Local Search

Facebook Has Bought Gowalla, Instagram and Now Glancee

A couple of days ago local-social startup Glancee announced that it was being acquired by Facebook:

We started Glancee in 2010 with the goal of bringing together the best of your physical and digital worlds. We wanted to make it easy to discover the hidden connections around you, and to meet interesting people. Since then Glancee has connected thousands of people, empowering serendipity and pioneering social discovery. We are therefore very excited to announce that Facebook has acquired Glancee and that we have joined the team in Menlo Park . . . 

Glancee, which is really just a 2.0 version of the original Loopt, adds to Facebook's growing arsenal of mobile assets. The social network has identified mobile as both an area of vulnerability and opportunity. In the Facebook IPO roadshow video COO Sheryl Sandberg calls out mobile as "a key area of growth for Facebook." 

What she's talking about is revenue rather than usage. The company already has more than 500 million active mobile users. And Flurry Analytics recently said that social networking activities now consume as much daily mobile app munitues as games, the former number one category. Much of that activity takes place within Facebook. 

Flurry Mobile App Time by Category

The purchase price of Glancee was not disclosed but we can assume it was an "acquhire," rather than a technology acquisition -- though there may have been a bit of technology that motivated the purchase.

Glancee was part of a group of "passive" or "ambient" location startups that include the over-hyped Highlight and a dozen others. I have argued in the past that ordinary people (as opposed to those in the tech industry) don't want to continuously broadcast their locations even to close friends and colleagues. Accordingly these friend finding and pseudo-dating apps are destined to fail unless the offer some other angle or utilitarian functionality. 

Facebook may choose to use some of Glancee's capabilities as part of a new version of its app. But my guess is that Glancee, like Gowalla, will be completely shuttered and that Facebook won't turn its app into a ambient friend finder. That would complicate the privacy picture for Facebook -- though I expect geofencing and geotargeted advertising to be part of what Facebook eventually develops for mobile marketers.

We're likely to see more acquisitions from Facebook as the company continues to build up its mobile capabilities. What the company hasn't figured out is how to make money in mobile, commensurate with its mobile usage. It now pumps Sponsored Stories through its users' news feeds, having just introduced mobile advertising. However that by itself won't fulfill the mobile ad revenue imperative about to be imposed on Facebook by its IPO.

Without Apps Local-Mobile Search Queries Won't Beat the PC in 3 Years

BIA/Kelsey has just put out a prediction that local-mobile search will surpass local search on the PC in 2015. The following year (2016) BIA "expects mobile local search to exceed desktop local search by more than 27 billion annual queries."

There's a certain logic here -- 40% of mobile search carries a local intent (per Google) and mobile is growing faster than PC search -- but I think the crossover date is farther out than three years from now. (In developing countries it may be much sooner.) The press release doesn't mention apps and I suspect the prediction is largely or entirely about query volumes coming from the search bar on the mobile browser (which is 95% Google).

Source: Performics, 3/11

To achieve the local query volumes projected and surpass PC search equivalents by 2015, however, apps would need to be included in the calculation. Right now nobody really knows how much "search" and local search is happening in the context of apps. Nobody is actively tracking it. However, the recent Local Search Study from 15Miles, comScore and Localeze suggests that a substantial percentage of local-mobile search is happening within apps.

The survey of 4,000 US adults found that 49% of smartphone and tablet owners are using apps to find local information. I speculated that half of "local search" query volume, which might otherwise be on Google or other search engines on the PC, might be going through apps on smartphones. It's a leap but one not without some merit.

According to 2011 US survey data from Performics (chart above), 60% of mobile search users conduct fewer than 20 mobile searches per month, while 40% do 20 or more searches monthly. There are other data and surveys I could cite; this is just one. It illustrates, however, that there's a significant gap currently between PC and mobile search today. On the PC, comScore said last year that US adults conduct an average of 107 search queries per month.

