory hurdles to come around mobile behavioral targeting. But mobile display (defined here to include video advertising and any graphical presentation of ads) will be a large and important part of the mobile ad ecosystem for a long time to come.  

Millennial Media SMART Report for September: Entertainment Top Ad Vertical, iPhone Top Handset

The following charts and data are excerpts from Millennial Media's September SMART report, which reflects activity on the company's ad network. The list below is taken verbatim from the report: 

  • iPhone/iPod Touch impressions increased once again in September by 5%. Q3 represented a steady growth with monthly increases: 29% in July and 15% in August.
  • Average monthly page views per user decreased slightly month over month from 111 to 109 in September.
  • The use of rich media increased 1% month over month to 18%.
  • Average session time increased from 4:59 to 4:78 month over month.
  • The Retail & CPG verticals continued to leverage rich media and iPhone/iPod Touch traffic to deliver their message, engage users and drive results. 

The following are the top verticals by ad spend in Q3 on Millennial's network. This is probably fairly representative of the broader market: 

  1. Entertainment (movies, games, music)
  2. Directories and portals
  3. Dating
  4. CPG
  5. Retail and restaurants
  6. Telecom
  7. Armed forces 
  8. Finance
  9. Education
  10. Travel

Millennial also shows the composition of the "retail and restaurants" spending category. Actual restaurants constitute a very small part (1%) of the ad spending in the category:

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The following chart represents the range of post-click activity that Millennial is seeing from users interacting with ads (be careful about generalizing):

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Finally, the following chart shows the top handsets on Millennial's network. Note that there are lots of non-smartphones present, although the iPhone is the dominant device:

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Placecast-Harris Survey: 42% Interested in LBS Ads, Offers After Opt-In

Location-based ad targeting firm/network 1020 Placecast has been putting out research and powerful anecdotal interviews with women as part of an "alert shopper" series. Now the company is releasing survey research done with Harris Interactive that addresses mobile shopping behavior.

The survey (n=2,029) was conducted online in July, with US adults, and "measured consumer sentiment towards using mobile devices as it relates to shopping, sales promotions and impulse purchases." At the top level, here's what Placecast found:

Most people make "impulse purchases" with some regularity: "Nearly a quarter of adults owning cell phones [22%] make this type of impulse purchase at least once per week or more often. Among women with cell phones ages 18 to 44, 27% report making at least one impulse purchase a week; among men 18 - 34, this number rises to 31%."

For this impulse purchase group:

About 2-in-5 of these adults would like to receive alerts about sales for:
-Movie/event tickets (43%)
-Weather information (39%)
-Clearance or liquidation sales (37%)

About another 3-in-10 of these adults would want to be alerted about:
-Pizza (31%)
-Clothes (30%)
-Fast food (27%)

About one quarter would want to be notified about:
-Electronics (25%)
-Music (24%)
-Happy hour specials or bar and night club offers (21%)

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The apparent bottom line here is that lots of people are interested in getting LBS and deals information on their mobile phones via alerts. The chart above reveals the hierarchy of shopper interests around alerts.

Last year HipCricket released survey findings that are broadly consistent with those above around offers and mobile coupons. And in our survey work we've found that about 42% of mobile users are interested in offers or deals from retailers or merchants from whom they opt-in to receive information. 

The numbers are pretty consistent that there's a sizable audience, approaching 50% of users, interested in mobile deals/offers/alerts. The Placecast survey argues that these people are also open to "impulse purchase" influence via their mobile devices. 

Search Will Not Be 73% of Mobile Ad Spend

Because of a research note sent out last week by Mark Mahaney at Citigoup the BIA/Kelsey mobile ad numbers were picked up in Business Insider and at TechCrunch. However, they're based on basic and in my view incomplete thinking about the market. As I've argued before forecasts are primarily a marketing vehicle and in one sense don't matter. They're almost like the "how many angels fit on the head of a pin" discussions of the Medieval European clergy. But because some numbers get repeated and become established it's important to be thoughtful and as rigorous as possible in developing them. In particular among the Kelsey numbers paid search is not going to constitute 73% of all mobile advertising in the US in 2013. 

