Mobile Advertising

Placecast-Harris Survey: 42% Interested in LBS Ads, Offers After Opt-In

Location-based ad targeting firm/network 1020 Placecast has been putting out research and powerful anecdotal interviews with women as part of an "alert shopper" series. Now the company is releasing survey research done with Harris Interactive that addresses mobile shopping behavior.

The survey (n=2,029) was conducted online in July, with US adults, and "measured consumer sentiment towards using mobile devices as it relates to shopping, sales promotions and impulse purchases." At the top level, here's what Placecast found:

Most people make "impulse purchases" with some regularity: "Nearly a quarter of adults owning cell phones [22%] make this type of impulse purchase at least once per week or more often. Among women with cell phones ages 18 to 44, 27% report making at least one impulse purchase a week; among men 18 - 34, this number rises to 31%."

For this impulse purchase group:

About 2-in-5 of these adults would like to receive alerts about sales for:
-Movie/event tickets (43%)
-Weather information (39%)
-Clearance or liquidation sales (37%)

About another 3-in-10 of these adults would want to be alerted about:
-Pizza (31%)
-Clothes (30%)
-Fast food (27%)

About one quarter would want to be notified about:
-Electronics (25%)
-Music (24%)
-Happy hour specials or bar and night club offers (21%)

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The apparent bottom line here is that lots of people are interested in getting LBS and deals information on their mobile phones via alerts. The chart above reveals the hierarchy of shopper interests around alerts.

Last year HipCricket released survey findings that are broadly consistent with those above around offers and mobile coupons. And in our survey work we've found that about 42% of mobile users are interested in offers or deals from retailers or merchants from whom they opt-in to receive information. 

The numbers are pretty consistent that there's a sizable audience, approaching 50% of users, interested in mobile deals/offers/alerts. The Placecast survey argues that these people are also open to "impulse purchase" influence via their mobile devices. 

NearbyNow Launches Another Magazine iPhone App: Brides

In addition to Lucky, Seventeen and Runner's World, NearbyNow has launched Condé Nast Brides magazine. (Consider this to be a prelude to many more Condé Nast magazine mobile app launches.). The app is similar to NearbyNow's original Lucky Magazine iPhone app. It allows brides and interested others to browse wedding dresses and related apparel. They can make an appointment to try on a dress at a local bridal shop, buy online and/or email images of the dress to friends and relatives.

The target audience is reportedly affluent female iPhone owners between 20-35 years old. Here are some screens from the app: 

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The app also features advertising sold by Brides magazine.

NearbyNow is shifting more of its resources into developing apps like this for magazine publishers. NearbyNow CEO Scott Dunlap recently told me that there was considerable demand from these traditional publishers, some of whom where already making good money from ads that they were sellling into these iPhone apps. It's impressive to me that these traditional publishers, otherwise considered perhaps to be digital laggards are leapfrogging brands and other types of marketers by so aggressively embracing mobile. 

As one of the benefits of working with NearbyNow the company already has retailer inventory information and so can locate the item in stores and enable consumers to reserve it for purchase in the store later on. 

Here's some additional discussion from Mobile Marketer.  

Nielsen Q2 Mobile Data: Smartphones, Ads, Social Nets

Nielsen blogged about a range of mobile data and user behavior earlier this week. Here's a summary of highlights:

Handset purchase criteria: Mobile consumers around the world applied different criteria when deciding what phone to purchase. Cost was the top factor across the board

US mobile subscriber numbers: the U.S. mobile subscriber base grew 7% to 277 million by the second quarter of 2009, which represented 221 million unique users, adjusting for multi-phone holders. (This argues there are more than 50 million people in the US who own more than one phone.) 

Smartphone penetration figures: Currently, smartphone penetration varies by country. In Italy and Spain, more than one-quarter of new mobile handsets purchased were smartphones, with 28% and 23% market penetration respectively. The United States followed at 17%, Sweden at 13%, Canada-Germany-United Kingdom at 12% and France at 11%.

(comScore contends US smartphone penetration is 12%; our data from earlier this year show roughly 15%)

US voice and data spending: All mobile subscribers spend $57.04 in billed services, with the monthly voice plan accounting for $35.40 and data extras adding $12.10 to the bill. Blackberry owners typically rack up $88.85 per month in charges, with $45.10 in voice plan costs and $28.20 in data extras. iPhone users spend nearly as much on data ($37.60) as they do on voice ($42.00) and have an average monthly bill of $89.35.

iPhone usage patterns: iPhone owners lead the way in media usage when it comes to mobile Internet (89%), text messaging (87%), software/application downloads and location-based services (75%), video/mobile TV (41%) and full track music (38%).

