The IAB held its mobile conference on July 13 in New York and here are Mark Mahaney's (director of Internet Research for Citi) takeaways:
Comments: much of the CPM inventory may be converting to CPC in a land grab by several of the ad networks, exerting downward price pressure. The Compete numbers re search and social networking are high in our view. Frequency and engagement vary dramatically and are obviously highest on smartphones.
Regarding the Dynamic Logic study, Insight Express has data that mirror those results.
Google CEO Eric Schmidt:
In mobile and android, another area of innovation in new businesses, mobile devices are becoming an extension of the Internet. We all know this. And more and more Google searches are coming from mobile phones of all kinds. So we are focusing to innovate in this space. So for example, we’ve done great news with Android, with somewhere between 18 and 20 Android powered phones on the market by the end of the year, which is phenomenal.
Product SVP Jonathan Rosenberg:
We also run product development by encouraging teams to make big product bets on key technical insights. We believe that our most innovative products historically, if you consider say search, maps, Gmail, news and Chrome, all of them are based on technical breakthroughs, or BETS. Recently we’ve become bullish on a new emerging standard called HTML 5 and it’s helping to make the web the platform for very powerful and rich applications. It’s especially important in mobile where the high-end phones with very rich browsers are becoming the norm.
And this quarter, we launched mobile versions of Gmail and mobile web maps that run in the browser using HTML 5. Their performance really is remarkable.
We believe that the runway to innovate due to the power of computers on these mobile devices is nearly unbounded at the moment. We are also making another technical bet with Google Chrome OS. A whole new generation of web-based apps demand a much better, faster user experience and once you have all your stuff online, you ought to be able to just open up your computer and get there in a matter of seconds.
We are also innovating and driving monetization with mobile and YouTube as well. Mobile monetization picked up a good bit of momentum as search traffic grew, again driven mostly by the smartphones. And we’re seeing that users on these high-end phones are very active and engaged beyond search, so display advertising on those phones is actually emerging as an interesting mechanism.
From the Q&A portion of the call:
Schmidt (on mobile ads):
On the mobile search side, one of the key things we’ve done in the last few months is we’ve started to show the desktop ads. It turns out that the separate mobile ads have their own formats. Typically there wasn’t enough demand, there weren’t enough kind of creatives and so forth. So we started showing the desktop ads on the mobile browsers of high quality and these of course include the iPhone and the Android phone and anything that’s a web-kit inspired browser.
All of a sudden we started seeing a tremendous number of searches and also very good click through rates. So they monetize at a similar level, if they are desktop-based because of course they are in the same auction.
It makes sense over time that those ads should perform better than on PCs because on a mobile device, we know more about the person and we could have an even more targeted ad but we don’t do that today.
Rosenberg (on mobile cannibalizing PC search traffic):
I don’t think there really is a cannibalization dynamic. We see that mobile searches tend to complement desktop volume. Mobile goes up when people are away from their desk, so weekend tends to be higher for mobile traffic. And of course, the reverse is true for the desk top.
Mobile ad network Millennial Media's May scorecard showed the Samsung Instinct as the top device on the company's network, which I found strange. The June report shows that the iPhone has overtaken it as the top device, which brings this data more in line with other sources in the market (e.g., AdMob).
In addition the data reflect that the entertainment vertical, especially movie studies promoting their films, is the top advertiser segment by ad spend.
Here's the company's chart of mobile ad campaign averages and stats:
Most marketers doing business with Millennial are using mobile landing pages, as opposed to simply directing people to a company site. This stands in contrast with Google's mobile display strategy and approach, where ads send users to PC sites under the assumption that the browser (iPhone, Android) will provide a good experience.
According to a new joint Universal McCann-AOL study one out of every seven minutes of media consumption time is happening on mobile devices. The study was written up in AdWeek. Here are the findings:
80% of smartphone users expressed satisfaction about the quality of the Internet on their mobile devices
Why/where they use mobile:
The cross platform platform:
Acceptance of advertising:
These findings are based on a US consumer survey conducted in Q4 08 and Q1 09 among 1,800 US mobile subscribers.
