Mobile Advertising

ChaCha 'Transformers' Ads Drive Big Awareness

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:

  • Males, 18-34, showed a dramatic 57% point increase in mobile ad awareness
  • Teens showed increases in unaided awareness, mobile ad awareness and purchase intent
  • Slightly older users, ages 19-24, responded best to the campaign with increases across all metrics
  • The campaign outperformed Insight Express' mobile norms in unaided awareness and mobile ad awareness 

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Partnership Puts 2D Barcodes on Bus Shelters in Paris 'Quartier Numérique'

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.

New Yahoo! Mobile Homepage (Re)Launches

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 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 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. 

Blyk Gives Up MVNO, SugarMama Goes on Extended Vacation

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.

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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.

Verizon Pitches Self-Service Audio Ads for 1-800-THE-INFO

First the good part: audio ads on free directory assistance (DA) platforms can be very effective. The bad part: most consumers don't call DA on mobile phones and most people who do call DA on mobile phones are still unaware of the various free options. Both AT&T and Verizon, which have traditional consumer-pays DA, also operate free services:

  • 800-yellowpages (AT&T)
  • 800-THE-INFO (Verizon) 

Both are ad supported. But the carriers have done little to promote them partly because of fears of "cannibalization" of call volumes from the cash-cow traditional DA offering.

At one point not too long ago there were high hopes that these free services would become significant mobile ad platforms -- to date 800-Free-411 is the most heavily monetized -- but, relatively speaking, advertising hasn't materialized at the levels hoped for. And it's unlikely to happen in the near term either. The whole segment is something of a disappointment from a revenues standpoint, although Free 411 is supposed to be profitable.

Boosting call volumes of these free services is the key to increased monetization. However that relies on promotion and traditional awareness marketing, which simply isn't happening in the sector. Free 411 and Goog 411 are the most well known. 800-yellowpages also shows up as one of the most used, but that's probably a "false positive," based on the familiarity of the "yellow pages" brand. 

This morning Verizon put out a press release on behalf of 1-800-THE-INFO promoting self-service advertising via VoodooVox's platform. The release says:

Businesses can start advertising on 1-800-THE-INFO simply by going to and following the steps to create an advertising campaign that includes audience targeting and scheduling. Businesses can upload their own pre-recorded announcements or create new ones through the platform's Audio Talent Network of voice-over actors. In addition, businesses have the ability to see up-to-the-minute performance analytics during their campaigns . . .

Through the VoodooVox self-service interface, advertisers can create an account and launch their first campaign in as little as 30 minutes, and the average one-month campaign usually won't cost more than $200.

This is really a play for brands and franchises, who already have radio assets. It's unlikely to have any traction at the "local-local" level among true SMBs. 

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To attract more advertisers, these services need more users. It's pretty simple. 

Yahoo! to Link Homepage and Mobile More Closely

Yahoo! today is unveiling a new more customizable homepage that allows users to integrate Yahoo! verticals with outside content from third party publishers, via a series of widgets or applications that appear on the left hand side of the page (see images below). They replace a static list of Yahoo! owned verticals and sites that currently reside in the left column.

As part of the new Yahoo! homepage, which has been in development for a year or so, Yahoo! will be revamping its mobile portal. If users are signed in they'll be able to access the same list of "favorites" they've set up on their homepage on mobile (image at bottom). This should make the mobile site, which has been customizable since relaunch early this year, even more user friendly.  

Here's the new homepage:

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 Detail of left "favorites" column:

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Yahoo! will also finally start autodecting devices and showing the mobile portal automatically to mobile users. If you go to on the mobile Safari or Android browsers today you see a rendered version of the current homepage rather than the mobile homepage, which requires users to go to

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AOL's Mobile Strategy Likely to Mirror PC: Many Apps, Brands

There are lots of articles online about new AOL CEO Tim Armstrong's first 100 days and his strategy going forward. AOL is going to be spun off through an IPO some time later this year. The company has reorganized and seems to be focused broadly on display advertising and content. I've written generally about it at Search Engine Land and more specifically about local issues on Screenwerk.

Turning now toward mobile, PaidContent breaks out the mobile part of its interview with Armstrong:

PC: Where does mobile fit into your strategy? Because mobile has sort of fallen off the face of the earth when it comes to AOL.

