Data And Forecasts

GroundTruth Emerges to Challenge comScore

The mobile analytics segment is starting to mature and rapidly becoming more competitive. M:Metrics has been arguably the strongest player in the segment for the past few years. The company was acquired by comScore in May, 2008. Since that time new players such as Pinch Media and Flurry have arisen, among others, to measure the smartphone apps marketplaces. These two firms merged in December.

But there are a slew of others out there trying to help marketers gauge where to place their mobile ad dollars. Today a company called "GroundTruth," based in Seattle and founded by one of the co-founders of Medio Systems, Michael Libes, emerged from "stealth mode."

According to the release out today:

To date, estimates of Mobile Internet traffic have varied markedly, making decisions difficult for publishers and advertisers.  Publishers have been unable to validate their audiences or use the information to understand their competitors.  Advertisers have struggled to justify media buys or effectively evaluate mobile marketing campaigns.

Ground Truth data comes directly from mobile operators and other data providers to report aggregate mobile data usage, on any visited mobile site.  What the company has found using this superior methodology dispels many commonly held beliefs about how consumers interact with the Mobile Internet. 

The company argues by implication that its analytics are much more accurate than competitors (read: comScore). GroundTruth is getting its data mostly from mobile carriers (probably by paying for it or cutting some sort of barter deal). The company received $2.6 million in venture capital funding to date. And GroundTruth's data set consists of 2.5 million mobile users.

As a teaser GroundTruth put out "Top 10 Mobile Web Sites"* for the first week of 2010 (January 4-10, 2010)
(Ranked by total Page Views)

  1. MySpace
  2. Facebook
  3. Google
  4. Mocospace
  5. FunForMobile
  6. AirG
  7. Yahoo!
  8. Cellufun
  9. Mbuzzy
  10. Myxer

*Not including pages served by operator portals

This is very different, for example, than Nielsen's Top Mobile Sites list for most of 2009:

  1. Google Search
  2. Yahoo! Mail
  3. Gmail
  4. Weather Channel
  5. Facebook
  6. MSN Hotmail
  7. Google Maps
  8. ESPN
  9. AOL Email
  10. CNN News 

Libes told Moconews some other observations about the market, based on its data:

  • Ad mob is/was the largest mobile ad network "by far." Quattro was/is number two
  • Most of the top-10 mobile sites (see list above) are mobile only sites
  • 64% of all mobile page views are for social networks
  • Carrier decks have about 10% of all internet page views

I'm actually skeptical of the top 10 list provided by GroundTruth. I assume this list is "everyone" and not simply smartphones or feature phones. I'm eager to talk to the firm about its methodology.

As popular as MySpace remains, I'm doubtful that it's truly the most visited mobile website. And while Mocospace has been around for some time, I'm also skeptical that it actually ranks as well as the GroundTruth list argues.

Consider the following list from Opera for November, 2009, which is based on actual usage rather than survey data: 

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Regardless, GroundTruth is a potentially strong and direct challenger to comScore (and Nielsen) because of its claims of greater accuracy and methodology based on actual usage and behavior rather than sampling or surveys. 

Google’s Q4 Earnings Call Comments: Mobile

Mobile is one of the areas on Google's Q4 earnings call that received the most attention and interest during the Q&A session. Here are verbatim comments (from the transcript) about mobile. I have grouped all of a particular individual's comments together though they may have been made at different times during the call.

CEO Eric Schmidt:

Everybody knows about the success of Android, our search traffic increased 5 times in the past two years. The Droid and Nexus One show the power of the Android approach. Great devices, multiple partners, great features, [lost] for use cases. Again, a pretty clear success at this point . . .

There the most obvious one in terms of growth rate would be mobile and a lot of that depends on the competitive dynamics of the industry, how successful the new AFMA product from us is, the AdMob acquisition if that comes through. We have a lot of evidence that people are moving to these data friendly mobile devices very, very, very quickly. Our search traffic growth rate is quite a bit faster than on PCs. We expect that to continue. So for lots of reasons 2010 will be a year of significant mobile revenue growth for the whole industry. I am sure we will be able to play a major part of that.

CFO Patrick Pichette:

As we enter 2010 we are very excited about the opportunities our core business, display, mobile and apps and so you should expect us to continue to drive real investment in significant ways in the areas we believe have real long-term opportunities for Google and that will accelerate our pace of innovation.

Product SVP Jonathan Rosenberg:

Personalization is also getting more important and we think mobile is a big part of that. More users both for search and other products are accessing us from mobile devices. With all the capabilities these phones that are coming out have like GPS, cameras, we think there is the potential to actually make this mobile web better than the PC web...