What this and other studies show is that mobile is a more versatile platform and vehicle for consumers and marketers. And for smartphone users it's becoming a kind of "everything" media device.
In the world of data and forecasting the "base" one uses is important. For example I've said, given our consumer research, that "27% of mobile users access the Internet on their phones." But what is that 27% in real terms; 27% of what larger number?
Assuming one can extrapolate from that data point or any piece of data to all mobile users in the US, the numbers are huge -- because there are so many mobile phone owners. The CTIA wireless trade association says there are 270 million mobile phone subscribers in the US. The total population of the United States is just over 304 million according to the US Census Bureau.
If the CTIA numbers are correct it means that about 89% of the US population owns a mobile phone. For comparison purposes only about 63% of the US is on the Internet (per comScore's data). The following, recently released Marist Poll data basically support the accuacy of the CTIA figure but also add some color based on age, income, regional differences and employment status:
Those under 45, making more than $50,000 in the Northeast and the South are the categories with the highest penetration of mobile phone ownership. I don't have access to the raw data but it would be interesting to see handset ownership by type (smartphone vs. feature phones), data plan subscriptions and mobie Internet access. Data plan subscriptions are correlated with handsets and income (but generally skew older).
The Marist Poll (n=1,128 US adults over 18) was conducted by telephone in March, 2009. It claims to be representative of the population in each region.
Best Buy Mobile commissioned GfK Roper to conduct a telephone survey (n=1,000) about Americans' mobile usage behavior and buying intentions surrounding smartphones. Poll respondents were equally split among men and women. All were over 18. Here are some of the data:
Other reasons inhibiting smartphone purchases among the survey respondents:
Comment: there were no brands or models mentioned in the press release. My guess is that there's lots of brand recognition around the iPhone and maybe BlackBerry and the confusion starts thereafter. I suspect those data are somewhere in the mix but just not among what was publicly released.
This is the significant finding among those above: 64% of Americans say they do not own a smartphone because they believe the devices are too expensive. This is what we've repeatedly seen in our data.
Additional findings, among smartphone owners:
SMS attitudes and usage:
In our most recent consumer survey data report we found that 20% of respondents who did not own smartphones were intending to buy one within the next 12 months.
I'm sure at this point you've read how reports of Michael Jackson's death drove huge traffic to places like Yahoo! News; and how Google initially thought the search volumes focused on Jackson were part of some automated attack:
The spike in searches related to Michael Jackson was so big that Google News initially mistook it for an automated attack. As a result, for about 25 minutes yesterday, when some people searched Google News they saw a "We're sorry" page before finding the articles they were looking for.
Google also said that the company saw large mobile search volumes:
People who weren’t near a computer yesterday turned to their mobile phones to check on breaking news. We saw one of the largest mobile search spikes we’ve ever seen, with 5 of the top 20 searches about the Moonwalker.
SMS-based search provider kgb reportedly saw big volumes of queries too according to the NY Times:
A spokesman for kgb said that since the first reports of Mr. Jackson’s hospitalization and death, the paid service — available by texting kgbkgb (or 542542) — has fielded more than 10,000 questions.
Each submitted question represents $.99 in revenue for the premium SMS service. Ad-supported voice/SMS mobile search service ChaCha apparently also saw considerable Jackson-related queries.
Many consumer surveys reveal the essential value that consumers place on their mobile phones -- Pew found that consumers would give up the PC Internet before their handsets. However, mobile data/Internet doesn't enjoy that same level of importance in consumers' minds, according to a new survey from Strategy Analytics. At least that's true in the context of financial pressure and the hypothetical need to reduce household expenses.
The firm conducted a survey of 1,110 US "household decision makers regarding their multiplay spending intentions over the next year, the impact of the economy on household entertainment purchases, and the relative importance of each component of the so-called multiplay 'bundle' (broadband, digital television, fixed voice, mobile voice and mobile data)."