Tim Armstrong: Let me clarify two things about mobile: There’s two foundational elements that are going under every strategy area: one is global and one is mobile. You will see us with a clear, succinct strategy and structure around mobile and global going forward. 

What Armstrong has generally signaled is that AOL will seek to simplify and unify its infrastructure while supporting numerous brands on top. He's said he likes the fragementation of the Internet:

I think we have a basic philosophy here, which is the web is going to get more fragmented over time. People are going to figure out how to serve unique audiences in faster, better, more concrete informational ways and that is a strategy that fits very well with what we have been looking at with Media Glow properties and other things. Fragmentation on the internet is good for us. We believe in it and we’re riding that trend. 

So mobile will likely be an extension or dimension across AOL properties rather than a separate vertical. In a way it's a mirror of the "local as a vertical" issue. Local isn't really a vertical, it's an element of almost every online content area or vertical. Mobile and local are both "horizontal-verticals." 

AOL has a great opportunity in mobile to build experiences and content that help its PC brands/sites as well. The thing is it can't be an afterthought or some sort of perfunctory exercise if it's going to work. 

Google Earnings Call Mobile Comments

Google reported Q2 earnings ($5.52 billion) on Thursday. Here are the mobile-related comments made during the earnings call from the Seeking Alpha transcript

Google CEO Eric Schmidt: 

In mobile and android, another area of innovation in new businesses, mobile devices are becoming an extension of the Internet. We all know this. And more and more Google searches are coming from mobile phones of all kinds. So we are focusing to innovate in this space. So for example, we’ve done great news with Android, with somewhere between 18 and 20 Android powered phones on the market by the end of the year, which is phenomenal.

Product SVP Jonathan Rosenberg:

We also run product development by encouraging teams to make big product bets on key technical insights. We believe that our most innovative products historically, if you consider say search, maps, Gmail, news and Chrome, all of them are based on technical breakthroughs, or BETS. Recently we’ve become bullish on a new emerging standard called HTML 5 and it’s helping to make the web the platform for very powerful and rich applications. It’s especially important in mobile where the high-end phones with very rich browsers are becoming the norm.

And this quarter, we launched mobile versions of Gmail and mobile web maps that run in the browser using HTML 5. Their performance really is remarkable.

We believe that the runway to innovate due to the power of computers on these mobile devices is nearly unbounded at the moment. We are also making another technical bet with Google Chrome OS. A whole new generation of web-based apps demand a much better, faster user experience and once you have all your stuff online, you ought to be able to just open up your computer and get there in a matter of seconds.

We are also innovating and driving monetization with mobile and YouTube as well. Mobile monetization picked up a good bit of momentum as search traffic grew, again driven mostly by the smartphones. And we’re seeing that users on these high-end phones are very active and engaged beyond search, so display advertising on those phones is actually emerging as an interesting mechanism.

From the Q&A portion of the call: 

Schmidt (on mobile ads): 

On the mobile search side, one of the key things we’ve done in the last few months is we’ve started to show the desktop ads. It turns out that the separate mobile ads have their own formats. Typically there wasn’t enough demand, there weren’t enough kind of creatives and so forth. So we started showing the desktop ads on the mobile browsers of high quality and these of course include the iPhone and the Android phone and anything that’s a web-kit inspired browser.

All of a sudden we started seeing a tremendous number of searches and also very good click through rates. So they monetize at a similar level, if they are desktop-based because of course they are in the same auction.

It makes sense over time that those ads should perform better than on PCs because on a mobile device, we know more about the person and we could have an even more targeted ad but we don’t do that today.

Rosenberg (on mobile cannibalizing PC search traffic):

I don’t think there really is a cannibalization dynamic. We see that mobile searches tend to complement desktop volume. Mobile goes up when people are away from their desk, so weekend tends to be higher for mobile traffic. And of course, the reverse is true for the desk top.

Millennial Media June Scorecard: Entertainment Top Ad Spender, iPhone Top Device

Mobile ad network Millennial Media's May scorecard showed the Samsung Instinct as the top device on the company's network, which I found strange. The June report shows that the iPhone has overtaken it as the top device, which brings this data more in line with other sources in the market (e.g., AdMob).

