Mobile Advertising

Is Apple Hoarding LBS Advertising?

Here's the much discussed statement from Apple to iPhone developers about location-based advertising:

The Core Location framework allows you to build applications which know where your users are and can deliver information based on their location, such as local weather, nearby restaurants, ATMs, and other location-based information.

If you build your application with features based on a user's location, make sure these features provide beneficial information. If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store.

Here's the prevailing interpretation of this directive:

"Looks like Apple is going to keep location-based advertising to themselves"

The speculation then proceeds that Quattro will be the sole provider of LBS ads to iPhone apps. I believe the above reading is incorrect. Instead I would argue that Apple is saying "don't just use location for ads alone":

make sure these features provide beneficial information. If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location, your app will be returned to you . . .

Here "beneficial information" is non-advertising content and services. At a time when Apple needs to court and retain developers it would alienate them (even more) to compell use of only Quattro advertising or otherwise preclude developers from serving LBS ads. 

Shape of Things to Come: Scan QR Code on TV to Download Android App

This is fascinating and in keeping with our recent discussion about opportunities in connecting mobile and traditional media, the weather channel is promoting downloads of its Android app by showing a 2D barcode that users can scan right from the TV.  Scan the image on the TV and get taken to the Android market to download the Weather Channel app.

Now you have an even more "intimate" relationship with that user and extend your brand into his/her pocket -- together with corresponding advertising opportunities. 

It's not very hard to imagine this idea broadly expanded to brands, restaurant chains, retailers and many other scenarios and use cases. It's very similar to including a short code in a traditional ad, but a bit more direct in the case of an app. Yet the "output" doesn't have to be an app; it can be a mobile website or landing page with an offer, etc. This is something that will become more and more widely used in the next few years.

In addition to extending the broadcast or media buy and acquiring a customer (or maintaining one) you also measure the effectiveness of the campaign or promotion via mobile. This could also be done (if the screen is near enough) in digital OOH as well. 

Here's a video of the presentation of the barcode: 

 Picture 9

(via AndroidTapp)

Pew Millennials Data Shows Mobile a Critical Medium for Reaching Youth

This may sound like data you've heard time and again (and it is): mobile phone ownership among younger people is nearing saturation. According to Pew, 75% of teens and 93% of 18-29 year-olds in the US have mobile phones.

New survey findings underscore that mobile is a critical medium (and by extension SMS because of its ubiquity) for reaching younger audiences. Here are some mobile-specific excerpts from Pew's recent millennial social media survey data:

  • Among teen cell phone users, more  than a quarter (27%) say they use their cell phone to go online . . . 35% of adults report that they access the Internet using a cell phone or other handheld device.

Extrapolating from the 35% number, which is admittedly self-reported survey data, that would mean something approaching 80 million US adults are accessing the Internet on mobile phones. Nielsen's number is 68 million; our survey data from 2009 argue that 27% to 29% of mobile users are accessing the Internet on mobile handsets.

Here's demographic data regarding US "wireless" Internet access by device category and age: 

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Daily teen activities, showing the primacy of SMS:  

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Related (per Nielsen): "American teenagers are using 3,146 messages a month, which translates into more than 10 messages every hour of the month that they are not sleeping or in school" 

Free 411 Offers iPhone, Android Apps

Free DA provider Jingle Networks (800-Free-411) has launched iPhone and Android apps. They're generally useful and visually appealing but otherwise unremarkable, directory style apps. The noteworthy thing is that the company is seeking to grow volume and extend the brand through these apps. It also offers additional advertising opportunities for Jingle in mobile. 

Jingle says that it does about 15 million calls per month or 180 million per year, compared with billions of calls annually in the US directory assistance market. Jingle is arguably the best known of the "free DA" providers, followed by Google's Goog 411 service. The most complete is Bing 411, powered by Tellme.