[W]e are starting to see . . . that advertisers are getting better at figuring out what kind of ads work on the mobile devices. The simple addition, for example, of things like including a phone number or an offer is substantially increasing the click through rates and the ROI for the subset of advertisers who are correctly optimizing their mobile campaigns. So we are certainly seeing very strong growth there . . .

I am not going to give specifics on mobile RPMS versus desktop RPMs but I think the main thing we can say is the new formats, the targeting tools and the reporting we are giving the mobile advertisers is making the huge difference. I mentioned Click to Call putting phone numbers in the mobile ads making a difference. Try something like auto insurance on your phone and you will see that the Progressive ad on the phone actually shows the phone number while on the PC it doesn’t. Nikesh gave the Razorfish example in his opening remarks and we are also letting the advertisers target high end devices, specific devices or specific carriers and we have also launched the reporting with analytics to the mobile phones. We are starting to see much improved monetization in general across mobile.

Head of Sales Nikesh Arora:

Finally with the trends that Jonathan mentioned, the penetration of smart phones and other mobile devices our sales teams are continuing to work with advertisers who can reach and target their customers through mobile advertising like never before.

One campaign of specific note was done by Razorfish, an agency partner of ours, who used a targeted mobile campaign to improve conversion rates towards monetary retail clients by approximately 10%. So we continue to see promise in this area.

Finally, regarding Apple specifically . . .

Eric Schmidt:

With respect to Apple it is probably better to say that Apple, I as a former board member have a special spot for Apple in my heart but I will tell you Apple is a very well run company. They have a lot of very good stuff coming. We have a couple of very good partnerships with them and we also compete with them in a couple of areas. My guess is that is a pretty stable situation for awhile . . .

We are not going to speculate on the market share of Apple mobile products. That is for Apple to discuss with you. As far as I can tell our business structures with Apple are quite stable. I am not going to speculate on any deals of any kind, rumored, true, not true, you name it we are not going to talk about it.

Report: 'NetTabs' to Sell Millions This Year

Consulting firm Deloitte contends that ''NetTabs will be purchased by tens of millions of people in 2010." NetTab is an awkward term coined by the firm to refer to the emerging category or tablet or slate computers.

In September last year electronics shopping site Retrevo published the results of a US survey (n=771) that asked about eReader buying intentions:

Planning to buy an eReader this year?

  • 21% yes (Males vs. females: 26% vs. 17%)
  • 79% no

What brand are you going to buy?

  • 62% Amazon Kindle
  • 32% Sony
  • 6% Other 

The Kindle and Sony devices are not Internet access devices at this point. Many new tablets/readers (including the Nook) have been introduced since this survey was conducted. However it's not clear to me that what Deloitte is arguing will come to pass. Much remains to be seen, including whether the Apple Tablet can be a mainstream device and "market maker."

Tablet computers have actually been around for a long time but failed to catch on. The new category of "bigger than a smartphone, more convenient than a netbook or laptop" is what we're talking about here. So far, however, none of the devices introduced are all that exciting (other than the pure eReaders like Kindle). Accordingly there's no indication that the category that Deloitte is talking about will take off -- at the moment. 

Gartner: $6.2 Billion in Mobile Apps in 2010

Gartner is predicting that mobile app downloads will be worth $6.2 this year: 

Consumers will spend $6.2 billion in 2010 in mobile application stores while advertising revenue is expected to generate $0.6 billion worldwide, according to Gartner, Inc. Analysts said mobile application stores will exceed 4.5 billion downloads in 2010, eight out of ten of which will be free to end users.

Gartner forecasts worldwide downloads in mobile application stores to surpass 21.6 billion by 2013. Free downloads will account for 82 per cent of all downloads in 2010, and will account for 87 per cent of downloads in 2013.

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I haven't independently tried to calculate or verify these numbers. However, the paid-free ratio that Garnter uses is relatively conservative; the firm assumes 18% of apps are paid. In 2013 that number goes down to 13% in the Gartner forecast. As another datapoint, there are roughly 6 million iPhone apps now downloaded on a daily basis according to simple math (see Apple Insider). That's more than 2 billion on the iPhone alone annually. 

The lion's share of apps revenue will be on the iPhone; however RIM and Android are a growing component. One variable to consider in all this is that more publishers and developers may shift from apps to mobile Web for several reasons: single "platform" across smartphones, no approvals (in the case of the iPhone). If there's a large developer and publisher shift in that direction it would mean diminished revenues vs. the 2013 Gartner projection.

On the other hand, deeper smartphone penetration could potentially mean more app downloads and revenues accordingly. Nielsen has boldly predicted 50% smartphone penetration in the US by 2011. Those numbers are very aggressive however. Right now we stand at between 15% and 17% smartphones in the US market. 

