Ad Networks

Survey: Few Click on Mobile Display Ads, SMS Yields Best Response

A study of just over 2,000 consumers in the UK, commissioned by mobile marketing company Upstream, conducted by YouGov, found that "only a minority of UK consumers claim to have clicked on a mobile display advert."

The survey found that 14% of mobile consumers reported clicking on a mobile display ad. For smartphone users the figure was slightly higher at 23%. Beyond this, 32% of all respondents and half of smartphone owners said they found mobile banners to be "an irritation." 

According to the study SMS was cited by respondents as the medium that "would make them most likely to respond fastest to a relevant deal or offer" (15%); 3% cited banners and 2% cited in-app ads. The SMS hypothetical response figures were larger among smartphone owners (25%).

These survey findings must be taken with a grain of salt. There are other data that show (based on actual consumer behavior) mobile display (including video) ad engagement is much higher than online. Mobile display ads across the board outperform online by a wide margin. InsightExpress has shown, based on measurement of actual campaigns, that mobile outperforms online by almost 5X in terms of most brand metrics. 

I have no doubt that people responded in the way described above and expressed "irritation" at mobile "banners." However, there's often a discrepancy between what people say in surveys and what they do.

Finally CTR is not necessarily the measure of an effective ad. There are documented "latent" and "offline" impacts from online display ads that have never been clicked on. Furthermore, I believe that mobile (including tablets) may turn out to be the most effective branding medium available to advertisers. 

See related: 

Millennial Media: Apple Regains Momentum, Android Dominates Ad Requests

Millennial Media put out its monthly "Mobile Mix" device and OS report reflecting the top operating systems and devices accessing publisher sites on its network. The report showed a renewed surge by Apple devices, but Android remained the top smartphone OS. The company also exposed some global OS metrics from Stat Counter.

Here are the highlights:

  • Apple, the leading device manufacturer represented 26% of the Top 15 Manufacturers impression share in January, a 24% increase month-over-month.
  • Apple iPod Touch reclaimed the number two position on the Top 30 Mobile Devices list in January
  • Android continues to lead iOS as the largest Smartphone OS for the second consecutive month, with a 54% impression share in January
  • HTC grew 36% in January to claim the number two position in the Top 15 Manufacturers Ranking
  • Symbian impressions grew significantly in January, increasing 24% month-over-month
  • Wi-Fi experienced a 21% increase month-over-month in January. The increase in impression share of Connected Devices month-over-month contributed to the increase in Wi-Fi

Here are the smartphone and OS share figures on Millennial's network for January:
Picture 33

Compare November, 2010:

Picture 10

Smartphone penetration has grown and Android has dramatically grown. Apple's OS now accounts for slighly more than half of the ad requests on Millennial's network. Below, however, is global OS market share, showing Android with about half the penetration of iOS. 

Picture 34

Campbell's Soup: iAd Outperforms TV

For some time I've speculated that mobile might be a more compelling branding medium than TV. InsightExpress and Dynamic Logic have shown data multiple times that reflect higher brand lift and unaided recall from mobile vs. PC display ads. Now comes a study with the first solid evidence of my prediction, showing that iAds performed better than TV advertising.

Campbell's Soup, one of the early iAd adopters, conducted a study with Nielsen, measuring recall, intent to purchase, favorability and other metrics. According to a write-up of the study in AdAge:

Those exposed to one of Campbell's iAds were more than twice as likely to recall it than those who had seen a TV ad. Indeed the five-week study, conducted by Nielsen, showed that consumers shown an iAd remembered the brand "Campbell's" five times more often than TV ad respondents and the ad messaging three times more often.

IAd respondents said they intended to purchase Campbell's four times more than the TV group and that they liked the ad five times more. TV and mobile audiences were queried separately in mobile and online surveys. The TV audiences were part of Nielsen's panel, while mobile users were recruited within various apps.

Once again: "IAd respondents said they intended to purchase Campbell's four times more than the TV group." These people are not only potential purchasers of the product but they're social promoters. They'll potentially tell friends about the campaign so there's a likely secondary benefit or effect (which wasn't reported). 

This study will have a major impact on brands and agencies, which are adopting mobile marketing and advertising in earnest. It's unlikely to move much of the TV budget in the near term. But if these results are replicated and repeated it will send a shockwave through the big agencies. 

Related posts:

Most Apps Don't Get a Chance to Make a Second Impression

We all know that Apple recently announced its 10 billionth app download. But the larger question about apps goes to engagement and retention. How often are apps used and are they used more than once? Mobile app analytics provider Localytics just published data that shows "26% of Apps Downloaded in 2010 Were Used Just Once."