US user access to social networks on mobile devices: The distribution of 18.3 million unique social network users by the top three sites is Facebook (26% reach), MySpace (13% reach) and Twitter (7% reach).

Mobile advertising: One-third of all mobile data users were exposed to some form of mobile advertising in Q2 2009. SMS and MMS comprised the two most popular forms of mobile advertising response. Roughly 16% of consumers responded to mobile ads most frequently via text message, a picture or MMS message, email or by visiting a designated web site. Teenagers were the most accepting of mobile advertising—the acceptance rate declines as age increases. Perceptions of mobile ads were highest among all age groups if it lowered their bill. Consumers age 45+ were the least accepting of mobile ads.

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Regarding mobile advertising, here's what our April consumer survey data show about ad exposures and ad types:

Opus Research/Internet2Go 4-09

Source: Opus Research April, 2009 (n=707 North American mobile users, exposed to ads [n=75]) 

Mobile Display and the 'Tyranny of the Click'

There are now quite a few studies that confirm what many people have known for a long time: the click is back metric with which to asses the effectiveness of (mobile) display advertising. While it may be a good metric for search, because of the behavior of search engine users, it does not capture the influence of display advertising on consumers. In addition, myriad studies from comScore, iProspect, Yahoo!, Microsoft and elsewhere show also that display + search campaigns perform better than search or display in isolation.


At Nielsen, we’ve done extensive work, particularly in the consumer packaged goods and retail industries, to help advertisers quantify the effect that online display advertising has on offline purchases. The results are quite positive. Looking at more than 300 campaigns over a span of about 5 years, using the basic formula below, we find the average ROI is a positive 157 percent . . .

Beyond the obvious finding that advertisers should not be overly focused on click through rates, the big idea here is that advertisers should be including online display advertising in their overall marketing mix, increasingly taking advantage of flash/video ad units to reach the consumer, without the hope that the person exposed to the ad will be one of the few that actually click on ads.


The original research, conducted using July 2007 comScore data, showed that 32 percent of Internet users clicked on at least one display ad during the month. These clickers were segmented into Heavy, Moderate and Light Clicking segments based on the group of users accounting for the top 50 percent of clicks (heavy), middle 30 percent (moderate), and bottom 20 percent (light). In 2007, comScore, Starcom and Tacoda found that heavy clickers represented 6 percent of U.S. Internet users, moderate clickers accounted for 10 percent and light clickers accounted for 16 percent. By March 2009, those numbers had dropped substantially in each case, to 4 percent of Internet users for heavy clickers, 4 percent for moderate clickers and 8 percent for light clickers.

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The results underscore the notion that, for most display ad campaigns, the click-through is not the most appropriate metric for evaluating campaign performance. Rather, advertisers should consider evaluating campaigns based on their view-through impact. comScore has conducted more than 200 client studies demonstrating that online display ads generate significant lift in brand site visitation, trademark search, and both online and offline sales among those Internet users who were exposed to the online ad campaigns – whether they clicked on the ad or not. These results, compiled in comScore’s influential “Whither the Click?” white paper, were reported in the June 2009 issue of the Journal of Advertising Research.

Online Publishers Association:

[T]he study “assessed 80 of the biggest branding campaigns across 200 of the most trafficked sites over a month’s time analyzing consumer behaviors of those Internet users who were exposed to display advertising . . . and measured three consumer actions: 1) searches conducted related to the advertisers’ brands; 2) site visitation, the traffic driven to the advertisers’ site and 3) consumer spending, the e-commerce transactions related to the advertisers’ brands.” The top-level findings were as follows:
--One in five conduct related searches and one in three visit the brands’ sites
--Users spent over 50% more time than the average visitor to these sites and consumed more pages
--Users spent about 10% more money online overall, and significantly more on product categories related to the advertised brands
--Higher income audiences visited the advertisers sites

Display also lifts online and offline sales. Indeed the "evidence" is overwhelming that display advertising's impact and effectiveness cannot be measured by the CTR. But mobile is in danger of succumbing to the click as ad networks seek to lure agencies and brands to their offerings and to minimize "risk." There's also the general culture of online advertising transferring into mobile and the default reliance on CTR as the universal measure of value. It's already happening.

