Ad Networks

Mobile + POS Data Will Transform "Online Marketing"

There are now a range of companies working on connecting online activity and ads with action at the POS using mobile devices. NFC-enabled mobile payments is just one of many initiatives going on. For example, Shopkick just announced a deal with Giant Eagle supermarkets that connects the mobile app with Giant Eagle loyalty accounts:

Shopkick's first partnership with a supermarket, and more importantly, co-founder and chief marketing officer Jeff Sellinger said that it allows the startup to "close the loop." Now, by tying user accounts to Giant Eagle loyalty cards, Shopkick will have data on what users actually purchase. That means brands can offer rewards not just for scanning products, but for buying them too.

Google Wallet just expanded its features, as well as the roster of participating stores and merchants. Now with a "single tap" Google Wallet users can pay, redeem coupons and get loyalty points. Currently Google doesn't see the transaction value or other details in the way that Shopkick and Giant Eagle will through their arrangement. But eventually Google will probably get access to more data and make that available to marketers.

Deal vendor Bloomspot has a system that uses registered credit cards to close the loop with daily deal buyers and determine whether they spent more than the face value of the deal in restaurants and stores. Placecast is working on something that matches offers and in-store transactions through credit card accounts. LSN Mobile has a relationship with First Data.

There are several other such examples I could use to illustrate what is a growing and very important trend. 

Mobile devices will allow marketers to see who showed up in stores and, in the very near future, what they bought and how much they spent. There are some significant privacy issues and implications of all this and I don't want to dismiss or minimize them. However the effort to track the influence of ads and offers from online (or traditional media) to the point of sale is a trend that is starting to gain momentum.

We're not that far away from a time when agencies and marketers will have considerably more visibility into what online ads drove what in-store purchases, as well as user profiles based on purchase behavior and response to ads. This data has been collected for years in the offline world but now, through mobile devices, online marketers are going to get some new visibility on the dominant online-offline shopping paradigm. 

Remember that e-commerce is only about 5% to total US retail but the Internet influences billions of dollars in offline transactions. Accordingly the growing visibility that marketers will have in just a few years about who responded to ads and what they spent will have a profound impact on the future sophistication and tactics of "online marketing." 

Report: Android Dominates but iOS the CTR King

Ad networks Jumptap and Millennial Media are out with their respective data newsletters today. The Millennial missive this time focuses on CPG companies and their campaigns. According to Millennial, most of its CPG advertisers' focus was on branding and awareness, rather than driving people into stores to buy products or app downloads.

Yet one of the primary "post click actions" of CPG campaigns involved sending users to a Facebook page or other social media account. "Mobile Social Media represented 78% of the Post-Click Campaign Action Mix for CPG Advertisers in August," according to Millennial. "CPG advertisers utilized mobile campaigns to drive customers to social media outlets where they could engage with the brands and provide feedback on products."

Consistent with their branding objectives, CPG brands also over-indexed on mobile video as well. 

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Jumptap presented data on a fairly broad range of topics, from CTR rates by OS to demographics and device marketshare. Jumptap now says that Android devices now deliver almost 50% of the impressions its network and that the Google OS is close to having more than twice the share of the other operating systems combined.

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For comparison purposes, here's what comScore said yesterday about smartphone OS share in the US: close but not identical to the Jumptap figures. 

Jumptap points out that despite Apple's smaller market share its iOS generates higher CTRs, while Android under-indexes vs. the average on Jumptap's network.
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Most Jumptap campaigns (see below) appear to be sending people to the mobile Web ("click to Web"). What's not clear from the data is whether these campaigns are sending people to mobile-optimized sites/landing pages or whether they're simply going to conventional PC websites. More likely than not it's the latter, given Google's previous comment than nearly 80% of its top advertisers didn't have a mobile-optimized presence. 

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Jumptap said that "mobile users age 45-74 have the highest CTR" and that men have 2X CTR of women. Those earning over $50K click on ads 5X more than those under $50K, which Jumptap attributes to higher rates of smartphone ownership among more affluent consumers.  

Among targeting methods -- and this is echoed by Millennial's data -- the top tactic was location targeting followed by device/handset targeting and demographic targeting. 

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Finally, Jumptap compared the top-spending verticals by CTR. The X-axis in the chart below shows spending and the Y-axis shows relative CTR. Entertainment is the vertical that sits in the sweet spot of both, followed by automotive, insurance and technology/electronics. 

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Survey: 67% Want Local-Mobile Offers, but 45% Concerned about Location Tracking

Prosper Mobile Insights released data from a recent US consumer survey (n=348 smartphone and iPad owners), conducted last month. The survey questions ask a range of things about mobile usage and mobile subscriber attitudes. Below I highlight a few coupon-related findings from the survey. 

Q: To what extent do you agree with the following statements about location-based coupons on your mobile device?:

They are very convenient and useful

Screen shot 2011-10-05 at 3.20.25 PM

Those that fall into the "Somewhat/Strongly Agree" category equal 67% or 2/3 of respondents. These data simply confirm many other survey findings that have found consumers are interested in mobile coupons. 

Interestingly marketing newsletter MarketingVox focused on the 18% (below) who said they didn't want coupons on their mobile devices, using the contrarian headline: "1 in 5 Mobile Users Don’t Want Coupons."

