Ad Networks

BIG: Cellphone Influence Highest with 18-24 Set

BIGResearch just released (via Marketing Charts) another of its Simultaneous Media Surveys (n=15K+). What the research found was that the influence of text messaging as an ad vehicle was relatively low, but highest among 18-24 year olds (US only):

Intent to purchase influence of SMS

The study also found the following:

  • Cell phones are much more likely to trigger an online search for young consumers than all adults (21.8% vs. 8.3%) as is text messaging (15.3% vs. 4.8%).
  • 18-24 year olds are more likely to download to a cell phone than the general market (31.6% vs. 15.9%).
  • More than half (50.5%) of 18-24-year-olds communicate with others about a service, product or brand via cell phone (compared with 29.6% of all adults), second only to face-to-face communication (66.9%).
  • 18-24-year-olds are also almost three times as likely to communicate through text messaging than all adults (30.7% v. 10.8%).

So clearly if the target audience is younger, text can be a highly effective ad medium.

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See related data on teens and text messaging below.

Bringing the 'Real Internet' to Mobile

The Wall Street Journal covers a push by Adobe into mobile (also in the BBC) in an effort to make the mobile Internet more like the desktop:

Adobe's agreement with cellphone makers Sony Ericsson, Nokia Corp., LG Electronics Inc., and Motorola Inc. is part of a broader move by industry players to improve the mobile Web browsing experience.

The iPhone currently doesn't support Flash but Adobe has pledged to gain Apple's acceptance.

On the broader project of making the mobile Internet more like the desktop, there are several companies working on improving the mobile browsing experience including Opera, Mozilla, Skyfire and Microsoft. Here's a video demo of Skyfire (just got my beta invite).

One question all this raise is: Will mobile applications and mobile Internet sites (WAP) become unnecessary or otherwise marginalized? Even though mobile Safari renders the full Internet (save flash) the best experience is still provided on apps built specifically for the device.

Another question is about advertising. The ads on these "full Internet" mobile browsers don't render well and are too small in most cases to be effective. So that presents a problem for monetization that will need to be solved if these browsers become the standard.

Hearst Deal with ShopText Makes Mags Interactive

In addition to advertising in mobile messages, apps or WAP sites, mobile has an interesting role to play in extending and measuring traditional media. We've written about this in the past. And while it's not "mobile advertising" per se, it represents and important category of marketing activity in mobile that will only grow.

Google has started to embed 2D bar codes in newspaper ads to measure response. NearbyNow has worked with retailers using its short code "Nearby" to offer dynamic promotions in traditional media ads, and there are other such examples.

Earlier this week Hearst extended a deal with ShopText to power mobile e-commerce and other promotions associated with Hearst print magazines:

[R]eaders of Hearst magazines -- including such popular titles as Cosmopolitan, CosmoGIRL!, Good Housekeeping, Redbook, O, The Oprah Magazine and Seventeen -- will be able to make purchases, request free samples or enter sweepstakes directly from the pages of the magazine.

This is one of the most interesting categories in mobile marketing. And it may be that in 10 years there isn't a traditional media ad in print, outdoor or elsewhere that doesn't have some sort of direct response (mobile) mechanism or code in it.

Google CEO on the Mobile Opportunity

From Google CEO Eric Schmidt's interview with CNBC:

Schmidt: Well, first this: We never rule anything out. But right now we're happy to let the cash accumulate. The cash represents a strategic option for the future. As you know, we had the luxury of entering the wireless auction. And we did not win the auction, but our financial resources allowed us to credibly and seriously enter an auction for 4.65 billion. Couldn't have done that without the cash.

CNBC: What did you get out of that, though, Eric?

Schmidt: Well, from a corporate perspective, we participated in something important. From a consumer perspective, we know that our participation helped in making sure that the networks remained open. So consumers get choices. What's better than that?

CNBC: Yeah, and the FCC was happy about that. Mobile. A lot of people say mobility is where it's at. You've said, actually, I've heard you on conference calls saying that this is one of the big priorities for the company. How do you envision this? Tell me what you're looking for.

Schmidt: First place, everyone I know, everyone you know carries a mobile phone. And it's true in every country.

CNBC: And I'm not carrying my PC, by the way.

