Ad Networks

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.

Bridging the PC-Mobile Divide

Google and Yahoo! are both doing a range of things in mobile that connect the PC experience to the handset more directly. I've recently written about this with Google's local results in mobile. But there are other examples as well. Yahoo! does ad targeting from PC to mobile if users are signed in on the Yahoo! mobile site.

This bridging between mobile and PC is consistent with a "one Web" (Opera's phrase) vision that both companies are explicitly promoting. To that end, yesterday Google enabled its recently introduced PC "search options" in mobile, allowing users to refine or fliter search results as one can on the PC. Here are some screen images from the Google Mobile blog:

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While this may be helpful in select situations it doesn't represent a big enhancement to the mobile search experience on Google in my view. It's more important as another example of the PC-mobile crossover and attempt to leverage the PC experience to build mobile user loyalty by providing familiar tools and capabilities. 

Yahoo! isn't exactly duplicating the PC experience in this way but it is seeking to build a familiar experience in mobile. Yesterday Yahoo! announced some changes and upgrades for its mobile homepage. It's now available on 1,900 mobile devices and there are a range of improvements (including more video) for smartphones:

  • Dynamically updated content with pagination – without using additional screen real estate or refreshing, users are able to access a wealth of content. For example, the ‘Today’ module now surfaces ten of the leading stories from around the Web and gives users immediate access to 48 of the top news, business, sports and entertainment articles directly to consumers’ fingertips.
  • An enhanced RSS reader –   that now supports photos with captions, and adds the ability to scroll through more headlines from favorite feeds without having to refresh content.
  • Enhanced mobile video integration – with one click consumers can watch streaming video including the Yahoo! produced Tech Ticker – a rundown of the latest financial news, and Prime Time in No Time – a recap of last night’s TV shows, as well as news, entertainment and sports videos from the Associated Press.
  • Enhanced movie results – movie posters now show you exactly what’s playing at a theatre near you, and with a few simple clicks you can watch the trailer, read reviews from Yahoo! and Rotten Tomatoes, and even buy tickets from participating theatres – all directly from your mobile device.

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Yahoo! has built a terrific mobile experience. The "My Favorites" functionality in a way conceptually duplicates the personalized homepage experience that Yahoo! introduced on the PC, although it's not a direct crossover. My guess is it will eventually become that.

Stepping back, Yahoo!, Google (and Microsoft) are seeking to take their massive audiences online and port them to mobile (especially smartphone) devices. This is also true of Facebook. In the mobile traffic reports we see how the brand strength of these companies (Microsoft to a lesser degree) is translating into mobile user behavior and loyalty. As they continue to invest in mobile the PC-mobile connect becomes stronger and harder for companies that don't have that strength to get attention. Witness, for example, how Facebook and MySpace (to some degree) are starting to squeeze out all the mobile-only social networks because they have no brand or usage presence on the PC. 

Yahoo! Search Ads Now Port to Mobile, Google's Bigger, Better Browser Ads

I had not known that on certain high-end handsets (Android, iPhone) Yahoo! is now showing paid search ads as a matter of course. The change came very recently. The approach, long used by Google, had initially been rejected by Yahoo! as not offering an optimal experience for mobile users. However, late last week Yahoo! made the change and posted about it:

[A]s of today, we’ve tweaked our Yahoo! Sponsored Search system to serve your ads to iPhone (all models, including iTouch) and Android mobile phones.
 
The coolest part is you don’t have to do anything to expand the reach of your ads. We’ve done it for you. As of today, your ads should begin appearing immediately on these devices for relevant searches, if they have not already.

Right now this is only in the US and only happening through Yahoo! directly, not its partners. Meanwhile Google announced larger and richer AdSense ads for mobile browsers:

Today we're launching a new feature for AdSense mobile publishers that will allow you to take advantage of the high-end mobile phone browsing experience. This feature offers publishers the ability to run larger AdSense ads visible on high-end phones. Before this launch, AdSense mobile publishers were only eligible to serve smaller text and image ads on their website content.