Q: How would you prefer to receive coupons on your smartphone or tablet? (Check all that apply)

Screen shot 2011-10-05 at 3.21.16 PM

One could group responses in the slide above generally into two categories: push and pull. Any category that requires "affirmative action" on the part of the consumer (e.g., search, QR code scanning) would fall into the "pull" category. Push categories would include email, SMS, geofencing ("automatically when I am near a store").

Social media check-in is more ambiguous but probably falls into the push category more than pull. Here the user is being presented with an offer as incentive to come to a location/store or is being shown an offer after checking in (e.g., "nearby offers"). 

Respondents were allowed to "check all that apply," so the numbers exceed 100%. Basically these responsdents appear to be saying they want to access coupons in multiple ways, actively and passively.

Using the percentages as points here's how the push vs. pull preferences broke down:

  • Push: 118
  • Pull: 64.1
  • No coupons: 18.1 

Even as many people are interested in searching for deals -- which is about inventory, relevance and control -- they're more interested in getting deals presented to them. Email was the preferred method of receiving deals information. This may be more about familiarity than anything else.

I am concerned about security issues and my location being tracked

Screen shot 2011-10-05 at 3.21.34 PM

Those who expressed moderate or strong concern about location tracking constituted 44.8% of respondents. This is generally consistent with other survey findings. For example, in Q2 WiFi ad network JiWire found that "53% of all respondents are willing to share location information in exchange for relevant content." That means 47% had concerns about location awareness or tracking.

Accordingly nearly half of the mobile users popular has some ambivalence or concern about giving up location information. 

Google Shows 3-Screen Dayparting Data

Google has been a great source of data and evangelism around mobile usage and advertising. The company is now regularly releasing survey data and exposing some of the usage patterns it is seeing internally in an effort to accelerate awareness of the strategic importance of mobile.

One interesting piece of data released yesterday is on comparative usage of PCs, smartphones and tablets (iPads):

What the data above reflect is that PCs are used throughout the day but usage peaks between 4pm and 6pm. Smartphones are also used throughout the day but usage steadily climbs and peaks between 9pm and 11pm. Tablets are primarily used at home during the evening.

There are obvious implications for publishers and advertisers coming from this and other data that show similar usage behavior.

In a previous Google-AdMob survey 77% of tablet (iPad) owners said that they were using their PCs/laptops less often following their purchase of a tablet. What we can infer from that and the above information is that some of the Internet usage at home that would have been on the PC is now happening on tablets. And this substitution will probably continue and grow as tablet sales grow. 

What Exactly Is Flurry Saying and What Does It Mean for Mobile Advertising?

Yesterday mobile analytics company Flurry presented data that was both compelling and potentially confusing. And the way it got reported was misleading: the value of mobile ad inventory to surpass PC display inventory. I want to take a closer look at what Flurry said and its implications for mobile advertising.

Here's what Flurry said verbatim: 

Flurry focuses on the size and growth of available advertising inventory within iOS and Android applications . . . The chart below shows that U.S. app inventory is not only growing at a staggering rate, but also poised to absorb the equivalent of the entire U.S. Internet display advertising spend by the end of this year.

USappInventory vs USonlineDisplayAdSpend resized 600

This is confusing. It's also hypothetical.

What Flurry means is that mobile app usage is growing and thereby creating opportunities for advertising ("inventory"). The actual ads aren't there yet. Although some networks and exchanges promise publishers/developers near 100% fill the existing monetization doesn't match the growth of page views. 

Flurry assigns a value to that growing "inventory" ($2.50 CPM), which is how they project out the hypothetical mobile spend. Accordingly if there were advertisers sufficient to fill all the potential mobile "inventory" it could potentially exceed the value of online advertising. However the discussion is all about consumer behavior, creating opportunities for advertising -- not about actual monetization.

According to Nielsen, two-thirds of (Android) user mobile Internet time is spent in apps vs. one-third spent on the mobile Web. 

Android smartphone apps-vs-web

By comparison mobile search occupies relatively little time, whether in-app or through a browser. However it's currently driving more revenue than display by some estimates.

Regardless, the implications of the Flurry data are significant. Beyond the fact that they show consumer adoption and massive revenue potential accordingly, they also show that mobile display is likely to be a larger part of the mobile advertising pie than many forecasters had imagined. 

With that assumption, the second question is: how much of that ad inventory will be geotargeted or local? Some have assumed that "local advertising" would dominate mobile because of the better targeting options on mobile devices vs. PC. However local ads many not be a dominant part of the ad spend. Location may play out on landing or secondary pages rather than in the ad creative itself.

Local deals may be pervasive in the display space but so will brand and national ads. 

Millennial: Windows Phones a Rowboat on the Android Sea

The iPhone vs. Android meme is getting very tired yet it persists. That's the thrust of the coverage surrounding Millennial Media's "Mobile Mix" report for July 2011. Among other data, it ranks handsets and market share on the Millennial network by device type and operating system. Here are the "quick facts":

  • iOS and RIM impressions were relatively flat month-over-month
  • Android impressions grew 31% month-over-month
  • Symbian impressions grew 11% month-over-month
  • Windows Phone 7 impressions grew 71% month-over-month

The Windows Phone growth is noteworthy for the fact that that there is growth/life. By contrast comScore shows Windows/Microsoft losing share month over month. However high percentage growth from a very small base is, in actual handset numbers, not particularly meaningful. Several months of such growth would be significant however. We'll need to wait for the first Nokisoft phones to appear to see whether Windows will "make it" as an OS.

