Ad Networks

Yahoo Mobile Makes Aggressive Pitch for TV Budget

TV is arguably still king of mass media. According to Nielsen the TV audience isn't eroding, although there's some evidence that cable audiences are shrinking and companies are losing subscribers. If it's not eroding, however, the TV (or video content) audience may well be fragmenting to some degree across multiple screens including mobile and connected devices like the iPad. 

TV remains a brand's best friend, for better or worse, and many CMOs are reluctant to pull money out of TV. However, Yahoo is making a bold push for a shift in marketing dollars from TV to mobile. To that end the company has introduced new mobile ad formats for mobile and the iPad:

  • Yahoo! Mobile Screen Takeover ads are custom units designed with engagement in mind. The ad stays with users as they scroll up and down the page.
  • Yahoo! Mobile Customized Expandable ads cover two-thirds of the screen, providing advertisers with the space to incorporate lead-capture tools, sophisticated graphics, social engagement features, polls and other options.
  • iPad Tap to Video ads are banner ads that mobile users can tap to expand, unveiling a full canvas.

There's plenty of empirical evidence that mobile display and video ads perform better than their counterparts online. That's partly because of novelty but also because of share of voice and the nature of mobile media. It's not unreasonable to argue then in favor of a shift in ad dollars from TV to the iPad, for example. And mobile is really one of the only mediums that can effectively reach younger users. 

The following is a Harris Poll result that shows, among media types, where consumers say they ignore ads the most. TV is in the middle. 

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What Is a Local Ad in Mobile?

The folks at BIA/K have updated their mobile forecast: $2.9B by 2014 in the US. I have some critiques of their assumptions, which I won't focus on now. But there's something in the press release that raises an interesting larger philosophical question around "accounting" and forecasting in the local-mobile ad space. It's an issue I've been thinking about for the past six months and this gives me an opportunity to write about it.

BIA/K says that local will represent 69% of US mobile advertising in 2014: 

BIA/Kelsey expects U.S. mobile local advertising revenues to grow from $213 million in 2009 to $2.03 billion in 2014 (57 percent CAGR). This represents 44 percent of total U.S. mobile ad revenues in 2009, growing to 69 percent in 2014.

This is a huge percentage and it begs the question: "what's a local ad?" Accordingly this is the part I want to focus on:

BIA/Kelsey defines mobile local advertising as that which is targeted based on a user’s location and/or actionable locally. Local targeting occurs to varying degrees and with different methods within each of the advertising formats examined in the forecast (search, display, SMS).

Again: "targeted based on a user’s location and/or actionable locally." Let's unpack this a bit. 

Arguably all product advertising in mobile is "actionable locally." For example a mobile display ad for a Sharp TV becomes "actionable locally" if it prompts me to head into a retail store and look at or buy the set. It may or may not have a "local call to action." And over on Screenwerk I've argued for five years that product search needs to be considered a part of local because that's where most of the transactions ultimately occur -- in stores. 

But transaction-location swallows almost all commerical activity and some people may feel that's too broad a concept. Similarly "actionable locally" is vague. I believe what they're trying to get at however is something like a coupon that needs to be redeemed in a store or a business service that must be fulfilled offlline.

But here's an interesting hypothetical that illustrates the challenge with this idea. What about a Gap ad (discount/coupon) in a mobile app that equally applies at all Gap stores across the US? How should this ad be categorized; is it a national ad or a local ad?

It may target audiences across the US equally and it doesn't necessarily contain local ad copy (in fact it probably wouldn't at this stage). Maybe it's exclusively for in-store purchases but maybe there's an e-commerce component (which is increasingly true for retailers: channel agnosticism). There may be a secondary or subordinate link on a landing page to a store locator. Absent any other local copy does this store locator make it a local ad? (More on that later.)

There are several considerations that are relevant to defining a local ad in a mobile context: targeting methodology, ad copy and ad format. Because users who see ads on mobile devices are always somewhere that can be pinpointed quite precisely, every mobile ad has the potential to become local in a way not possible on the PC. 

Millennial Media reported that in October roughly 18% of all display campaigns it saw were geotargeted. Here "geo" is defined quite broadly to include country and state. Given that marketers can target mobile users with great precision, what level of geo is required before we call an ad local?

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Does an ad need to be targeted down to the DMA or city level to be considered local? Or would we be willing to call ads that target France, for example, or all of New York local? I don't have an easy answer but I would argue we'd need to get down to at least the DMA level. We could call a state-level ad "geotargeted" (because it is) but "local" implies something more narrow.

Now to ad copy. Clearly an ad that contains city-level references would seem to qualify as "local."

