Mobile Advertising

BIGresearch: Dislike for Mobile Marketing Has Increased

Flying in the face of several recent reports that argue people are becoming more comfortable with mobile marketing BIGResearch has found the opposite. According to the firm, based on surveys of more than 15,000 US adults, "the percentage of people who don’t like mobile marketing has increased":

  • Text ads: 66.8% don’t like (v. 63.5 in ‘08)
  • Voicemail ads: 60.2% don’t like (v. 56.8% in ‘08)
  • Video ads: 59.6% don’t like (v. 56.1% in ‘08)

In addition more people now say that "marketers need permission prior to sending an ad" (58% v. 55.6% in ‘08) and those who think they [ads] are an invasion of privacy (52.1% v. 49.5% in ‘08).

Here is BIG's profiling of "mobile marketing users" vs. "non-users" (those receptive and less receptive):

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In our most recent consumer research we also found high levels of resistance to mobile advertising; however, the way the questions are framed helps determine the outcome. In addition there are often differences between attitudes and behavior in concrete situations.

GoogMob Is a Big Deal for Both Companies

By now even your grandmother probably knows that Google has acquired mobile ad network AdMob for $750 million in stock. Here's an excerpt from a post on the acquisition put out by AdMob CEO Omar Hamoui:

The best part of all this is what's next. We are not going away. After our deal with Google closes, we will work together to accelerate the pace of innovation in this area. Our product and engineering teams will keep building great products for all of our customers. Our business development team will keep working to maximize ad revenue for the more than 15,000 mobile Web sites and applications that make up AdMob's publisher network. Our sales teams will keep working with our thousands advertisers to deliver successful campaigns and our marketing group will keep pushing to get the word out about mobile. It's just that now we will be able to do an even better job for all of our customers.

I have one important thank you left and it is for Google. We've been blown away by their entrepreneurial attitude, their speed, and their insight. My management team and I have been lucky enough to spend time with some key people at Google, and we've always walked away excited about our shared values and similar cultures. In all of our interactions we've felt their passion for innovation and new ideas. Obviously this transaction represents only a part of their overall interest in mobile but all of us at AdMob are looking forward to working with them to make sure that the future of mobile is no longer so far away.

"We've been blown away by their entrepreneurial attitude, their speed, and their insight."

Indeed, Google is now at the forefront of mobile display advertising and seemingly moving much faster than its competitors on several fronts. Here are some mobile ad network reach numbers (monthly uniques) compiled by Mobile Marketer from Nielsen data:

  1. Millennial Media: 45.6 million
  2. Yahoo!: 36.1 million
  3. Google: 31.9 million
  4. AOL/Platform-A’s Third Screen Media: 28.6 million
  5. AdMob: 25.7 million
  6. Microsoft: 25.4 million (doesn’t include the new Verizon deal)
  7. Jumptap: 23.4 million
  8. Quattro Wireless: 23 million

Assuming the accuracy of the numbers, if we combine the Google and AdMob figures it would make Google the ad network with the greatest reach in mobile. Google came late to display advertising online but is now charging ahead in mobile just as the market is picking up. Much of AdMob's inventory is now in apps on the iPhone and Android devices. But that's where the action is from a usage standpoint and that's where the best mobile ad creative is to be displayed -- although mobile Web is getting much better.

One of the reasons Google personnel said they acquired AdMob was to get the team, which has been thinking about mobile and operating in the segment for more than four years. This provides sales, creative and other mobile expertise that plugs a hole for Google.  

The acquisition could trigger a wave of M&A activity as nervous others try to build more scale or as larger players try to add mobile display assets that they believe they will now need to have to compete in the near and medium term. 

Jumptap's CMO Paran Johar said not long ago to me on the phone that they were seeing two and three times the number of RFPs of only a few months ago. It's clear that mobile advertising is gaining steam and crebility and that this acquisition will only further that development. Indeed, Johar said this morning in an email statement:

The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising. We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google. The industry front runner will be determined by who can deliver the most advanced targeting capabilities for better ROI for advertisers and publishers.