Unfortunately Millennial doesn't put much historical context into its individual reports. So I always like to take a look at the data from several months or a year ago to compare the figures. Accordingly here are several charts from this month's report and July 2010:

Top handsets on the network (7/10 then 7/11):

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Screen shot 2011-08-24 at 8.12.55 AM

The iPhone has maintained its top position and RIM is holding on with three handsets in the top 20 vs. four a year ago. But otherwise it's all Android.

Operating system share (7/10 then 7/11):

 Screen shot 2011-08-24 at 8.10.24 AMScreen shot 2011-08-24 at 8.09.51 AM

As you can see smartphones have grown from 49% to 68% on the network. In the US market smartphones are about 40% of all handsets now according to Nielsen. As you can also see, the relationship between iOS and Android has flipped in a year with Android handsets now representing 61% of all impressions. 

In terms of monetization and revenue, however, Android continues to underperform its share while Apple devices outperform their relative share. 

Screen shot 2011-08-24 at 8.11.14 AM

Finally, as PaidContent has pointed out, one of the more interesting pieces of data surrounds "carrier" usage. Over the past year WiFi access has grown from 26% to 33%. This is probably a direct result of the use of "connected devices" (e.g., the iPad) more than any other variable. 

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However as carriers eliminate unlimited data and throttle speeds on their networks, on the go users will increasingly seek alternatives that offer cheaper and/or faster access to their applications and the mobile Internet.

Placecast ShopAlerts Now App-Ready

Placecast announced today the availability of ShopAlerts push notifications for retailer mobile apps. Previously Placecast ShopAlerts enabled geographically relevant SMS or MMS messages after a consumer opt-in. This new announcement means that geofenced alerts can be integrated into existing retailer apps to boost the effectiveness of those apps.

In the conventional scenario, users need to launch a retailer app and affirmatively search or browse for content. The new program enables consumers to receive LBS alerts that use promotional messages to direct consumers to the nearest local store or outlet, once inside the geofenced area. It's not clear whether the app-based ShopAlerts would require explicit consent to LBS notifications. (On the iPhone notifications require acceptance in general.) Best practices suggest at least a disclosure if not an opt-in. 

Push notifications aren't new but this combination of app + alerts could prove effective for retailers and help boost app usage. Examples of companies already working with Placecast ShopAlerts include North Face, Subway, Kohl’s, Kmart, Starbucks and JetBlue, among several others.

The efficacy of geofenced ShopAlerts has been demonstrated in the UK with O2 and in various tests and trials in the US.

Related Placecast posts: 

Millennial's 50th SMART Report Charts Growing Sophistication of Mobile Campaigns

Millennial Media is out with its monthly SMART report. Yesterday the company hosted an in-depth webinar to review the data in advance of the report's release and in honor of this being the 50th such report. Familiar data points about campaign tactics and devices were discussed. For example, in June, Android retains its platform leadership (53% of impressions), while the iPhone remains the top individual device (27% of impressions).

Here are some of the things I "tweeted" yesterday during the webinar: 

  • More than 70% of Millennial ad impressions are coming from in-app activity
  • 40% of mobile consumers' usage time spent inside the home (based on InsightExpress data)
  • Local market targeting continues to gain traction to drive consumers to brick and mortar locations
  • Feature phones are no longer in top 20 handsets on the Millennial network

But the most interesting thing about the report to me is the comparison of June 2011 findings with those in the first report more than two years ago. Here are several graphics that reflect the market's growth and evolution:

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Screen shot 2011-08-12 at 7.35.54 AM

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The broad themes reflected in the graphics above are: the rise of touchscreen smartphones (Android and the iPhone in particular) and the growing sophistication of mobile advertisers and their campaigns. I don't have the vertical categories chart among those above. However Millennial has seen explosive, quadruple-digit growth in verticals like Finance, Retail/Restaurants, Automotive, Entertainment, Travel and Pharma. 

In response to a question during the webinar about the sophistication of advertisers Millennial SVP  Mack McKelvey responded, "The vast majority of our advertisers are very savvy and challenge us all the time."

Mobile Users Prefer Coupons and Opt-In SMS to Other Types of Ads

A press release based on research from Upstream (conducted by Luth Research) carries the following headline: "Personalized Messages Four Times More Effective than Time-, Lifestyle- or Location-Based Offers . . ." This came to me in an email last night.

The headline and the presentation of the data in the release are somewhat misleading, however. And with so many companies releasing data for PR reasons (and the market awash in numbers) no one should rely on a single piece of data or single study. There are some interesting findings however. 

The Upstream study involved a consumer survey of just over 2,000 US adults (both smartphone and feature phone users); there's no behavioral data here. Below is the hierarchy of ad preferences based on the categories in the survey:

Users ranked personalized offers at 59 percent over those focused on timing (18 percent), lifestyle (16 percent) or location (8 percent). Smartphone users responded in similar fashion, with 60 percent preferring personalized offers over promotions based on timing (17 percent), lifestyle (10 percent) or location (14 percent).