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In addition the data reflect that the entertainment vertical, especially movie studies promoting their films, is the top advertiser segment by ad spend.
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Here's the company's chart of mobile ad campaign averages and stats:

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Most marketers doing business with Millennial are using mobile landing pages, as opposed to simply directing people to a company site. This stands in contrast with Google's mobile display strategy and approach, where ads send users to PC sites under the assumption that the browser (iPhone, Android) will provide a good experience. 

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MobileBeat 2009 - Exposing Growing Pains for Mobile Marketing

MobileBeat2009 opened impressively with VentureBeat's Matt Marshall moderating a "Fireside Chat" among Vic Gundotra from Google; Michael Abbott, SVP applications and services from Palm; and Dr. Tero Ojanperä, Executive Vice President Services at Nokia. The resulting talk generated some true gems of insight emanated from the discussion, forged from disparate views of how the market is maturing. For Google, for instance, the course is set around the World Wide Web. "We believe the Web has won and that's where we're investing," Gundotra explained. Later, he elaborated by saying "The 'Killer App' on mobile is a wonderful Web browser", but added the condition that it also requires an inexpensive, unlimited data plan.

Palm's Abbott largely agreed with Google. After all, with WebOS as the application platform for its newly launched Pre, the primacy of Web-based applications speak for itself. However the issue of "openness" in support of application developers came up front-and-center as Abbott acknowledged that it had to be "methodical" in terms of rolling out apps. It just released the SDK (software development kit) for the Pre and is exhibiting caution in order to ensure a quality experience for users.

In that respect (addressing the user experience), Nokia's Ojanpera was in agreement. "Open versus closed is not relevant," he said. "It's what is best for the users" that is most important. He added that the OVI Platform "will be open" in a selective sort of way. using exposure of the Map API as an example. He regards OVI as "in the cloud" and notes that, in addition to Maps, APIs for both Location and Music will be opening up and that they already have interesting partners.

Without carriers on the stage, these producers of smartphone application environments charted a worldview where growth is the result of the proliferation of smartphones and low-cost, high-speed data links. Questions from the audience drew attention to the realities of today's mobile economy and ecosystem. One questioner even asserted that there is a slowdown in smartphone sales, but was countered by Gundotra who observed that "Google sees the move to smartphones accelerating (based on unspecified, empirical observations of the mobile activity on Google's various properties).

Nokia, which has global marketshare leadership across all categories of phones, sees a "polarized" market emerging, with high-end phones (in the $700 range but selling for a subsidized $199) co-existing with a broader base of low-end phones whose subsidized price will vary from $0 to $99. The low-end are the prime candidates for services like Nokia's Life Tools which support a range of services for emerging markets.

Yet the conversation kept returning to the viability of Google's vision for a persistent, low-cost data link along with more functions on the browser (including geolocation and application caching in mobile versions of Firefox, Chrome and Opera). The underlying economic model continues to come into question with members of the audience asserting that Google's ultimate aspiration is to by-pass the wireless carriers. To this Gundotra pointed to the search giant's experience in Japan, where carriers KDDI and DoCoMo integrate Gmail into their service offerings under a formal partnership agreement.

Based on this evidence Gundotra noted that "People misunderstand our ambition to cut the carriers out." This was the only line that elicited audible laughter from the audience.

Mobile TV Subscriptions "a Disaster," but Ads May Gain

On this blog I've been a big detractor of mobile TV -- the consumer pays subscription model that is. Mobile video viewing and usage will only go up but the prospects for charging people to watch shows on mobile devices will dim as they bump up against a wall of tepid or non-existent consumer demand.

Let me qualify this by saying that people may be willing to buy premium subscriptions that include TV as part of some larger offer (i.e., unlimited data). They may also pay for the ability to access events from time to time (e.g., world cup soccer). And in some cases they might pay their cable company some additional, nominal fee to get slingbox-like access to their TV on a smartphone. 

But the idea that millions and millions of users will pay $15-$30 per month more to get access to conventional TV programming on the small screen is not going to happen. Carriers that had been counting on developing a healthy additional revenue stream from TV subscriptions are not going to see big dollars, pounds, euros emerge. 

This quote from a recent Reuters story about the state of mobile TV sums it up:

"It is a financial disaster," said John Strand, a consultant who has followed the mobile [TV] industry closely for more than 12 years. "It's a nice product, but the customers won't pay for it."