Another interesting angle here is Google's potential to create a unified PC-mobile ad buying platform for brands and large advertisers. Mobclix just did something like that in a deal with and Traffic Marketplace. Google has the potential to do it on a much larger scale. 


Update: Here are some additional Nielsen (September) traffic numbers (minus Google & Yahoo!) provided to me by Quattro:

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Loopt Offers Local-Social Approach in Pulse

Loopt has been struggling to reinvent itself since Facebook came to dominate the mobile social landscape (and to a lesser degree Twitter). It's very hard to compete with an installed base of 300 million, with more than 70 million using a mobile app to access the social network. Hence LooptMix and now Pulse.

Mix is a dating app and Pulse is much more of a ultiliarian local search tool, with social recommendations -- rather than a mobile social network that has local listings. The (re)positioning is important.

There are two modes in Pulse: search and "pulse" (discover). Here's what the NY Times said earlier this week:

Loopt aims to distinguish itself by making its service comprehensive. It incorporates feeds from 20 sources, including listings and review services like Zagat, Citysearch and Eventful as well as content sites like DailyCandy, Thrillist and The Village Voice.

Pulse produces a personalized and ever-changing list of recommendations based on where you are, the time of day and Loopt’s own data on where you and your friends have been. It shows editorial descriptions and reviews from the partner sites and averages the ratings a business has received.

The two differentiators are thus content breadth and the push-recommendations. At a high level, however, this is the same conceptual discussion we had with Aloqa this afternoon. Having said that Loopt is better off through diversification and repositioning as a local entertainment source rather than being primarily a friend finder. 

Yet there are a lot of companies in the mobile-local segment and the incumbents will not cede the space easily. Witness Whrrl (from Pelago) that was aiming to be what Pulse aspires to. The company was unsuccessful gaining traction as Yelp, Citysearch and other established companies moved more aggressively into mobile. 

However Loopt seems pretty scrappy and adaptable. We'll see how the new direction fares. 

Tetherball and ViVOtech Promote RFID Mobile Loyalty Programs

Mobile loyalty firm Tetherball and "contactless" payment services provider ViVOtech have joined forces to promote NFC/RFID-based mobile loyalty marketing programs. Tetherball is currently running one such program with QSR chain Dairy Queen. It works as follows: the Dairy Queen customer, who has previously opted-in to receive communication or offers via SMS (and has placed an RFID tag/sticker on her phone), takes that phone to a small in-store kiosk and swipes it to receive a paper version of the offer (coupon) and redeem it. The kiosk prints out the right coupon for the customer, controlling for fraud and making redemption easier at the register. 

The new partnership combines this RFID based mobile loyalty program approach with ViVOtech’s installed base of contactless readers (and their customers). Here's how the press release explains it: 

Integrating traditional marketing methods such as in-store advertising, customers are engaged to sign up for mobile loyalty rewards programs offering promotional discounts and rewards points for purchases or visits. Upon joining, customers are given a Tetherball Tag™ powered by ViVOtech technology, a tiny RFID chip that is easily affixed to their current mobile phones, which uniquely identifies them through Tetherball’s sophisticated technology platform. Tetherball clients are then able to send offers to their customers via standard text messaging. Offers are redeemed electronically using existing in-store Contactless point-of-sale terminals or stand-alone Contactless kiosks provided by Tetherball. 

One of the challenges of the old system that Tetherball was using was the need to install the kiosk/readers at the POS. Now through this partnership they've got access to an existing infrastructure. 

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You can listen to a webinar featuring Tetherball President Jay Highley discuss mobile loyalty with SmartReply's Mike Roman from our recent Mobile Marketing Summit.

Data from Quattro's Q2 Mobile ROI Report

I'm finally getting to this a couple of days late, but ad network Quattro released some very interesting mobile advertising trend data about mobile ad performance, device specific patterns and CTRs. Like AdMob's reports these data are from its network and not necessarily an absolute reflection of the market; however, like AdMob, it's going to be directionally consistent with the broader market.