Screen shot 2011-08-10 at 9.23.10 AM

This stands for the idea that personalization trumps dayparting, lifestyle and location. Lifestyle is a vague concept that seems less relevant than "my tastes and interests." Indeed, this phrase implies greater relevance than these other aided-response categories. The verbatim question is: "In your mind what constitutes the best basis for an offer to be relevant to you?"

Location by itself doesn't mean an offer or ad is relevant, neither does timing. Timing and location are "hollow" in the above list. An ad directed ad people in San Francisco may or may not have any application to my situation. However an ad or offer that has to do with "my tastes and interests" may require location to be relevant and actionable. I can't attend a movie premiere or retail sale happening in another city.

Timing is also an important variable. A discount offer for a restaurant or bar may be more or less relevant depending on time of day and/or day of week.  

The larger point is: multiple variables help make ads more actionable and relevant. And most transactions are conducted or fulfilled offline, so location becomes a way to lead people to a transaction unless it's a pure ecommerce event.

An ad for a new product -- a sound system for example -- needs to show me where I can hear, see and possibly buy the product (location) to make it more than simply a less-than-optimal awareness ad. An ad for a holiday retail sale on my phone is going to be a lot more effective if it comes with a store locator vs. taking me to a crappy mobile shopping experience on my handset. 

Some of the other data among the findings reveal that consumers often assume offline action or local fulfillment. For example, smartphone owners valued the following categories as those they were most interested in (re ads/offers): 

  1. "Content" for my mobile device (it's unclear but this might be apps, music)
  2. Movies/entertainment, including tickets (all fulfilled locally)
  3. Offering from my mobile service provider (perhaps hoping for a discount)
  4. Retail store (95%+ offline purchase probability)
  5. Computers and technology
  6. Travel or vacation (likely e-commerce transaction that pertains to location)

So when we "peel back the onion" on the data, what we see is that people want relevant ads and offers but that location is very much in the background or an assumed feature of the offer.

Perhaps the most interesting and significant data form the survey concerns the most desired marketing "channel" or ad delivery mechanism. The survey question asks, "Which of the following channels for delivering ads to your mobile phone about a product/service would make you more likely to learn more about or purchase the product/service?"

Screen shot 2011-08-10 at 10.42.55 AM

Among smartphone owners the top responses were the following:

  1. Mobile coupon
  2. Text message (after opt-in)
  3. Mobile email
  4. Ad on mobile site 

Amazingly smartphone users were more interested in SMS marketing messages than feature phone users.

The big conclusion I draw from the data above is that mobile users are interested in saving money (coupons) and essentially want control over the marketing messages they receive (opt-in SMS, or email). Thus these types of ads are likely to be most effective. However, again, the survey is measuring attitudes and not behavior. 

Report: SonyEricsson Android Owners Click Ads Most, HTC Least

Ad network Jumptap released its latest "MobileSTAT" data dive for July. This month's newsletter focuses on Android but also contains general metrics from the Jumptap network. There's a link to a write up of the June data at the bottom of this post.

In the latest issue of its newsletter Jumptap has created a map that shows where Android, iOS and RIM handsets "overindex" by state. This aspect of the report is getting lots of coverage. However the data are little more than a curiosity with few practical or actionable implications. These data may also not actually reflect the sales distribution of the various OS handsets because the Jumptap network is not necessarily representative of the mobile Internet as a whole or used equally by a representative group of mobile subscribers.

Screen shot 2011-08-05 at 8.34.04 AM

More interesting are the other metrics in the report. For example, Jumptap showcases Android handset CTRs by device type and by carrier. CTRs for Android devices are generally consistent across carriers (averaging about 20%). But there appears to be wide variability in display ad CTRs according to handset type. There's no satisfactory explanation offered for the variation in CTR performance by handset.

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Jumptap says the following about why Android SonyEricsson handset owners generate the highest CTRs:

We speculate Sony’s relatively high CTR is due to their positioning as a premium brand, but don’t rule out the role that usability, hardware and interface may have.

By contrast I would speculate that LG and SonyEricsson handset owners are late Android adopters, while HTC and Motorola handset owners are earlier adopters and so less inclined to click on ads than Android neophytes.

The following is Jumptap's CTR chart by age, showing that those between 55 and 75 click the most. 

Screen shot 2011-08-05 at 8.35.20 AM

Compare the data from June: 

Screen shot 2011-06-30 at 5.30.39 PM

These data are likely impacted by a higher number of "unintended clicks" and/or lower mobile sophistication levels in these older age groups. 

Jumptap also said that 61% of the campaigns on its network are targeted in some way (vs. 49% in June). The chart below shows the breakdown of targeting methods. Note that "location" is only used by about 18% of advertisers using any form of targeting. 

Screen shot 2011-08-05 at 8.34.50 AM

Finally most advertisers on Jumptap's network appear to be sending people to mobile websites or landing pages. Jumptap speculates that this reflects growth in the number of mobile websites. It's a safe bet however that the entire "click to Web" group is not sending users to optimized mobile sites or landing pages.

Screen shot 2011-08-05 at 8.35.11 AM

A substantial number of these "click to Web" mobile marketers may be unsophisticated, however, and simply sending users to their PC sites -- incorrectly assuming that the smartphone browser does a good job rendering them.