To prevent this from settling in and from devaluing mobile display advertising, publishers, ad networks and others need to be vigilant and make a conscious effort to prevent the encroachment of the click. Beyond the problem with CTR as a measure of value, mobile is its own animal and should have a set of metrics that take into account the unique characteristics of the medium.

Search Will Not Be 73% of Mobile Ad Spend

Because of a research note sent out last week by Mark Mahaney at Citigoup the BIA/Kelsey mobile ad numbers were picked up in Business Insider and at TechCrunch. However, they're based on basic and in my view incomplete thinking about the market. As I've argued before forecasts are primarily a marketing vehicle and in one sense don't matter. They're almost like the "how many angels fit on the head of a pin" discussions of the Medieval European clergy. But because some numbers get repeated and become established it's important to be thoughtful and as rigorous as possible in developing them. In particular among the Kelsey numbers paid search is not going to constitute 73% of all mobile advertising in the US in 2013. 

First the numbers: 



SMS: 63%
Search: 24%
Display: 13%

Compare eMarketer: 

SMS: 60%
Search: 22%
Display: 18% 



SMS: 9%
Search: 73%
Display: 18%

Compare eMarketer: 

SMS: 28%
Search: 35%
Display: 37% 

Today display represents 22% and search 47% of the online ad spend. In recent quarters there has been a move toward search and away from display to a degree. Display prices online, until recently, also took a pretty severe beating because of excess inventory. Thus a big bet on search in mobile by analogy seems to make sense. Search is proven, search is safe. There's also the logical priority of local search in mobile, which occupies a disproportionate volume of mobile search revenues in the Kelsey forecast. 

But unless you define "search" extremely broadly to be any directional-intent lookup, using a variety of methods and modalities, this 73% figure is unlikely to come to pass. It's just too large a share. In addition, as TechCrunch points out, Kelsey is effectively arguing that 73% of mobile ad revenues in the US will be owned by Google as the dominant player. I'm certainly bullish on local and search more generally but these projections are insufficiently sensitive to potential future market developments and the more complex nature of mobile. 

Google and Yahoo are both putting ads in mobile search results on smartphones as a matter of routine. In this sense the issue of how mobile search will be monetized is conceptually solved: online campaigns simply go into mobile with limited additional effort by the advertiser. Mobile clicks on paid search results = mobile search revenues. However there are only one or two ads in Google mobile results that are "above the fold" compared to as many as eight or so online. Better CTRs in mobile ultimately may compensate for smaller numbers of ads to some degree. 

However, the conventional PC based search experience as it exists today will not prevail on the mobile handset over time -- it could in the world of eReaders and tablets if they catch on and become mainstream Internet access devices. But the mobile "search" experience will evolve. Competition guarantees it. There are a range of mobile apps and experiences that use a browse approach but also represent a "directional intent" lookup: Yelp's "restaurants" category that shows nearby places to eat. Is this a mobile "search"? yes and no.

There's also the question of the distribution of ads and ad revenues from apps vs. the mobile Web. Mobile apps are largely monetized and supported by display ad networks, including Google AdSense. And relatively soon, like search, online display campaigns will be more easily ported over the mobile. This will create a great deal more relevant display ad inventory. However there are some challenges that must be overcome before mobile display can truly fulfill its potential. But those challenges will be solved. 

Recently online display CPMs have fallen. And with display there's the question of whether the model is pure CPM, CPC or even CPA. If CPC prevails, which it rightfully should not, then the display contribution will be lower than if most mobile display is billed on a CPM basis. There's another post coming on why CTRs are a bad metric for mobile display. ComScore and the OPA have recently made that point several times.

Regardless, display (and rich media) will play a significant role in mobile advertising over the long term. That will include mobile Web and apps. How will AR be monetized? Both by search and display. Views through the camera will offer display ads, brand logos (not unlike what Google is doing with Maps on the iPhone), coupons and deals.

Then there's the question of definitions and what counts as "advertising" vs. "mobile marketing." SMS will have an ongoing role in mobile marketing, especially as a customer acquisition and loyalty tool and as a way to connect traditional media and mobile, but it may not turn out to be a huge "advertising" revenue generator. What about app development? Branded apps are both marketing and advertising vehicles but app development, clearly a mobile marketing expenditure, is not "advertising."

