The mobile ad networks have gotten together and carved out a day to woo brands during Advertising Week in New York later in September. Dubbed the Mobile Advertising Summit, the event is sponsored by four mobile ad networks:
The agenda is full of agencies, with some big names from traditional ad agencies, including:
among others . . .
Yesterday the news came out that ad network AdMob had acquired the assets of "mediation layer"/aggregator AdWhirl. This likely sets the stage for an exchange play (in earnest) by AdMob, analogous to what Yahoo has with RightMedia on the PC.
AdWhirl enabled iPhone developers to sign up for ad units/inventory from a wide range of ad networks, to improve fill rates -- it was promising 100% -- and optimize CPM/CPC revenue in addition. At one point AdMob had said it was no longer going to work with AdWhirl but later decided not to go through with that move. Now the former has bought AdWhirl.
Deal terms where not disclosed. AdWhirl had reported $1 million in funding and so I'm guessing that the purchase price was south of $10 million (perhaps several million shy). Reportedly AdWhirl will now expand to encompass other apps platforms, including Android, BlackBerry and so on.
In expressing its objections to AdWhirl's methodology at the time, AdMob VP Ali Diab said in a blog post:
What we have also found over the last few months is that mediation layers significantly impair AdMob’s ability to optimize the selection of ads for the apps that choose to use them, by obstructing our view of these applications’ traffic profiles. These traffic profiles are a key input parameter that we use at AdMob to select the right ad for the right app at the right time. By working directly with the publisher, AdMob is able to generate a much more accurate profile of the traffic, in terms of both volume and timing, generated by a specific iPhone app, which will enable us to optimize the revenue potential that we can deliver for the app.
Now AdMob has embraced the "mediation" concept, perhaps shrewdly so. AdWhirl can now be the basis of a broader marketplace or exchange that will reach multiple smartphone platforms. AdMob thus gets a kind of "hedge" if the mobile ad market should start to heavily favor exchanges vs. networks. Other networks, such as Quattro, have been experimenting with delivering third party ads along with their own to publishers.
AdMob CEO Omar Hamoui provided the following statement to TechCrunch:
Our open source solution will be both for the client and the server. We anticipate there will be many independent servers run by developers, and possibly our competitors as well. Once we release the code into the community, we think it will be adopted widely.
Most developers use mediation layers for percentage based inventory allocation. This is not something that you can game or manipulate. The mediation component either fulfills the percentage allocation or not. We are committed to making this solution as open as it needs to be to make everybody comfortable. We also expect the market will hold us accountable to this course of action.
The AdWhirl team has visited our offices over the past several days as we have worked through this deal. However any claims that we have historically been sharing data with AdWhirl or manipulating how it works for our benefit is completely false.
Since the news broke we’ve been talking to developers and they agree that the key is an open and transparent solution. We expect to be held to that.
The article in which that quote appeared asked the question whether AdMob would maintain AdWhirl as a "neutral" exchange or whether it was going to favor its own advertising. Commenting on the deal, along those lines, Greystripe CEO Michael Chang said the following about a potential "conflict of interest" for AdMob:
“We believe that it is a conflict of interest for an ad network to own a mediation company. A mediation company needs to be a separate entity to do its job of unbiased optimizing of a number of ad networks.”
If AdWhirl does remain neutral and open as AdMob CEO Omar Hamoui promises it should continue to thrive. If it becomes biased toward AdMob's own inventory or in some other way, new "meditors" will rise up to replace it.
According to the Pew Internet & American Life Project, based on a review of historical survey data, the top daily activity for US teens is text messaging. In other words, teens text more than they do almost anything else. In addition, we've reported on mobile SMS campaigns that reflect response rates that are often 2X to 10X higher than online advertising. Yet T-Mobile has said that SMS campaigns in Europe with well-known brands were, on average, 30X more effective than online display advertising.
Here's Pew's teen activities chart:
In addition SRG reports (n=2,000) that for young women (12 -24), mobile is the technology with the greatest impact on their lives:
You should join us then for the forthcoming webinar in Thursday, August 27: SMS Marketing: Direct Route to Consumer Engagement, featuring 4Info and ChaCha. We'll provide an overview of the market and they'll provide cases and concrete examples of SMS marketing in practice.