See also: Selective Zip-Level Targeting Produced 85% Lift.

HipCricket Acquired by Little-Known Augme

Yesterday Augme Technologies, which recently purchased 2D barcode marketer JAGTAG, announced the acquisition of SMS mobile marketing pioneer HipCricket. The purchase price of was $44.5 million ($6 million in cash and $38.5 million in Augme stock). There's also an earnout that could yield an additional $27.5 million.

The HipCricket team will be retained by Augme, which has been until now an off-the-radar mobile marketing company. The addition of HipCricket, together with the JAGTAG assets, will provide a revenue boost and a new client base, as well as a broad array of tools and new capabilities. 

HipCricket began as an SMS-based marketing platform in 2004 but more recently started to offer a wider array of mobile marketing capabilities, as well as launching an ad network. HipCricket clients include Nestle, Macys, ClearChannel, Coors and others. 

The structure of the deal (mostly stock from a little-known company) suggests that HipCricket was actively trying to sell itself.

Placecast Opens Up Geofenced Marketing to Self-Service

Placecast has introduced a self-service version of its SMS and MMS ShopAlerts marketing platform. The platform enables template-driven campaign creation, with extensive control over the radius of geofenced areas as well as the time and dates of message delivery.

This means that any merchant, franchisee or small businesses could potentially utilize the Placecast platform to deliver geographic-based push messages and promotions to opt-in consumers. It's going to be challenging for small businesses as a practical matter. But it's particularly well-suited to franchise businesses and can handle multiple locations with ease. Distribution is up to the business or entity, which would need to capture the opt-ins (similar to follow us on Twitter or Like us on Facebook).

Messages or promotions can be built around deals and offers but don't have to be; there are many other types of content that can populate these messages.  

Placecast works with O2 in the UK and AT&T in the US, as well as individual retailers. The O2 program has seen great success in the UK; the AT&T program is still in very early stages. Unless carriers are going to buy ad networks, the ShopAlerts/O2program is the model for carrier-based advertising -- although it's not apparent that the carriers see that clearly.

Screen shot 2011-07-21 at 11.15.11 AM

The original beta version of the ShopAlerts program, tested with selected retailers in the US in late 2009 and early 2010, yielded impressive results:

  • 60% of participants found the location-triggered messages to be cool & innovative
  • 79% said it increased their likelihood to visit a store
  • 65% made a purchase as a result of a ShopAlerts message (though not necessarily in real time after receiving the SMS)
  • 73% of participants would definitely or probably use the service in the future

Agencies and companies often neglect SMS as a marketing medium and CRM tool. Even with smartphone penetration nearing 40% in the US that still means that 60% of users don't have them. SMS penetration and usage are nearly 100%. 

Related posts on Placecast: 

Android Has 16 of Top 20 Phones on Millennial Network, Tablets Cannibalizing PC Usage

Millennial Media's Mobile Mix monthly device report is out this morning. And once again I'll excerpt what I think is interesting. First here are some of the top bullets, representing trends the company is seeing on its mobile ad network:

  • The iPhone was the top individual device (for a long time now). However Android was the "leading OS on our network for the 7th consecutive month  . . . Android also had 16 of the top 20 mobile phones."
  • iOS impressions (iPhone, iPad, iPod Touch) grew 18% vs a year ago. Android impressions grew 11%.
  • Windows Phone impressions grew 31% quarter-over-quarter; RIM impressions grew 29% quarter-over-quarter.
  • Connected devices (iPod touch, etc.) and tablets (iPad) accounted for 18% of all impressions on the network

The share of impressions being generated by smartphones is basically flat. In March 2011 smartphones were responsible for 64% of the impressions on Millennial's network. Today, in July, it's 65%. 

Screen shot 2011-07-15 at 5.34.25 AM

So-called connected devices constitute 18% of Millennial's impressions. This month Millennial has included some InsightExpress data that addresses tablets. In the chart below are behaviors that have shifted to tablets or have been impacted by the acquisition of an iPad or other tablet device:

 Screen shot 2011-07-15 at 5.34.42 AM

These numbers are lower but consistent with other data showing that tablets do cannibalize some PC usage. Below are data from a Google-AdMob survey on the same question: 

 Picture 27

Nielsen offers similar data (May 2011): 

Now back to the Millennial data. In May iOS had a 27% share of impressions but was responsible for 45% of revenue on the Millennial network. This month, iOS's share is 26% but revenues generated are 49%. Accordingly from a revenue standpoint iOS continues to "outperform" its share percentage, while Android "underperforms": 54% share, 41% of revenue generated. 

Screen shot 2011-07-15 at 5.35.01 AM

Among the top 20 handsets that Millennial sees, there are three RIM devices and the iPhone. Otherwise it's all Android. This is an amazing story.

Google CEO Larry Page said yesterday on Google's earnings call that the company was activating 550,000 devices a day. The company also disclosed that there were a total of 135 million activated Android devices in the market. There are a total of 400 Android devices in the market.

As of the end of Q2 2011 Apple had sold a total of 189 million iOS devices, including iPod Touches and iPads. 

UK Carrier O2 Seeing Success with LBS Offers

UK carrier O2 (owned by Spain's Telefonica) is seeing great success with its opt-in SMS marketing program O2 More. The location-based service is powered by Placecast, which also supports a similar but more nascent program in the US for AT&T. (It's not clear how much promotional effort AT&T is putting behind it.)