I'm trying to illustrate that there are lots of variables and a host of developments to come in mobile. Mobile is analogous to the PC but distinct in important ways and will follow its own evoluationary path. Search, in the sense of a directional lookup, is going to be a prominent feature of the mobile user experience but it won't be limited to a search box and blue links on Google (think about QR codes as as both search and display). Lots of "searching" in mobile will be going on outside of traditional search engines -- and that behavior will be monetized in different ways: sponsorships, coupons, deals, display ads, video, as well as conventional text ads.

Bridging the PC-Mobile Divide

Google and Yahoo! are both doing a range of things in mobile that connect the PC experience to the handset more directly. I've recently written about this with Google's local results in mobile. But there are other examples as well. Yahoo! does ad targeting from PC to mobile if users are signed in on the Yahoo! mobile site.

This bridging between mobile and PC is consistent with a "one Web" (Opera's phrase) vision that both companies are explicitly promoting. To that end, yesterday Google enabled its recently introduced PC "search options" in mobile, allowing users to refine or fliter search results as one can on the PC. Here are some screen images from the Google Mobile blog:

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While this may be helpful in select situations it doesn't represent a big enhancement to the mobile search experience on Google in my view. It's more important as another example of the PC-mobile crossover and attempt to leverage the PC experience to build mobile user loyalty by providing familiar tools and capabilities. 

Yahoo! isn't exactly duplicating the PC experience in this way but it is seeking to build a familiar experience in mobile. Yesterday Yahoo! announced some changes and upgrades for its mobile homepage. It's now available on 1,900 mobile devices and there are a range of improvements (including more video) for smartphones:

  • Dynamically updated content with pagination – without using additional screen real estate or refreshing, users are able to access a wealth of content. For example, the ‘Today’ module now surfaces ten of the leading stories from around the Web and gives users immediate access to 48 of the top news, business, sports and entertainment articles directly to consumers’ fingertips.
  • An enhanced RSS reader –   that now supports photos with captions, and adds the ability to scroll through more headlines from favorite feeds without having to refresh content.
  • Enhanced mobile video integration – with one click consumers can watch streaming video including the Yahoo! produced Tech Ticker – a rundown of the latest financial news, and Prime Time in No Time – a recap of last night’s TV shows, as well as news, entertainment and sports videos from the Associated Press.
  • Enhanced movie results – movie posters now show you exactly what’s playing at a theatre near you, and with a few simple clicks you can watch the trailer, read reviews from Yahoo! and Rotten Tomatoes, and even buy tickets from participating theatres – all directly from your mobile device.

 Picture 7

Yahoo! has built a terrific mobile experience. The "My Favorites" functionality in a way conceptually duplicates the personalized homepage experience that Yahoo! introduced on the PC, although it's not a direct crossover. My guess is it will eventually become that.

Stepping back, Yahoo!, Google (and Microsoft) are seeking to take their massive audiences online and port them to mobile (especially smartphone) devices. This is also true of Facebook. In the mobile traffic reports we see how the brand strength of these companies (Microsoft to a lesser degree) is translating into mobile user behavior and loyalty. As they continue to invest in mobile the PC-mobile connect becomes stronger and harder for companies that don't have that strength to get attention. Witness, for example, how Facebook and MySpace (to some degree) are starting to squeeze out all the mobile-only social networks because they have no brand or usage presence on the PC. 

ChaCha Launches Coupon Service, Enters Crowded Space

Seeking to both capitalize on the immense popularity of coupons and to also diversify its revenue base, ChaCha launched an online and mobile coupons service earlier today: makes it easy for people to search for local companies and offers by business type, area of the city, alphabetical listing, newest deals, and more, in a simple, friendly interface. Site visitors can print coupons at their desktop or send them to their mobile phones to be redeemed at their favorite businesses. They can also send a coupon via text messaging to a ChaCha in-store coupon printer. At launch, hundreds of local offers are on the site with special coupons and discounts. has 13 different main categories for deals ranging from home services, to beauty, to restaurants and beyond. 

We've written very extensively about mobile coupons and their appeal in the past. There's lots of data about coupon interest and response in my recent post on HipCricket's introduction of mobile coupons, so I won't repeat that information here. 

The move is a good one for ChaCha, the questions I have go to integration into the existing user experience and whether the site will be able to develop or acquire the volume of coupon "inventory" required for a successful offering. It appears. however, there's a good deal at launch: 

Picture 258

Yahoo! Search Ads Now Port to Mobile, Google's Bigger, Better Browser Ads

I had not known that on certain high-end handsets (Android, iPhone) Yahoo! is now showing paid search ads as a matter of course. The change came very recently. The approach, long used by Google, had initially been rejected by Yahoo! as not offering an optimal experience for mobile users. However, late last week Yahoo! made the change and posted about it:

[A]s of today, we’ve tweaked our Yahoo! Sponsored Search system to serve your ads to iPhone (all models, including iTouch) and Android mobile phones.
The coolest part is you don’t have to do anything to expand the reach of your ads. We’ve done it for you. As of today, your ads should begin appearing immediately on these devices for relevant searches, if they have not already.