If we use Google's 20% PC local search number, it would mean that in March there were roughly 3.7 billion local searches on the PC in the US. If we use Yahoo's 30% figure it would be more like 5.5 billion. The average of the two is 4.6 billion monthly local queries. (I believe these figures probably under count PC local intent search volumes.) If there are now roughly 125 million smartphone users in the US and roughly 90% of them use search, that means in any given month 112.5 million people are searching for stuff. If we assume they're all doing 20 queries a month (near the top end of the Perfomics range) that comes to 2.25 billion mobile queries monthly in the US. However only a subset of those are local.

If we use Google's 40% (of mobile search is local) figure, then roughly 900 million mobile search queries have a local intent on a monthly basis. (This number is likely higher than what's actually happening in the market given the assumption of 20 searches per month on average.) And again this doesn't account for local search queries happening in apps, which is probably hundreds of millions at least.

Indeed, "search" takes many forms on mobile devices, and much of it isn't running through a traditional search engine like Google. Yet mobile queries on Google are also growing rapidly. While overall mobile search volumes will continue to grow and while they could grow from 900 million to more than 4 or 5 billion monthly queries in three years I just don't see that happening unless we count app-based query volumes as part of the equation.

Will Payments Apps Become Next-Gen Local Directories?

Despite all the activity and hype in the segment, mobile payments and mobile wallets have been adopted by relatively few consumers in North America to date. It's well below 10% of the smartphone population according to data I've seen. Lack of availability, lack of awareness and consumer security fears are among the reasons.

Despite slow consumer adoption of mobile payments, companies such as Square, PayPal and Intuit are making major inroads on the merchant side. For example, Square is processing millions of dollars of payments per day at local businesses.

Its main product relies on a traditional card swipe, so the consumer does nothing new and needs no new apps or equipment. PayPal and Intuit have essentially copied Square's product. In particular PayPal's brand awareness and footprint have helped the company generate significant, immediate demand for the new PayPal Here product. 

These and other mobile payments apps (e.g., Levelup) include directories of merchants using their payments systems. It leads me to think these payments apps could become the next generation of LBS or local directory apps. It's natural for them to try and build out more comprehensive local listings, as well as get more deeply into offers and deals (not to mention analytics and CRM). 

It also makes sense for a company like Foursquare, which already has a large user footprint, to acquire or create a mobile payments capability itself -- as a complement to its positioning as a loyalty tool for SMB marketers.

Google Offers Free Mobile Sites to SMBs in Partnership with DudaMobile

Google announced this morning that it is offering free mobile websites to US small businesses for one year through its howtogomo.com portal. DudaMobile is the vendor providing the site building capability (DIY) and hosting.

After the year is up I would imagine that DudaMobile's pricing and rate card kick in. However its basic hosting is free already. So this must be a premium account that Google is offering. Accordingly it would likely cost business owners $9 per month to maintain their mobile sites on DudaMobile.

The company also offers a do-it-for-me service that costs $500 for the build/set-up fee and then $90 per year for hosting. 

Screen shot 2012-04-05 at 7.11.03 AM

What's interesting here is that Google isn't doing this with its own mobile site builder, which by implication the company is admitting is inferior to the DudaMobile product. 

Mobile Search Engine Do@ Now 'Everything.me'

Last May Tel Aviv-based mobile app/search engine do@ (pronounced “do at”) launched with high expectations. The company raised $7 million against the promise of delivering a search experience to smartphones that was both more efficient and more elegant than Google.

Rather than indexing pages, do@ showed live sites that were optimized for mobile. Sites were initially ranked by default but users had the ability to re-order results. It was a radically different and smart approach to mobile search -- and one that might have been expected to work at some level. However nobody used it, reflecting the power of Google's brand and its prominence on both the iPhone and Android devices.

You can see a video of do@ in action here.

Screen shot 2012-04-02 at 6.16.10 AM

Now the company has re-imagined do@ as a kind of mobile meta-search engine: Everything.me. You enter a query and can search "vertically" in any of the many different sites displayed on the screen. Logos replace Google's blue links. 

Because Everything.me gives you access to familiar, branded sites (and some that are less familiar) it has a better chance than do@ did. However, many people have smartphone apps for common mobile search categories: restaurants, travel, shopping/price comparisons. Then, of course, there's Google for "everything else." 