The ad below, from a JiWire-run campaign (online), was a national buy that dynamically inserted local references to make it appear more relevant to users in specific markets. But it did this across the US; it was not otherwise a "local" ad. There was no local call to action, no store locator; it was a pure brand campaign that happened to include location references. Is this a "local" ad?

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Now back to the "store locator" issue. Recall my "first date with iAD." I saw an ad for Klondike Bars. There was nothing local in the content of the ad, except that it did offer a store locator of sorts ("find a bar"). Is this a "local" ad?

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My view is that most brand-oriented ads in mobile are going to contain dealer or store finder capabilities as a matter of course. It will essentially be a "checkbox." This is because the phone and its functionality (maps) permit it -- so why wouldn't you do it? It makes brand messages actionable locally. Buick? Find a dealer. Klondike? Find a bar. Marriott? Find a room.

If we consider these local ads then more and more mobile display moves over into the "local" column. That raises a related issue: ads with phone numbers in them.

As I just argued mobile ads (whether search or display) will routinely have store locators or links to maps. But they will also increasingly show phone numbers too -- again because of the way the inherent capabilities of the handset can be invoked. Does a national, brand-centric insurance ad buy (e.g., State Farm) become local if it contains an 800 number that routes calls to local offices? What if it has a dynamically inserted local tracking number but no other local element? 

While an ad for a local sushi restaurant is clearly a local ad (one town, one restaurant), some of these other scenarios (national --> local) are much more ambiguous. And as I suggested, location and local ad copy will increasingly be dynamically inserted based on a national database of locations, ad copy and images. Google is already doing this in mobile today. 

There's somewhat less ambiguity when it comes to search advertising but not much less.

The focus for small business will be less on buying mobile advertising per se than getting exposure broadly across platforms via channel enablers. There will be some mobile-specific activity by SMBs (e.g., Foursquare marketing, Facebook Deals) but most marketing will not be mobile-centric. Indeed, very few true SMBs will be buying PPCall ads on Google. Most of the action for SMBs in mobile will be about organic distribution.

For the foreseeable future most of the "local" advertising on mobile devices will be bought by enterprises that otherwise seek regional or national reach but local stores, dealers or outlets. Thus we return to the various scenarios above and the question of what do we consider a local ad in mobile?

It's a much harder question to answer than it seems.

Under the broadest definition of "local" the category swallows the lion's share of mobile advertising going forward. And we can manipulate the definition of "local" to make the category larger or smaller. But where we place ad revenues is less important than how consumers are interacting with mobile devices and what sort of marketing or advertising methods are effective in reaching them. 

WHERE Becomes a 'Local Discovery Engine'

WHERE has upgraded and redesigned its mobile apps for RIM, Android and the iPhone. Rather than a "commodity" local search service, it has now become a "local discovery engine." A big part of the redesigned experience is new content ("guides") and personalized recommendations ("best bets").

WHERE is using several methodologies to make recommendations but the app first asks users to engage in very brief statement of preferences from a short menu of icons organized around the concept "play, eat, drink."

Another recently launched online recommendation site, Bizzy, confronted me with a much more extensive battery of questions about tastes, preferences and favorites. It went on too long in my opinion. By contrast the WHERE interaction only allowed me to specify five things or categories of interest -- too few in my opinion. The process took literally less than a minute. I think they've erred a bit too much on the side of brevity. 

Overall the new app is quite a bit more interesting and versatile than previous incarnations. I can still do all the directed local queries (i.e., specific restaurants and other local venues). I can also browse for content and suggestions. However the new categories, "guides" and "best bests," allow for discovery of information that I might not otherwise have thought about or discovered on my own in their absence.

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Guides are intended to offer ideas and inspiration. They're typically editorial lists and roundups "curated" by humans. Examples include: 

  • The ultimate San Francisco guide
  • North Beach bars
  • Girls night out in San Francisco
  • Getaways in the Bay Area

Best Bets contains a list of personalized recommendations, which as mentioned are based on preference statements but also a number of other factors, including "latent semantic indexing" according to the company. All listings and content can also be saved to lists for later reference: "favorites" and "wish lists."

WHERE is also a deals aggregator and offers local coupons and deals as part of the app. It's a fairly comprehensive mix of content and features. I was also told by Nataly Kogan, WHERE consumer experience VP, that a new social layer would be coming soon. Users are currently encouraged to sign in via Facebook Connect (of course). 

One of the best local URLs out there, WHERE has yet to exploit its website fully. I'm told that's coming too -- so that users can move between platforms, collect and save information and so on.

WHERE has shown itself to be impressively inventive and flexible, evolving in creative ways as the market has evolved. The new app is certainly an example of that. 