Somewhat strangely, the public has not raced to adopt these services as once was expected (despite the money savings they offer). Lack of awareness is one factor, as is "inertia" around the number 411. Yet traditional directory assistance volumes also are in significant decline in the US. The decline of landlines and the rise of smartphones are likely also directly affecting traditional DA. Smartphones in particular make content and information available to users that far exceeds what is typically offered on a DA call.

kgb, which operates a "wholesale DA" business as well as a consumer-facing information services in the US and Europe, has reacted to the market with clever "reinventions" of the traditional offering on the iPhone (kgb answers and Knowtopia), which adds a game-like dimension to the service. The company is also doing Super Bowl advertising in an effort to further build awareness. 

MotoScan: Motorola Invests in Scanbuy

We wrote yesterday about Microsoft's 2D barcode program "Tag" and why we think that 2D barcodes and barcode scanning in general has arrived in the US. Today comes news from Motorola that the company has invested an undisclosed amount in Scanbuy, which owns popular barcode scanning software ScanLife. The software works on all major smartphone platforms and across all major barcode formats, including traditional UPC codes.

Motorola said it invested because the ScanLife app/technology was "best of breed":

"Motorola has looked at this market very carefully and believes that Scanbuy has the best combination of technology and strong ecosystem partners in its space," said Reese Schroeder, managing director of Motorola Ventures. "Mobile barcodes are an extremely powerful tool for consumers, businesses and wireless providers, which makes this opportunity very exciting for Motorola. The camera quality, display capability and processing power of today's smartphones, coupled with advanced network speeds, now enable consumers and the advertising community to fully take advantage of mobile barcode technology."

Expect to see the software pre-installed on Motorola handsets going forward. 

Greystripe Extends Support to Ovi Store

Rich media mobile ad network Greystripe announced that it's extending its support Nokia's Ovi Store. According to the release out today:

Although Greystripe has supported hundreds of millions of Java downloads, this is the first time they will be supporting apps in the Ovi store. Greystripe is beginning to migrate 1,200 Gamejump.com Java titles into the Ovi App Store. With this announcement, Greystripe now supports the top three smartphone marketplaces: the iPhone App Store, the Android Marketplace, and Nokia’s Ovi App Store . .

Currently Greystripe supports over 1,400 Java handset models, in addition to iPhone and Android. Greystripe continues to expand its Java/Symbian app downloads, which account for approximately 250,000 app downloads on the network per day. Since Symbian is still a popular platform globally, this announcement is significant for brands that want to reach a wider audience by advertising on the Java/Symbian network, such as Navy and JC Penny.

We learned last week that Nokia's Ovi Store is seeing "more than 1 millions downloads a day." These numbers suggest that, at least outside the US, Ovi will be a force to be reckoned with.

Previously Greystripe did a deal with online ad network Tribal Fusion to automatically translate IAB ad units into mobile: 

Greystripe takes Flash ads and transcodes them using their award winning technology so the ad is compatible on the iPhone. With this process, advertisers are seeing 10-20x higher performance with the mobile ad compared to the same online campaigns, with average CTRs well above 1%.

This model is the future of much of mobile display advertising -- one buy across platforms, or an "extension" into mobile of an existing campaign -- and will accelarate the movement of ad dollars into mobile. Mobclix offers something similar with Advertising.com but on a smaller scale. Google will likely be doing this with AdMob if that transaction gains approval. 

And, in an effort to grow and protect its distribution vs others., last June Greystripe launched what it calls a CPM protection program that guarantees iPhone developers a minimum CPM.

FourSquare's Future Emerging in Bravo Deal

Yelp adds check-ins, Facebook "is working on a Foursquare-Killer." How will the crafty location game/social net survive amid better known and more visible rivals? We're seeing how, first in a partnership with Harvard and now in a much more significant partnership with Bravo TV (owned by NBCU, in turn owned by Comcast). 

According to the NY Times' story:

Starting Monday, Bravo will begin offering Foursquare players “badges” and special prizes when viewers visit more than 500 Bravo locations. The locations will be picked by Bravo to correspond with select Bravo shows including “The Real Housewives,” “The Millionaire Matchmaker,” “Top Chef,” “Kell on Earth,” “Top Chef Masters” and “Shear Genius.”