O2 not long ago announced it had more than two million subscribers for More. Consumers sign up for the O2 program, specifiy interest categories and recieve no more than a single text per day. The program sees very low churn. 

Earlier this month the UK carrier touted the success of a More campaign for gym Fitness First:

Fitness First targeted O2 customers with location-based messages offering a free two-day pass and details of the nearest club. This resulted over 1,100 recipients signing up as new members of Fitness First on four month and 12 month contracts.

With average membership costing just under £300 per year, this uptake generated increased revenue around £400,000.

The best responding target audience was 18 to 35-year-old smart phone using single Londoners, who enjoy engaging through social media.

US carrier T-Mobile recently got into the daily deals market with the launch of an app called "more for me." But with much larger competitors -- and so many competitors -- it's unlikely that T-Mobile will see great success with the program.

However daily deals could be converted into SMS messages for broader distribution and differentiation. Indeed, the O2-Placecast model is a stronger bet than an app strategy for carrier advertising, and can reach 100% of the carrier's customers potentially.

Many marketers and companies tend to look "beyond" SMS to in-app ads and mobile Web advertising because SMS isn't sexy. (Just like text ads in search aren't sexy.) However the reach of SMS is 100% and the response rates to opt-in text messaging programs can be huge. 

For example, in early 2010 Placecast found the following in its US beta test of ShopAlerts (the same kind of program run by O2): 

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

Apple's iAd Cuts Prices but Sees Defections

There's a great deal of analysis and even schadenfreude going on over the news that Apple's iAd unit (formerly Quattro Wireless) "has cut rates by as much as 70 percent as some marquee clients are using rival services . . . signaling the company is struggling to parlay its technology leadership into success in the ad industry." 

According to Bloomberg: 

Apple has cut the minimum ad purchase from $1 million to $500,000, and it’s offering agencies deals for as low as $300,000 if they bring together multiple campaigns, the two people [familiar with the matter] said. 

What people fail to realize is that iAd is effectively a very high profile "proof of concept" for mobile display advertising. It lent enormous credibility to mobile advertising with brands and got them to bet six and seven figures on mobile, which they had not before. 

It also compelled rivals to develop richer ad formats. All of these things are good for mobile advertising in general.

I don't believe that Apple ever saw mobile advertising as a significant revenue stream for the company, however. It was more about supporting developers and enabling them to make money -- having control over a revenue stream for the iOS ecosystem. But that concern has substantially subsided. Apple's developers have access to multiple ad networks.

In the end it really doesn't matter whether Apple gets $300K or $500K up front. It just matters that advertisers are spending that money somewhere in mobile. 

Related iAd posts: 

App Downloads Show Complexity of Mobile Usage: It's Not All about Local

Many people (including some analysts) make simplistic assumptions about the mobile market: for example that mobile and local are all but synonymous. I'm obviously a big advocate of local but I see mobile usage as quite complex and defying easy conclusions about usage or the future direction of the market.

There are lots of functions and activities that people perform and do on mobile handsets that have nothing to do with their immediate surroundings or local. For example: games, news, entertainment, music, sports, social networking and so on.

A new set of Nielsen data about app downloads/usage in the past 30 days reflect that mobile is a platform that is complex and diverse in its usage. While local content and apps are well represented in the hierarcy a large number popular app categories have nothing to do with location.

Instead they probably reflect that people are using mobile as a "generic" Internet access tool. Games, the most popular category, is a phenomenon unto itself.

Most purchases occur in the physical world. So most mobile ads will either direct people to actual stores or, in the case of most future display campaigns, offer a dealer or store locator -- at a minimum. Mobile will be a huge branding medium, irrespective of any localization component. And there will be many awareness ads that have a location component as secondary or perfunctory matter. 

Moreover we get into an "accounting" problem in defining what is a "local" ad in mobile.

Is a Klondike Bar ad that contains a store locator buried two clicks down a "local ad"? What about mobile click-to-call ads for a florist network, which sends users to call center to place an order fulfilled locally? Is a mobile-video brand campaign for Hilton Hotels that can direct you to the nearest property if you initiate a search or lookup?

There's a lot of gray in determining what is a local ad. We might want to "require" localization in the ad creative before we consider mobile ads as "local." Just a thought.

But just as people often fail to recognize how local or offline purchase intent permeates a great many things that happen on the PC it's equally the case that non-local activity/interest is very much tied up in mobile activity. The chart above nicely illustrates that. 

Millennial: 'Place Call' the Top 'Post Click' Action on Network

Yesterday Millennial Media released its latest SMART report for May. It shows advertiser trends and marketing tactics on its network. There was a drill-down focus on automotive in the report (which I'm not going to focus on except in one respect). The data indicate the increasing nuance and sophistication of mobile marketing programs.

There are a wide range of goals/objectives that marketers are pursuing via mobile: local, social, demographic targeting and so on. These tactics and objectives defy easy assumptions about the trajectory of mobile advertising over the next several years.

Mobile is a branding and awareness medium, it's also a local ad medium and it will be used in tandem with other media. It's not going to be primarily one thing (e.g., LBS). There will be enormous diversity in the campaigns and tactics seen. Indeed, I've argued before that mobile is a better branding medium than online display. That assertion is supported by the data. 