Hulu for Mobile Payments: Carriers Form Isis Joint Venture

Think of it as "Hulu for mobile payments." AT&T, Verizon & T-Mobile have joined forces to introduce an NFC-enabled mobile wallet through a joint venture called Isis. According to the release out this morning:

Founding members, AT&T Mobility, T-Mobile USA and Verizon Wireless, collectively provide wireless services to more than 200 million consumers who will have access to the Isis service. Isis is working with Discover Financial Services' payment network, currently accepted at more than seven million merchant locations nationwide, to develop an extensive mobile payment infrastructure for the joint venture.

Barclaycard US, part of Barclays PLC, is expected to be the first issuer on the network, offering multiple mobile payment products to meet the needs of every customer . . .

The new venture will enable contactless mobile payment and commerce services using near-field communication technology. NFC uses short-range, high frequency wireless technology to enable the encrypted exchange of information between devices at a short distance. The new system is being designed and built to include strong security and privacy safeguards.

This is a formidable group but it remains to be seen whether consumers will adopt. Still the growing competition around mobile payments makes their adoption inevitable. Yesterday at the Web 2.0 conference Google CEO Eric Schmidt said that the next update of Android would enable NFC mobile payments. Apple will also introduce similar functionality for the iPhone at some point. 

Sprint is not a part of the carrier joint venture and introduced its own mobile payments initiative recently. Visa is also independently working on mobile payments programs. Amazon and PayPal are similarly contenders in the space. And there are a growing number of mobile payments "startups," some of which are very heavily funded, such as Boku. 

Because I don't know quite enough about technical infrastructure issues I can't pick winners and losers at this point. I can say this about the broader market: 

  • Consumers will adopt mobile payments (provided they can be assured of security)
  • They won't adopt any system that puts charges on their phone bills; a system that can tap into existing accounts creates the least "friction" (e.g., Sprint, iTunes, Amazon, Google Checkout)
  • Scale will be critical; those without it will be marginalized
  • No one player or even constituency can "win" on its own; there will need to be cooperation and standards that are widely accepted.

Visa Using Facebook Page As Mobile Landing Page

I'm sure this is becoming more common, but I hadn't seen it previously: an advertiser driving from a mobile display ad to a Facebook page (see images below). In this case the advertiser is Visa (and the NFL) and the ad appeared on the mobile Internet HTML homepage of Yahoo.

The Facebook fan page isn't optimized for mobile so arguably it's not going to be as effective in driving fan acquisition as would be a specific mobile fan page. It could either be a test of the utility and feasibility of Facebook pages as landing pages -- or it could just be sloppy.

Previously Millennial Media reported that the following was the mix of "destinations" for mobile ad campaigns on its network:  

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The largest category of "destinations" was a corporate site, followed by a custom landing page and then an application download. Presumably the custom landing page is optimized for mobile and so wouldn't be a conventional Facebook fan page.

Here's the Visa banner ad and then the full Facebook landing page, which is too small to really be effective on the iPhone. 

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Google AdSense Ads Come to AdMob Network

From a publisher perspective mobile display advertising is all about fill rates, ad relevance and revenue maximization. From an advertiser perspective it's all about reach and efficiency.

Just as with online, there are the networks and the mediators/exchanges jockeying for position in mobile. The Smaatos, AdMarvels and Nexages of the world are trying to provide greater fill and ad optimization (and thus revenue) for publishers. But some of the ad networks believe that they're the ones creating the value in the ecosystem and that exchanges and mediators will become unnecessary if they can provide greater fill rates and more revenue accordingly. 

Google has had two incomplete mobile networks: AdMob and AdSense for Mobile. Yesterday it announced that it was partially combining them by bringing AdSense ads to the AdMob network (though not the other way at present). The algorithim will optimize ad selection to provide the best ad for the publisher. Mostly it will serve AdMob ads, but sometimes AdSense ads if there isn't a relevant AdMob ad to deliver.

In addition to greater fill rates, the new arrangement also provides greater reach for AdSense advertisers on the Google mobile display network (previously the Google content network). Google says the following about how it will work:

Publishers using a recent version of the SDK will not have to update their code. Reporting will integrate directly into your AdMob account, and you will continue to receive a single check from AdMob each month. Publishers should note that they will not be able to filter the types of AdSense ads (e.g. category, URL) that run in their app. As a result, publishers who have ad filters selected for their AdMob inventory need to opt in to receive Google ads. Publishers can check their “App Settings” tab in the Sites & Apps section of their publisher account to see if they are eligible for Google ads and opt in. Eligible iPhone and Android application publishers not utilizing ad filters will be opted into receiving Google ads as the feature is rolled out in phases over the next several weeks.

Google has still more mobile display assets over at DoubleClick and with Teracent, which can serve dynamic ad creative depending on several variables. It will be interesting to see how it all gets integrated. 