This is the way FourSquare becomes "mainstream" (my persistent complaint/critique about the service), generates revenue and stays ahead of rivals. Forget about selling coupons to SMBs, which isn't really scalable for the startup. This is a much, much bigger opportunity. 

It's appropriate that I just wrote about QR codes and the way they extend the value of traditional media and make them more dynamic. Here's an analogous function for TV -- a way to engage viewer-users in the real world when they're not watching TV, and extend the value of the brands involved. 

Again from the Times' article: 

“We really want to tap into the power of Foursquare by engaging their audiences and bringing our Bravo viewers these unique experiences on a national level,” said Ellen Stone, Bravo’s senior vice president for marketing. Mrs. Stone said Bravo would start creating on-air TV promotions telling viewers how to play the Bravo-enhanced features of Foursquare.

This is huge for FourSquare and puts them on the path toward acquisition. Other networks and shows are probably calling Dennis Crowley right now. 

Microsoft Tag: 'Hyperlink the Real World'

CNet showcases Microsoft Tag, a nouveau QR code for traditional media publishers and products. Most QR code systems, including Microsoft Tag, require a download of software that can read the 2D barcode. On smartphones this is not the problem it once was. New market entrant JagTag doesn't require specialized software.

Microsoft Tag works with feature phones that have a camera as well. 

There are lots of companies in this 2D barcode space and lots of proprietary formats. Standardization would push the whole industry forward. Microsoft may have success with Tag because it's, well, Microsoft. Companies such as Geovector and NeoMedia have patents in this area and we'll probably see litigation eventually. 

Putting all that aside, this phenomenon of "hyperlinking the real world," is going to be massive -- capital M. Phenomena like SMS marketing and QR codes/Tag proliferation could actually move much faster than "mobile advertising" overall. Because they help measure consumer response as well as make traditional advertising more dynamic -- you can put anything you want behind a Tag including video, websites or coupons -- industry and publishers will adopt these technologies in the very near term. Indeed, they already are. 

People and most industry observers don't realize how pervasive this will be in say three years, provided that there's some standardization that helps remove uncertainty over which system to use. Consumers are already using traditional barcode readers in stores to get price and reviews information. I've both done this and witnessed this extensively (over the past Xmas shopping season). 

Imagine a code/Tag on every product, in stores on displays, on TV, in newspapers and magazines, vending machines, yellow pages directories, outdoor ads (e.g., movie posters). These codes will be absolutely everywhere. It's just a matter of time. 

As a side note, we're also likely to see 2D barcodes integrated into location gaming in the very near future . . . 

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Related: Jagtag Extends 2D Barcode System To All Major U.S. Carriers

Will FourSquare Survive Facebook's Onslaught?

Facebook is the dominant "mobile social network." We know this from Opera, Nielsen, our surveys and other third party data. We know for example that more than 70 million Facebook regularly access the site on a mobile device. No other network appears close (notwithstanding GroundTruth's assertion that MySpace is the largest mobile social network). 

Silicon Alley Insider now reports that "Facebook Is Working On A Foursquare-Killer." As a digression it's lamentable that "Fill-in-the-blank Killer" has to appear in every third technology headline. Having said that, here's the relevant part of the discussion:

A source briefed on the matter tells us Facebook is working on a feature that will allow users who access the network from mobile devices to "check-in" and broadcast their current location to all their friends.

If Facebook does add check-ins for mobile devices does it "kill" FourSquare? My answer would be "no." Facebook has a massive mobile user base, true, but FourSquare has a loyal following. Just as various Google products were launched in many instances with the moniker "X-Killer," only in a few cases has this actually turned out to be true. Navigation is one of them.