Schmidt: And most people in most developed countries have a roughly 100 percent coverage of mobile phones. So it really is a tremendous phenomenon. Over the next three or four years, there'll be more than another billion or so mobile phones added. Eventually our numbers indicate that there'll be five or so billion mobile phones in a world of six billion or so. People, this is a phenomenon. It's an unprecedented reach, even greater than, for example, television, or even electricity in some cases. So that's a platform that we can exploit. Our mobile phone, both search traffic as well as advertising is growing very rapidly, and we think people will do more and more interesting things in mobile phones. And, I mean, small phones, big phones, big screens, things that don't look like a phone, things which are mobile. Furthermore, the telecommunications industry is helping because they're deploying billions of dollars of literally excess data capacity so these things will have fast networks wherever I go. One of the greatest things for me is whenever I fly somewhere, I open up and I open up my iPhone or my BlackBerry, and, boom, there's everything in my world as I've landed in a country I've never been in. It's a remarkable achievement.

CNBC: Yeah. What needs to happen before we actually get to that world that you're talking about? In other words, do we need to see the providers create different screens? I mean, do you need a larger screen to access some of this data? How do we get there?

Schmidt: Well, one of the problems is we haven't figured out a way to change finger sizes. We just haven't...

CNBC: Right.

Schmidt: There's no solution to that.

(Voice is a solution to the problem of the input mechanism and awkward mobile keyboards)

CNBC: Right.

Schmidt: We'd like to, but we haven't done it. And people don't like to kind of go like this. So you need a certain size screen. But there's other technology. For example, the processors in the phones have gotten faster. The batteries have gotten longer last--longer lasting. The screens have gotten brighter. The whole device has gotten lighter. So all of that has been happening while people have been talking about this. We know that these things are working now. We know because we measure it that there's been a huge increase in maps, Google Maps, hugely successful. These phones have GPSes in them. So when I want to go to the equivalent of a Starbucks, I just type "Starbucks," it says it's over there. For me, that's just a huge--a huge improvement. And that service is available almost everywhere in the world.

Medio Expands Ad Network to Europe

Medio Systems announced this morning that it was expanding its MobileNow ad network to the UK, as well as other countries in Europe and beyond next year. These ads generally appear on its publisher network "off deck." Publisher partners include various CBS mobile properties and mobile sites for the The CW TV network.

According to the release issued this morning, Medio is already serving ads in the U.K., Germany, France, Spain, Australia and South Africa. The roll out in these countries will continue in 2008.

Medio provides mobile search functionality and advertising to partners. All of the ads in the system are performance-based and the company says it has achieved conversion rates of "up to 15%" across its network.

The rate of conversions in a mobile environment is all over the map, based on our conversations, with some companies claiming rates north of 20% and others saying it's in the low single digits. Of course it depends on ad quality and context. Over time mobile conversion rates will go down as more users come into the mobile Internet. Google has said generally, regarding mobile conversions, the "performance of these ads is excellent."

Medio began life as a white label search vendor for carriers to help them compete with Google and Yahoo in mobile search. However, the ad network, launched in March of this year, is a wise diversification strategy that will take the company farther than if had limited itself to its original model.

Conversation with JumpTap: Of Androids and Trojan Horses

White label mobile search and ads provider JumpTap is arguing that Google's Android platform is a "Trojan Horse" that ultimately seeks to siphon off carrier customer relationships and potential ad revenues. Here's one version of that story from Adam Saroca, JumpTap GM, on Search Engine Watch.

I believe some version of that future is possible but what I would call "the reality" is more complicated. Accordingly, I had what I would call a more nuanced conversation with Jorey Ramer, VP of Corp. Dev for JumpTap. We had the "Android is a Trojan Horse" conversation but also spoke about the ways in which the psychological shake-up in the market caused by Andriod -- psychological because there are not yet any phones out -- could benefit JumpTap and accelerate their business.

We also talked about how opening up of the market benefits all players in theory. Even if everyone (read: carriers) gets scared and starts doing deals and focusing more on mobile content, ads and search it's a good thing for the industry and JumpTap. While the carriers might want everything to remain as it is for the indefinite future, it will not. The truth is: the iPhone and Android have done the overall market in the US a great service by waking people up and motivating them to act.