There are just too many free sources of content and alternatives. And in a time of belt-tightening and recession mobile TV is a frivolous expense. However, ad-supported mobile video and TV may have a bright future. Users will be willing to watch video/TV commercials on mobile devices in exchange for free content -- like the traditional TV broadcast model. A recent Forbes piece offers some data on current ad rates for mobile TV:

The average cost for ads on mobile TV ranges from $5-$10 per thousand impressions for a banner ad and $30-$40 per thousand impressions for video.

This is where the action will be: free TV programming and video supported by ads or purchased directly without commercials (i.e., via iTunes).  

Gartner (Wrongly) Predicts Increase in Subscription LBS

IT research firm Gartner says that consumer subscription-based LBS services (e.g., navigation/friend finders) will double and continue to grow. According to the company's release:

Worldwide consumer location-based services (LBS) subscribers and revenue are on pace to double in 2009, according to Gartner, Inc. Despite an expected 4 per cent decrease in mobile device sales, LBS subscribers are forecast to grow from 41.0 million in 2008 to 95.7 million in 2009 while revenue is anticipated to increase from $998.3 million in 2008 to $2.2 billion in 2009.

Gartner defines LBS as services that use information about the location of mobile devices, derived from cellular networks, Wi-Fi access points or via satellite links to receivers in (or connected to) the handsets themselves. Examples are services that enable friends to find each other, parents to locate their children, mapping and navigation. Location-based services may be offered by mobile network carriers or other providers. They are also known as location-aware services.

Correctly the company qualifies all this by saying that free LBS services will gain and eat into LBS subscription revenues. But the company doesn't take that far enough.

Those that are willing to pay for PND devices and navigation subscriptions will be a tiny minority in a very short period. Free (assuming a not-free data plan) will all but destroy the paid market unless those consumer fees are one-time payments or truly nominal monthly subscriptions. 

Too many folks will be offering maps and turn-by-turn directions for free (e.g., Google, MapQuest) and there will be a number of free friend finder products that will replace the paid "family locator" subscription products in the market today. In short absent some super-compelling, unimaginably fantastic applications (which Gartner is counting on), the paid LBS market is going to get smaller and smaller . . . not bigger.

Mingler: 'Close-Range' Social App Rides on Top of Existing Online Networks

Israeli company MobiApp announced that it received a small funding round from Maayan Ventures, an Israeli government-funded VC. The company has a social networking mobile app/client called Mingler, currently operating only is Tel Aviv, Israel. Here's how the funder describes Mingler:

Mingler enables creating close range social networks which interface the WEB.

When a user enters the social event he will receive a message in his mobile which will ask him if he wishes to connect to the local network, after he confirms he will join the Mingler network.

The user doesn't need to have any prior application installed; he will get the application on the spot by the air with no cost (based on Bluetooth).

The Mingler lets the user fill his local profile and in the future this profile will be available on his web social network. The users can send (and receive) personal messages/Instant messaging (like SMS but without charge) to his network friends and of course search, filter etc'. All the users are in the same location which is defined by approx. 100m radius (can be extended with aggregation) are connected to the local network. This creates a free local network.

The Mingler website will provide lots of web/location services to Mingler members for example: getting the location of your friend and sending them free messages from the web, it'll give the option to see who is in specific event and more.
Moreover Mingler will allow the users to interface with their WEB social networks(FaceBook, mySpace, linkedIn…).

The application and the services are free for the users but it is based on ads, this gives advertisers the option to advertise to specific market focused by: gender, location, age, company segment, position in organization, etc.

At the moment there isn't ad inventory "granular" enough to fulfill the promise of these temporary, very local networks envisioned by MobiApp. That will come as more LBS ads are assembled "on the fly" dynamically. There are a few use cases one can think of for Mingler: B2B (conferences), colleges or other institutional settings and dating.

The fact that this rides on top of existing social networks is a significant factor. Stand-alone mobile social networks will find it almost impossible to compete with established online players such as Facebook and Twitter. There may be one or two exceptions that succeed.

Services like Loopt and Google Latitude are competing friend-finder/dating platforms. 

Idle Screen Ad Receives 18% Response

Idle screen mobile ad platform Mobile Posse put out a press release that touted an 18% click-through rate on a holiday promotional campaign for Ace Hardware. According to the release:

A national campaign launched around Ace’s Memorial Day Sale invited consumers to visit their local Ace Hardware to take advantage of great deals. The campaign was executed by Horizon Media and generated an average CTR of 18%. In addition, consumers that viewed the campaign were nearly 30% more likely to visit an Ace Hardware retail store . . .