However, Google Checkout didn't kill PayPal. Google Base (now closed) didn't kill Craigslist. Knol didn't kill Wikipedia. Lively didn't kill Second Life (yes, it's still around). Okut didn't kill . . . well, it hasn't done very well outside a few isolated markets. And Facebook hasn't killed Twitter, despite becoming much more Twitter-like over the past six months. 

I had predicted that Facebook would buy FourSquare, but instead the social media site appears to be trying to adopt some of its functionality. FourSquare founder Dennis Crowley is a smart guy and understands that he has to keep ahead of his competitors with new content and features.  

Quoting Crowley on his reaction to the report, SAI reports:

For his part, Foursquare cofounder Dennis Crowley told us he fully expects Facebook and others to launch "check-in" functionality, making it "commodity by the end of the year."

Dennis says Foursquare's survival depends on providing "the most incentive for a user to check-in." Right now, Foursquare awards frequent users badges and calls the users who check-in at certain venues the most "mayor."

"I think we're doing this better than anyone else and I think we'll continue to do so. We have so much stuff on the whiteboard that we haven't even touched yet... we're really just getting started."

FourSquare's movement further into the mainstream is what could be affected by Facebook, if the latter copies FourSquare's features. However simply adding mobile check-ins alone won't truly impact FourSquare. As I've said, check-ins predate FourSquare and it's not all that FourSquare offers to its users.

The iPad, AT&T and Advertisers

On the morning after the iPad unveiling people are still trying to figure out whether consumers will want the device, what it might be good for and even what it is. The mule (half horse, half donkey) of mobile computers, it seeks to create (or solidify) a new category of devices that offer the benefits of smartphone mobility, but with a larger screen is are lighter and more elegant than a laptop or netbook.

A number of companies rushed out releases saying they would build apps for or support it. In the mobile advertising realm JumpTap, Greystripe and Mobclix were among the first to make announcements or public statements. Motally said it would provide analytics for the iPad. 

Because of the high expectations there are a fair number of disappointed people. I'm relatively bullish on this device, but I see the confusion and hestitation as partly justified. 

Many of those disappointed have characterized it as just "an iPod Touch on steroids," using the tired metaphor. But is it? The iPod Touch analogy and the fact that it runs iPhone apps suggests that many/most of the advertising options will be comparable. I believe, however, that there will be many more and more varied opportunities for advertisers on this device -- assuming it sells. 

The 9.7 inch screen size means that ads on websites viewed through the Safari browser will be "viable" in a way they aren't currently on the iPhone or other smartphones. But it equally means that ads appearing within iPad-specific versions of magazines and newspapers will be more compelling and interesting than they could be within an iPhone app or on the mobile Web more generally.

Video will be central to the user experience, and so will video advertising. This is really the first device where mobile video advertising could get really interesting. 

And then there's retailing and catalog sales; this could be another very interesting opportunity on this device. Imagine the Macy's catalog on this device with embedded e-commerce -- not the Macy's e-commerce website but a visually rich version of the catalog, where users can turn pages as do in the physical, paper catalog. 

As these examples seek to illustrate the larger visual "canvas" will be a potential "game changer" (to use another tired metaphor) for marketers. 

Another striking element about the iPad is the pricing of the 3G plan from AT&T. Many (including me) had expected a more expensive devices with a cheaper version subsidized by a two-year carrier commitment. Instead the device offers two options: $14.99 and $29.99. The latter is "unlimited" and unlocked; there's no contract required. 

This pricing scheme may be a new precedent: low-monthly unlimited data on a non-phone connected device (Kindle doesn't count here). This isn't exactly like a dongle or wireless card. (BTW: this device can be used as a phone with a VoIP app.) However this lower-priced model for data could enable a wide range of new connected mobile devices. It could also bring competition from carriers like Sprint with additional capacity, looking for new revenue streams.  

Millennial Media: Portals & Directories Become Top Category by Ad Spend

Millennial Media's December/Q4 SMART report reflects some interesting trends, but mostly incredmental changes from November. The top ad spending category is now "portals and directories," which includes major Internet players (e.g., Yahoo, MSN). Travel moved up from category number 10 to number eight, as well.