Apple takes a 30% of all paid apps. 

What's also at stake with the debate surrounding apps vs. mobile Web is the focus and placement of mobile advertising. More apps means more ads in apps. Fewer apps or a weakening apps ecosystem over time would mean more attention and ad revenues would shift to the mobile Web. Of course ads will be in both locations. 

Kids, Mobile Phones and eReaders

Last month Mediamark released survey data on kids with mobile devices as well as demographic data on the 2.1 million owners of eReader devices in the US. Mobile phones are now deeply penetrated in the tween segment and eReaders are for the affluent according to the data, which follow. 

First kids and mobile devices . . .

The data come from the company's "2009 American Kids Study, with approximately 5,000 participants from households included in the Survey of the American Consumer." Here were the top activities among kids on their mobile phones:

  • Call my parents: 88.1%
  • Call friends: 68.1%
  • Emergency Purposes: 55.7%
  • Text Messaging: 54.1%
  • Play Games: 49.0%
  • Take Pictures: 47.8%
  • Listen to music: 34.4%
  • Picture messaging: 24.2%
  • Download ringtones: 16.5%

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eReaders:

Mediamark says there are approximately 2.1 million US adults who own eReaders. The firm said that owners are "more likely than the average adult to be well-educated and have high incomes . . .They are also far more likely to be heavy Internet users." This of course makes sense, given that these are largely luxuries or "frivilous" devices right now. 

Percent More Likely Than Average U.S. Adult to….

  • Have accessed the Internet outside the home via WiFi or wireless connection (in last 30 days): 199%
  • Have household income of $100,000 or more annually: 87%
  • Have accessed the Internet with a cell phone or other mobile device (in last 30 days): 154%
  • Be a Heavy Internet User: 116%
  • Have a Bachelor’s or Post-Graduate Degree: 111%
  • Be between the ages of 35-54: 20%
  • Be male: 16%

According to Mediamark:

At 56.3% of e-reader users, men outnumber women (43.7%).  Adults ages 35-54 are the “sweet spot” for this product, as they are 20% more likely than the average adult to own an e-reader.

These data from from MRI's Fall 2009 Survey of the American Consumer, which is based on 26,000 interviews of US adults. 

Gartner Predicts Mobile Web Beats PC by 2013

Among the many Gartner IT-related predictions the company asserts that mobile Web usage on a global basis will exceed that of the PC by 2013 -- three years from now:

By 2013, mobile phones will overtake PCs as the most common Web access device worldwide. According to Gartner's PC installed base forecast, the total number of PCs in use will reach 1.78 billion units in 2013. By 2013, the combined installed base of smartphones and browser-equipped enhanced phones will exceed 1.82 billion units and will be greater than the installed base for PCs thereafter.

Mobile Web users are typically prepared to make fewer clicks on a website than users accessing sites from a PC. Although a growing number of websites and Web-based applications offer support for small-form-factor mobile devices, many still do not. Websites not optimized for the smaller-screen formats will become a market barrier for their owners — much content and many sites will need to be reformatted/rebuilt.

There's no question this is true in developing countries. However it's unlikely to be the case in the West.

Today there are approximately 198 million Internet users in the US; there are just over 70 million mobile Internet users. It's very likely that number will grow to 100 million at some point this year. Accordingly the mobile Internet audience will be roughly half of the PC Internet in the US. The numbers are probably comparable in Europe.

But the lesson is not whether the Garnter prediction is technically accurate. The lesson and takeaway is: prepare for the mobile Internet today. Because there will be a time relatively soon when a substantial amount of traffic -- if not the majority -- is coming from smartphones and other mobile devices. 

Will Google Turn Away from 700 Million Users?

Google has said that its infrastructure was hacked in an apparent effort to get at Chinese dissidents' GMail accounts. The implication is that the Chinese government was behind the attacks. The company has taken a laudable and very strong stand and said it will no longer comply with Chinese government censorship. It also said that if it cannot operate in an uncensored way going forward it may exit the market entirely. 

According to the Google blog post:

These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

China is the world's largest mobile market with 700 million subscribers, more than twice as large as the US population as a whole. The Internet advertising market in China is less mature than in the US and Europe, but over time it would be worth many billions off dollars. Baidu currently dominates search on PCs with roughly 65% - 80% market share. 

This is a very gutsy move on Google's part. There's no reason to believe the Chinese government will allow Google to operate on an uncensored basis. So that may mean -- if Google is true to its public word here -- that it must say goodbye to the world's largest Internet market. 