Right now this is only in the US and only happening through Yahoo! directly, not its partners. Meanwhile Google announced larger and richer AdSense ads for mobile browsers:

Today we're launching a new feature for AdSense mobile publishers that will allow you to take advantage of the high-end mobile phone browsing experience. This feature offers publishers the ability to run larger AdSense ads visible on high-end phones. Before this launch, AdSense mobile publishers were only eligible to serve smaller text and image ads on their website content.

This is consistent with Google's emphasis on mobile and its growing emphasis on display advertising more broadly.

Interesting Developments in Mobile Mapping, Advertising and Search

It flew under just about everyone's radar when Apple purchased Placebase earlier this year. But the first fruits of that acquisition has led to a tremendous amount of discussion among industry analysts. Most thought positions Placebase as a "Google Maps killer", but that's highly unlikely given the number of local search-based applications (including Goog411) that use the Google Maps database to support location-aware query-and-response activity. Over at Screenwerk, I2Go's Greg Sterling gives a telling example of how ads are being baked into links generated when iPhone users generate queries on GoogleMaps.

It is a statement by Google that it has a mechanism to generate revenue from location-aware applications on the iPhone. At the same time it demonstrates how Google might be vulerable to location-based attacks on new revenue streams if the likes of Placebase or Bing Maps is able to displace it on key mobile platforms (specifically the iPhone or the forthcoming Windows Phone).

Mobile Ads: The Paradox of Targeting and Reach

I was on a call with Mobclix in which, among other things, we discussed location targeting and other types of targeting on mobile devices. The fantasy of mobile marketing and advertising is "right ad, right time, right place," also known as 1:1 marketing. That phrase is repeated almost as often as the joke about the last ten years each being the "year of mobile." 

What agencies and large advertisers want is reach. They want audiences and targeting but not at the expense of reach. In other words agencies and advertisers need big audiences that cross certain traffic thresholds before they'll pay attention. 

But the 1:1 marketing fantasy flies right in the face of those requirements. Same goes for LBS marketing (which ofters targeting but at the expense of reach; if you slice audiences by location they get smaller and smaller). This is a contradiction that is surprisingly not discussed very much at industry events or in articles about mobile advertising and LBS. 

The only way to reconcile the brand and agency desire for targeting and reach in mobile is to essentially do what Yahoo has done on the PC: create a dynamic ad serving platform into which the creative elements and offers are poured and which can then assemble those elements in real-time according to the targeting parameters, location and context of the end user. Google has also done a version of this online with its "local extensions" offering in AdWords. 1020 Placecast also does this to varying degrees in its campaigns. 

The dynamic ad server in the middle is the key to realizing the targeting benefits of mobile and providing the scale that large advertisers need to take the medium seriously. 

CNN iPhone App Feature Rich, Test for Paid News

CNN's new iPhone app offers a smorgasbord of news content, from text to live video. It also provides users the ability to directly upload video to CNN's iReport, its user-contributed news feature. The experience of watching video on the app (not YouTube) is especially good. Accordingly, the CNN app rivals and in some ways improves upon CNN's website itself. 

As you already know the app costs $1.99, which is a first for a news/content app (in my memory). It's also got prominent advertising, appearing as banners and full-page takeovers before video clips (expect commercials soon). Because the app's quality is so good and the fee is one-time only, rather than a subscription, I don't think the $1.99 will deter end users.

Those who don't want to pay can always go to the CNN mobile site and get the content for free, though the experience is not as good. 

Picture 9

As this plays out over the next several months, news organizations will be watching to see how users respond. If they respond favorably we'll see more changing for apps, like this. The Wall Street Journal has announced it will be charging a subscription fee for mobile access in the near future. With the exception of the Wall Street Journal, which is subsidized by corporations and tax deductions, ongoing fees for mobile news apps are likely to be met with tepid user response. There's empirical evidence that users will flee when the pay walls go up. Accordingly the CNN formula is probably the right one: a one-time fee for the app, plus advertising. But we'll see.  