I believe that eventually Google will have two marketplaces: one for text ads and one for graphical and rich media ads. I also believe that over time Google will more tightly integrate PC and mobile ad buying (which is fairly well integrated today on the search side) -- although that can never be completely accomplished because of the separate demands of the different mediums. 

Already the king of search, Google is becoming a more and more formidable competitor in display on both the PC and in mobile. 

If Facebook Were an Ad Network, It Would Be the Biggest

Yesterday in the context of its mobile event Facebook announced (consistent with my prediction) that the company had more than 200 million active mobile users around the world. I earlier asked Facebook to break this out by US vs. international numbers, which they declined to do. But let's try and figure that out . . . shall we.

Facebook itself says that 70% of its usage comes from outside the US: "About 70% of Facebook users are outside the United States." That means (assuming 500 million total users) that 150 million users are in the US. 

If we were to assume that mobile usage breaks down along the same US-international lines that would mean 140 million mobile users would be international, while 60 million would be in the US. My guess is that mobile usage doesn't break down along those lines exactly. Much of Facebook's mobile usage is likely to come from smartphones and its mobile apps in particular, although Facebook does operate sites for non-smartphone browsers and has a text only site at 0.facebook.com.

The US doesn't have the highest smartphone penetration among Western countries, Spain probably does. But in absolute numbers the US has more smartphones than any other country. Let's say (based on a collection of third party data points) that are something like 60 million smartphone users in the US. How many of those people are using Facebook (probably not 100%). Yet Facebook's mobile usage doesn't come exclusively from smartphones. We don't know, however, how many non-smartphone Facebook users there are in the US or elsewhere in the world. 

Nielsen says there are 85 million mobile Internet users total. So one would need to assume that there aren't more US mobile Facebook users than 85 million. My guess then is that there are about 75 million mobile facebook users in the US. If we were to treat Facebook as a mobile ad network, where would 75 million users put them in the hierarchy?

According to the Nielsen data, Facebook would be the largest mobile ad network. Notwithstanding Facebook Deals, announced yesterday, it doesn't quality as a mobile ad network -- quite yet.

4Info Moves Beyond SMS to Become All-Purpose Mobile Ads Platform

Despite its reach SMS gets little respect in the mobile marketing world. Brand advertisers seem preoccupied with rich media and display and DR marketers are focused on mobile search or remnant display. Traditional media are enamored of the way barcodes may tie their physical ads to the Internet. (SMS has been able to do that for a long time.)

4Info has long been one of the largest SMS platform purveyors but now it's making a bid to be a "complete mobile ad platform." For the past year the company has been building out other ad format and channel capabilities and has announced AdHaven, which "offers display and SMS advertising, as well mobile app, rich media, and video ad units."

Citing Nielsen data 4Info claims impressive reach, second only to Millennial Media: 

The company also announced today that through AdHaven, the mobile web display portion of its Mobile Audience Network now reaches a unique audience of more than 63 million, which represents 75 percent of all U.S. Mobile Web users according to a recent Nielsen report*. The overall reach of the 4INFO Audience Network is even greater, as it includes the largest SMS ad network in the US, with more than 45 million unique users.

Amazingly 4Info's display network's reach is greater than its SMS network. TechCrunch published (perhaps provided by 4Info) Nielsen data supporting the reach claims:

http://tctechcrunch.files.wordpress.com/2010/11/4info.jpg

Credit: Nielsen/TechCrunch/4Info 

I'd be interested to hear Nielsen weigh in on these numbers. But assuming they're accurate 4Info emerges as one of the largest mobile ad networks, with huge reach across the existing US mobile audience. 

The reach plus "all in one" value proposition and repositioning of 4Info will undoutedly get agencies and marketers to take a much closer look at the company, which may have seemed "parochial" to them in the past. 

WHERE teams with Constant Contact, Integrates Mobile & Email Marketing

Mobile marketing platform provider WHERE.com has teamed up with small business email vendor Constant Contact to combine the benefits of mobile and email marketing. Email marketing, though "old school" compared to mobile, is highly effective and so regarded by many small businesses. Indeed, they often rate it as the most effective or one of the top three most effective marketing tools they use.

The WHERE-Constant Contact deal contemplates that WHERE daily deals and offers can be marketed to existing customers through email via Constant Contact. And the reverse is true: Constant Contact users can now reach WHERE's consumer audience and mobile ad network (a combined 50 million people) with deals and offers.

This is an oversimplification, but WHERE sees itself as the new customer acquisition platform while Constant Contact is the CRM tool: 

This integration will allow small business owners to create daily deals through WHERE and market them to their current customers through Constant Contact’s email marketing tool, as well as to WHERE’s 50 million mobile consumers. WHERE merchants can also add Constant Contact’s “join my mailing list” (JMML) button to their listings, an easy way to grow their email subscriber list. The collaboration will enable Constant Contact’s customers to utilize the WHERE platform to deliver deals to their existing customers, while reaching new customers through WHERE’s location-based mobile advertising. In addition, WHERE’s recent acquisition of LocalGinger.com , a pioneer in the local group buying category, gives merchants interested in group buying deals a massive platform to help drive foot traffic.