The data overall show between 20% and 30% of mobile subscribers only use apps a single time -- presumably deciding there's not enough there to make them come back. However 75% or so do return, though whether it's more than twice is not mentioned in the Localytics data.

 http://www.localytics.com/images/uploads/Localytics-one-time-app-usage.png

Being discovered is increasingly tough, which is why lots of mobile advertising promotes app downloads. Retaining users it also tough. To my knowledge nobody yet has "normalized" app churn (downloads to regular users). Regardless of the apps heavy users are going to be in the minority vs. occasional users vs. all downloads. 

The above data impliedly argue that users should be educated about what the app is about before downloading (via news, PR, word of mouth) and that the app's value proposition must be very intuitive and self-evident. Games are arguably in a different category. 

The average number of smartphone apps (per Nielsen) is 37 for the iPhone and 22 for Android devices. Here are the most common app discovery methods:

Picture 12

Accordingly word of mouth would appear to be a critical driver of app adoption. Thus the mundane advice is: build a great and useful (or fun) app and then promote the heck out of it through all available channels. 

Mobile Display Growing Dramatically for Google

Friday Google released AdMob data showing 2010 growth and ad distribution by region for the Google mobile display network. The largest region is North America (dominated by the US), followed by Asia and Western Europe.

According to IDC's most recent estimates mobile display is not as big a revenue source as mobile paid search for Google. Here are the estimated US mobile display ad market share figures (minus search dollars): 

  • Google: 19%
  • Apple: 18.8%
  • Millennial: 15.4%
  • Yahoo: 10.1%
  • Jumptap: 8.4%
  • Microsoft: 7.8% 
  • Others (including AOL, Nokia): 20.5%

The following are the AdMob charts showing 2010 growth by region:

Picture 51Picture 52Picture 53

4Info Touts Growth, Transformation to '360°' Ad Network

4INFO yesterday announced that it has dramatically grown its display ad business and now reaches "75 percent of all US Mobile Web." It has done this by leveraging its US SMS advertising and publisher relationships to include display advertising from the company. 4INFO also touted some high display campaigns in its release: 

  • KFC – After a successful launch of the Doublicious chicken sandwich supported by a free version of the Backbreaker Lite app, KFC is back to promote Hot Wings with brand integration in the Backbreaker 2 app. This special edition of Backbreaker 2 will be available for download from the App Storesm within the next few weeks.
  • Universal Picture’s “Little Fockers” – 4INFO created an interactive mobile campaign, reaching consumers with mobile advertising. The campaign included a free iPhone app called “My Holiday Planner” that helped prepare users for their family holiday visits and tasks. The app was specifically chosen in conjunction with the Fockers release and the holiday season.
  • Proctor & Gamble – P&G has renewed multiple product campaigns, including Herbal Essence and CoverGirl.

Last November 4INFO launched its "AdHaven" platform, which the company promotes as a "360 degree" solution for advertisers and which offers "display and SMS advertising, as well mobile app, rich media, and video ad units."

While SMS has the greatest reach of any mobile ad format it's not well appreciated by brands and agencies, much like search was shunned by brands for years until necessity drove adoption. 

Verve Names New CEO, Readies for Expansion

Verve Wireless has named Tom MacIsaac as new CEO. Art Howe, co-founder of Verve and prior CEO, will remain as Chairman. According to the press release that went out this morning:

Tom was CEO of ExtendMedia, which he grew into the leading IP video platform serving major operators, including AT&T, Verizon and Bell Canada, and leading movie studios, including Disney and Paramount. Extend was acquired by Cisco Systems in September 2010. Previously, Tom served as CEO of Lightningcast, a pioneer in online video advertising where he led the development of the first advertising technology platform specifically designed for monetizing broadband video and launched the first online video ad network. After AOL acquired Lightningcast in 2006, Tom served as SVP Strategy overseeing strategy, strategic planning and corporate and business development for AOL's market-leading advertising business, Advertising.com. Prior to Lightningcast, Tom was founder and CEO of Backwire, an online and mobile messaging company that was acquired by Leap Wireless in 2001. Prior to his career in digital media, Tom was a corporate lawyer with the global law firm Dechert.

Verve is positioning itself as a premium local display ad network for mobile. It originally developed its network, like Quattro and others previously, by building and hosting publisher (primarily newspaper) mobile sites. The company is focused on both national-local and small business advertisers. It has a presence in the "top 200 markets" in the US. 

Recently surveys by Handmark and Pew show the degree to which mobile has become an important and even preferred news medium, especially for breaking news. According to the Handmark survey (n=300,000):

Mobile has pulled ahead of the desktop web as the preferred medium to access breaking news information. More than 30% of respondents surveyed feel mobile is the most important medium to access breaking news, compared to 29% who prefer the desktop web, 21% who prefer television, and a mere 3% who chose newspapers as their the most important medium for breaking news.  