It is true that if Android is widely adopted and phones ultimately reach consumers, and are not locked by carriers, the monogamous relationship between user and carrier will be weakened. Any way you slice it, however, the carriers' collective position in the US is going to get weaker, with a growing emphasis on devices and mobile content.

One of the most interesting things that Ramer pointed out, which I hadn't focused on, is how Google Checkout might become the basis for a mobile payments system and direct billing relationship with the end user. I think that's a fascinating prospect.

Google Checkout has struggled to make inroads against PayPal, which is already offering mobile payments. But a second opportunity might come in mobile, provided Android gains market acceptance.

Competition from Google and Yahoo! is good for JumpTap's business and they can "sell against" the Google threat, which is clearly what the company is doing. And like everyone else, JumpTap could write on top of Android too.

The bigger challenge for JumpTap is differentiating itself from Medio Systems and vice versa.

Google Introduces non-GPS "My Location" Feature for Mobile

Many mobile industry insiders and pundits have argued that when GPS becomes ubiquitous then "location based services" will really take off. The problem is: GPS doesn't always work, it isn't yet in every device, and isn't always enabled even if it is present. But the premise that passive location awareness represents a big opportunity in mobile is correct. Accordingly, Google is introducing a new "My Location" feature for Google Maps for Mobile that takes advantage of GPS (if present) but uses cell-tower triangulation for the majority of phones where GPS isn't present or won't work for one reason or another.

In non-GPS scenarios the service can pinpoint user location within 500 to 5000 meters. Where it uses GPS, the new feature identifies user location precisely. Here's how Google explains how My Location works:

Mobile towers are placed by operators throughout an area to provide coverage for their users. Each of these towers has its own individual coverage area, usually spilt into three non-overlapping sections know as "cells." These cells come with identification numbers, but no location information. Google takes geo-contextual information [from anonymous GPS readings, etc.] and associates this information with the cell at that location to develop a database of cell locations. Based on this information, Google uses various algorithms to approximate a user's handset location relative to the cells nearest to them. The accuracy of this information depends on how big an individual cell is. Thus, areas with a denser concentration of mobile towers allow for a more accurate My Location reading. Additionally, as our database of cell locations continues to improve, so too does the accuracy and coverage of the My Location feature.

In order to fix your location, you press the "0" key on the handset. It doesn't work 100 percent of the time but it has performed fairly consistently in my testing. What the user is then permitted to do is conduct a search and discover results in closest proximity nearby. It removes the inconvenience of keying in location information.

One can simply enter "Starbucks" or "sushi" or "salons" or any other query and find the nearest locations. It thereby eliminates the frustrations of having to key in additional characters or query terms.

My Location is available today for the majority of smartphones, including BlackBerry, Nokia (Series 60) and many Windows Mobile phones. Not supported currently are the iPhone, Motorola Q, Samsung Blackjack and Palm Treo 700w. The service works in the U.S., U.K., most of Europe, including Russia, and in Taiwan. It's not available in China or Japan currently.

There is no advertising on Google Maps for Mobile now of course. But expect that over time ads will be introduced just as they exist on Google Maps on the desktop. More precise user location information creates an opportunity for those ads to become much more locally relevant than on the PC.

Here's a whimsical video from Google that explains the feature:

Blyk Click-Throughs and Mobiya Classifieds

PaidContent reports on a conversation in which ad-subsidized, youth-oriented U.K. carrier/MVNO Blyk sales director Jonathan McDonald reports on response rates to mobile ads:

[A]ds users receive have so far got a click-through rate of between 12 and 43 percent, depending on the format (Blyk does SMS, text-and-picture MMS, photos, animations, video and a bespoke format).

4Info has spoken of response rates that are in the middle of that range. Of course, as the novelty wears off and the medium becomes more mainstream response rates will go down, as historically was true of the desktop Internet.

Over in Belgium, Mobiya has launched text-based mobile classifieds: "Everyone in Belgium with a mobile phone can place classifieds ads for free using sms or mms. Our distribution deals with Metro and Koopjeskrant provide significant reach of the ads."

There are now multiple providers of mobile classifieds. Text is the right medium for the target (youth) audience. Even though it's a small market now, there could be a kind of "insider" quality to classifieds (especially jobs) on mobile devices. This is how Craigslist began, as a small insiders network that was relatively unknown and exclusive.