First the numbers: 

2008:

Kelsey:

SMS: 63%
Search: 24%
Display: 13%

Compare eMarketer: 

SMS: 60%
Search: 22%
Display: 18% 

2013:

Kelsey:

SMS: 9%
Search: 73%
Display: 18%

Compare eMarketer: 

SMS: 28%
Search: 35%
Display: 37% 

Today display represents 22% and search 47% of the online ad spend. In recent quarters there has been a move toward search and away from display to a degree. Display prices online, until recently, also took a pretty severe beating because of excess inventory. Thus a big bet on search in mobile by analogy seems to make sense. Search is proven, search is safe. There's also the logical priority of local search in mobile, which occupies a disproportionate volume of mobile search revenues in the Kelsey forecast. 

But unless you define "search" extremely broadly to be any directional-intent lookup, using a variety of methods and modalities, this 73% figure is unlikely to come to pass. It's just too large a share. In addition, as TechCrunch points out, Kelsey is effectively arguing that 73% of mobile ad revenues in the US will be owned by Google as the dominant player. I'm certainly bullish on local and search more generally but these projections are insufficiently sensitive to potential future market developments and the more complex nature of mobile. 

Google and Yahoo are both putting ads in mobile search results on smartphones as a matter of routine. In this sense the issue of how mobile search will be monetized is conceptually solved: online campaigns simply go into mobile with limited additional effort by the advertiser. Mobile clicks on paid search results = mobile search revenues. However there are only one or two ads in Google mobile results that are "above the fold" compared to as many as eight or so online. Better CTRs in mobile ultimately may compensate for smaller numbers of ads to some degree. 

However, the conventional PC based search experience as it exists today will not prevail on the mobile handset over time -- it could in the world of eReaders and tablets if they catch on and become mainstream Internet access devices. But the mobile "search" experience will evolve. Competition guarantees it. There are a range of mobile apps and experiences that use a browse approach but also represent a "directional intent" lookup: Yelp's "restaurants" category that shows nearby places to eat. Is this a mobile "search"? yes and no.

There's also the question of the distribution of ads and ad revenues from apps vs. the mobile Web. Mobile apps are largely monetized and supported by display ad networks, including Google AdSense. And relatively soon, like search, online display campaigns will be more easily ported over the mobile. This will create a great deal more relevant display ad inventory. However there are some challenges that must be overcome before mobile display can truly fulfill its potential. But those challenges will be solved. 

Recently online display CPMs have fallen. And with display there's the question of whether the model is pure CPM, CPC or even CPA. If CPC prevails, which it rightfully should not, then the display contribution will be lower than if most mobile display is billed on a CPM basis. There's another post coming on why CTRs are a bad metric for mobile display. ComScore and the OPA have recently made that point several times.

Regardless, display (and rich media) will play a significant role in mobile advertising over the long term. That will include mobile Web and apps. How will AR be monetized? Both by search and display. Views through the camera will offer display ads, brand logos (not unlike what Google is doing with Maps on the iPhone), coupons and deals.

Then there's the question of definitions and what counts as "advertising" vs. "mobile marketing." SMS will have an ongoing role in mobile marketing, especially as a customer acquisition and loyalty tool and as a way to connect traditional media and mobile, but it may not turn out to be a huge "advertising" revenue generator. What about app development? Branded apps are both marketing and advertising vehicles but app development, clearly a mobile marketing expenditure, is not "advertising."

I'm trying to illustrate that there are lots of variables and a host of developments to come in mobile. Mobile is analogous to the PC but distinct in important ways and will follow its own evoluationary path. Search, in the sense of a directional lookup, is going to be a prominent feature of the mobile user experience but it won't be limited to a search box and blue links on Google (think about QR codes as as both search and display). Lots of "searching" in mobile will be going on outside of traditional search engines -- and that behavior will be monetized in different ways: sponsorships, coupons, deals, display ads, video, as well as conventional text ads.