Accordingly I think the company is fighting the same battle it was before. And even though this relaunch is a clever adaptation of the company's underlying technology it will face the same challenges of adoption and usage. 

Study Illustrates Problems with Offline Mobile Conversion Tracking

Earlier this week Marin Software released some very interesting aggregated data on mobile search trends. The report sees dramatic growth for mobile paid-search. It projects that smartphones and tablets will combine to generate 25% of all Google’s paid-search clicks and 23% of paid-search spending in the US by the end of this year.

Among the other data the report assembles are click-through (CTR), cost-per-click (CPC) and conversion rates in mobile. It compares them to comparable metrics in desktop paid search. The numbers are averages based on client campaigns.

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Smartphones show higher CTRs and lower CPCs than PC search campaigns. But they also show lower conversion rates and thus higher per-conversion costs than either tablets or PCs. 

The smartphone conversion data appear lower likely because most conversions are happening offline and they're not being accurately tracked. Marin says as much in its recommendations for marketers about offline conversion tracking:

Mobile searches often result in conversions that happen via a call or a physical store. Unfortunately, most marketers lack the ability to glue these clicks together into a unified conversion funnel. Marketers should look to estimate their mobile-influenced revenue through the use of popular mobile ad formats such as click-to-call and store-locator. By combining the typical conversion rate for in-store and phone-based transactions with the average revenue per transaction, marketers can estimate a revenue per click for mobile devices, and adjust their mobile CPCs and budget accordingly.

Whether paid search or display ads, marketers need to track calls and have landing pages where "secondary actions" like store locator or map lookups can be tracked to see whether consumers are acting on the ads. If the tracking isn't set up properly then you're going to see fewer conversions or no conversions and the ROI data will be distorted. 

The conversions are there, they're just not visibile in many cases. 

Tablets Become a Key Local Search Platform

We've known for several years how important and influential smartphones are in finding local business information, especially "on the go." However the latest Local Search User Study from Localeze, 15 Miles and comScore documents, among other things, the increasing role of tablets in the process of finding offline information.

Consistent with other consumer data in the market, the survey of 4,000 US adults found that the top reason for conducting a local business lookup on a mobile device/smartphone is the immediate need for information. Interestingly, the survey discovered that nearly half (49%) of smartphone and tablet owners were using apps for local business searches (e.g., Yelp, Urbanspoon, YP.com) vs browser-based search (e.g., Google).  

http://www.screenwerk.com/media/Screen-shot-2012-02-29-at-2.00.48-AM.png

The Local Search Study also found that while tablets were used "throughout the [local search] process," usage was concentrated in the early and middle stages (research + consideration) of the purchase process. This might be expected because of the analogy to PC usage. However comScore found that among the three groups (PC, smartphone, tablet users) tablet owners are the most engaged and active: "most tablet users conduct local business searches at least once a week . . . more frequently than PC/Laptop users and mobile phone users." 

Another interesting finding: tablet owners had increased their usage of the devices over the past year. That wasn't equally true of smartphone owners. Part of the higher levels of tablet engagement can be attributed to the fact that tablets are more "immediate" than PCs but offer a larger display for "more complete information" -- as the graphic above reflects. 

 Screen shot 2012-02-29 at 6.59.51 AM

Consistent with this heightened engagement the study found that tablet owners were more likely to make purchases after local search activity (which in this case largely mean offline transactions) and spend more money on average.

Less than 10% of Mobile Ad Impressions Are 'Hyper-Local' with Lat-Long

Last week I moderated an evening workshop about mobile ad exchanges and mobile advertising more broadly. The event was sponsored by DataXu and intended to introduce agencies to the concept and mechanics of mobile ad exchanges. It featured a mini-ecosystem of company representatives:

  • Rob Kramer, EVP Sales, Celtra
  • Jim Payne, CEO, MoPub
  • Brent Gaskamp, President, Collider Media
  • Iryna Newman, Mobile Marketing Manager, Groupon Mobile
  • Lara Mehanna, GM Mobile, DataXu

There were lots of interesting questions and issues discussed. It was a great event.