It's free and if you sign up you get a copy of our corresponding white paper -- also for free.
Scarborough Research has found that the combined category text/email now exceeds "Internet sites" as one of the ways that US consumers obtain coupons. Newspapers remain the top source.
The firm's recent consumer survey found "that 8.6 million (8%) of U.S. households currently acquire coupons via text messages and/or email." According to Scarborough:
Those consumers who obtain coupons via text messages and/or email tend to be young, affluent, educated and female. Scarborough data shows that they are 14% more likely than the average adult to be ages 18-24; 51% more likely to be a college graduate or have an advanced degree; and six percent more likely to be female. Where do these consumers live? The top local market for text message and/or email coupon users is Providence, RI. Twelve percent of households in Providence typically obtain coupons via text message or email. Washington D.C., Atlanta, San Diego, Austin and Chicago, where 11% of households get coupons via this medium, are also among the leading markets for this activity . . .
While I understand the logic of grouping email and SMS together, they're two distinct mediums. However, we've also found high levels of consumer acceptance of mobile offers and coupons (vs. other types of mobile advertising) in our consumer research.
AdAge features a piece that advises mobile marketers to start looking beyond the iPhone. Yes, that's prudent advice as a general matter; the iPhone represents a tiny slice of the handset market. However, if you're talking apps then it's all about the iPhone -- at least right now. The app experience is less significant on Android; it will grow over time and as more Android devices enter the market it will become a potentially important apps platform.
Rhomobile and Appcelerator (and others) have "write once" native apps development platforms. This scenario will become more common, allowing publishers and developers to more efficiently build apps across the major smartphone platforms. Right now, however, among smartphones it's really mostly about the iPhone:
According to Nielsen (pre 3Gs), iPhone users:
As the AdAge article points out, if you want reach beyond the iPhone, you can and should think about the mobile Internet. Google itself is increasingly banking on the browser as its "cross-platform" strategy. However if you need an app to create the optimal user experience then it's: iPhone, BlackBerry, Android, Windows Mobile and Symbian (outside the US) in order of potential reach.
Related: After iPhone exclusivity ends, AT&T is looking to a "plethora" of devices to constitute its "second act." AT&T reportedly envisions a broad range of connected devices with related consumer subscriptions to the network.
PaidContent has used Nielsen data (from an article in Mobile Marketer) on unique visitors to compile a list of the largest mobile ad networks. Here's the list according to the site (based on monthly unique reach in the US):
I invite the companies on the list (or comScore) to dispute it and provide their numbers.
City guide and local search utility CityVoter has launched an iPhone app. I spoke briefly to CityVoter CEO Josh Walker about the app and provided some feedback. During the call, he acknowledged that it was imperfect but that the company was testing it and would develop version 2.0 after gaining customer and market feedback. He characterized it as a first effort. And with that caveat, it is a good one.
CityVoter provides local content for media partners such as local TV affiliates and newspapers.
The new iPhone app features categories that allow users to browse the top five businesses ("winners") in each. Some of the categories are clever or non-traditional (such as "cheap eats," "great meals," "out and active"). The difference between CityVoter and many other local sites and mobile guides is that it features "best of lists" (based on community voting) rather than an extensive list of businesses in the particular heading or category.
The idea is efficiency. Walker pointed out that this was especially true for mobile, where users often want quick information. Here are some screens:
The app lacks certain features that I believe would make it more useful. But the top lists, use of images and category browsing are very helpful. I told Walker that the horizontally scrolling "parade of winners" on the home screen should be modified in my view.
The highly visual nature of the app is central to its appeal. And that's most fully expressed on the carousel screen.
One of the interesting things about the app is that unlike some of its competitors that use categories and location awareness to find nearby businesses, CityVoter doesn't do that. It only uses location to find the user's city at the outset.