This will be a significant year for mobile advertising and growth. The foundation has been laid in the form of consumer adoption of smartphones and mobile in general. Regardless of which mobile ad forecast one points to, the medium is now a critical one -- both for publishers and advertisers seeking to build awareness or to drive offline purchases. 

Related posts: 

Android Surging, Potential iPhone Switching

On the heels of Verizon's embrace of the iPhone and speculation over how it may impact Android handset sales, ad network Millennial Media released December data showing that ad requests coming from Android handsets were now generating more impressions (and revenue) on Millennial's network than the iPhone.

This is consistent with sales data from comScore and Nielsen showing that Android has surged among recent smartphone purchasers. It's the first time that Android has collectively surpassed iOS devices on Millennial's network. However the iPhone remained the top single device, followed by the BlackBerry Curve.

Screen shot 2011-01-13 at 4.45.08 PM

Android's growth represented a 13% increase quarter-over-quarter, according to Millennial. Since January, Android has grown a massive 3130%. Smartphones now represent 60% of devices on Millennial's network (compared to 48% in May, 2010).

Simultaneously ChangeWave released some survey findings about potential switching to a Verizon iPhone. 

The chart above indicates the percentage of mobile subscribers who plan to switch carriers without regard to any particular device. However the chart below shows that 16% of AT&T customers are stongly considering a switch to Verizon for the iPhone. Another 23% are ambivalent. The chief reasons for considering leaving AT&T were "poor reception" and "dropped calls." 

If we interpret "don't know" in the chart above as "maybe," it suggests that almost 40% of AT&T customers surveyed may leave for the iPhone. If even the 16% make good on their impulse it would be significant. 

The early evidence is that people are quite excited about the Verizon iPhone and we're likely to see high initial sales figures. A not-so-hidden benefit in all this for Apple is that a VZW iPhone blocks or will dilute some of the Android brand advertising.

Of course Verizon will continue to promote Android devices but without the hard-charging and almost offensive ads that attacked the iPhone as "feminine."

AdMob Now Seeing 2B Daily Ad Requests

Now that AdMob is part of Google we're not getting the great monthly data and reports that we used to see from the company. But Google has just put out some new data on impression growth. The headline (literally) is that AdMob is seeing 2+ billion ad requests per day (on a global basis).

Here's more: 

  • Ad requests have grown 4X in the past 12 months
  • More than 100 million unique Android and iOS devices requested an ad each month, nearly doubling over the last six months.
  • Nine countries in the AdMob network generated more than a billion monthly ad requests in December 2010, up from just one country a year ago.
  • The strongest regional growth in monthly ad requests over the past year has come from Asia (564%), Western Europe (471%) and Oceania (363%)

Google previously said that it had a $1 billion mobile advertising run rate. I did a quick analysis of how that billion might break down, assuming that mobile ad revenues were distributed along the same lines as paid-search revenue generally speaking.

IDC's revised US mobile ad numbers show Google as totally dominant over the rest of the field in terms of market share.

  • Google: 59%
  • Apple: 8.4%
  • Millennial: 6.8%
  • Yahoo: 5.6% 
  • Microsoft: 4.3%
  • Other: 15.9%

These figures below include search, which is 56% of mobile ad revenue in the US according to the firm. Almost none of the competing mobile ad networks and platforms have search ad revenue, which is why it's so lopsided in Google's favor. Just looking at display the IDC numbers look somewhat more balanced:

  • Google: 19%
  • Apple: 18.8%
  • Millennial: 15.4%
  • Yahoo: 10.1%
  • Jumptap: 8.4%
  • Microsoft: 7.8% 
  • Others (including AOL, Nokia): 20.5%

LBS Apps & Brands: SVNGR & Nissan

Previously I argued that LBS apps are as much about brand engagement as they are about deals/coupons. (Indeed this is where the money is.) Here's another of several examples: the Nissan "Juke the City" promotion using SCVNGR as an engagement tool.

SCVNGR, which just raised a $15 million funding round is being used by Nissan in connection with a sweepstakes to help build awareness of the new car.

According to the company's blog, users with the app (iPhone, Android) check in and complete challenges at locations in several cities (Chicago, Los Angeles, New York or San Francisco) in order to be entered to win a new Juke. There are also lesser prizes involved. 

Picture 6

We'll see more and more smart brands use LBS apps to influence user behavior around new products this year and into the future. It's partly about location but mostly about brand awareness and affinity. And the gaming aspect works perfects in this context. 

Deals are great to drive people into stores and physical locations (and for loyalty). But there's an equally large if not larger opportunity for these LBS firms and brands to work together in clever and creative ways. 