This collaboration aspires to be a kind of "360 degree" solution for small business to help drive people from the Web into stores. Constant Contact reported that it had 415,000 paying customers as of the end of Q3. Yesterday Constant Contact released an iPhone application. 

Constant Contact's customer base offers a massive potential audience for WHERE, which offers mobile landing pages and a wide array of promotional opportunities for SMBs. 

Facebook Mobile Deals Coming on November 3?

As is now widely known Facebook is having a "mobile event" on November 3. There have been many rumors of a "Facebook phone." That would be pretty interesting and exciting but it's fairly unlikely. So what will be announced?

My guess is that Facebook will first rattle off some impressive mobile statistics. Here's where Facebook's mobile stats stand today:

  • There are more than 150 million active users currently accessing Facebook through their mobile devices.
  • People that use Facebook on their mobile devices are twice as active on Facebook than non-mobile users.
  • There are more than 200 mobile operators in 60 countries working to deploy and promote Facebook mobile products

I'll guess that we'll hear that there are now more than 200 million active mobile users on Facebook among other juicy tidbits. 

I've long speculated that Facebook would eventually become a mobile ad network. The amazing thing, if it were to do so, is that it would have equal or greater reach than any mobile carrier and probably any other mobile ad network today. But Facebook isn't immediately concerned with making money in mobile; there's no internal pressure to monetize mobile. Some have estimated that Facebook is on track to do $2 billion in online ad revenue. 

Another reasonable guess is that we'll see the debut of "Facebook Deals," which may be partly tied to Facebook Places. It may also have an entirely independent existence on the PC. Right now Facebook Places doesn't offer any "reason" for users to check in -- unlike other LBS services that offer badges or coupons. I've seen estimates recently that Facebook Places has "7X" the check-ins of Foursquare, which now boasts about 4 million users. 

A deals product could offer a check-in incentive and a nice advertising vehicle for brands and SMBs alike. Regardless of what gets announced next Wednesday, Facebook is a kind of "sleeping giant" in mobile and LBS. Anything it does in these realms has the potential to shake up (or accelerate) the industry. 

Millennial: Geo Top Targeting Method for Mobile Campaigns

The Millennial Media SMART report for September is out. As usual it has lots of data about advertisers and their campaigns. You can get the full report here.

I will, in my capricious way, selectively highlight data from the report. Of interest, 44% of mobile marketers on Millennial's network used some sort of targeting while 56% wanted broad reach. Among the targeting methodologies used (geographic, demographic, behavioral audience and audience takeover) 42% used geotargeting. That means roughly 18% of advertisers on Millennial's network are doing geotargeting.

Equally interesting are data published by Millennial but from InsightExpress' Q2 2010 Digital Consumer Portrait of mobile moms:

  • 32% of moms own a Smartphone in 2010 vs. 20% in 2009 (a 60% increase)
  • 32% of moms say they use the Mobile Internet once a week in 2010 vs. 20% in 2009 (a 60% increase).

General smartphone penetration in the US is 25% per Nielsen. Moms make the household buying decisions so they're one of the most critical audiences for marketers to reach. The first chart below has more of the IE mom-related data:

Moms and their mobile usage: 

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Targeting on Millennial's network:

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Campaign destinations/landing pages:

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Compared to a year ago many more advertisers are driving application downloads. 

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Sprint's War on App Stores Could Turn into Litigation Nightmare

In the ongoing struggle to make themselves relevant to consumers and developers carriers have launched app and developer initiatives. Verizon is the highest profile of those with its Android apps. But now Sprint is making a move with a "cross platform" initiative that would use the browser rather than a traditional app store to deliver apps to consumers. 

According to a write up in Computerworld the company would offer network location as well as demographic and behavioral data about users and analytics to woo developers, potentially giving the effort superior data and tools vs more "traditional" app stores: 

Sprint is looking at providing data on user activity across both device-resident and Web-based applications, according to McGinnis. It could offer both general statistics about the subscribers that use an app and data on a particular user, he said. The individual subscriber data would only be used if the customer gave explicit consent, and personally identifiable information would be removed, he said.

But that data could give developers the resources to make their Web applications more relevant than those in the established app stores, according to Openwave's Nguyen. The information could include location, Web browsing history and other data. With data about where a particular subscriber has gone on the mobile Web, carriers could use Integra to place that subscriber in a particular demographic segment, Nguyen said. Knowing that demographic segment would help the application provider offer more targeted content or advertising.