This is consistent with Google's emphasis on mobile and its growing emphasis on display advertising more broadly.

Mobile Ads: The Paradox of Targeting and Reach

I was on a call with Mobclix in which, among other things, we discussed location targeting and other types of targeting on mobile devices. The fantasy of mobile marketing and advertising is "right ad, right time, right place," also known as 1:1 marketing. That phrase is repeated almost as often as the joke about the last ten years each being the "year of mobile." 

What agencies and large advertisers want is reach. They want audiences and targeting but not at the expense of reach. In other words agencies and advertisers need big audiences that cross certain traffic thresholds before they'll pay attention. 

But the 1:1 marketing fantasy flies right in the face of those requirements. Same goes for LBS marketing (which ofters targeting but at the expense of reach; if you slice audiences by location they get smaller and smaller). This is a contradiction that is surprisingly not discussed very much at industry events or in articles about mobile advertising and LBS. 

The only way to reconcile the brand and agency desire for targeting and reach in mobile is to essentially do what Yahoo has done on the PC: create a dynamic ad serving platform into which the creative elements and offers are poured and which can then assemble those elements in real-time according to the targeting parameters, location and context of the end user. Google has also done a version of this online with its "local extensions" offering in AdWords. 1020 Placecast also does this to varying degrees in its campaigns. 

The dynamic ad server in the middle is the key to realizing the targeting benefits of mobile and providing the scale that large advertisers need to take the medium seriously. 

August AdMob Metrics: Globally Apple, Android Up, RIM Flat

AdMob put out its monthly metrics report showing market share trends, among other things. Here are some of the highlights (verbatim) from August:

  • Worldwide iPhone OS marketshare has increased from 33 to 40 percent in the last 6 months, with substantial share in all regions except for Asia and Africa.
  • Although its marketshare has been declining, Nokia continues to hold 12 of the top 20 smartphone devices in AdMob’s network. Nokia’s N97 and 5800 XpressMusic touchscreen devices were the fourth and fifth most popular smartphones in the UK in August.
  • RIM smartphone share declined only slightly over the last 6 months.  There are 7 RIM models in the top 20 smartphones in North America.
  • Android is growing rapidly in North America and Western Europe. The HTC Magic (my Touch) is a Top 10 smartphone in both North America and Western Europe.
  • Palm Pre also had a strong month due to the addition of new publishers to the AdMob network.

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Business Insider's Dan Frommer savages the report as being a misrepresentation of the market. While I've always cautioned that AdMob's data reflect its own network, which may be iPhone heavy, I believe it's directionally consistent with the broader market. In addition, internal trends -- changes month over month -- are significant and interesting.

Apple has a disproportionate share of mobile Internet activity, especially given its relatively small handset market share. I was speaking with ad exchange Mobclix, which began life as an iPhone apps analytics platform, and the company said that 90% of the activity it sees is on the iPhone. This too is skewed by virtue of the company's legacy. But it cannot be denied that iPhone users are much more engaged than users of comparable smartphone devices. 

This is true in my experience as well. Observing my own usage of the Palm Pre and my iPod Touch. I do email on the Pre and use my calendar (and Pandora). By contrast, my use of the mobile Internet is much greater and broader on the iPod Touch because of its superior user experience. 

HipCricket Debuts Enhanced SMS Coupons

SMS Marketing firm HipCricket announced the launch of a hosted mobile coupon offering for retailers and fast-food restaurants, also known in the industry as "quick service restaurants." From the HipCricket release that went out earlier today:

This new enhanced HipCricket mobile coupon offering provides consumers with single use promotional codes that are fully trackable by any point of sale (POS) system that accepts VISA or MasterCard. It also features a specific solution for quick service restaurants, QSR Plus. QSR Plus adds creative and ongoing consulting to help businesses maintain and increase customer loyalty, establish one-to-one communication with their prospects and customers and, ultimately, increase average customer spend and frequency . . .