Here are a few of the data points and charts released by Quattro:

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There's much more data where that came from. A few things are interesting from the charts above:

  • iPhone/iPod Touch as top devices mirrors the AdMob data
  • iPhone users as most engaged with and responsive to ads directly contracts this study from Chitika, which claimed iPhone users had the lowest CTRs. 
  • The ads that people appear to be responding to (index of CTR) is not entirely intuitive: travel, food, retail (presumptive mobile categories) are low, while CPG, finance and autos are high.  

It's great to get these reports from companies like Quattro because they show actual behavior rather than attitudinal data from consumer surveys. These data should also convince people that display and brand advertising will have a very healthy future on the mobile handset and will not be totally marginalized by search.

AdMob's September Metrics: Android Rising

AdMob's latest monthly metrics report shows that Android-based handsets are growing as a percentage of overall requests. This month's report also shows the rise and fall of various handsets over a period of nearly three years. AdMob also takes pains to counter criticism it has received by being very explicit about what its data do and do not reflect:

The report is based on the ad requests we receive from our network of more than 15,000 mobile Web sites and iPhone and Android applications. The data contained in the report is a measure of mobile data usage and does not represent the traditional view of market share based on the number of handsets sold.

And now for the data:

  • In September 2009, the list of the top 10 devices in the US included five with touchscreens, six with Wi-Fi capabilities, and six with application stores.  These devices are responsible for a much higher percentage of mobile usage than their share of handsets sold.
  • In September 2009 42% of requests in the US were made from Wi-Fi capable devices. 18% of actual US requests were made over a Wi-Fi connection in September 2009 compared to only 5% in September 2008.
  • Devices running on Android accounted for 17% of smartphone traffic in the US in September 2009, up from 13% in August 2009. The HTC Dream (G1) was the number three device and the
  • HTC Magic was the number 10 device in September 2009 in the US. As with the iPhone OS, much of the Android traffic in AdMob’s network came from applications.

The following tables reflect handsets responsible for mobile Web and app views on the AdMob network (US and UK). Note the shifts from 2007 to 2009: The rise of Apple, HTC, RIM and Samsung in the UK; and the fall of Motorola (and to some degree RIM) in the US. 

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The following compares US smartphone OS share on AdMob's network in Decemberr 2008 vs. September 2009 (bottom):

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  • iPhone -- 2008: 48%, 2009: 48%
  • Android -- 2008: 2%, 2009: 17%
  • Windows Mobile -- 2008: 15%, 2009: 5%
  • RIM -- 2008: 18%. 2009: 14% 
  • Symbian: 2008: 2%, 2009: gone
  • Palm/WebOS: 2008: 9%, 2009: 10%

None of these are market share numbers per se, as AdMob is now careful to point out. But they do reflect directional trends in the broader market.

Mobile Marketing Summit Tomorrow

I know from talking to a number of people that Mary Meeker's enthusiastic presentation on mobile (among other topics) at the Web 2.0 Summit in San Francisco opened their eyes. It's not that people haven't been taking mobile seriously exactly but for many it was still something for "later."

Meeker's numbers and bullish assertions about how mobile is ramping very quickly woke them up and lent "credibility" to the mobile space -- for those in the tech and financial communities who haven't been paying close attention. So more people are now taking mobile much more seriously. 

If you want or need quick immersion in mobile marketing and advertising, with companies that have been doing it and are in the trenches, who will offer practical, concrete examples, case studies and tactical advice, you should attend our free Online Mobile Marketing Summit this Wednesday. It's being presented by Internet2Go, BrightTalk, Mashable and the DMA.

The sessions include:

You can attend any or all of these and it’s all free. You just have to register on the system in advance. Companies presenting include:

  • Ad-Village
  • Brand Anywhere
  • DMA
  • HipCricket
  • iCrossing
  • InsightExpress
  • LSN Mobile
  • Opus Research/Internet2Go
  • NearbyNow
  • SmartReply
  • Tetherball
  • VerveWireless

Attend one or attend all the sessions for free. This is a fast way to come up to speed on a range of mobile marketing and advertising topics that will be criticial to know and understand, sooner rather than later.