Immediately below is the mix of targeting methodologies used by marketers on the Millennial network in May. The number of campaigns that were targeted in some way has remained relatively constant on Millennial's network for roughly the past year. But of that targeted advertising geo/local has grown and so has demographic targeting to some degree. 

 Screen shot 2011-07-01 at 7.26.29 AM

Compare the data for Q3 2010 (below). Geo-targeting was the primary targeting method employed by marketers in 42% of all targeted campaigns on Millennial's network. In May, 2011 that was smaller percentage of targeted ads but a higher percentage of them used local targeting (which can be state, city or zip).

Picture 14

Automotive advertisers were much more local in their mobile marketing efforts (chart below), seeking to send people into dealerships or to generate phone calls. They were less interested than advertisers generally in getting people to Like them on Facebook ("mocial"). 

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As a general matter Millennial said:

  • Store Locator grew 48% month-over-month and represented 22% of the Post-Click Campaign Action Mix on our network in May (above). Retail and Automotive brands heavily drove mobile users into retail outlets and dealerships by creating unique and engaging Moms, Dads and Grads promotions for their target audiences.
  • Mocial (Mobile Social Media) experienced growth of 36% month-over-month, with 23% of the Post-Click Campaign Action Mix in May (Chart C). Telecom, Entertainment and Retail advertisers increased their usage of Mocial as a Post-Click Campaign Action to acquire social media followers and gather feedback on movie releases and new product launches in May.

Below is the mix of advertiser goals and "landing pages" they sent clicks to. Screen shot 2011-07-01 at 7.27.02 AM

Compare Jumptap's data showing some similar things around targeting or post-click activity. Jumptap also shows consumer click metrics and the improved lift of local + demo targeting. 

Selective Zip-Level Targeting Produced 85% Lift

Mobile ad network Jumptap released its second MobileSTAT issue for June earlier today. It's very much like the Millennial Media SMART reports or the AdMob Metrics reports that began the trend. There are a range of interesting findings in the document; I excerpt and summarize some of that material below.

Among smartphone operating systems, Android leads the iPhone by a margin of 42% to 30% on the Jumptap network. This 12 point margin is consistent with the Nielsen-reported 11-point margin between the shares of the two operating systems in the broader US mobile market. 

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Compare Nielsen's data released earlier today:

A relatively unique piece of data in the report is the "content consumption" breakdown between apps and the mobile Web (below). There's no discussion of this graphic in the report so one would need to speculate on whether this is based on where Jumptap ad impressions were served or whether this is somehow a broader measure of consumption trends on mobile devices. 

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According to a recent report from mobile analytics company Flurry, which some have disputed, mobile apps have overtaken the Web (PC and mobile) in time spent. Regardless of whether that's precisly accurate, plenty of data indicate users are spending increasing amounts of time with mobile apps. 

There's also considerable data in the report about CTRs on mobile ads. The first graph immediately below shows Jumptap's CTR by smartphone OS. The Apple iOS platform shows CTRs that are almost double those of Android and other platforms except the Palm webOS. 

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Mobile ad exchange/mediator Smaato offers a similar chart (global, Q1 2011), which shows Windows Phones leading the CTR pack followed by Symbian and then Apple, et al.  

Operating System Click Through Rate Worldwide Q1 2011

Jumptap also said that people between 50 and 70 years old clicked on more ads than members of other age groups. This is an interesting and somewhat curious finding. I would be interested in seeing age-CTR segmentation data by handset type. I suspect that for smartphone owners it would skew younger. 

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Mobile subscribers with incomes above $50K clicked on ads quite a bit more than those with incomes under that threshold. Again I would suspect that higher incomes correlate positively with smartphone ownership and that's going to factor in to this data.

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There's now a fair amount of data from various sources about what time of the day/week mobile users are most active. In the Jumptap chart below ad clicks start to grow in mid-morning (with increased mobile activity generally) and peak at about 6pm. 

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Local-Mobile network Verve Wireless also recently put out findings about consumer behavior on its network. The company said that nearly 60% of page views on its network occurred during the afternoon commute hours and in the evening (between 7-10pm).

Another very interesting data set released by Jumptap is based on a mobile ad campaign with "a major auto advertiser," which targeted selected, demographically qualified zip codes "that are more likely to purchase their brand." According to Jumptap these zip-based ads showed terrific lift "over ads broadly targeted in almost every campaign" -- as much as 85%. 

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The final bit of data I'm including from the report shows the "post-click activity" or objectives of advertisers. Sixty seven percent of users clicked from an ad to a mobile Web-based landing page (or site), while 18% clicked to call and 15% downloaded something (probably an app).

Screen shot 2011-06-30 at 5.31.38 PM

Because we don't now when it says "click to Web" whether these are just PC sites on a mobile browser or HTML5 optimized landing pages we can't evaluable how sophisticated these advertisers are. As a general matter however I would speculate that we'll see a movement away from "click to Web" as marketers try and maximize the effectiveness of their mobile campaigns. 

Verve: Local Mobile Spend Grew 82% YoY

Verve Wireless is a San Diego CA-based mobile ad network consisting of approximately 1200 local media sites (mostly newspapers). The company's network features both small business and national-local advertisers; and it has created and released the first of what will apparently be quarterly reports focused on local-mobile advertising and consumer behavior.