Here's the question:
Imagine that, due to household budgetary constraints, you have to reduce home entertainment /communications services expenses. How would this affect your spending on:
In other words, almost 50% said that given the need to reduce expenses they would drop mobile data services entirely. That compares with just 10% saying they'd drop the PC Internet.
What would be interesting to discover is whether there were any smarphone/iPhone users here and how their results compared with the averages. My guess is that you'd see more of them reluctant to drop mobile data.
In addition if you surveyed a broader age group -- household decision makers are parents/older adults -- you'd also probably find younger users willing to drop mobile voice before their SMS/data plans because they text a great deal more than they talk on mobile phones.
Opera Software released its "State of the Mobile Web" report for May. The report places an emphasis on trends in Southeast Asia: "Growth rates in Southeast Asia remain high: Vietnam leads the top 9 countries with 412.9% growth in users this year, followed by the Philippines (353.6% growth) and Malaysia (249.6% growth)." However it also presents data for the range of coutries in North America and Europe that have Opera users.
Remember this is not the entire mobile Internet, nor does it represent a true view of smartphone users (other than perhaps on BlackBerry, which has a poor browser currently). Rather these data are from handsets where users have downloaded and installed the Opera browser. They offer a view of a different segment of mobile users than we're used to hearing about, given the industry's focus on smartphones -- which remain in the minority.
Here are some of the data for the US and UK:
Note the "average number of search portal page-views" in the data: 35.7 for the US, 21.4 for the UK. This is not necessarily eqivalent to query volume per user but it's probably directionally eqivalent. These numbers are much higher than 2008 "official" averages (per Nielsen) of 8 searches per user. Our data also show much higher volumes, though not quite as high as the Opera numbers suggest.
Speaking in Cannes, France Scott Howe, VP of the Advertiser and Publisher Solutions Group at Microsoft, said that he believed mobile advertising "will account for 5-10 percent of global media ad spending within five years." That's quite a bullish prediction but we like it.
Microsoft also recently announced that Hyatt is the inaugural client for its mobile partnership with Verizon. Here's a screen showing one of the Hyatt ads:
Here are some Bing-Verizon screens (Bing is now the default search provider on Verizon). This is mobile Web.
Yellowpages.com (AT&T), as Microsoft's partner, is a huge beneficiary of the deal and is the sole (current) provider of local ads:
We're waiting for a rebranded and updated version of the Live Search client, which was very useful and effective but under-appreciated. This time around it will likely get more attention, given that Bing is having some initial consumer success and as part of the multi-million dollar Bing ad campaign. It will also probably offer an improved user interface/experience as well.
There have been a flurry of announcements and activity surrounding mobile payments recently (i.e., Boku, Zong, Obopay, Visa + NeuStar, etc.). It's a segment that's gaining steam in the US and EU and already fairly well established in certain developing countries. Yet a recent online poll (n=1,800) conducted in May by Harris Interactive for messaging security firm Cloudmark found that a solid majority of Americans (2/3) are concerned about security on their mobile devices -- and these fears are potentially inhibiting them from conducting certain kinds of activities, namely financial transactions.
In addition, the poll found, "mobile spam is impacting a significant portion of wireless customers, with 44 percent of owners reporting that they have received mobile spam." Among the 44% of survey respondents who say they've received spam on their phones, this is what they report about it:
As text-based spam grows it poses a threat to the efficacy of SMS marketing. Here are some of the data from the rest of the survey about security fears:
On the flip side there are a healthy number of people who've "ever sent confidential information" through their phones. And one might also argue that this is like the early days of e-commerce, where people expressed (and still express) some of these same security concerns. However for most people those fears have been overcome. Therefore, of the two issues explored in the survey, spam and security, spam is the bigger issue and long-term threat, in my view.
Related: GSMA launches mobile money exchange community.