However I was struck by a comment made by Groupon's Iryna Newman during the session. I'm paraphrasing but she essentially said that she would pay a premium for as many lat-long mobile impressions as she could get her hands on -- but there simply aren't enough of them. 

This seems a strange comment given the much-touted location targeting capabilities of mobile apps and ad networks, and the frenzy around LBS and "hyper-local" advertising.

There are still numerous barriers to delivering lat-long information to advertisers. Privacy is one, especially on iOS. But many mobile ad networks are offering location only at the country, state or DMA level, without any precision beyond that. 

Some networks and publishers represent they can offer a lat-long but may in fact be "faking" it. 

On the mobile Web you're typically only getting IP-based targeting; and that faces the same accuracy challenges in mobile that it does on the PC. There's also a perceived lack of demand from advertisers for "hyper local impressions." However, the Groupon remark contradicts that very clearly. 

I was told by someone in a position to know that only about 5% to 10% of mobile ad impressions currently carry a lat-long. If accurate, and I assume it is, it's somewhat shocking given the rhetoric of mobile advertising and its targeting capabilities. 

There are various ad forecasts now in the market that argue that a substantial minority or a majority of mobile ads will be geo-targeted in the very near future. The analyst firms that developed these forecasts may be largely unaware of these fundamental "plumbing" and infrastructure challenges (mostly on the display side). In search it's a completely different situation and the same is true for individual apps.

Google, with the advent of Chrome for mobile, is seeking to remedy this for Android-based handsets. It will follow users from PC to mobile and also have much more data about them when they're mobile. 

As a general matter, there are display workarounds involving landing pages that can generate more location precision. But the industry currently faces a gap regarding what it says it can do and what it can actually deliver at scale.

Eventually there will be alignment. But I was quite surprised to learn about all these limitations. 

Groupon in Local + Mobile EU Distribution Deal with Deutsche Telekom

This morning Groupon and Deutsche Telekom announced a "strategic partnership" that will deliver Groupon deals to Deutsche Telekom customers throughout Europe. The deal is significant for both parties. Deutsche Telekom has a presence in 10 European countries. 

According to the release: 

The partnership marks the first time Groupon will partner with a multi-national service provider to distribute its products and services across a wide international network. It is also significantly enhances Deutsche Telekom's position as a leading provider of the latest applications for its customers.

Using a wide range of marketing and sales tools, varying from promotion activities to deeply integrating Groupon services in selected fixed and mobile services, Deutsche Telekom will offer Groupon services directly to its customers. Scheduled to be available in the first half of 2012 Deutsche Telekom mobile customers will enjoy Groupon's mobile services on their devices without the need for a separate download providing easy access to the best local deals in their area.

To those who dismiss Groupon as a business without a future, this deal is a powerful reminder of the strength of the Groupon brand and its near-global footprint.

The key to success will involve two things: deal coverage and execution. How much inventory is offered and how well presented are the deals?

Groupon Now, the company's mobile offering, in the US has so far not been a success. Accordingly that experience raises questions about how this might play out in a mobile context with Deutsche Telekom's subscribers. However it will not be limited to mobile. 

By contrast UK carrier (Telefonica) O2's opt-in "O2 More" partnership with Placecast to deliver local coupons/deals has proven to be very successful. So there is a precedent that shows this could play out in a very successful way for both companies if well executed. 

Telenav Introduces Personalized, X-Platform Navigation and Search App: "Scout"

At CES today GPS provider Telenav is launching a new app (and a new brand in a way) called Scout. It's a website; there's also a smartphone app (iPhone for now) and an in-car nav capability. Accordingly, it's coming to Ford vehicles later this year according to the company.

Here's how Telenav describes Scout: "The first daily personal navigator that will be seamlessly accessible across the web, smartphones, and in-car systems – offering users an easy and consistent discovery and navigation experience no matter where they are." 