No planes, trains or automobiles -- or hotel rooms -- it's all online

Mobclix Announces Deals to Enable Online-Mobile Crossover Display Buys

Google and Yahoo! are both making their paid-search advertisers' online campaigns available in mobile search results, at least on smartphones. As a general matter this simplifies the process for advertisers, who can make one ad buy and get distribution across platforms. That's not truly been possible for display advertising to date (unless you count Google's content network's automated banner creation from text ads).

However in a move that will have significant implications for online ad networks and potentially display advertising as a whole, mobile ad exchange Mobclix has announced a deal this morning with AOL's and Trafffic Marketplace. The deal will facilitate cross-platform display ad buying. The idea is that the two online networks now become a place that advertisers can buy mobile display inventory, as well as online, via Mobclix. 

Mobclix says that it's the largest mobile ad exchange and works with more than 20 leading mobile ad networks. Mobclix's rise has been very rapid. Founded in September, 2008 the company promises "100% fill rates" for publishers and app developers. 

As mobile gains momentum -- Jumptap told me last Friday that it has seen a big increase in RFPs from advertisers in the past few months -- this sort of cross-platform capability becomes highly desirable and will help accelerate that momentum. It creates a kind of "instant reach" to mobile audiences.

One of the historical inhibitors of mobile ad buying for agencies and large advertisers has been the fragmentation of the market. This deal (and others that will likely emulate it in the future) overcome the problem of fragmentation by creating a "one-stop-shop" opportunity.  AOL's Third Screen Media was part of its former "Platform A" initiative that was supposed to be that sort of "one-stop shop" for display ad buying; however the promise of that concept was never truly fulfilled.

Recently AdMob acquired ad "mediator"/exchange AdWhirl. Arguably the most visible mobile ad network, this announcement may put some pressure on that company and other mobile ad networks to make similar cross-platform deals. Accordingly we're probably entering a time of increased deal-making and even consolidation in the mobile ad network space as the economy improves. 

Google Custom Search for Mobile: Syndication Push

One of the ways that Google built its business and brand in the early days was by powering search on third party sites. Lots of newspaper publishers for example offered Google site and Web search on their sites. But it was pretty extensive beyond that and drove considerable volume over time.

Now Google is offering custom search to mobile sites. This is a syndication play that may help drive additional Google mobile search volumes, which have grown 30% Q over Q. Ads and monetization are also a part of it (and part of the appeal for some publishers). See, for example, this search for "sushi":

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Are Apps Here to Stay? So It Would Seem

BusinessWeek has an extensive piece on apps, mobile and online, and the corresponding revenue projections associated with the "app economy":

The money flowing into apps is inspired by the belief that smartphones and other portable devices are transforming the tech world. The growth of mobile computing is sparking a renaissance in software development. Gaming apps are the most popular programs right now, but mobile shopping, content, social media, communications, and productivity tools are attracting increasing amounts of capital. "We don't think this is slowing down anytime soon," says Matt Murphy, the partner at Kleiner Perkins running the fund dedicated to Apple-related investments.

Yesterday VW announced free game app, "Real Racing GTI," for the iPhone. This is one of the only "vehicles" being used to promote the company's new GTI car for the time being. Later there will probably be conventional advertising and marketing, but for now it's the app (essentially product placement) and PR. This will enable VW to determine how (cost) effective mobile and specifically apps are as a marketing/advertising medium.

Magazine publisher Conde Nast is offering the December issue of GQ as a $2.99 app download. According to AdAge

It's a potentially significant step in print publishers' efforts to make something positive out of digital media. For one thing, the iPhone app puts Conde in position to play on new e-readers and tablets, the company said today. "If you can get here, you're ready to go there," President-CEO Charles H. Townsend said in a presentation to reporters. "That's what this is about."