Many publishers, however, may use online and mobile subscriptions as a print retention tool -- by subscribing to print you get online access (and maybe a mobile app) as well. Tablets and eReaders will also probably support a subscription model but it remains to be seen.

Forecasts Don't Matter, Consumers Do

At this point, there are tons of mobile ad forecasts in the market. Most of them are wrong. Why? Because they're too high level, have too few X variables or are insufficiently focused on the right assumptions and "levers." But it's also just difficult to predict the future and the rate of growth. Recall the early (and wildly inaccurate as it turned out) Forrester and Jupiter e-commerce numbers. 

There are generally two objectives for forecasts: planning and PR. If one is using a forecast for internal planning purposes it needs to be as accurate (read: conservative) as possible. By contrast, if one is trying to raise money or gain exposure, one needs to make the biggest splash possible. Thus the forecasts that offer the greatest growth, the biggest "hockey stick," are the ones that show up in conference and investor presentations.

Often the firms that are putting out the forecasts are equally seeking publicity or to promote something. So there's an inherent bias toward inflation. If forecast B is smaller than forecast A it won't get coverage; so it must be larger or more sensational in some way. This is not true for all firms across the board. For example, I would also say, from having spoken to Noah Elkin at eMarketer before he put out their US mobile ad forecast, that he was trying very hard to be cautious and sensitive to all the issues. 

But for all the love the media show them, mobile ad spending forecasts in the end just don't matter. They're just fodder for discussion and industry conferences. (I suppose they matter to investors in public companies who are speculating about the future.) But in my view they don't matter because consumers have already established mobile and the mobile Internet as an essential marketing medium. It's done. It's here. Stop telling the "every year is the year of mobile" joke. This IS the year of mobile -- for consumers at least. 

Those marketers that embrace it in earnest will benefit, those that "wait and see" will lose out on first-mover advantages. No debate. The only questions now involve "how" and not "why." Those that continue to ask why don't get it.

All brands should have an iPhone app. Period. This is even more true for companies that run loyalty programs. They must also consider building apps for other smartphone platforms: Android, BlackBerry, Windows Mobile and Palm. (Nokia outside the US). All online publishers should have sites optimized for mobile. All marketers should be considering how they can integrate their traditional campaigns with mobile and should have an SMS strategy. SMS should not be neglected

On the Internet many marketers still have not caught up to consumers. This is especially true in the local segment: marketers still don't "get" local and how consumers interact with the Internet. Consumers don't care about marketers, their sophistication (or lack thereof) or their strategies. Consumers care about finding deals, deciding where to go and what to do and communicating with others. Mobile is already becoming a more central part of those activities and will only continue to gain. 

Regardless of whether growth in mobile ad spending is 15% per year or 51%, marketers and publishers need to get on board. The train is leaving the station. 

Tetherball Offers Real-Time Loyalty Reporting

Mobile loyalty and coupon provider Tetherball has launched analytics that can show advertisers how their promotions are doing in real time (opt-ins, outs, redemptions). According to the press release:

Mobiquitous 2.0 provides detailed reporting at virtually any level required by clients – whether at a specific campaign level, geographic level or even for a specific time of day. Mobiquitous 2.0 provides clients with a “real time window” so that they can adjust quickly and leverage the real time nature of mobile marketing. Mobiquitous 2.0 is extremely flexible and supports standard reporting, as well as fully customizable on‐the‐fly reporting to deliver better visibility and analytics around specific program performance. 

You've got to like the name of the platform "Mobiquitious." Here's a screen shot that shows the dashboard:

Picture 143

The company claims mobile coupon redemption rates of "50% − versus 1%-2% with online and traditional paper coupons." 

eMarketer: Mobile Ads Worth $1.56 Billion in 2013

EMarketer just released its mobile ad forecast for the US. I actually spoke to analyst Noah Elkin about the details of the forecast a few weeks ago. Vexing questions surround how to define the market and about the assumptions behind the growth figures and distribution of ad spend. The three main components of the spend in the eMarketer forecast are SMS, display and search (see graph below).

There's a whole category of "mobile marketing" spending that is potentially large and not reflected here because it's not "advertising" per se (inventory puchased in search, on sites or in apps), including app development and mobile optimization. 

Here are the eMarketer numbers, which have been toned down a bit from prior estimates:

Picture 141

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Compare the current online mix of ad spending in the US, where display (including video and rich media) constitutes about 31% of the online ad spend vs. search, which is closing in on 50% (46% at the end of 2008 per the IAB). 