Indeed, the cross-platform feature and personalization are key differentiation themes: 

Scout opens to My Dashboard, a customizable start screen that allows users to quickly get personalized, real-time commute times to work or home – as well as instant access to local search for easy discovery of new places and saved favorites. My Dashboard was created to solve the need for an everyday navigation tool, even when driving to familiar destinations.

The website Scout.me enables users to conduct local searches (ratings are coming largely from Yelp), create favorite lists, get directions and share content with friends. That content can be later accessed on the Scout smartphone app or in-car.

photo

Scout is free and will provide voice-guided turn-by-turn directions. Telenav also has free and paid apps for the iPhone and Android, which provide the same capabilities and most of the same content and local search features. The Scout app and site are supported by ads from Citysearch and xAd. 

The "Scout" brand as well as its look and features are more consumer friendly than "Telenav," which came out of the enterprise navigation segment.  That was probably the impetus behind the creation of the new site/app, which relies on the same infrastructure as Telenav proper. Telenav is also the provider behind many of the carriers' paid navigation apps. 

My experience with the Telenav app for the iPhone since giving up my Android handset and Google Navigation has been very positive.

Report: Facebook Mobile Ads Coming Before IPO

I've argued in the past that Facebook would be compelled to monetize mobile once it went public. I envisioned that monetization taking the form of more-or-less straight ahead display ads that were targeted in some way. I also recently performed a very loose calculation of what Facebook's global mobile ad inventory might be worth (at a $2.50 CPM) and determined it could be up to $2.5 billion.

What Bloomberg reported yesterday, however, was that Facebook was considering launching mobile ads that were more integrated into the Facebook feed:

Facebook Inc. plans its first push into mobile advertising by the end of March, giving the company a fresh source of revenue ahead of a possible initial public offering . . . An idea being considered is putting Facebook’s Sponsored Stories ads, which feature friends’ interactions with brands, within the mobile News Feed, said the people, who declined to be identified because the plans aren’t public.

Sponsored Stories in the mobile news feed would be like "promoted Tweets" on Twitter in some respects. Sponsored stories allow advertisers to show Likes from people in your network (brands, products, stores) in the ad copy. They reportedly dramatically improve CTRs. Below is an example from Facebook online: 

Earlier this week Nielsen reported that Facebook has the greatest "active reach" of any app across the Android OS (after the Android market). Facebook's most recent official mobile-user number is 350 million globally, out of more than 800 million total users.

My guess is that Facebook will be experimenting with various mobile advertising units/types before it launches anything officially. It already has a quasi-advertising vehicle in mobile "check-in offers." However Facebook itself currently doesn't make any money off these deals. Eventually that will probably change. 

Screen shot 2011-12-14 at 9.52.42 AM

TeleNav Launches in-App Turn-by-Turn Directions for Mobile Developers

Navigation provider TeleNav is launching what it's calling "the first HTML5 browser-based, voice-guided, turn-by-turn GPS navigation service for mobile devices." The new developer-facing service will be available here (soon). The idea is to enable mobile publishers and developers to add a single line of code and then deliver GPS-based maps and voice-guided directions within their app experience to users (via HTML5).

Remarkably, the company says the service will be entirely free and available across mobile platforms (because it's HTML5). It will become publicly available in Q1 2012. However TeleNav is soliciting developers for early testing now. 

The benefits of this are obvious. Currently on Android and iOS, any mapping request takes users out of the publisher app experience to Google-branded maps on either platform. This TeleNav functionality would not only allow publishers to retain users within apps when maps are requested but would provide voice-guided, turn-by-turn directions to locations (retaurants, hotels, shops, etc.) as well. 

I haven't spoken to TeleNav about this or the fact that they're making it free to publishers -- I'm guessing it's a branding/distribution play. But it's a pretty sweet proposition if it all works as the press materials represent. 

Network xAd Raises $9M, Will Challenge AT&T for Local-Mobile Ad Crown

Local-mobile ad network xAd has announced a new $9 million round of funding. The money comes from Emergence Capital Partners, SoftBank Capital and Palisades Ventures and Silicon Valley Bank. Roughly a year ago xAd raised about $4 million from Emergence Capital.