Location, analytics and user data is certainly one way to make carriers relevant in the new smartphone world. However there's a privacy nightmare looming here. The online world is currently grappling over myriad privacy controversies and litigation. Unless it was very carefully executed (opt-in) carriers and their partners would find themselves on the receiving end of class action lawsuits.

Though the passage above references "explicit" consumer consent, any scenario in which carriers "watch" their users and provide demographic and behavioral information to third parties (even if anonymous and in the aggregate) will be met with litigation.

The O2 More-Placecast opt-in SMS model is a much cleaner and better approach to reinserting the carrier brand into the consumer experience (and reaches a broader audience as well). Of course it's not mutually exclusive of providing data and location to developers. However too much data is going to be a major legal problem.

Carriers do have some sway over Android and potentially Windows 7 Phones. But this cross-platform app strategy won't work on a device like the iPhone, where the consumer's allegiance is to Apple and the carrier is the incidental provider of bandwidth.  

What Is "Google Offers"?

On Friday Mobile Marketer published an article, based on a talk given by Google's Mike Steib in New York. The article appeared to "announce" a new Google couponing effort called "Google Offers":

“The Holy Grail for local advertising is location-targeted coupons, and we’re building Google Offers to enable that, as well as click-to-call functionality for nearby businesses,” Mr. Steib said. “If you have the ability to reach out to consumers nearby and pull them in using mobile, it’s great for consumers and advertisers.”

I had an opportunity to talk to Google on Friday (though not Steib) about this, as well as its $1 billion in mobile ad revenues and other subjects of interest. Most of the conversation was off the record. However my conclusion is that "Google Offers" is much more of an idea than a product at this point. What the talk in New York really means is that Google sees locally oriented advertising on mobile devices, driving calls and foot traffic into stores, as very powerful and desirable both for consumers and merchants.

Part of that calculus is coupons, which more than any other advertising vehicle have a direct impact on consumer purchase behavior. Currently SMBs and others with Places pages on Google can offer coupons. However Google needs to do a better job of surfacing those coupons in order to gain consumer notice and further merchant adoption. Somewhat more visible are Google "Tags," which can also be coupons.

There's also the broader question of how deeply Google wants to get into coupons. Does the company, for example, want to integrate them into Google Shopping/Product Search or limit them to service businesses exposed via Local/Maps? Would Google create a "coupon destination," as others have done, including Yahoo and Ask?

I'm sure that Google has looked carefully at the "daily deals" segment as well. But so far the company has declined to either buy a company or mimic the offering. However it did recently invest in a company called Signpost, which is in the same general space. 

It's clear that Google does want to get more deeply into local deals and coupons and is trying to figure out what's the best, most scalable way to do that. It also appears there's no new product (ad) announcement coming in the immediate future. 

Millennial: iOS on Top but Android Revenue Growth Beats iPhone

Millennial Media's MobileMix report is out this mornng and it has some interesting data points. The story is mostly the same as previous months: iOS devices lead but Android is fastest growing collection of devices. The data also suggest that RIM is holding its own in an increasingly competitive smartphone landscape.

Here are the top data-points, followed by some charts from the report:

  • Android ad requests grew 26% month-over-month. Since January, Android has grown 1,283%.
  • Apple ad requests increased 10% month-over-month. Since January, Apple has increased 18%. iPad ad requests grew 63% month-over-month.
  • RIM ad requests increased 16% month-over-month. Since January, RIM has increased 143%.
  • This month, for the rst time, Android revenue exceeded iPhone-only revenue on our network amidst strong raw iOS impression growth.

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Compare March 2010 Millennial data, showing smartphones with a 45% share and Apple with a 70% share of that segment: 

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 Now back to the current month:

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What do we take away from all this? Apple's iOS suite of devices remain the market leader (though the iPhone is far less dominant), with Android gaining. And good ol' RIM is alive and kicking, showing some growth in this report. 

Update: Millennial ads some "color" to the numbers released this morning in a blog post

One of our key observations was the continued growth of Android Smartphones on our network. Though we’ve predicted that Android would eventually overtake iPhone in revenue, we didn’t anticipate it to happen this soon.  In September, Android revenue exceeded iPhone-only revenue.  However, impressions from iOS still outpace Android impressions.  So how is it that Android could see fewer impressions, but come out ahead in revenue?  Here are a few reasons:

  1. Devices versus operating systems – We are only comparing iPhone and Android devices, not operating systems. iOS includes not only iPhone, but also iPad and iPod Touch. Currently, Android only consists of Smartphones on our network.  Of course, as Android-powered tablets and other consumer electronic devices hit the marketplace in the near future, that will certainly change.
  2. Less inventory coupled with soaring demand – We saw higher average fill rates, click-through rates and prices on Android applications and mobile web inventory than on iPhone inventory last month. Why?  We believe this occurred because there are fewer applications available on Android than on iPhone (though the gap is narrowing), and the mix of applications available on Android is still different than the mix on iPhone.   This means less inventory to meet current advertiser demand, resulting in higher fill rates and prices.
  3. Reaching a diverse set of Smartphone buyers – Many Android users are often first-time Smartphone buyers.  We believe some advertisers are paying a premium to reach those users early in their Smartphone experience.   Our advertisers have also shared that Android allows them to reach a diverse set of consumers across all major carriers, making the platform highly desirable and increasing demand for the platform.