Here are the highlights, as reported verbatim by Millennial:

  • The U.S. Mobile Web: Decreased slightly to 66.6M users, according to Nielsen (Nov.)
  • For the first time since S.M.A.R.T™ was first published in March ’09, Entertainment was not the top advertising vertical.  Portals and Directories took the top slot in Q4. Telecom, Finance, Entertainment and Dating round out the top 5.
  • Engagement: Average monthly page views per user increased to 125 in December from 113 in November; and, average user session times increased from 5:02 to 5:09 (min:sec).
  • Devices: Samsung represented approximately 23% of our network’s impression share in Q4. But the iPhone was the leading smart phone on our network with 41% of our network’s U.S. impressions. 

Picture 137

We don't know all the specific advertisers in these categories but I would argue that at least five (maybe six) of these categories are substantially or mostly concerned with local "on their face":

  • Entertainment
  • Dating 
  • Retail/restaurants
  • Travel
  • Automotive 

Turning to handsets and OS market share, here's what Millennial is seeing on its network:

Picture 138

Compare AdMob's smartphone share numbers (North America) from December:

Picture 139

In both cases the iPhone is has the largest share, but on Millennial RIM is second, while AdMob's network shows Android handsets second to the iPhone. Among the top 20 mobile handsets appearing on Millennial's network, the G1 is the only Android handset reflected to date. 

Little Overlap in Top Apps on Mobile Platforms

App store analytics provider Distimo has released its latest report profiling activity in the various app stores. The report points out, among other things, that app prices are highest in Europe and on the BlackBerry. It also shows that the majority of apps in the Android market (65%) are from US developers, presumably catering to the US market. However that will change as Android gains momentum in other markets.

Interestingly, the charts reflecting the top free and paid apps don't show much overlap on the major platforms. Below are graphics from the Distimo report about the top free apps:

Picture 305

Here are a few casual observations. Facebook is universally popular, voice search tools show up across platforms (Bing, Vlingo, Nuance/Dragon). Weather is there a couple of times (RIM and Android). Barcode scanners are also popular. Not reflected above, RedLaser is the top paid app for the iPhone, and two scanners are in the top 10 for Android, according to these data. 

Some of the differences in app popularity may have to do with timing. Pandora was released first on the iPhone and was the most popular app that year. Later it rolled out to other platforms and became popular accordingly, while its popularity in the iTunes store declined.

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Geo Most Commonly Used Targeting Feature

I was reading the Rubicon Project's Q4 market report and it cited and reminded me of a September Millennial Media mobile ad survey of "100 leading [US] agencies" and brands. The Millennial report presents a picture of increasing investment in mobile marketing but also, a lack of resources and knowledge to effectively mount mobile campaigns in some cases.

Here's an excerpt from the executive summary:

Mobile spending is expected to increase next year, with 31 percent of agency respondents stating that they will invest between $100K and $249K. More than 15 percent (15.4 percent) plan to invest more than $1 million. More than half of Q4 mobile campaigns will represent between 1 percent and 10 percent of their clients’ total spending, but, for a few, that number will be a whopping 40 percent - 50 percent. Current participation remains high with nearly ¾ of the 100 leading agencies that responded to “The State of the Industry” stating that they have developed mobile campaigns for themselves or a client. Meanwhile, 28 percent have not taken the plunge.

It's worth revisiting and showing a few of the graphs:

Targeting approaches utilized:

 Picture 119

Campaign objectives and success metrics:

 Picture 120

Barriers to mobile ad adoption: 

 Picture 121

Arguably this final slide is the most important, with many agencies and brands not being sure where to begin, as well as being intimidated by what they perceive as complexity (also fragmentation) in the market.

It's very curious, however, that half of the agency respondents say they have "no internal resources" to deal with mobile. Many of the big holding companies bought mobile agencies (e.g., Publicis/Phone Valley). But, beyond that, isn't it their job to deal with important emerging channels? One would think so. 