AdMob says this morning that it served its "100 billionth ad." The company has been around since 2006 served its "billionth" ad in 2007. (McDonald's comparisons seem inevitable here.)
Here are some data cited in the blog post announcing the 100 billionth ad:
Meanwhile, AdMob has decided, at least temporarily, to not discontinue support for "ad mediators" AdWhirl and TapJoy:
In order to ensure that we are focused on doing what is best for our publishers, we have decided to temporarily delay the discontinuation of support for mediation layers until we can introduce a comprehensive plan that meets our publishers’ needs while also continuing to provide advertisers and end users with the best possible experience on mobile.
It took quite awhile for "ad exchanges" to arise online. Years after the proliferation of ad networks ad exchanges came along to aggregate inventory and bring more "liquidity" to the market. They also aim to overcome market fragmentation. Indeed, there are more than 400 online ad networks and, depending on how one defines exchange, 5-10 online ad exchanges.
A parallel trend is taking off in mobile, even before mobile ad networks have reached anything approaching maturity. Today mobile ad exchange Mobclix announced that it had developed the largest mobile ad exchange:
Through partnerships with over 20 leading ad networks, Mobclix provides the largest community of developers, advertisers, agencies and ad networks on one common platform for consolidated relationship management. As marketers leverage the Mobclix platform for precise audience targeting based on geographic, demographic and behavioral insights, developers use its analytics and advertising expertise to gain access to multiple networks in order to secure 100 percent fill rates and the highest eCPMs.
Mobile ad networks (partial list):
Mobile "exchanges," "mediators" and/or marketplaces (partial list):
Also some of the "networks" in the first list are starting to incorporate quasi-exchange features and third party inventory.
Measurement firm comScore says that there are 29 million smartphone owners and more than 1,000 mobile devices (obviously extending beyond smartphones) being used to "access mobile media" in the US market. The company also contends there are 233 million mobile subscribers in the US. CTIA says the number is 270 million.
Using comScore's 233 million mobile subscriber "base" and the figure of 29 million smartphone owners arrives at a penetration rate of roughly 12.5%. Our data suggest a 15% penetration level. Others in the market put the smartphone percentage even higher.
The reason the smartphone number is important is that smartphone adoption is directly correlated with mobile Internet engagement (leading indicator) and, over time, mobile ad revenues. The comScore data affirm this; smartphone users are:
The company also said that 59.5% of US mobile users have sent or received SMS messages (see our SMS marketing report here) and 25.3% have received an SMS ad.
Separately, comScore identifies the top mobile applications categories:
Source: comScore (May, 2009)
There are "three worlds" in mobile: apps, mobile Web and SMS. In the case of smartphone owners, they will use all three to varying degrees. However non-smartphone owners are generally not going to be very engaged in the "mobile Internet" because of data plan cost (and corresponding inhibitions) and generally poor user experience.
What's interesting to contemplate is an emerging category of phones that exists between low-end feature phones and the iPhone and its bretheren. This category is represented by INQ's "social mobiles," phones offering built-in apps that provide a better experience on Facebook, Skype, Twitter:
According to the release:
The new phones offer high-spec functionality without the hefty price tag - shaking up the market by giving operators a unique proposition - a 3G social mobile with the speed, usability and suite of applications capable of driving data usage in the mass market.
The INQ Chat 3G is the company's first qwerty-style phone, while the compact INQ Mini 3G expands the range and provides an entry-level social mobile ideal for the price-sensitive prepay market. They complement the award-winning INQ1.
For the two new phones, Twitter joins the suite of communications applications that INQ has already woven into the heart of its social mobiles: which include Facebook, Skype and Instant Messaging.
These are inexpensive phones that offer a high-end app experience around certain functions or sites. This doesn't provide an iPhone-like mobile Internet experience, nor is there an app store, just a few high use case apps specifically tailored to the phone. I suspect we'll see more of this sort of device, not a true "smartphone" but more full featured and high functioning than today's lower end phones -- especially to appeal to the price sensitive youth market.