When we consider all of these elements together, it helps us see how Android overtook the iPhone on a revenue basis on our network in September.  With more advertiser demand per each available impression on Android, it resulted in more revenue per impression.

Unpacking $1 Billion in Google Mobile Ad Revenues

One could almost hear the collective gasp yesterday when Google's SVP of product Jonathan Rosenberg announced that Google would make $1 billion in top-line mobile ad revenue on an annualized basis. Here's the relevant discussion from the earnings call transcript:

Mobile is on an annualized run rate of over $1 billion. This means the people who are accessing our products and services through their mobile phones are adding a $1 billion annually to our existing revenue streams. Clearly, this is the future of search in the Internet, more people in more countries coming online from these smartphones. Our mobile search queries have grown five times over the past couple of years. And of course, a lot more of those queries are now coming from Android phones.

Let's "unpack" this very impressive number.

My understanding is that it's a mix of AdMob display revenues, Google mobile search and mobile AdSense revenues and a sprinkling of Android market revenues.

I would imagine that the Android market revenues (30% of the sale of paid apps) are quite small. Google/Android has underperformed in the sale of paid apps. It's safe to assume that the contribution to the $1 billion figure is less than $75 million and maybe closer to $50 million. 

Next is AdMob.

TechCrunch reported in November last year that AdMob board member Jim Goetz, a partner at Sequoia Capital, said the following: “[AdMob] built what is approaching a $100 million business in three years." AdMob's revenue split was 60/40 to publishers. In other words the company's revenues would have been $40 million at the end of 2009.

Mobile advertising accelerated in Q4 last year and continued to accelerate this year.

Let's assume, optimistically, that AdMob revenues are closer to $80 million as we sit here today (or if you want to count topline instead, perhaps closing in on $200 million). These figures are probably too large, if we assume the AdMob board member was reporting revenues accurately. But let's run with them anyway.

Putting these "optimistic" scenarios together would leave about $725 million for Google's "advertising" contribution to the $1 billion. How much of that is search and how much is display/mobile AdSense?

The Google Content Network represented about 30% of Google's revenues in Q3 2010. Let's assume that percentage holds for mobile as well (it might not). That would mean about $217.5 million of the $725 (based on the above) is attributable to Google's mobile AdSense. The rest, then, would be mobile search revenues, or $507 million. This number is consistent with an estimate that Citi's Mark Mahaney put out some time ago.

To summarize my revenue allocation: 

  • AdMob: $200 million in topline (optimistic)
  • Google mobile AdSense: $217.5 million
  • Google mobile search: $507 million 
  • Android app revenues: $75 million (optimistic) 

 Again, this is all loose math. But the $1 billion is real (and coming from somewhere). And it validates that mobile advertising has definitely arrived.

Google Says Mobile Ad Revenues Now $1 Billion

Google's Jonathan Rosenberg just disclosed on Google's earnings call that the company had $1 billion in mobile ad revenues. This number includes both search and display and is probably global. (Update: revenues are split between, search, display and Android apps). 

Eric Schmidt: Display will become a "very significant" component of mobile ad revenues. There's "hockey stick-like growth." 

This is the first time that Google has shared such a number. If that number is a projection for 2010 based on a current run rate it would represent a small amount of what will likely turn into a $29-$30 billion year for Mountain View. But in general it's a very large number and it shows that Google already has a very real business. 

No doubt that revenue number is substantially boosted by AdMob. 

Update: 

Google said CPC prices are "a good bit lower" on mobile vs. the PC. But Click2Call and hyperlocal are driving better CPMs and better monetization, relatively speaking. 

Google CEO Eric Schmidt said Google isn't threatned by competitive Android stores (Verizon, Amazon). He said Google isn't looking to Android app revenue share as a meaningful source of revenue. 

xAD Raises Money, Game On in Local Ad Network Space

Local ad platform xAD (formerly V-Enable) just announced that it had raised $4 million Emergence Capital. It also announced that it is profitable, growing 20% per month and "serving 200m local search ad requests per month." The company also says it delivers 10 million calls per month.

xAD said it will use the money for technology upgrades and development. 