A survey of 600 US netbook owners by NPD in April and May found very mixed reactions and satisfaction levels. According to the survey:
People are primarily responding to the lower pricing of netbooks, it would appear, rather than their portability. The now widespread presence of netbooks places the entire PC OEM industry in something of a difficult spot. If these findings are representative of the larger population, sales may slow -- netbooks have been a bright spot in PC hardware sales -- but consumers won't want to "go back" to paying considerably more for conventional laptops.
It appears to be a matter however of setting the right expectations of consumers, who largely seem to be believe they're getting full notebook memory and functionality in simply a smaller (and cheaper) package.
In our recent consumer survey, we asked people in the abstract if they would rather have a smartphone or netbook if the costs were equal:
“If the costs were the same, would you rather have a smartphone or a netbook as your mobile Internet device?”
LMS/Opus (question n=352; survey n=611)
Having spent some time with it, I can tell you that the Samsung Instinct is a vastly inferior phone to the iPhone. However, according to Millennial Media's Mobile Advertising Scorecard for May, "the Instinct replaced the iPhone as #1 on the list of the Top 20 Mobile Phones across our network."
This created something of a mystery in my mind because it's inconsistent with most other data in the market.
The following chart shows the hierarcy of devices across the Millenial network:
The traffic above doesn't include iPod Touch devices. Although the Instinct has sold reasonably well for Sprint, it has not sold numbers that approach the iPhone. How then do we explain this result?
Like all mobile platforms and providers putting metrics into the marketplace, these data are based on activity on Millennial's own network. AdMob's data are based on traffic it sees on its network and Opera's data are drawn from the Opera Mobile and Mini browsers. While they may be reflective of trends across the mobile Internet, they're not an "objective" view of the marketplace.
The answer to how the Samsung Instinct beats the iPhone lies in a closer examination of Millennial's network itself, which over-represents Sprint traffic vs. AT&T and other carriers relative to their actual shares in the US market.
If there are 270 million wireless subscribers in the US this is how the numbers break out on a percentage basis (numbers are approximate):
However the traffic distribution on Millennial's network's is as follows:
In terms of the mobile Internet, until the Palm Pre the Instinct was the most user friendly Sprint device and the one driving the highest engagement among Sprint users. But as you can see from the comparison, AT&T is considerably under-represented (not counting WiFi) and Sprint is somewhat over-represented on Millennial's network.
It's likely that Sprint users who want a smartphone and wish to remain with Sprint will opt for the Pre, which supersedes the Instinct in almost every respect.
Parks Associates released its mobile ad forecast, which predicts that mobile advertising revenues will reach $1.5 billion in the US and Canada by 2013. Those dollars are mostly going to be US based because of the relatively small size of the Canadian market. The IAB recently said that in 2007 Canadian mobile ad revenues were $2.7 million.
The Parks forecast reportedly includes apps, SMS, search, display and video. Our previous mobile ad forecast, which is being substantially refined, predicted ad revenues of $2.3 billion in North America by 2012.
Parks also estimated that there were 62 million smartphone users in North America in 2008, with user penetration to reach 239 million in 2013. If the combined mobile user population of the US and Canada is roughly 290 million, 62 million smartphones would represent just over 21% of the current market. That number is about 7 points too high. Smartphones are selling well and represent a key growth driver of mobile Internet adoption, but the number is closer to 14% of the market.
AdMob and comScore just put out results of a study (n=7,300 US mobile users over 13) that contains a lot of interesting demographic and behavioral data about the similarities and differences between iPod Touch and iPhone users. However, by far the most important finding of the study -- consistent with what we've been arguing around here -- is that 40% of those users are going online more often on those mobile devices than through a PC (see graphic below).
While this is self-reported data, it points toward a near-term future when growing numbers people use their smartphones as primary and their PCs as secondary ways to access the Internet. (See also, here and here for more confirmation of this.) This phenomenon is already true in many developing nations, where mobile phones are outstripping PCs for Internet access -- and where search volumes on mobile devices are approaching or exceeding the PC accordingly.