The Memorial Day campaign, consisting of two ads and a seven-day sponsorship of weather forecasts, delivered strong overall results. Ace Hardware ads generated an average CTR of 18%, while the weather sponsorship generated an average CTR of 17%. Nearly 65% of Mobile Posse customers viewed at least one component of the Ace Hardware campaign during the promotion . . .

In follow-up to the Ace campaign, users were asked whether they had visited an Ace Hardware store within the past seven-to-ten days. Users that viewed the campaign were 29% more likely to have visited an Ace Hardware retail store than users that did not view the campaign.

These are impressive response rates, especially when one considers it's entirely a "push" display campaign. Compare online display CTRs of .06% to .17% (per DoubleClick), although clicks are not the right metric for display measurement. There was also a local component of the campaign, likely a store locator, based on the language in from the release.

The idle screen ads are targeted to feature phone users, who must "opt-in to Mobile Posse’s free application to receive informative and fun content, along with valued offers from local and national retailers."

We've seen varying levels of interest, generally, in mobile advertising. It depends to some degree on how the advertising "value proposition" is presented.

If consumers understand clearly the benefits they'll receive, they're more favorably disposed toward mobile ads. Offers and coupons are categories of greater interest than generic mobile advertising. More sophisticated mobile phone users (e.g., smartphone owners) and those that are more engaged in the mobile Internet are also more favorably inclined toward mobile ads as a rule.

Text to Donate: Another Side of Mobile Payments

On Sunday my family and I were at a free concert featuring the San Francisco Symphony at a place called Stern Grove. It's a kind of amphitheater in the park that offers free concerts during the summer in San Francisco and has for the past 72 years. The organization that runs the concert series said the season costs $2 million to produce, which must be raised from donations and corporate sponsors.

At various breaks they asked people in the audience to donate $5 to the facility. One of the ways to do that was via text message. There was a large sign (pictured) that requested people to "Text 'Grove' to 90999." Once you sent the text you received a message back asking for simple confirmation that you wanted to give the donation. The payment would appear on your mobile phone bill and there was nothing more to do or complete. 

The company behind this is mGive, which has a large roster of non-profit organizations that use the service. The amount that can be given by any individual in any single transaction is limited (by the carriers) but the system is very efficient because of its simplicity and the fact that there's no credit card involvement.

Focused on the non-profit sector the company is very much like Zong, which similarly uses SMS for mobile payments. The company makes money by charging set up fees, monthly fees and some transaction fees, depending on volume. The pricing makes it appear expensive for smaller non-profits.

The situation I was in was a perfect use case: an event where direct appeals were being made to a group. But the company also provides examples of outdoor campaigns (billboards). While it's very unlikely that someone walking down the street or driving is going to pull out a credit card and make a donation via telephone, sending a text message is much easier and more likely to elicit an on-the-spot contribution. 

QSR Chain Qdoba Does Mobile Rewards with Tetherball

Qdoba is the latest "quick service" restaurant to push into mobile. Competitor Chipotle offers online and mobile ordering. Qdoba is using Tetherball for its mobile marketing and loyalty program. According to the press release out this morning:

Tetherball’s fully customizable permission-based text messaging mobile marketing platform allows brands to intimately interact with customers through their mobile phones and allows loyal customers to benefit instantly from offers. The Qdoba Mobile Rewards program kicked off at an Indianapolis market festival during which nearly 20 percent of festival attendees engaged the mobile program – indicating strong acceptance of offers made via mobile.

Unlike other mobile marketing programs, no downloading of special software or an expensive mobile data plan is necessary. The solution is simple and it works on any phone. Tetherball clients’ mobile loyalty programs have seen up to 24 percent redemption rates on initial opt-in offers followed by 10 percent redemption rates on proceeding offers — substantially better results than the less than two percent redemption rates offered by traditional paper and online coupons.

In the restaurants at the point of sale, consumers are prompted to text the word “BURRITO” to a short code to opt-in to the program. They then receive promotions via SMS that also direct them to nearby restaurant locations.

Fast food restaurants, because of their focus on younger audiences, are among the early adopters of mobile marketing, promotions and mobile loyalty programs. And, indeed, as the PR materials above suggest, these programs do work. 