The new app platform, however, could help the company squeeze circulation and real ad revenue from digital. Because the apps will include all the editorial and ads that the print editions do, the Audit Bureau of Circulations will consider the apps to be paid circulation just like newsstand sales and subscriber copies. That's important because advertisers only want to pay for ad space in issues that the audit bureau defines as paid. But it's also a big deal because Conde wants the digitized versions of its magazines to command print ad rates, not the far lower rates seen online.

Local shopping and inventory enabler NearbyNow has shifted its business substantially to developing mobile apps for magazine publishers and helping them monetize those apps. NearbyNow is building some of those Conde Nast magazine apps, such as Lucky and Brides. It's also working with Runners World, Seventeen and a range of others to come. CEO Scott Dunlap previously told me that some of these apps have more downloads than the print publications have subscribers. 

What apps allow is a richer experience on smartphones, and potentially eReaders over time. However in some cases the distinctions between smartphone apps and the mobile Web version of the publisher experience are breaking down or becoming more similar. Facebook's iPhone mobile Web site is a case in point. Not quite as rich as the app, it's a very good substitute and worthy alternative:

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Google is another company that's trying to bridge the divide between "app" and mobile website. But the oft-mentioned idea that apps are simply an interim step until the mobile Web is sufficiently developed to "take over" now seems incorrect.

At our online mobile marketing summit next week, Rachel Pasqua of iCrossing and Scott Dunlap of NearbyNow will talk about apps and the "mobile app opprtunity." The session -- as well as the entire summit -- is free. You can register here.

Nook Mobile Ads on the iPhone, LA Times Reveals Kindle Subscriber Numbers

I was reading the NY Times on the iPhone last night and saw a display ad for the new Barnes & Noble eReader "Nook." I was immediately struck by this for a couple of reasons:

  • Barnes & Noble is smartly going after audiences on smartphones who are likely buyers
  • I've never seen a comparable ad for Kindle

Amazon just dropped the price of the international version of Kindle to $259 to remain competitive with the Barnes & Noble device, which doesn't offer a non-US version (perhaps yet). In addition LA Times editor Russ Stanton says that the newspaper has 2,700 Kindle subscribers. That's a largish number for a new technology but a tiny contribution (less than $100K) in absolute terms. 

There are maybe 10 eReader devices announced or already in the market, with more to come. And while the Kindle offers "limited" Web browsing I believe the Nook does not. The winning device(s) will offer a large or full-size color screen, WiFi and full Web browsing and video capability. Alternatively, a range of devices can co-exist if they're relatively inexpensive and well equipped. 

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Mobile Display to Yield to Search? Guess Again

There are a number of ad forecasts that assume mobile display will constitute a very small portion of mobile ad revenue over time. While search is a compelling form of advertising on mobile devices the argument that display will be marginalized or insignificant is misguided and incorrect.

Search and display complement each other online and while search often gets credit for conversions (the "last click") and is perceived as the most effective form of online advertising the reality is more nuanced and complex. People are stimulated to search by traditional media, by conversations and by other online ads or promotions.

Search does have a role to play in "brand" advertising and increasingly search is evolving to allow for richer branding displays in results -- take Google and Yahoo!'s experiments with video in search results and brand icons, as well as Yahoo! Search Monkey, for example.

But a short survey of mobile display ads from the Yahoo! site yesterday should illustrate why display will continue to have an important role in mobile advertising: 

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If I'm looking for a Lexus dealer the search ad works well. However in that context I've already formed a clear interest. How does Lexus stimulate my interest? The answer is traditional media, online display or  . . . mobile display advertising. 

The above ads for Clarion and Lexus are much richer and more interactive that the simple text ad in search. In a way they're like mini apps. Indeed, many branded apps are like uber-display ads that offer rich functionality. The issue with display ads is targeting and relevance. That's generally the place from which the anti-display prognosticators assume mobile display ads will wither: "nobody wants to see irrelevant display advertising on their handsets." 


That's why all the flavors of targeting are being employed in mobile. There may be some regulatory hurdles to come around mobile behavioral targeting. But mobile display (defined here to include video advertising and any graphical presentation of ads) will be a large and important part of the mobile ad ecosystem for a long time to come.  

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:

 Picture 6

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.