Pandora, the top Internet radio brand -- really the YouTube of Internet radio -- and the top free app for the iPhone in 2008 has struck an ad sales deal with Clear Channel, according to AdAge:
Clear Channel's radio ad sales rep firm, Katz Media Group, will start selling display and audio ads for Pandora through its Katz 360 digital sales group
Pandora comes to Katz 360 with a fledgling display-ad business that just introduced audio inventory in late 2008, yielding a total $18 million in 2008, or 95% of the company's revenue. Doug Stern, Pandora's director-audio sales, expected that total to double by the end of 2009 before the Katz 360 deal, and is now even more optimistic that Pandora will fit into advertisers' mind-set as often as it does listeners.
To date, Pandora has been using Google on its iPhone app to monetize inventory with AdSense banners. Apparently there are occasional audio ads that appear on Pandora, but I've never encountered one.
I'm a daily (and heavy) user of Pandora but, as I said to founder Tim Westergren at the EconSM show earlier this year: the minute I start hearing audio ads interrupting the music I'm gone.
Pandora has spoken in the past about a subscription offering (for its heaviest users). Audio ads could be part of a dual strategy to monetize inventory but also to drive those (like me) who listen to Pandora, in part because there are no ads, to a subscription offering.
We'll see how it plays out but there's danger in injecting conventional audio advertising into Pandora and alienating its audience -- or at least me.
Pandora, which owes its success in large measure to its iPhone app, has now become a clear (channel) acquisition target.
Mobile video ad platform and network Transpera put out a release today showing dramatic growth of video consumption on partner MSNBC's mobile properties:
Since first introducing video into the msnbc.com mobile Web product in March, monthly video views across the full suite of msnbc.com mobile product offerings has increased 207% - that’s an impressive 3x more video views in just over 4 months.
Further, according to msnbc.com, 60% of its mobile users are the most sophisticated class of smartphone user: they are savvy, active, and shop online.
InsightExpress performed the research on mobile video users for Transpera. Among "mobile users who watch mobile video at least once a week," the company found the following:
Source: Charts and data InsightExpress
Mobile ad network and search vendor JumpTap now says that its "premium ad network" reaches 42% of the US mobile internet audience, or 22 million people*, citing Nielsen figures. The premium network includes:
go2 Media, Hearst Magazines digital media, LatCel, Mobclix, MoFuse, and Weather Underground to an already impressive list of top tier properties. The network currently serves ads for hundreds of mobile sites, carriers and application developers including AT&T, Alltel, Ask.com, E! Online, Kargo (includes MotorTrend, Tiger Beat, Shape, US Magazine, Star Magazine, & BlackBook), LimeLife, MSNBC, and Shazam.
The company put out a release this morning that highlights its "momentum" in the market. I spoke briefly Friday to Paran Johar, JumpTap's CMO. He told me, among other things, that he's seeing "increasing mobile budgets, increasing seriousness" among advertisers.
We discussed a range of industry metrics and he told me that the JumpTap's advertisers break out 60-40 in favor of CPM vs CPC. This is similar to what AdMob has indicated.
Johar asserts that JumpTap is distinguished from other mobile networks by its carrier data targeting. In the US, for on-deck advertising with AT&T, US Cellular, Virgin Mobile and Boost (both Sprint properties), a range of carrier data are passed so that they can be leveraged for more relevant ad serving.
JumpTap started as a white label search provider, seeking to counter Google and Yahoo! with carriers. As Google and Yahoo! (and Microsoft) started to do more direct carrier deals, the company began to develop its ad network and that part of the business now represents the future.
JumpTap and Medio Systems used to be almost indistinguishable in terms of their claims and presentation of their capabilities to the market. However I haven't heard anything from Medio in quite some time. JumpTap appears to be going strong.
*Nielsen assumes a total US mobile Internet population of approximately 53 million. We believe the numbers are larger than that, although they decline if frequency of usage becomes a critical variable.
Skyhook Wireless has released a white paper entitled "Developer’s Guide to In-Application Advertising: How developers today can make money off apps" (.pdf). As the title indicates, it's aimed at mobile app developers or would-be mobile developers. The document offers a range of "how to" information and advice, including best practices.