Poynt & V-Enable Team Up for Lo-Mo Money

Multiplied Media's Poynt for BlackBerry app has been wildly successful, now with over a million downloads. One could argue that Poynt "owns" local search on the BlackBerry. Today the company announced that it had partnered with V-Enable for directory listings and corresponding advertising in the restaurants category:

Multiplied Media Corporation, an award-winning, Calgary-based provider of mobile local search services, and V-Enable, Inc., a leader in local search and advertising solutions for mobile and internet, are pleased to announce an agreement to deliver local directory related content and listings for the restaurant section of Poynt, Multiplied Media's flagship mobile local search application ...

V-Enable has partnered with multiple information and advertising providers to assemble one of the largest national local business listings and advertising networks offered through an automated turnkey platform that matches user inputs based on their search activity.

V-Enable, which came out of the directory assistance world, distributes local listings and ads from a wide range of directory and mobile advertising partners. Here's a video demo of Poynt in action on the BlackBerry Storm:

Picture 117

Foursquare and Local Mobile Deals

I'll admit that I was an early Twitter critic and now I'm a convert. So I may be similarly wrong when I say the following about Foursquare: it's not a mainstream app or broad SMB ad platform because of its limited appeal to select groups of people (read: college students and twentysomethings with time on their hands). 

Recently Foursquare launched Foursquare for business, which is effectively a mobile coupon or loyalty program. There are a range of businesses seeking to drive visits via Foursquare. Here's an example:

Picture 113

Foursquare can create a kind of loyal, cult following and potentially drive meaningful foot traffic for selected categories of businesses (restaurants/cafes, bars, clubs, youth oriented hotels). But the commitment required to play and the mild complexity of the game creates a barrier for older (read: busy) adults and most SMBs.

This is not to say that Foursquare can't achieve success but it won't have the broad appeal that a Twitter does today. The appeal of Twitter lies in its simplicity.


Related: There Goes the Neighborhood: How Foursquare is Subtly Threatening Your Anonymity

Publishers: Mobile and eReaders/Tablets Important Distribution Platforms

The North American Audit Bureau of Circulations (ABC) recently surveyed its 4,000-strong "U.S. and Canadian newspaper, magazine and business membership to learn more about publishers’ current mobile initiatives, their strategic plans, and ABC’s potential role." What the organization found was the there's growing interest in mobile and most publishers increasingly see it as a critical distribution platform. This includes the emerging eReader/Tablet segment.

Here are the survey's key findings:

  • More than 80% of respondents believe people will rely more heavily on mobile devices as a primary information source in the next three years.
  • Nearly 70% agree that mobile is receiving more attention at their publication this year than last.
  • More than a third believe their publication already has a well-developed plan for attacking and conquering the mobile market.
  • 44% of respondents who track mobile’s impact on their Web site traffic said the devices increased visits by up to 10% today. Half believe mobile traffic to their Web sites will increase by five to 25% in the next two years.
  • Among senior executive respondents, 56% said their publication has plans to develop a smartphone application in the next 24 months, in addition to the 17% of respondents who already have an app in production.
  • Regardless of mobile’s anticipated rise, ABC publisher members do not plan to abandon their print publications in favor of a digital-only product in the near term.
  • While 55% believe that digital delivery of their publication is important to their strategic future, three-fourths believe that their publication will be available in a print form five years from now.
  • More than 50% of survey respondents believe the future business model of mobile content will be supported by both advertising and subscriptions.
  • Nearly a third believe that mobile will have a significant impact on their publication’s revenue in just three years.

Here are some charts from the report:

Picture 12Picture 10Picture 9

Picture 7

Souce: All Charts ABC

In terms of the eReaders or tablets that publisher-respondents thought would have the greatest impact on the market:

  1. Apple (tablet is still a well-established rumor)
  2. Amazon
  3. Sony
  4. Plastic Logic
  5. First Paper
  6. Other

Related: Microsoft to make "another run" at the tablet. And Archos' Android Tablet is about to hit the market.

Mobile Behavioral Targeting: Danger Ahead

Last week Microsoft announced mobile behavioral targeting (BT). The company said that behavioral data come from:

  • PC Web keyword search behavior from Bing Search
  • PC Web Site visits to various sites across the Microsoft network
  • Microsoft network data (i.e. Hotmail newsletters, Xbox subscription data)
  • Profile data from Windows Live

With Microsoft Mobile Behavioral Targeting, data from these sources and others is factored together along with its relevancy to create hundreds of unique, specific segments. Within these niches are the consumers who are most likely to be receptive to your message. Your mobile ads are served only to users in you desired segments, enabling you to refine your reach and increase your campaign's performance. Simple yet powerful, Behavioral Targeting is one of the most effective and efficient forms of mobile advertising available today.