The company supports search, display and pay-per-call advertising. It also owns the Go2 mobile directory properties.

xAd says it's the "largest mobile-local advertising network in the U.S." Recently AT&T has laid claim to that crown saying it serves a billion mobile ad impressions monthly. AT&T offers mobile display ads, while xAd has text-based search ads as well. In May xAd announced that it had served more than 2 billion ads. 

In November, xAd reported 10 billion monthly ad impressions and 90 million monthly local-search requests. 

While ad networks such as Jumptap, Millennial, InMobi and AdMob all offer geotargeted ad inventory (to varying degrees of geo), xAd and AT&T specialize in locally relevant advertising. AT&T contends its ads deliver a much higher CPM than "remnant" ad networks. Previously xAd said that it can deliver a $30 CPM to publishers (not all inventory). 

In addition to xAd and AT&T, there are other local-mobile ad networks (mostly display):

  • LSN Mobile
  • Verve Wireless
  • Where.com
  • Marchex (PPCall) 
  • Chitika
  • CityGrid
  • Navteq
  • JiWire

xAd both aggregates third party (e.g., yellow pages) advertiser inventory and sells directly to national and local businesses. In September xAd said that it had 1.2 million advertisers in its network, which represented "about 30% to 40% of [total] local mobile search traffic and reach" in the US.

Millennial Media: Local Targeting Grows on Percentage Basis

The latest Millennial Media SMART report shows growth of location targeting among retailers and brands. Among other data presented in the October report, Millennial said that retailers and telecom advertisers (e.g., AT&T, Verizon) used store locators on landing pages to drive people into local outlets: 

Store Locator experienced growth of 5% month-over-month, with 23% of the Post-Click Campaign Action Mix in October (Chart C). Retail and Telecom advertisers increased their usage of Store Locator as a Post-Click Campaign Action to drive customers to stores for fall sales or to buy new mobile devices.

Screen shot 2011-12-09 at 6.28.21 AM

The use of the store locator on a mobile landing page will be the primary way that brand and national advertisers "localize" for the foreseeable future. This is in contrast to the use of dynamic creative that inserts locations into the ad copy itself. Google mobile search results will be (and are already) an exception.

According to Millennial, "local market targeting" was the dominant component (66%) of the company's "Targeted Audience Mix" (40% of its overall campaigns). However, very interestingly, the use of targeting on Millennial's network has actually declined from six months ago.

In April 48% of campaigns were targeted (vs. 40% in October). Of those, 56% of impressions served by Millennial were directed toward local markets. 

Screen shot 2011-12-09 at 6.28.56 AM

In absolute terms, then, the amount of locally targeted impressions being served by Millennial in April and October was almost identical. So while there's growth on a percentage basis, which is significant, overall local targeting in real terms remained flat. 

The fact that fewer campaigns on Millennial are targeted overall makes me wonder whether that money, especially locally oriented ad dollars, are fleeing to other networks.

Google Maps Is Android's Chief Competitive Weapon Against the iPhone

Google Maps are on both the iPhone and Android smartphones -- but they're increasingly very different products. Today Google added the beginnings of extensive interior mapping to the new version of Google Maps for Android. It provides floor plans for a number of shopping malls and retail stores in the US such as Home Depot, Macy's and IKEA. It also provides maps for quite a few major airports.

Google has said this is just the beginning of an ambitious project to map interior spaces. It complements Google's effort to bring interior business photography online. For the time being the new floor plan maps are only available for mobile devices, and only for Android. 

I recently switched from an Android EVO to an iPhone 4S as my primary phone. The screen is smaller and there's no Google Navigation; however overall the experience is superior. I do however miss the Google Navigation, although there are many navigation apps for the iPhone. 

Google knows that Maps (including Navigation and related content) is a key differentiator for Android vs. the iPhone. That's why it has never allowed Navigation on the iPhone and why it's in no rush to bring interior maps to the rival platform. Google might incorporate interior floor plans into an HTML5 version of Google Maps, in which case it would appear via the mobile Web. However it would have far less functionality than the version that's rolling out for Android Maps 6.0. 