As platforms and exchanges emerge to make it easier to buy across the ecosystem or single networks with enough reach (e.g., Goog-Mob)  are established we'll see many more brands and agencies move into mobile. This year and early next, we'll see rapid advancement of mobile advertising.

Crisp Brings 'App-Like' Ads to Mobile Web

Crisp Wireless announced a new ad technology that promises to bring mobile app-like rich media display ad units to the mobile Web (for smartphones). According to the release:

Crisp Wireless . . . today announced the launch of Adhesion, a new proprietary mobile ad placement technology for smartphones. Adhesion is a fixed placement technology that brings the best of in-app advertising to the mobile Web and enables publishers to sell premium inventory more effectively.

Standard mobile web banners have limited effectiveness because they go out of view as soon as the user scrolls. Adhesion ads remain fixed “above-the-fold”, providing the maximum view time and opportunities for engagement. Publishers can easily add Adhesion to their mobile sites by using the Crisp Ad Management Platform.  No changes to the mobile site are required.

Hearst has reportedly signed on for the units across the publisher's digital magazine and other properties. Here's a video that shows some of the dynamic units in operation: 

Picture 288

The Crisp Wireless technology and ad units promise better engagement and more options for "brands" seeking to do mobile advertising.

The assumption behind all of this is that mobile Web ads are not as engaging or perform more poorly than in-app display ads. However, a recent WhitePages.com/Continental study found that the opposite was true.

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: 

 Picture 131

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. 

Will Mobile 'Revolutionize' Local Advertising?

There's a very strong piece in AdAge about mobile trends for 2010. Here are the top-level predictions:

  1. Mobile will completely revolutionize the way local advertisers can connect with potential customers.
  2. Growth in adoption of mobile shopping applications will continue to alter in-store consumer behavior, increasing the significance of mobile in point of sale decisions making.
  3. Brands and agencies will continue to build branded apps, but will also have more attractive display media options, thanks to Google.
  4. Advertising's outdoor real estate is fast becoming another connected channel capable of delivering high-fidelity digital experiences as unique, varied and measurable as more well-established mediums.
  5. Consumers have new power to express their opinions through social technologies from anywhere, anytime. Smart marketers will do all they can to encourage and act on this real-time feedback. 

I think all these are good observations and predictions in general. However I take issue with the first prediction. Yes, from a consumer standpoint, mobile is revolutionary when it comes to obtaining local information (which includes products in my book).

Here's what the discussion of that first point in AdAge goes on to say in part:

While online display advertising has been incredibly effective for many companies, it hasn't offered all that much value to small, independently owned businesses. For one, the web is good at scale, not so good at precision. It's difficult for mom-and-pops to reach the relatively small audiences that might reasonably be expected to patronize their stores.

The article references FourSquare, Place Pages (Google) and GoWalla (but not Yelp) as a new and improved way for local advertisers to connect with customers. In isloated cases, it may be true that FourSquare is a boon to SMBs (See our related post: FourSquare Morphing into Mobile Loyalty Program for SMBs). Indeed, some advertisers might be able to find new business and improve loyalty and frequency with a FourSquare or GoWalla. But in another way these sites/companies simply add more noise to the local (SMB) advertisers' consideration set. 

I suspect the article's authors are not that familiar with local, small business advertising and are speaking at a conceptual level. They don't know that most local advertisers with any budget to spend are getting 10 calls a day before 9 am from sales reps of one sort or another. 

With an established brand, online reach (25+ million uniques), a strong mobile presence across platforms and, let's not forget, 200 telephone salespeople, Yelp is in a much stronger position than its newer mobile challengers to successfully sell to "mom and pops." 

The local world is full of clutter, noise, confusion and fragmentation. Yellow pages publishers and independent sales channels such as Yodle or ReachLocal are trying to knit all that together into a "network" or single point of contact and simplified selling proposition. Google, for its part, is almost in a unique position here (selling only its own traffic) because of its dominance of local search and huge mindshare. 