That single 40% data point alone is the answer to the "why" question of mobile marketing -- not the "4 billion phones vs. 1 billion PCs" statement that one often hears in the first couple slides of a presentation. Another striking finding: "5 in 10 consumers on both iPhone and iPod touch devices use the mobile Web more frequently than they read printed newspapers." Indeed, we just posted "Smartphones are the new print."
Below are slides showing the percentage of iPhone/iPod Touch users who use mobile more than the identified medium:
One could argue that the smartphone is the everything media device: a newspaper, magazine, TV, radio, PC rolled into one. But wait, there's more . . .
And now for the demographic information (verbatim from the release):
The conventional belief about mobile phone and Internet users is that they're younger. Perhaps true as a broad generalization, it's not true for BlackBerry and the iPhone where data plans are costly and/or the devices come through the company or are used for work. Older demographics abound.
Indeed at our Internet2Go event earlier this year, the Yahoo!-Cramer-Krasselt keynote discussed how Porsche was able to reach more difficult-to-reach business types (prospects) through mobile, BlackBerry especially.
Here's how the campaign performed online and in mobile (better across all metrics):
Nielsen does some demographic and behavioral analysis of iPhone users in the US and finds:
Furthermore, 53% of the iPhone user base in the US is older than 35:
BlackBerry is going to show very similar demographics in terms of age and income distribution.
Related: Forrester has similar (but somewhat contradictory) data about iPhone users:
The answer appears to be yes for a significant minority according to a new survey by Mformation. According to the survey, which polled 4,000 people in the US and UK:
In addition to telephone numbers:
In terms of loss or theft:
That last data point now partly reflects that people have confidence credit cards and other information in wallets can be replaced with comparative ease. But it also shows how "personal" mobile phones have become, especially smartphones:
Source: Pew Internet Project (12/07), n=2,054
Coming out of its conference last week the MMA offered estimates that mobile ad spending would grow from roughly "$1.7 billion this year to $2.16 billion in 2010," according to coverage of the event in MediaPost. The MMA simultaneously released a survey in which it found that 50% of brands and agencies were doing some advertising or marketing in mobile:
Brands have reportedly embraced mobile more than agencies, half of which still view the medium as "experimental" according to the survey findings. However, despite very strong ROI metrics in the market, most respondents said they were only having "average" success with the medium according to the MediaPost coverage.
Perceptions of "average" success represent generally bad news for mobile, which has to sell itself either as a superior medium or perhaps more realistically as a way to extend other advertising and/or reach tough-to-reach audiences.
A related story coming out of the conference was this one about the need for more than clicks (or calls) to define ROI in mobile: Brands need to reinvent ROI metrics for mobile: MMF panel.
The danger in mobile is that because the click or CTR is the currency of online marketing (and so familiar and accepted by marketers) it will creep over into mobile -- it already has. But the click is generally a myopic measure of the success of a campaign and should only be used to define ROI in purely direct response contexts.
Nielsen put out findings on mobile usage in the Canadian market:
21% of Canadian mobile subscribers use their cell phones to browse the Internet. This is up from Q4 2008 with the top sites including portals, e-mail, weather, news & current events and search. Overall, Mobile internet penetration increased from 16 percent in Q4 2008 to 21.3 percent in Q1 2009.
Here's the chart on top sites for Canadian mobile users:
Canada is a similar market to the US but smaller. Live email as the most popular site validates the popularity of email for mobile users (our data show email as the most popular mobile category as well).
Opera Software released its monthly State of the Mobile Web report for April. Like AdMob's data this reflects usage on Opera Mobile and Mini browsers. According to Opera, "customers of U.S. operators view more data-intensive pages than subscribers in any other country."
Note that Android and the iPhone are not represented because Opera doesn't operate on those devices. So we're seeing a different set of users vs. the AdMob data released today.