Apple has been building up mapping assets suggestive of a total replacement for Google. But so far we haven't seen a product. If or when Apple's mapping offering appears it will need to be pretty sophisticated to satisfy users and compete with Google Maps. 

Free Webinar Tomorrow: The Convergence of Local & Mobile Advertising

Tomorrow at 1 US Eastern, 10 Pacific is our free webinar: The Convergence of Local and Mobile Marketing. I'll be providing a broad market overview on the following issues:

  • Smartphone and mobile Internet adoption
  • Local-mobile user behavior
  • Tablet adoption
  • Mobile advertising projections
  • SMB demand for mobile marketing  

AT&T Interactive’s Executive Director of Product Management Matthew Goldman will offer their view of the mobile market "on the ground." What are consumers really doing in mobile and what are they looking for? How are they responding to mobile ads? And, beyond surveys, is there truly demand among SMBs for mobile marketing? If so, where is that demand concentrated? 

We'll also take questions from the audience on these and related issues. If you're operating in the local-mobile segment or selling to small business advertisers you won't want to miss it.

To attend you must first register here

Millennial: Local Targeting Gains by 50%

Millennial Media has released its latest SMART report, which offers data about the campaigns running on its network. This edition has case studies and more data than most.

I zeroed in on a statistic that has also been reported in several other articles: location targeting increased by 50% quarter-over-quarter. Among campaigns on Millennial's network using any form of targeting, local targeting (which is at the city level) represented 66% percent of 45% of campaigns employing any form of targeting.

Screen shot 2011-11-10 at 9.51.59 AM

I took a look back at a previous report covering July 2011 and discovered that 44% of campaigns were then targeted and 67% of those campaigns used what Millennial calls "Local Market Targeting." So the 50% growth figure doesn't entirely make sense to me. But I'm glad to see more advertisers recognizing the value of location targeting. 

Millennial highlights, among others, a Benjamin Moore paint campaign that sought to drive consumers into retail stores with a special offer. According to Millennial, "the campaign drove a consumer engagement rate that is more than double the network’s average for home furnishings and produced unique analytics for Benjamin Moore on consumer behavior around couponing."

Millennial also touted "triple-digit growth" across a range of verticals. Clearly we're in a hyper-growth period for mobile. In addition, Millennial announced earlier this week that they were expanding their operations to the Asian market. 

Mobile Will Capture 22% of Search Spending by 2012 -- and Google Gets Most of It

Search marketing firm Efficient Frontier released a mobile search report yesterday in conjunction with investment firm Macquarie Capital. The report presents a number of findings gleaned from actual campaigns and not simply survey data. However it does extrapolate and project what the US mobile search market is likely to be worth next year -- based on its clients' spending patterns and the rapidly increasing demand for mobile campaigns. 

Accordingly Efficient Frontier says it expects mobile paid search to be worth between 16% and 22% of the overall US search market by the end of next year (2012). I've done some quick math (in my related post on Search Engine Land) and determined, roughly speaking, this represents a range of $2.7 to $3.7 billion -- in the US alone. 

Efficient Frontier points out that Google captures slightly more than 96% of its clients' mobile search budgets. Google itself has said that it has a $2.5 billion run rate (including display) on a global basis. 

Efficient Frontier reported that mobile phone and tablet click-through rates for its advertisers are higher than for its desktop search campaigns, "at 166% and 137%, respectively, of CTRs in desktop search."

One of the surprises in the document was the percentage of clicks and and spending that were tied to tablets: 43% of the mobile search spend and 50% of the clicks.

Is Siri Steve Jobs' Revenge Against Android?