The company operates LocalAdXChange which was one of the first local ad networks for mobile. It takes inventory (ads) from many sources, including yellow pages publishers, and delivers those ads to a growing list of publishers across its network. It also optimizes ads across sites and by geography. 

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In the past 12-18 months a number of other local and local-mobile ad networks have launched:

  • CityGrid
  • Marchex (calls)
  • Chitika
  • Where.com
  • LSN
  • Verve Wireless 

AT&T Interactive should also be considered a network and provides lots of inventory to others, including Bing.

Where there was once almost nothing now the segment is very crowded with local and local-mobile networks. That's good for advertisers and publishers both.

Generally speaking CTRs, engagement and performance of mobile ads beat the PC. In my previous post I discussed data that suggest mobile uses are better and more immediate prospects for local ads (or locally targeted ads) than PC users.

Yahoo Messenger Offers Video Calling over 3G

Several weeks ago at Yahoo I saw a demo of video calling from a PC to my Android phone. It was "pretty cool." Now the Yahoo Messenger app is out for the iPhone and allows users to make video and voice calls to mobile devices (with front-facing cameras) and PCs over 3G or WiFi. You can also call landlines and mobile numbers with a Voice Out account. 

Apple's FaceTime only works over WiFi currently. Qik, Tango and Fring also offer video calls on mobile devices.

Voice calls between Yahoo Messenger accounts are free. Yahoo Voice Out accounts are available to users in the US, France, Germany, Spain and Singapore. However you can make calls anywhere in the world. Voice Out offers low cost per-minute calling but no flat-fee accounts. Skype by contrast has unlimited flat-fee plans as well as per-minute plans.

Google is also involved here with its Voice offering, allowing free calls from PC-Gmail for the time being. There's also video chat on the PC. However, it's only a matter of time before an independent Google Voice and video calling come to mobile devices. 

Front-facing cameras and video calling will become a standard feature on smartphones going forward. One question is whether VoIP and video calls will count against carrier-plan minutes. Skype calls on Verizon handsets can't be made over WiFi, but can be made over Verizon's 3G network and don't count against minutes.  

A cat-and-mouse game with carriers will ensue wherein people try to use data to make free voice and video calls. Carriers can restrict or block these efforts but ultimately people will be making more calls (and video calls) over VoIP and WiFi networks.

Related: Tango’s iPhone/Android video chat app takes off with 1M downloads

 

Yahoo Makes Mobile Search More App-Like

Yahoo has enriched its mobile search experience for Android and iPhone users. The new, HTML5-powered search results include tabs that generally mimic or correspond to the new "accordion" design of Yahoo search results on the PC (see top image below). Here's the Yahoo discussion of the mobile search improvements:

Late last week, we rolled out an updated mobile search experience for smartphones. We’ve honed search results for local business listings, stock information, entertainment topics, videos, and images. You’ll see that results for these topics are neatly packaged so you can find exactly what you need when you’re out and about . . .

U.S. users of most iPhones and some newer versions of Android 2.x phones are automatically being taken to this new product when you search from http://m.yahoo.com. If you are an Android user, you can also search from the Yahoo! Search for Android widget (download it from the Android market on your phone). It is now available in 13 countries, and you can speak your query in English, Spanish, and Bahasa Indonesia.

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Overall, there's more information "above the fold" and more functionality in the new results. They're also "cleaner" and more visually appealing than corresponding search results on the mobile Web version of Google. 

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Hipcricket Integrates Barcodes into Platform

Hipcricket has teamed up with Scanbuy to integrate QR codes into the Hipcricket platform:

Through this partnership, Hipcricket clients have enhanced capabilities to provide information, pictures of a product, or other rich media delivered when a barcode is scanned. Over 90% of phones today come with a camera, making virtually any mobile device a personal barcode scanner.

Barcode scanning is gaining momentum in the US as another marketing tool for brands and advertisers. Barcode scanning is similar to using SMS in that it can "go anywhere": on a print ad, billboard, TV ad and so on. Thus it can help make "static" traditional media more dynamic and interactive. Marketers can tie any message, URL, video, landing page or image to a QR code.

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The benefits to marketers are almost self-evident. The challenge is educating consumers and getting the software on their handsets. In the direct mail piece from REI above, it contains information about what QR codes are and where to get one for your phone. 

In this particular case the QR code sends you to a mobile optimized version of an REI store locator. It also contains a URL for people who want to go online to find stores.

Scanbuy recently released some interesting data on barcode scanning in the US in an effort to promote its usage by marketers. And in fact we've now moved from a kind of novelty phase in the US to real implementation of QR codes by marketers, as another tool to engage consumers. 

See also: Barcode (2D) Adventures in the Big Apple