Verve is calling the quarterly report the "Local Mobile Index" (LMI). The ad inventory measured is all mobile display. Verve says the data presented in its inaugural report are a mix of "Omniture, comScore and Verve reporting." The data can be compared to what Millennial Media is doing with its SMART reports but at a purely local level.

As with all such network-based data the Verve report must be seen as a reflection of what's happening on the company's own network primarily. However it's large enough that these data are going to be directionally reflective of larger trends in the local-mobile market.

Top ad verticals

Top five local-mobile ad verticals on the Verve network (Q1 2011):

  • Autos
  • Real estate
  • Entertainment
  • Banking 
  • Health care

Compare Millennial Media's top 10 verticals by ad spend for Q1:

  1. Retail & Restaurants
  2. Telecommunications
  3. Portals & Directories
  4. Finance
  5. Automotive
  6. Entertainment
  7. Dating
  8. Education
  9. Travel
  10. CPG

Spending growth

According to Verve the local ad spend grew 82% year over year (Q1 2010 to Q1 2011) for the identical inventory in its network. This growth rate is in line or somewhat higher than general mobile spending growth. For example, here are eMarketer's mobile ad growth projections:

In the table immediately above, eMarketer said that mobile display grew 122% in 2010 but will slow to 65% annual growth in 2011. I believe it's too soon to argue that mobile ad growth will slow, however, and believe these figures are somewhat conservative. 


About 56% of page views on Verve's network occurred during the afternoon commute hours and in the evening (between 7-10pm). The chart below reflects mobile usage throughout the week.

Screen shot 2011-06-27 at 4.14.04 AM

These data seem to contradict other mobile data that show weekends as a time of heavy mobile activity. However this might be explained by the fact that most of Verve's sites are newspaper sites and that consumption of these sites may decline on the weekend. 

Ad performance

Verve said that in-app ads outperformed mobile web ads "by a factor of nearly 3x (2.67)" during Q1 2011. This is not a surprise given higher levels of consumer engagement with apps vs. the mobile web.

In addition, according to Verve, "rich media campaigns out performed standard banner programs, as measured by consumer engagement, by a factor of 7:1." However some rich media ads that launched video from the banner "performed worse than those without video or had video embedded in a landing page (1.61% video banners vs. 2.67% video embedded), which may indicate some reticence on the part of consumers to go straight into video without an intermediate step." 

Top cities

Perhaps the most interesting data from Verve's report is the list of top DMAs by ad revenue. Here they are and they feature some surprises: 

  1. St. Louis
  2. Houston
  3. New York 
  4. San Francisco  
  5. Portland
  6. Denver
  7. Memphis
  8. Seattle
  9. Dallas
  10. Cleveland-Akron

Texas is the top state by ad revenue in Verve's network. 

Here's a situation where the data from Verve's network may diverge significantly from larger trends in the market. It's very unlikely, for example, that St. Louis is the top overall DMA for mobile ad revenue in the US. What's more plausible is that the sales reps in that market have had great success selling mobile to their advertisers (Verve does some national ad sales). 

iPhone vs. Android

The iPhone represented nearly half of all traffic on Verve's network. However the company said that Android users were more engaged. Verve doesn't elaborate on the meaning of this statement in its report but says that "Android achieved 52% better engagement results during the quarter." 

Screen shot 2011-06-27 at 4.35.09 AM

It's also interesting that BlackBerry had nearly as much share as Android on Verve's network. This is probably a reflect of the legacy of numerous RIM devices in the market.

There hasn't been much good local-mobile ad spending data in the market prior to this. So it will be great to see these quarterly reports and assess how the market is doing based on "facts on the ground." Most of the forecasts (though not all) about local-mobile released to date have been based on very high-level data and often incorrect assumptions about the market.

Millennial: More than Half of Smartphones Now Androids

Millennial Media's device index, "Mobile Mix," is now out for May. Here are some bullets from the report:

  • Smartphones now represent 67% of the impressions on Millennial's network (vs. 36% of US handsets in market per Nielsen)
  • The iPhone remained the top individual device for the 20th straight month. Apple was also the leading OEM on the network. 
  • Android was the leading smartphone OS, with 53% of smartphone impressions
  • Windows Phone grew 92% month-over-month in terms of impressions
  • Among "connected devices" showing up on Millennial's network, 70% are "gaming devices" (e.g., iPod Touch, Sony PSP), 29% are tablets
  • BlackBerry OS experienced modest 6% growth and represented a relatively stable 17% of smartphone impressions on Millennial's network

The chart immediately below reflects the top 20 phones for May. BlackBerry is hanging on but this list is mostly about Android.

 Screen shot 2011-06-15 at 4.10.26 AM

Sixty-seven percent of mobile devices on the Millennial network were smartphones in May (vs 64% in March). In the category 53% are Android devices, up from 48% in March.

Screen shot 2011-06-15 at 4.11.09 AM

Apple had a 27% share of smartphone impressions but generated 45% of the revenue vs. 43% for Android devices, which had a 53% share of impressions. It would be interesting to have more insight into why the iPhone is generating more ad revenue relative to its impression share vs. Android. 

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