Here's our prior write-up of Tetherball and its novel RFID couponing program. 

Legal Minefield Awaits in Mobile Marketing

A new group called the Mobile Advocacy Coalition has formed to combat a legal ruling handed down earlier this month by the US 9th Circuit Court of Appeals in a case called Satterfield v. Simon & Schuster. Book publisher Simon and Schuster generated a text message promoting a Stephen King novel to plaintiff Satterfield, who had previously downloaded a ringtone from a mobile marketing firm (not explicitly affiliated with publisher Simon & Schuster). The marketing message to Satterfield was unsolicited and a class-action lawsuit followed.

The reference to TCPA below is to the Telephone Consumer Protection Act of 1991. Here's the 9th Circuit's discussion of the factual and procedural background:

Satterfield filed suit, alleging a violation of the TCPA for Simon & Schuster’s transmission, of this unsolicited text mes- sage to her and other class members’ cell phones, by an Auto-matic Telephone Dialing System (“ATDS”). Simon & Schuster moved for summary judgment, arguing that (1) it had not used an ATDS, (2) Satterfield had not received a “call” within the meaning of the TCPA, and (3) Satterfield had consented to the message and had not been charged for its receipt. The district court granted the summary judgment holding that (1) Simon & Schuster and ipsh! had not used an ATDS and (2) Satterfield had consented to receiving the mes- sage. The district court did not rule on Simon & Schuster’s argument that a text message is not a “call” under the TCPA. 

The TCPA requires consumer consent to receive automated "calls" (interpreted here to include SMS messages). According to the 9th Circuit's ruling:

[W]e hold that it is reasonable to interpret “call” under the TCPA to include both voice calls and text messages.

The 9th Circuit reversed summary judgment for Simon & Schuster and remanded to the lower court for further adjudication. The potential consequences, according to the Mobile Advocacy Coalition are as follows:

The US Court of Appeals for the Ninth Circuit ruled against Simon & Schuster, and in doing so, has twisted the meaning of the Telephone Consumer Protection Act of 1991 in a way that imperils the entire mobile marketing industry.

The court has ruled that any computer that sends texts is considered an auto dialer, which puts any mobile marketing campaign on the wrong side of the law.

If the coalition's view is correct, a heavy burden might be placed on SMS marketers to obtain explicit consent to marketing messages before they're sent. Given consumers' abstract aversion to much of mobile marketing, the danger here is almost self-evident. 

Mobile marketing is also confronted by a more expansive, pending complaint before the US FTC about a range of issues surrounding mobile marketing and advertising brought by the Center for Digital Democracy and the U.S. Public Interest Research Group (USPIRG) as an extension of their 2006 complaint regarding behavioral targeting online. The complaint is far reaching and touches practically every element of mobile advertising and marketing on consumer privacy grounds. 

These are significant legal threats to mobile marketing and advertising. However, it is unlikely that Congress and regulators will allow litigation or regulation to kill mobile advertising. But there may be more stringent rules that emerge around consent that could add considerable friction to the process and dampen ad revenues accordingly. 

More on this to come. 

Google Doing Display Ads for Mobile App

Perhaps they were there before and I just didn't notice. But yesterday I saw two ads for Google's iPhone app, one on a blog online and another in the new Fluent Mobile news app. The latter was on the AdMob network. Below is what the online version of the ad looked like. Why is Google advertising its mobile app, which has been in the top 20 in the iTunes store for many months?

Despite the public confidence of Google and others who see little future distinction between the Internet and the mobile Internet (and user behavior accordingly), I think it's not a foregone conclusion that everyone will be using search in the same way on mobile devices that they do on PCs today. Mobile is a different animal and the mobile market is quite fluid and evolving rapidly. 

I find myself using Google's voice search on my Android (HTC Magic) phone quite a bit -- especially voice search in Google Maps -- and like it. But on my iPod Touch (on a WiFi connection) I use apps and bookmarks far more than I use traditional search. However I don't have access to the iPhone's voice search capability on that device. If I did, my behavior might be different. 