It appears to be a probablistic model that isn't about individual users but aggregated user behavior. Yahoo! also employs BT in mobile. To my knowledge Google has not yet, but it offers BT online in the form of "interest-based ads." 

Behavioral targeting and other forms of online advertising are going to be regulated. The precise burden and disclosures remain to be seen, but there's almost no question that regulation is coming. The perception in Washington is that the big ad networks and sites are data mining at will without consent or the knowledge of consumers. 

The Center for Digital Democracy (together with other consumer groups) brought a complaint in 2006 to the US FTC and amended that complaint in 2008 to extend to mobile marketing and advertising. The concerns and objections go to the heart of mobile ad targeting. 

The paradox, which I've discussed many times, is that consumers don't want to be tracked but they only want relevant ads. If the major marketing companies are required to offer prominent disclosures and opt-out pages, many consumers will indeed opt-out of mobile advertising. The challenge is selling targeting to consumers as in their interest and how to make disclosures sufficiently prominent without making them a big roadblock.

There are some who've argued that all mobile advertising and marketing should be opt-in. Indeed, that works well for SMS campaigns and email. And search is an implicitly opt-in. But mobile display is where these privacy and disclosure issues will play out. As a practical matter it would be difficult to get consumers to opt-in to mobile display campaigns because there are so many sites and networks. One could imagine an industry supported "dashboard" where consumers managed privacy preferences and ad interests. But that seems almost impossible to pull off given the level of coordination it would require. 

The FTC will try and balance interests to allow mobile advertising to grow but is going to require more from mobile publishers and ad networks than is now the case. It will be really interesting to see how this progresses at the level of user experience because of the complications and challenges in pulling it off. 

ValPak Now Comes in an iPhone App

Direct mail/coupon advertising provider ValPak now has an iPhone app. It's nicely executed and offers a number of ways to get access to deals: searching, browsing by category and a map-based view that shows users all the deals across categories in a specific area.

Previously, after launching a new PC site that was better optimized for mobile, the company saw a big uptick in mobile coupon "prints." In fact the company told me that there was a 25% conversion on average from mobile visitors. In this case "print" meant clicking through to a particular screen that showed a code.

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A seach in the iTunes apps store reveals almost 30 apps that represent themselves as coupon providers or offer coupons in one way or another. 

I was speaking on Friday to a big online coupon site and they were raising questions about POS redemption of mobile coupons as a barrier. ValPak has solved that problem by simply asking users to "show coupon to business when placing order." 

Coupons are a big area of opportunity for mobile. We have plenty of data that support this proposition. Compete's recent smartphone survey also shows that mobile deals/coupons are of high interest to mobile consumers: 

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Survey: Millennials More Open to SMS Offers, Want Them Frequently

Reported about a week ago Epsilon’s Global Consumer Email Study (n=4,084) found that so-called millennials (18-25) are highly willing to receive opt-in marketing messages in email and SMS. According to the press release:

Compared to other age groups, millennials are more likely to use tools such as instant messaging (IM), social networking and text/SMS messages as their primary tool for personal online communications. Over one-third (35%) cited instant messaging, whereas 26% of 26-35 year olds and 11% of 36-45 year olds selected IM.

Another notable difference amongst millennials reveals they were more receptive to both online and offline specials in permission-based emails . . .

Here are the categories of offers that millennials were interested in receiving offers from more than once a day (according to the survey):

  • online merchants (34%),
  • entertainment (32%),
  • sports (28%),
  • special offers from traditional (offline) retailers (26%),
  • electronics information (21%), and
  • telecommunications information (21%).

Mobile-only categories of offers will be slightly different and include, for example, discounts on meals/entertainment.

Interestingly millennials want more frequent offers, which reinforces their loyalty. Other age groups in the survey were not as open to more than once a day offers. The survey also found millennials respond well to and expect personalization. However, Epsilon also found concern among them about spam, as one would expect.

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Source: Epsilon (June, 2009)

SMS is arguably better suited than email or IM for the higher frequency offers (opt-in only) because of its on the go nature and the fact that people are always in possession of their mobile devices. However marketers must be even more diligent about relevance and spam prevention in SMS marketing and on mobile devices generally.