Beyond this there are lots of others selling to the local market: ValPak, daily and weekly newspapers and other specialized print publications (e.g., Pennysaver), other local coupon providers of one sort or another and others (the list goes on). Much of all this is "opaque" to the SMB owner. He or she is growing more savvy but doesn't have time to fully investigate all the options or test what works and what doesn't generally speaking. 

Most SMBs want a trusted partner that will help them navigate the complexity of online and mobile advertising. For those that want to DIY or go it alone, they're much more likely focus on a "brand" or big name: Google, Yelp, Facebook, even Twitter. It's very challenging for a little-known startup to get attention among SMB owners, let alone sell anything to them -- especially "at scale."

So while mobile and LBS on the consumer side is increasingly compelling and will lead to more connections between local buyers and sellers, local advertiers' lives are being made more difficult -- not less -- by the advent of more local-mobile players and options. 

Having said all that, I think that FourSquare has strong momentum among various segments of users and becomes a takeover target in the not too distant future by a larger player that has a stronger capacity to "monetize" the consumer traffic. 

Will Apple's iPad Get People to Pay for Content?

There have been many rumors and articles in the past several months about Apple courting "old media" for its tablet launch. The Wall Street Journal devotes much of its article from yesterday on the forthcoming Apple tablet to the topic:

Apple has recently been in discussions with book, magazine and newspaper publishers about how they can work together. The company has talked with New York Times Co., Condé Nast Publications Inc. and HarperCollins Publishers and its owner News Corp., which also owns The Wall Street Journal, over content for the tablet, say people familiar with the talks.

New York Times Chairman Arthur Sulzberger declined to comment in an interview Wednesday on its involvement in the new device except to say, "stay tuned."

Apple is also negotiating with television networks such as CBSWalt Disney Co., which owns ABC, for a monthly TV subscription service, the Journal has reported. Apple is also working with videogame publisher Electronic Arts Inc. to show off the tablet's game capabilities, according to one person familiar with the matter . . .

Apple pitched media companies on a "best of TV" subscription service to television networks under which customers would pay a monthly fee for on-demand access to programs from a bundle of participating TV networks, giving consumers another way to readily access television content.

Clearly people are buying books and newspapers via the Kindle. But Apple may be uniquely positioned to pull off this pay model because of the "culture" of paid apps for the iPhone and its iTunes payment platform. It may be the case that out of the gate to get specialized, formatted content on the tablet you'll have to pay. 

However, undoubtedly there will be a Safari browser. And with an Internet connection many people might navigate around the pay wall to the desired publisher's free Internet site. As the anticipation builds toward launch, how can the company possibly live up to the hype?

We'll see next week. But in the meantime, here's a scenario to consider . . .

Are people going to have an iPhone or other smartphone, a laptop (with a dongle) and now a tablet (with a plan)? That's a lot to ask and probably closing in on $300 in monthly connectivity fees. That's not counting the home ISP charges starting at $30 per month at the low end.  

But let's say that Verizon or other carriers offer a reasonable subsidy, bringing the device down to under $500 with a two-year contract. An all-you-can-eat data plan or MiFi hotspot (as an alternative) might run $40 per month. What if this tablet could truly be a netbook substitute (with a dock and USB keyboard) as well as have a gallery of apps like the iPhone. That would be pretty interesting. 

You could potentially do VoIP calling (Skype, Truphone, Vonage, Google) and entirely ditch the carrier voice plan. Most people won't pursue this, but it's quite possible. This also argues for a time in the next three years where people are only interested in a fast data connection and are less and less willing to pay for voice . . . 

Here is a roundup some of the latest speculation:

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.

WhitePages: Mobile Web Better Than App Ads

Yesterday MediaPost covered a case study/mobile ad campaign from Continental Airlines that appeared on WhitePages.com's iPhone app and its iPhone mobile website. Continental and WhitePages had expected ad performance (as measured by CTRs and bookings) to be better on the app than on the mobile website.