Presumably Android handsets would still be available in China (e.g., the Dell Mini 3) but they would likely have to be stripped of Google Search and other services. 

CDC: Almost 22% in US Are Mobile Only

I wrote about this in more detail in December, but it's interesting to see the growth visually depiticed. Here's the US CDC's discussion of the data for 1H 09:

In the first 6 months of 2009, more than one of every five households (22.7%) did not have a landline telephone but did have at least one wireless telephone (Table 1). Approximately 21.1% of all adults--approximately 48 million adults--lived in households with only wireless telephones; 21.3% of all children--nearly 16 million children--lived in households with only wireless telephones.

The percentage of households that are wireless-only has been steadily increasing. The 2.5-percentage-point increase from the last 6 months of 2008 through the first 6 months of 2009 is nearly equivalent to the 2.7-percentage-point increase observed from the first 6 months of 2008 through the last 6 months of 2008. The percentage of households that are wireless-only increased by approximately 5 percentage points in just 12 months, from 17.5% in the first 6 months of 2008 to 22.7% in the first 6 months of 2009.

The percentage of adults living in wireless-only households has also been increasing steadily (see figure). During the first 6 months of 2009, more than one of every five adults lived in wireless-only households. One year before that (i.e., during the first 6 months of 2008), one of every six adults lived in wireless-only households. And 2 years before that (i.e., during the first 6 months of 2006), only 1 of every 10 adults lived in wireless-only households.

 Picture 146

 Given the trend, it's likely that we'll hit 25% at some point in 2010. That's a lot of people.

More Than 50% Using Mobile Phones During Shopping

The survey is from Motorola and TNS International. It was conducted during this past November and December. It had 4,500 respondents. Respondents were from the US, Canada, UK, Germany, France, Italy, Spain, Mexico, Brazil, India and China.

Here are the findings:

  • 64% of consumers between the ages of 18 and 34 used their mobile phones while shopping in the preceding two weeks, and about a third of Baby Boomers, or people over the age of 50, also used cell phones. Across countries and ages, just over 50% did.
  • 39% of shoppers overall were ready to walk away from a purchase if coupons and discounts were unavailable 
  • Use of mobile phones for shopping was highest in Asia, with 78%, and lowest in Canada and the United States, where 45.1% of shoppers did, the survey found.

These are not simply smartphones either. Consumers are doing a range of activities on the phones: looking for price comparison information or reviews, taking photos of products, looking for coupons or deals and so on.

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We've argued for a long time that shopping was one of the "near-term use cases for mobile phones." It's only going to be more so in the future. 

Related: Clients see our recent mobile coupons report

Report: People Using Smartphones for Shopping, Not Buying

Nielsen says that smartphones are now 15% of the US handset market, while Forrester says it's 17%. Our data from 2009 show 15% as well. Previously Nielsen argued that smartphones would cross the 50% threshold by 2011. That's still optimistic I believe but they're grabbing a larger and larger share of handsets.

We know from our research and that of others that people are very enaged with their smartphone devices. Now Compete Inc has released some data from its Q3 2009 smartphone survey about shopping and "m-commerce" on these devices. Here are the top-level bullets:

  • 37% of smartphone owners have purchased something non-mobile with their handset in the past 6 months.
  • 19% of total smartphone owners have purchased music from their device, 14% have purchased books, DVDs, or video games and 12% have purchased movie tickets.
  • 41% of iPhone users and 43% of Android users are most likely to check sale prices at alternative locations from their mobile phones while they are shopping.
  • The second most likely activity is accessing consumer reviews, with 39% of iPhone owners and 31% of Android owners investigating reviews from their handset before they purchase.

Picture 115

The slide able suggests that people aren't willing to spend more than token amounts of money via smartphone purchases. This will change as people come to see the Internet on their smart devices as comparable to e-commerce online. However, most purchases do not occur online; they take place in stores. However the Internet influences those purchases. 

Picture 117

The smartphone is a bridge between the PC Internet and the larger physical world.

Much of the behavior in the slide immediately above is the same or substantially the same as what exists online today. The difference with smartphones is that people have them when they're standing directly in front of an item in a store. Accordingly people are looking for reviews, competitive price information, and coupons about products they want to buy. They're also trying to find stores and stores where they can pick up those products.

Finally here's the strategic takeaway:

8% of smartphone owners that tried to purchase a product on their device were unable to do so. 45% of those that abandoned the process reported that they did so because the site would not load, and an additional 38% left the site because it was not developed specifically for smartphone users.

So despite the webkit browsers that can render full websites, you still need a smartphone-optimized mobile website (or an app or both) for optimal user engagement, especially if you're trying to sell things. 