It's a kind of crash course on mobile advertising and the mobile ecosystem for those unfamilar with the wonderful world of apps or how to make money with them. In addition, there are also interesting bits of data sprinkled throughout, from Skyhook's recent survey of mobile app developers. For example, location and demographic targeting appear to be the most desired capabilities or qualities among developers:
At the end, the report also features a list of vendors: ad networks, analytics providers and "ad enablers."
This morning's conference call with Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer covered a broad range of topics related to the Microsoft-Yahoo! search deal. Here are some excerpts from the call transcript related to mobile:
We want to invest in what is really important to our future success, including winning audience properties, display advertising capabilities, and mobile experiences . . .
I'm excited that this agreement provides us with the focus and the resources to invest in our audience properties, display advertising leadership, and mobile experiences . . .
We have the option of using the Microsoft technology for the mobile Web experience. It's not exclusive as it is on the PC. But we certainly have the benefit of it, and we will start, in fact, exercising that right to do it.
So, the only difference is it's not exclusive. If somewhere down the road we wanted to switch, we could, but there's no intent in that arena.
I think all of us would say we don't know what we don't know about all of the scenarios that we're going to try to invest in, in the mobile case. If -- and Carol can speak for herself, but it won't make sense to do a whole separate crawl of the Internet for Web sites to do mobile search, and yet what that really looks like, even whether the ad model for mobile search looks like the ad model frankly for PC search, I think that's an interesting question, and this gives Yahoo! flexibility to consider that broadly.
think the thing is for us is what we're very interested in, just like by the way with PC-based, we're very interested on doubling down on the mobile experience to integrate search as part of that, to integrate our content such as our normal finance, news, sports, homepage, that sort of thing. So, being able to have an integrated search is important, and it also frees us up to, as I said, really invest in the other areas of the mobile experience.
So, again it's a partnership that is very supportive, and allows Yahoo! to do what it does well, and that's really be the center of information, entertainment, friends, family, activity, and that sort of thing, both the desktop and the mobile experience we're looking for.
What this means is that Yahoo!, although not required, will be using Bing algorithmic search index for mobile. It makes sense from an economic perspective. Part of the reason Yahoo! is doing this deal is to outsource technology development and reduce costs. It would thus make no sense to invest in search for mobile and not on the PC.
Mobile search monetization and how that will go is a little more unclear. One version of the story is: direct overlap between PC and mobile. But that's been more Google's approach. Yahoo! has treated PC and mobile search separately. So I'm unsure how this will play out. In the broader relationship Yahoo! will sell "premium search" (complex campagins to large advertisers) while Microsoft will handle the self-service aspect of the business. Yahoo! will thus manage the PC + mobile search and display ad campaigns for large advertisers.
Separately, there are open questions about how differentiated Yahoo! Search and Bing will be on the PC side, but they will certainly be very differentiated on the mobile side (compare m.bing.com with new.m.yahoo.com) despite the fact that they will use the same index.
Microsoft and Yahoo! announced their long-awaited search deal this morning. Here's the press release which includes videos from both CEOs. Here's a site set up to explain the deal and here are the terms laid out by the release:
According to remarks made on the conference call, Yahoo! doesn't have to use Bing/MSFT's technology in mobile. There's more flexibility there for Yahoo! to maintain a separate search technology or work with other partners if it chose to do so. However it sounded like Yahoo! would be using the MSFT/Bing technology there as well. Part of the "flexibility" on the mobile side comes from uncertainty regarding how mobile advertising will play out.
Here's a paraphrase of remarks made by the two CEOs regarding mobile:
Bartz: We have option of using MSFT technology for the mobile experience. It’s not exclusive as on the PC. If somewhere down the road we want to switch we could.We’re very interested in doubling down on the mobile experience. Having an integrated search is important.
Baller: We don’t know all the scenarios involving mobile search. This gives Yahoo flexibility on the mobile side.