For consumers, the route to a mobile coupon is simple: a consumer sees a call to action and texts the “keyword” to a short code; the consumer receives a mobile voucher including an eight-digit unique code and a promotional message; the consumer takes voucher to store to receive discount/offer; the unique code is entered into the POS system via cash register or card reader; the validity of voucher is checked in real time with a coupon server; if the voucher is valid, it is redeemed; if not valid, a detailed message is returned for checkout management. 

Coupons and deals are a very hot segment right now. And mobile offers is one of the areas that consumers are most receptive to in the abstract as well as in practice. Here are some recent data from AOL and Compete:

AOL/Universal McCann (of the 38% who responded to mobile ads on smartphones): 

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(n=1,800 smartphone owners who used the mobile Web at least once a week).

Compete (smartphone users): 

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(n=970 smartphone users)

Finally from a recent study about e-mail and SMS marketing, so-called millennials (18-25) were found to be highly willing to receive opt-in marketing messages in SMS. Here are the categories that millennials were interested in receiving offers from more than once a day:

  1. online merchants (34%),
  2. entertainment (32%),
  3. sports (28%),
  4. special offers from traditional (offline) retailers (26%),
  5. electronics information (21%), and
  6. telecommunications information (21%).

Forecasts Don't Matter, Consumers Do

At this point, there are tons of mobile ad forecasts in the market. Most of them are wrong. Why? Because they're too high level, have too few X variables or are insufficiently focused on the right assumptions and "levers." But it's also just difficult to predict the future and the rate of growth. Recall the early (and wildly inaccurate as it turned out) Forrester and Jupiter e-commerce numbers. 

There are generally two objectives for forecasts: planning and PR. If one is using a forecast for internal planning purposes it needs to be as accurate (read: conservative) as possible. By contrast, if one is trying to raise money or gain exposure, one needs to make the biggest splash possible. Thus the forecasts that offer the greatest growth, the biggest "hockey stick," are the ones that show up in conference and investor presentations.

Often the firms that are putting out the forecasts are equally seeking publicity or to promote something. So there's an inherent bias toward inflation. If forecast B is smaller than forecast A it won't get coverage; so it must be larger or more sensational in some way. This is not true for all firms across the board. For example, I would also say, from having spoken to Noah Elkin at eMarketer before he put out their US mobile ad forecast, that he was trying very hard to be cautious and sensitive to all the issues. 

But for all the love the media show them, mobile ad spending forecasts in the end just don't matter. They're just fodder for discussion and industry conferences. (I suppose they matter to investors in public companies who are speculating about the future.) But in my view they don't matter because consumers have already established mobile and the mobile Internet as an essential marketing medium. It's done. It's here. Stop telling the "every year is the year of mobile" joke. This IS the year of mobile -- for consumers at least. 

Those marketers that embrace it in earnest will benefit, those that "wait and see" will lose out on first-mover advantages. No debate. The only questions now involve "how" and not "why." Those that continue to ask why don't get it.

All brands should have an iPhone app. Period. This is even more true for companies that run loyalty programs. They must also consider building apps for other smartphone platforms: Android, BlackBerry, Windows Mobile and Palm. (Nokia outside the US). All online publishers should have sites optimized for mobile. All marketers should be considering how they can integrate their traditional campaigns with mobile and should have an SMS strategy. SMS should not be neglected

On the Internet many marketers still have not caught up to consumers. This is especially true in the local segment: marketers still don't "get" local and how consumers interact with the Internet. Consumers don't care about marketers, their sophistication (or lack thereof) or their strategies. Consumers care about finding deals, deciding where to go and what to do and communicating with others. Mobile is already becoming a more central part of those activities and will only continue to gain. 

Regardless of whether growth in mobile ad spending is 15% per year or 51%, marketers and publishers need to get on board. The train is leaving the station.