Mobile Web Usage Jumps 110% in 2009

In a banner day for the mobile Internet that included noteworthy announcements from both Apple and Google, a newly released Quantcast report details the explosive growth of the mobile Web in the last year.

While growing mobile Web usage is to be expected, the numbers are significant and today's announcements underscore the dramatic battle for market share that's sure be had in the coming year.

Among the highlights in the report:

  • North American mobile web share up 110% in 2009 (Dec ’09 vs. Dec ’08)
  • Global mobile web consumption share up 148% in 2009
  • Apple continues to dominate, though market share has declined as increased competition emerges
  • Android supports over 12% of North American mobile web pageviews, overtaking RIM’s Blackberry
  • Motorola’s Android based Droid is the most impressive market entry since the iPhone and is largely responsible for a 10x improvement in Motorola’s North American mobile web share
  • Apple, Nintendo, Motorola and HTC saw the largest ‘stocking stuffer’ bounce this past holiday season
  • Pre-launch web visibility points to a wide variety of new devices from Motorola, HTC, Blackberry and others in 2010

A snapshot below shows the steep rise in mobile Web consumption over the past three years.

Nielsen's Top Handsets, Brands and Mobile Sites for 2009

We reported on this earlier but Nielsen has released its year-end mobile lists: handsets, brands and top sites accessed via mobile devices. It's not entirely clear what the distinction between a "site" and a "brand" is in this set of rankings but below are the charts.

 Picture 140

Compare the top Nielsen sites (for 2009) with Opera's top sites for November. There's overlap but the lists are also different, Presumably the Nielsen data capture iPhone, Android and a somewhat broader spectrum of device usage than the Opera data: 

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And finally, the top handsets for the year: 

Picture 139

Opera State of Mobile Web for November

This month Opera is focusing on Africa. I'm not going to elaborate on the findings there except to point out that Opera says:

Facebook has taken the lead in Africa; it is the most popular site visited by Opera Mini users in 6 out of 10 countries and the #2 site in three of the countries where it is not #1. Google is also very popular, and is ahead of Facebook in a few of the top 10 African countries. Yahoo and Wikipedia are also ubiquitous in the top 10 lists of the various African countries.

Here are the top lists for the US, UK and China:

Picture 132

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As with all other such data (e.g., from AdMob, Millennial Media) it's important to note that these data are from handsets where Opera Mini is installed and not necessarily representative of the mobile Internet as a whole. However these data are going to be broadly consistent with trends among other users.

Smartphone Owners: Device One of Three Top Media Products They Own

Deloitte conducted its "State of the Media Democracy survey" this past September. Just over 2,000 responses were collected from the online survey. Respondents were between 14 and 75 and reside in the US.

It was a very broad survey about media usage and attitudes. Here are the mobile-related findings:

  • 47% of smartphone owners identify the device as "one of their three most valuable media and entertainment products" -- a significant increase from 20% last year
  • 30% of surveyed consumers use their mobile phone as an entertainment device
  • 48% have data plans for their mobile phones
  • 42% are using their phones to access the Internet.
  • 15% of consumers already purchasing products on their phone.

According to the survey these were the most popular mobile activities:

  1. text messaging (72%)
  2. accessing the Internet (42%)
  3. online search (30%)
  4. downloading applications (27%)
  5. using GPS (26%)

Android Way Up in November AdMob Report

The latest mobile metrics report from AdMob shows the growth of Android devices and the increase in WiFi mobile Internet access. It also shows where in the world the now almost 80 million iPhone OS devices reside. Here are the top-level data and some of the familiar charts:

  • In the US, smartphones generated 48% of mobile Web and application traffic  . . . up from 30% a year ago.
  • The percentage of requests over WiFi in the US tripled in the past year . . .
  • 50% of the unique iPhone and iPod touch devices that requested at least one ad from AdMob in November 2009 were located in the US . . .
  • Japan, France, and Australia were the fastest growing of the Top 10 countries for Apple devices in 2009 . . . 
  • The growth of traffic from Android devices has been fueled by the release of new devices . . . 

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Finally, in the US market  -- at least on the AdMob network -- it's really shaping up to be a contest between the iPhone, Android and RIM; the other operating systems are really shrinking or being squeezed out. 

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All of these data are qualified by the fact that this is a reflection of AdMob's network and not the "mobile Internet" as a whole; however the trends are going to be consistent with the broader mobile Internet.

US CDC: 64 Million in US Now Wireless Only

The US Center for Disease control has been tracking the number of households (and related demographics) that have landlines, mobile phones or a combination of mobile and landlines. As of the first half of this year:

More than one of every five American homes (22.7%) had only wireless telephones (also known as cellular telephones, cell phones, or mobile phones) during the first half of 2009--an increase of 2.5 percentage points since the second half of 2008. In addition, one of every seven American homes (14.7%) had a landline yet received all or almost all calls on wireless telephones.