On Android devices search is on the home screen and, given that, it's a bigger part of the Android experience than on the iPhone, notwithstanding the recent addition of spotlight. If we do get the promised 18 Android devices and they sell well, we may see search become a prominent navigational tool in the way it is on the PC. However, if apps become the dominant way that people access sites and content on smartphones, where most of the mobile Internet "action" is taking place, conventional search may become a "secondary" tool. 

Then there are now obscure "search" tools that may gain mainstream adoption down the line, such as the camera as doorway to "augmented reality" or as a barcode scanner. And a range of others are working on mobile searching without search: offering up data and content based on location or context without entry of a formal search query. There are a range of iPhone apps that do this using a browse approach (business category X "nearby"). Geodelic is pursuing this model as the back end for T-Mobile's new "Sherpa" app

None of this means that paid "search" ads or Google won't be successful in mobile. It means that user behavior and the market may evolve in ways that are distinct from PC-based Internet activity. But we'll see won't we.  

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Sense Networks: Interesting but Is the Market Ready?

Last June we wrote briefly about CitySense (from Sense Networks) and its effort to use real-time, aggregated urban heatmap data to profile and make recommendations to people looking for things to do. VentureBeat reported yesterday there was a bit of a bidding war by two VC firms to provide the second round of funding ($6 million) to the company:

Semiconductor giant Intel led the deal, after beating out Sequoia Capital, the well-known Silicon Valley venture capital firm, we’ve learned from a source very close to the deal. The negotiations got tense after Intel made its offer for investment. The following day, after hearing about Intel’s offer, Sequoia tried to make the company’s CEO take money exclusively from Sequoia. The company’s chief executive Greg Skibiski, we’re told, wasn’t impressed, and decided to take Intel’s money. One point we aren’t able to confirm is whether Intel offered better deal terms. Neither Sense Networks nor Intel nor Sequoia responded to requests for comment. An announcement about the deal is expected in about a week.

The idea behind CitySense is to provide recommendations to end users about things to do and "eliminate the need to search" by using aggregated profiling data. Whrrl originally was pursuing a similar idea and, conceptually, so is Geodelic but without group profiling.

The so-called alpha version of CitySense offers a pretty poor user experience. However, the company is reportedly just demonstrating its technology with the app and is ultimately not interested in competing in the consumer market directly. It's apparently planning to aggregate and provide data to other consumer-facing companies and mobile ad networks, perhaps even brands and marketers directly. Hence the $6 million second round. 

Sense Networks' techology uses machine learning to identify patterns and trends that third parties could then use for recommendation or advertising purposes:

Sense Networks applies advanced statistical algorithms to normalize activity based on years of historical data combined with demographic, weather, and other variables. Once a broad understanding of the spatial behaviors in a city is available, companies and investors can leverage the continuously updating framework to better understand their own customers from sparse location data, discover trends in aggregate consumer behavior for correlation with financial indicators, and predict demand for services and places.

Here's how the company describes its process for identifying the top nightlife destinations in San Francisco:

  1. Identify and isolate the top 200 nightlife destinations
  2. Create a network of movement between these locations
  3. Machine learning algorithms analyze each location in the context of the overall movement and categorize it (colored dots added) by examining everyone's point of origin, and where everyone goes afterwards
  4. The categorized places are now grouped by behavioral similarity, not proximity (convergent dots represent places with the most similar "type" of people present, in real-time, versus geographical proximity)
  5. The spatial behavioral map is overlaid onto a spatial geographical map and the system continuously learns as new live data is received

 Picture 4

Clearly there's value in this data to third party publishers and apps, as well as to ad networks. But like the promise of LBS and the notion of the "right ad, right time, right place," marketers and ad networks may not be prepared or able to truly to take full advantage of such data for some time.

Screenwerk Digest: Krillion and; Google Maps Morph into City Tours

Greg has been posting some very interesting items over at Screenwerk. He notes that Krillion and (owned by eBay) have collaborated to introduce a widget that helps searchers find local merchants for the products they seek online. Called the Krillion 360 Product locator, it is not positioned as a mobile utility, but the transition from online search to offline purchase is a natural for mobile search.

Likewise, the Screenwerk feature on "City Tours", which is under development (ergo available for use) at Google Labs is a neat way to organize one's local itinerary. To me the mental bridge to a shopping tour and presentation on a browser based phone is a natural. As I recall, Local Matters includes a similar planning service in its Destination Search(TM) suite. It's one of those services that requires a bit of marketing to reinforce regular use.