In written testimony submitted to the US Senate Judiciary committee on antitrust, Google Executive Chairman Eric Schmidt identified Apple's voice assistant Siri as a competitor in mobile search: 

Moreover, history shows that popular technology is often supplanted by entirely new models. Even in the few weeks since the hearing, Apple has launched an entirely new approach to search technology with Siri, its voice-activated search and task-completion service built into the iPhone 4S. As one respected technology site reported: “[E]veryone keeps insisting that Apple will eventually get into the search engine business. Well they have. But not in the way that everyone was thinking. Siri is their entry point.” Another commentator has described Siri more simply as intended to be a “Google killer."

The hyperbolic "Google killer" designation is invoked by Schmidt to show that Google is beset by competition on all sides. I've written previously that Siri may actually increase the number of Google searches coming from the iPhone, as people discover they can "search the Web for  . . ." Siri can also be used to search Bing or Yahoo, though most people continue to have Google as their "default" search provider on the iPhone. 

In the short term Siri doesn't to anything to degrade Google search query volumes. As I said it may increase them. Over time, as apps become integrated into Siri, people may use it as a tool to access their favorite vertical search or content providers for local, travel, health, weather and so on. In such a scenario (which is how the original Siri app was set up and intended to be used), Google could see less traffic. However that's speculative at this point. 

The way that Siri "harms" Google today is by making itself and not Google the starting point for mobile search and discovery on the iPhone. It hasn't become that for most users but it could in short order. Siri sits "on top" of Google (or Bing) just as Google sits on top of third party sites and content on the PC. 

In that way Siri supplants the Google brand and becomes the "go to" source for information for iPhone 4S owners. This is the way that Siri really damages Google, at least in the near term. It potentially does to Google what Google has done to so many third party content providers online.

I don't actually think that Siri is Steve Jobs' revenge -- he famously threatened to spend all Apple's cash reserves to destroy Android -- I just wrote that to get attention.  

Why QR Codes, NFC and Augmented Reality Will Disappear into 'Visual Search'

QR codes are proliferating yet it's not clear that consumers are "getting it." ScanLife, it is Q3 trends report, says that 2D or QR barcode scanning is growing dramatically:

  • We have seen over 20 million scans in 2011, and that represents a 440% increase from 2010 through the same time period.
  • The number of countries scanning in a single day increased by 66% in a year. Users are now scanning from 128 different countries daily, a testament to the expanding global footprint of this technology.
  • The aggregated growth is also translating into a significant rise in the individual scans per code. As an example, the single largest marketing campaign this past quarter saw over 400,000 scans, compared to 65,000 a year ago. 

However US and UK consumer surveys indicate that most consumers don't know what a QR code is and only between 6% and 11% have ever scanned one (in the UK it appears to be 19%). According to comScore data, QR code scanners are mainly men and younger people (18-34) vs. other market segments.

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Somewhat strangely, QR codes seem to polarize marketers. There are some very vocal and aggressive QR code detractors that consider the technology a failure. And many see QR codes as some sort of interim step before NFC technology become mass market. 

In a parallel vein there's augmented reality ("AR"), which is a "cool technology" chasing a mass market use case. AR continues to be more of a novelty than something really useful to consumers -- or marketers. But it has potential in many non-commercial and commercial situations.

Then there's NFC, which has been written about extensively in connection with the launch of Google Wallet and mobile payments. Beyond payments, NFC is also a marketing tool and can deliver content and marketing messages to a handset with a simple touch of the device on an NFC-enabled surface or receiver. Given that very close proximity is required to invoke NFC it's not a substitute in all situations for AR or QR codes, which can both work from a distance.

A category that will likely subsume and incorporate all these technologies and tools is "visual search." Exemplified by Google Goggles or Amazon's new "Flow" app, it simply asks consumers to position the handset/camera over or in front of an object and then delivers information: reviews, prices, nearby stores, additional content and so on.

The notion of "visual search" is conceptually simpler and much more consumer friendly than "Augmented Reality," "QR codes" or "NFC." For that reason I believe that visual search will become the metaphor or category name for a range of approaches and technologies that are collectively about getting information or content (whether commercial or non-commercial) into the handset through the smartphone lens. 

NFC, AR and QR Codes all wear their complexity on their proverbial sleeves, while the term "visual search" buries the technological complexity behind a very descriptive and easy to understand concept.