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If almost 23% are mobile only and 14% mostly use their mobile phones -- the landline is like a "spam catcher," as Dan Miller likes to say -- then 37% of US households should be considered mobile-centric, where the mobile device is the only or primary means of phone communication. According to the CDC here is the demographic breakdown:

  • 18-24 years: 37.6%
  • 25-29 years: 45.8%
  • 30-34 years: 33.5%
  • 35-44 years: 21.5%
  • 45-64 years: 12.8%
  • 65 years and over: 5.4%

It shows how people under 45 are becoming more and more mobile centric. This has implications for all kinds of things, including of course advertising.

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According to the US Census Bureau, there are roughly 113 million US households against 304 million people, or 2.6 people on average per household. Twenty-two percent of these numbers equals about 64 million people with mobile only service and 109 million in this larger group I'm calling mobile-centric.

Predictions: JumpTap, MMA & Juniper

I'm not going to keep doing this for the next week or so, but here are JumpTap's and the MMA's predictions for next year:

JumpTap:

  1. Doubleclick and Atlas launch integrated post click tracking for advertisers
  2. Mobile Video takes off
  3. Mobile Search gains steam
  4. Targeting becomes the key differentiator for mobile ad networks
  5. First mobile cross media study is published showing incremental unique audience and brand effects of adding mobile advertising
  6. Android is the new black…or at least the iPhone for 2010
  7. Government takes a position on privacy
  8. Carriers take a more active role in response to Google’s anticipated moves with Nexus One
  9. Microsoft, Oracle, Yahoo, and Apple each acquire a pure play mobile adnetwork
  10. Carrier, behavioral, location and contextual data go mainstream

Juniper Research:

  1. Mobile data traffic will put strain on 3G networks
  2. The mobile ecosystem will start to go green
  3. Mobile to head for the cloud
  4. New category of smartbooks to emerge
  5. App stores all around
  6. Mobile social networking to integrate with other applications including m-commerce
  7. NFC (RFID) phones appear in the shops
  8. At least 10 LTE networks will be launched into service
  9. Smartphones to get augmented reality makeover
  10. Holiday Kindle sales expected to herald the rise of the connected embedded consumer devices

MMA (verbatim):

10. Hypochondriac? We've got an app for that!

Ongoing global pandemics and concerns about socialized healthcare warrant a prescription for mobile content geared toward the sick and the paranoid. Symptoms to watch for include apps that diagnose, doctors that text and medical reminders at hand. Mobile health is just what the doctor ordered!

9. Back to Reality...

Oh, those boring old coupons - they get lost, forgotten, left behind or expired. Look for augmented reality to start playing a larger role in location-based advertising. Now, when you're walking into your favorite coffee shop, the real-time mobile coupon you receive gives you instant gratification with your discounted daily grind.

8. I want my Mobile TV.

In the coming year, both the 2010 Winter Olympics and the 2010 World Cup will heighten mobile video consumption. The introduction of new ad units, including interactive and partial screen, will subsidize free content.

7. Practice Safe Text

Governments and safety advocates around the world warned against texting and driving in 2009. We expect 2010 to bring about technology solutions that disable handset features when the owner is driving.

6. A guy walks into a Barcode...

Proliferation of standardized technology and higher quality camera phones will not only lead to increased adoption of mobile barcodes and coupons, but will also offer a whole new access point to content.

5. Have you hugged your aggregator lately?

Look for aggregators to expand their businesses beyond shortcodes. Aggregation services in the areas of location, customer service and mobile commerce will begin to emerge.

4. Turn free in 1.2 miles

Free is a very good price. We're keeping an eye out for no-cost turn-by-turn navigation applications rolling out on more devices in 2010. The end of stand-alone GPS is in sight. What great news for consumers...and McDonalds, Dunkin Donuts and Dairy Queen.

3. Your Skype is Showing

Services that enable video conferencing and the networks and handsets that support it (like cameras on the front of the phone!) will proliferate in the coming year. More consumers will connect via WiFi, offloading traditional non-wireless video conferencing services.

2. How does mobile measure up?

Moving into 2010 and beyond, campaign effectiveness will be measured in a variety of different and very creative ways. The number of eyeballs, shakes and finger swipes. The number of blogs, articles, tweets and diggs. The number of acquisitions, conversions, calls, responses or purchases. Total basket size, consumer recall, loyalty and recommendations. Check-ins on foursquare and check-outs on Amazon.