Millennial Media Raises $27.5M Round for Growth, Acquisitions

Millennial Media this morning announced $27.5 million in new funding from Bessemer Venture Partners, Columbia Capital, Charles River Ventures and New Enterprise Associates. This brings total funding of Millennial to over $65 million. 

The company said that it would use the money for growth (especially international), technology investment and targeted acquisitions. Millennial also said that the company grew revenues 3X in 2010 over 2009. That partly reflects Millennial's particular success as well as the mobile ad industry's general revenue growth.

Mobile advertising and marketing growth will accelerate in 2011. Currently the overall number is just under $1 billion in the US. 

IDC's revised its US mobile ad numbers in December. They depict Millennial as the number three mobile display network, after Google (#1) and Apple (#2). Currently Millennial operates in 250 countries globally and says it reaches 85% of the mobile Internet audience in the US (now almost 90 million according to Nielsen). 

Millennial is a future candidate for an IPO but also could be an attractive takeover target as well. However the new funding makes the company more expensive to would-be acquirors. 

See related posts:

JiWire Launches App-like 'Compass' Ads for Mobile Users

JiWire is becoming a more interesting company by the day. It began as a WiFi ad network, showing location and contextually relevant ads to people logging on to WiFi hotspots. A couple of weeks ago the company acquired NearbyNow, which offers mobile app development and local product inventory information, together with a concierge service that allows users to hold products for local in-store pickup.

Today the company launched Compass ads for the iPhone, iPad and laptops. They look like conventional mobile display ads but provide very rich iAd-like functionality. Beyond that they also provide the full capability of NearbyNow's product inventory and in-store pickup service. In other words these ads are highly interactive and operate like mini-apps effectively. 

Below is a set of images of how the ads look on the iPhone, for a fictional campaign. A traditional-looking mobile banner opens a highly interactive app-like ad in which users can interact with content in several ways including browsing product inventory and putting items on hold for local-store pickup:

Picture 62

Launch partners for the ads include Groupon, The Gap, Ritz Camera, HP and Clinique. These ads would allow retailers and brands to send users to local retail stores to purchase products. 

Previously JiWire said that display ads with local ad copy provide a 40% lift vs. generic national ads. And ads with a “local call to action” have shown as much as a 120% lift. JiWire told me that it now reaches 40 million monthly uniques and is continuing to expand distribution. 

Google, Telenav and Navteq have similarly introduced ads that tie into maps and can lead users to a point of sale. This is a huge opportunity in mobile to take brand or product ads and show consumers where they can buy them nearby. The effectively of this type of advertising has already been demonstrated. 

It's now just a question of getting the word out to agencies and media buyers. 

Millennial: Android Share Even with Apple's

Millennial Media's new Mobile Mix devices report shows Android's continuing incremental gains vs. Apple. Perhaps more interesting, it also holds some positive news for Windows Phones as well.

In Millennial's top devices list Apple now occupies the top two positions (with the iPad at 7), while the most prominent BlackBerry device (Curve, formerly #2) fell two spots vs. last month's report. Similarly the Motorola Droid gained two places to now reside at #3. Collectively Android handsets now have greater share on Millennial's network than the iPhone but not iOS devices as a whole. 

The share of smartphones on Millennial's network was actually down 2 points from October (61%). In November Smartphones represented 58% of the devices there. By comparison Nielsen says that smartphones are now 28% of all handsets in the US

The relative share of iPhones vs. Android devices was relatively stable (both with 38% of impressions). They were tied at 37% last month. In the ongoing iPhone vs. Android debate and narrative there are ways to spin these data to show Android now beating the iPhone and vice versa. The takeaways from the report will largely reflect Android's gains. However, yesterday Verizon data came out that showed surprising weakness at the platform's largest carrier-partner. 

Picture 11

 Millennial's devices ranking April, 2010: 

Picture 12

 Picture 10

The data in the chart below show developer intentions regarding platform support in 2011. What's interesting is the relatively high level of enthusiasm (in the abstract) for Windows Phones. Microsoft has not released sales figures suggesting that the platform has underperformed and that sales are less than hoped for. But this is a bit of good news. A strong apps catalog and developer ecosystem is critical for success in the current market -- although Windows Phones de-emphasize the role of apps in the use experience. 

 Picture 8

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. 

Screen shot 2010-12-10 at 11.46.21 AM

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?

Picture 27

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?

Picture 28

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?

Screen shot 2010-09-20 at 5.28.25 AM

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.

Screen shot 2010-12-01 at 5.03.45 AM

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:  

http://farm5.static.flickr.com/4032/5123123931_d0191803ee.jpg

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. 

Screen shot 2010-11-07 at 6.29.53 AMScreen shot 2010-11-07 at 6.30.13 AM

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.