But that was not the case. In fact the iPhone mobile web version of the same ad creative performed better than the app.

I reached out to WhitePages to get more insight and information. The company shared their slides about the campaign with me. Here was the ad creative shown on the WhitePages mobile website and in the company's iPhone app -- essentially identical:

Picture 111
Here's what WhitePages and Continental found in terms of consumer response to this same creative in the two iPhone environments:

Picture 112
How did the WhitePages and Continental attempt to explain the outcomes of this campaign; and what other insights emerged?

  • Task oriented utility app users don’t want to leave the app
  • Top banner ad placements performed better than bottom ads
  • Day part targeting has potential (heavy travel searches late in the day)

As the bold bullet above asserts, they observed and inferred a reluctance by users to click on the app ad and potentially leave the app environment. This is a very interesting finding and requires more investigation. 

There were also some open questions that WhitePages, Continental and its agency partner said needed further study:

  • Is mobile is best for reaching, servicing and up-selling existing customers?
  • Are bigger incentives needed to drive ticket purchases in the mobile environment?
  • Are mobile internet users still hesitant to purchase high consideration/price items?

This study should not be too broadly generalized; it's one campaign. But it raises interesting questions about in-app vs. mobile Web advertising and how they might be used differently or in complementary ways -- assuming similar results or outcomes are observed by others.

I'm grateful to WhitePages for sharing this data because marketers are still in a largely experimental stage with mobile advertising and the marketplace still needs a great deal of education about "best practices" and successful case studies.

AdMob December: Nokia Leads in Developing Markets, Slipping in West; Apple, Android Showing Growth

It's always important to point out that AdMob's data come from its network, which is not the same thing as the mobile Internet as a whole. Certain trends may be exaggerated or underrepresented accordingly. But I believe that directionally the data capture what's going on in the broader market. With that caveat, AdMob has released its December, 2009 metrics report

This report captures handset and smartphone operating system share around the world. Here are some of the regional bullets the company has released:

  • Asia: Nokia continues to be the leading manufacturer in Asia by a wide margin with 53% of requests in Q4 2009.  After launching in several countries in Asia in 2009, the iPhone had a strong Q4 and doubled its share of smartphone requests to 27%.
  • Eastern Europe: Nokia’s share decreased slightly throughout the year to 35% in Q4 2009.  Apple, Sony Ericsson, and Samsung devices generated 23%, 12% and 9% of requests, respectively.  Eight of the top 10 smartphones in the region were Nokia devices, including the 6300, N70, and N95.
  • North America: In Q4 2009, Apple lead with 40% followed by Samsung with 17% and Motorola with 11%.  The iPhone generated 54% of smartphone requests in Q4 2009. Android share grew throughout the year reaching 27% in Q4 2009, by far its highest penetration in any region.
  • Western Europe: Apple made strong gains in manufacturer share in 2009. In Q4 2009 the Apple iPhone and iPod touch generated more than half of total requests from the region at the expense of Nokia, Samsung, and Sony Ericsson.  Android had a strong Q4 2009 and generated 8% share of smartphone requests, second only to North America in penetration.

 Here are the market share graphics . . . 

Global manufacturer and smartphone operating system share: 

Picture 250

Picture 251

 Devices Western Europe:

Picture 245

 Devices North America:

Picture 246

North America shows strong Android growth above (though it's off in Europe), while Palm is fading. In particular Droid showed significant growth vs. the previous quarter. In AdMob's data BlackBerry is flat or off (BlackBerry had huge international sales last year, which should show up at some point in AdMob's data). Finally Windows Mobile is MIA in these data. 

Nokia should see these data (as well as others in the market) as alarming. Symbian will get an update and new UI upgrades this year but it may not be enough in the face of iPhone, RIM and Anroid competition. Nokia has a very strong position in Asia, Africa and Eastern Europe but it's losing momentum everywhere else according to AdMob.