1. Mobile's Sixth Sense

Over the past few years, the mobile device has moved beyond standard technology inputs. We're no longer talking, typing and clicking. Now, we're photographing, recording, touching, locating, shaking, accelerating and blowing. What's next? We're rooting for smell recognition.

Morgan: Mobile Internet to Be 2X the PC Internet

Morgan Stanley's Mary Meeker gave a mobile-centric Web 2.0 conference presentation that everyone was talking about several months ago. From our point of view there wasn't anything particularly new in her remarks but she put everything together into historical context. And the crowd there, which may not have seen mobile as "distruptive," was paying attention.

Now comes hundreds of pages and slides that everyone can download here

  1. “The Mobile Internet Report Setup” – a 92-slide presentation that excerpts highlights of the key themes from the report.
  2. “The Mobile Internet Report Key Themes” – a 659-slide presentation that drills down on thoughts covered in “The Mobile Internet Report.”
  3. “The Mobile Internet Report” – a 424 page report which explores 8 major themes in depth and includes the two aforementioned slide presentations + related overview text.

There's a ton of data and projections in these documents. Read them over the holiday or before bedtime. Perhaps the most interesting part (I haven't been through everything) is the historical analysis that talks about previous disruption cycles and predicts winners and losers in the future accordingly. 

The big themes are that the mobile Internet will be "at least" 2X the size of the PC Internet and that the whole thing is "ramping" much faster than the desktop did. The latter point we've made many times in the past. 

We are clearly in a kind of double-transition period: traditional media are contending with the fruits of massive consumer Internet adoption but the transition to mobile is happening simultaneously and perhaps a bit obscured as a result. But just as the Internet is "disruptive" of traditional media, mobile is also potentially disruptive of aspects of the Internet. Google has seen that perhaps better than any of its competitors and moved very aggressively as a result.

Many companies, analyst firms and media outlets tend to focus on ad revenues as a measure of whether a medium has "arrived." For example, many of the articles and even forecasts about mobile ad revenues tend to talk about how small they are relative to traditional Internet advertising. And when, oh when, will it be "the year of mobile"?

Dude this year already was. We're here. 

Whether ad networks and publishers can efficiently and effectively monetize the mobile Internet is not going to matter to consumers -- not going to matter. Consumers will be using the mobile Internet more and more and as a primary access point in an increasing number of situations. It will be preferred in a large number of cases. 

The smartphone is going to become "the remote control for your life," in the way that the iPhone or iPod Touch can literally become a remote control device for TV. People will want to access content that they've researched, saved, collected online (i.e., in the cloud) from the mobile device. But the future is not just about phones; it's about myriad mobile devices and Internet access points in the world against near-ubiquitous connectivity. 

The mobile Internet -- from a consumer perspective -- will get larger and larger. Ad revenues will come but consumers are way ahead. Millennial Media predicted that we'd see 100 million mobile Internet users in the US next year. I think that's nearly a slam dunk prediction. Frequency is another matter of course but it too will go up over time. Voice search on my handset may mean that I do as many or more searches there than on my PC.

I'm sitting on the couch and I want to know the answer to trivia question X. Do I get up and go into the other room? No, I take out the smartphone and speak the query: "Who was the 17th president of the US?" Done. Now back to the movie. 

Advertisers, agencies and publishers ignore the mobile Internet at their own peril.

If you thought that the PC Internet gave people control over which ads they consumed, you ain't seen nothing yet. Less inventory and consumer ambivalence about ads on their handsets means that advertising will really need to turn into "content" or be so viral or targeted that people will be motivated to respond. This despite the fact that mobile response rates are much higher than on the PC.

That's a bit of a paradox, I realize. 

Picture 139

Source: Morgan Stanely research

Out Come the 2010 Predictions

Predictions: they're unavoidable PR products this time of year, a ritual that is almost compulsory now. Mobile Marketer has rounded up a number of predictions in a new article. Some of those are from Millennial Media, which released its set independently.

Here's the Millennial Media list:

  1. The US mobile web will reach nearly 100 million unique per month in 2010
  2. Advertisers invest significantly in site and application mobile destinations
  3. New entrants to the mobile market emerge
  4. Location x relevancy x immediacy = mobile triple play in 2010
  5. Advertisers will increasingly buy audiences over buying media properties
  6. Mobile will be called to task on privacy
  7. Mobile retail activity and commerce proliferates
  8. Demand will exceed supply in some areas; supply will exceed demand in others
  9. Competition (vs. Apple) in the application space increases (Android, RIM)
  10. Agencies demand frequency capping & share of voice

Here's what we agree with among the above:

  • 100 million uniques at some point in 2010 -- yes
  • Advertisers spend more on mobile -- yes
  • Buying audiences vs. properties -- yes (this is increasingly true online too)
  • Retail is a big category for mobile marketing -- yes
  • More apps for non-Apple platforms -- clearly yes; Android has now reached 20K apps.  