The two companies on the PC side are creating a single paid search market. There's more gray in the mobile execution. However I suspect that it will also play out the same way in mobile: a combined market for mobile paid search. On the PC side that means the reach of a combined Microsoft-Yahoo is approaching 30% market share; it will be something comparable on the mobile side.
Mobile answers service ChaCha released the results of a case study today based on an SMS campaign run on its network for the movie Transformers. It ran in June before the movie's theatrical release. We feature this case study in a white paper publishing later today on SMS marketing.
Insight Express performed the study. Here are some datapoints and takeaways:
French 2D barcode platform vendor MobileTag and outdoor advertising company JCDecaux have announced a deal to put 2D barcodes on 19 bus shelters throughout the area of Paris known as the "Quartier Numérique" primarily in the 2nd arrondissement. The area is WiFi enabled. The barcodes provide access to "practical, historical, cultural and entertaining content using flashcodes." According to the release:
To obtain content, users simply shoot one of the flashcodes (2D barcodes) located on either side of the bus shelter with their mobile phone's camera which then gives instant access to the mobile portal via their Internet connection.
The technology works with smartphones and feature phones (with a camera). However the technology is not so instant. MobileTag's software must be installed for the content to render on phones. This software/application download requirement is a barrier to widespread adoption of 2D barcodes. However, apps stores are conditioning smartphone users to download software so this may be less of a barrier over time.
Yahoo! recently launched its new, customizable homepage for the PC. Though in development for a year it represents a gutsy and postive move for the site. And in the past couple of days Yahoo! updated its mobile site, better aligning the new PC homepage with the mobile experience (though it's still not fully aligned).
The Yahoo! Mobile iPhone app was a dramatic improvement over the old Yahoo! Go application when it launched in Q1 of this year. And the new mobile Web portal in some respects offers a better experience than even the iPhone app.
The new mobile Yahoo.com is somewhat more streamlined, simpler and cleaner than the earlier version of the mobile website. It has three principal sections: Today, My Favorites and All Sites. The Today section is programmed by Yahoo and is essentially a news site featuring news, display ads and video. My Favorites is a highly customizable area that includes mail, a feed reader and incorporates social network updates ("Social Pulse"). It also allows for simultaneous updating of Facebook and Twitter. The former Yahoo! mobile social networking tool oneConnect appears to be gone.
Finally All Sites is a useful collection of Yahoo! properties from Local and Messenger to Sports, Movies and Search. As an aside, the iPhone version of the site can tailor content (and ads) to user location because Safari now supports location (after the 3.0 software update).
The layout and overall user experience on m.yahoo.com keep improving and these most recent changes and upgrades make the new mobile version of Yahoo! probably the most useful single destination on the mobile Internet.
Youth oriented European MVNO Blyk has decided to give up being an MVNO and become an ad network and mobile applications provider instead. Existing customers are being transitioned to established carriers in the UK and Netherlands where Blyk operates. It will reportedly deliver ads to carries it works with in those markets, Vodafone and Orange. Though Blyk had some great case studies and ROI for advertisers seeking to reach the youth market, it was having trouble growing and broadening its reach.
Over in the US, MVNO VirginMobile is suspending its ads-for-free-texts-and-minutes-program SugarMama. The explanation offered is cryptic:
Why is Sugar Mama going away?
It's not because Virgin Mobile got sick of giving away free minutes, or because people were using it too much, or anything like that. It's due to some operational issues which impacted our ability to effectively deliver and administer the program.
One could read that as cost, as in the program cost to much for the returns it was generating for Virgin. But I'm speculating. What it means is that these two programs are now both shuttered. In Europe there may continue to be some ads-for-minutes programs available via Blyk but effectively the model is on "life support" if not dead.
These programs were ahead of their time because there aren't yet enough mobile ad dollars flowing through the market. As mobile advertising picks up we may see another run at ads-for-minutes/texts. Fundamentally these offerings are about youth markets. Blyk's audience was 16 - 24.
Related: According to PaidContent, Virgin Mobile is preparing litigation against the operator of the Sugar Mama program, Ultramercial. This would potentially explain the cryptic explanation ("some operational issues") above for shuttering the program.