Privacy may become a significant issue for mobile in 2010 as it has online this year. One of the predictions in the Mobile Marketer piece is that the carriers open up location this coming year to third parties. That's likely to be the case; increasingly cast in the "dumb pipe" role they need to find ways to make themselves relevant to advertisers, ad networks and consumers.

Stepping back, two broad things are important to point out:

  • 2009 was the long-awaited "year of mobile" for consumers. The mobile Internet became credible and visible this year; advertisers always lag consumer adoption
  • Mobile is going to be much more important than people now realize; it will become the primary Internet access vehicle for increasing numbers of people over time. But mobile and the PC Internet are joined and must be considered together. 

Along the lines of the latter point, as has been repeated many times before, mobile is not a stand-alone marketing strategy. It must be considered in the larger context of an overall campaign. And all publishers (and increasingly brands) must have a mobile strategy in 2010 -- but be thoughtful about it.

I would also argue that online and mobile media buying will become much more integrated in the coming year to reduce barriers to mobile advertising and provide combined reach to marketers. Mobclix's deal with Advertising.com is a leading indicator of what's to come.

The mobile handset is a "bridge" between the digital and physical worlds and location matters -- a lot. But "local" is not the alpha and omega of the mobile experience. People do all sorts of things on their handsets that have nothing to do with where they are right now. However to realize the "location x relevancy x immediacy" opportunity argued above, dynamic ad creative will need to become more widely used (see Google-Teracent). 

Social media and communication between people is also a central part of the mobile experience that wasn't really discussed in the predictions above. Local + mobile + social will be widespread in 2010. Voice search and voice control of handset functions will become more central to the user experience. 

Finally augmented reality; here's what the Mobile Marketer piece says:

Augmented reality will likely gain traction in 2010, but will remain a bell and whistle compared to list and map view.

1020 Placecast believes that 2010 will be the year that this exciting technology begins to be adopted on mobile phones . . .

Expect to see retailers and entertainment companies trying out ways of showcasing their brands with this niche, but exciting new technology. Although augmented reality will appear in more applications, consumers will still prefer the list and map versions to search results on a usage basis.

I would say something slightly different. It's not going to be the list or map vs. the floating Twitter posts. Augmented Reality's use cases have already started to emerge and the "more information about what's in front of me" scenario is what will stick for AR in the near term.

AR "browsers" won't replace conventional search or be widely adopted, but the ability to gain more information through the camera or by taking a picture of an object (e.g., Amazon-SnapTell, Google Goggles) will become more commonplace as part of a larger application or experience. I won't scan the street with my camera to get reviews about the restaurants in Times Square. But I will get more information about a painting, a building or a product using the camera. I might stand in front of a restaurant to see if there's a deal or discount via AR. (Related to this is QR codes, which may become more widespread in the US in 2010.)

Augmented reality in the form of "visual search" is right now the most provocative area for mobile development in my opinion. Voice is perhaps more mundane but very important for the advancement of the mobile user experience. 

___

Update: Neglected to mention tablets will continue to proliferate but may not have an impact until 2011. 

Nielsen: iPhone Most Popular Handset in US

According to Nielsen, last year the top US mobile handsets list looked like this (the % numbers are "embedded subscriber base"):

  1. Motorola RAZR V3 series (V3, V3c, V3m, V3i, V3i DG, V3)    9.3%
  2. Motorola MotoKRZR series (K1m, K1)    2.0%
  3. LG VX8300 series    1.6%
  4. Apple iPhone    1.5%
  5. LG VX8500 series (Chocolate, VX8500, VX8550)    1.2%
  6. RIM BlackBerry 8100 series (Pearl,8110, 8120, 8129)    1.2%
  7. Nokia 6101 series (6101, 6102, 6102i)    1.1%
  8. LG VX8350    1.0%
  9. Motorola V325 series (V325, V323, V325i, V323i)    0.9%
  10. Nokia 6010 series    0.9% 

In 2009 (through Q3) the list has changed, with the iPhone now moving into first position:

Picture 71
Significantly, Nokia, which had two handsets on the list, is gone entirely and there isn't a Windows Phone present either. Of course, neither is there an Android handset but I would imagine that we'll see one or two Android handsets at least next year. Palm isn't there and isn't likely to be next year either.

Nokia is probably done in the US, as I've argued. The real question is whether Microsoft will have phones on this list next year. If not it will be panic time in Redmond.