Mobile Advertising

Google Expands AdSense for Mobile Apps Program

Tested with a small group of roughly 10 publishers for several months, including Urbanspoon and Pandora, Google is now expanding its beta for AdSense for Mobile Apps. These are display ads (text and graphical) that appear within apps on the iPhone or Android. New publishers are welcome to apply but must meet page view thresholds and a few other criteria. 

Unless they opt-out all advertisers in the Google content network will automatically appear on these apps, if contextually and/or geographically relevant.

Most of Google's advertisers don't yet have optimized-for-mobile landing pages. So the landing page or CTR page will be the one designated by the advertiser as part of its traditional online campaign. Google feels that the browsers on the iPhone and Android will make for a good enough experience for users to not require a mobile landing page or mobile-optimized site. In fact Google shut down its mobile landing page building tool several months ago. 

For those advertisers that do have such landing pages or sites, Google will detect the handset and if it's an iPhone or Android device show the appropriate mobile site/page accordingly. 

While mobile-only ad networks such as AdMob, JumpTap or Quattro have advantages for publishers over Google because they're only focused on mobile advertising, Google brings many more advertisers to the table and can potentially monetize more page views and queries accordingly. It's a trade-off. 

MSFT: Mobile Will Be 5-10% of Global Ad Spend in 5 Years

Speaking in Cannes, France Scott Howe, VP of the Advertiser and Publisher Solutions Group at Microsoft, said that he believed mobile advertising "will account for 5-10 percent of global media ad spending within five years." That's quite a bullish prediction but we like it. 

Microsoft also recently announced that Hyatt is the inaugural client for its mobile partnership with Verizon. Here's a screen showing one of the Hyatt ads:

Hyatt ad on MSN

Here are some Bing-Verizon screens (Bing is now the default search provider on Verizon). This is mobile Web.

 Bing 1

Yellowpages.com (AT&T), as Microsoft's partner, is a huge beneficiary of the deal and is the sole (current) provider of local ads:

Bing 2

We're waiting for a rebranded and updated version of the Live Search client, which was very useful and effective but under-appreciated. This time around it will likely get more attention, given that Bing is having some initial consumer success and as part of the multi-million dollar Bing ad campaign. It will also probably offer an improved user interface/experience as well.  

Push IM vs. SMS: Will IM Take Over Eventually?

The advent of push notifications and IM on iPhone 3.0 has raised the question (again) of how IM might impact SMS and related carrier fees. In 2007 we speculated about whether IM on mobile devices might one day take over vs. SMS:

[O]ver the long term IM could potentially replace SMS for mobile users, especially if people shift from text plans to Internet plans (unless they're bundled) as the mobile Internet becomes more important.

With a growing range of SMS alternatives such as Facebook, Twitter, mobile Skype, Google Latitude "shout outs" and various mobile IM clients (and aggregators) we're likely to see some shift in messaging volumes to IM from SMS. There's no immediate danger to SMS (and carrier fees) but that's certainly going to be the long-term trend. 

Initial MSFT-Verizon Campaign with Hyatt

Microsoft put out a press release that announced its initial mobile advertising campaign under the Verizon partnership is with Hyatt Hotels, a local advertiser, although the campaign doesn't appear to leverage location:

The mobile advertising display campaign is designed to drive people to register for the Hyatt Gold Passport frequent guest rewards program and encourage people to visit Hyatt’s new, fully functional mobile Web site using their mobile phone.

I haven't seen the campaign, but Verizon is providing data and placement to Microsoft and Redmond is offering mobile in the context of a multi-screen "one stop shop" digital ad solution:

“The powerful combination of Microsoft’s popular destination sites like MSN and Verizon Wireless’ Mobile Web service not only offers exceptional reach to our target audience, but provides us with an efficient solution to work with both a large publisher and service provider through one simple platform.”

As part of the announcement Microsoft released some impressive findings from an earlier study done in France:

To demonstrate the value of mobile advertising, Microsoft conducted a research study for Toyota in France in preparation for the launch of its IQ car. The goal of the study was to determine the impact of using a “two screen versus one” advertising approach in reaching consumers. The findings indicated that incorporating mobile advertising with online display advertising provided an increase to Toyota’s online presence, driving a 200 percent incremental lift in ad recall and a 40 percent lift in brand recall. In addition, the synergy between mobile search and mobile display showed similar results, with mobile display experiencing a 350 percent lift in ad recall and a 125 percent increase in brand recall through the inclusion of mobile search ads.

Geodelic Creates Personalized 'Geobrowsing' App for New T-Mobile Android Phone

T-Mobile is announcing today that its myTouch 3G (G2) is coming out formally in August. As I've written it's a much better phone than the G1. One of the features I like quite a bit is the Google voice search capability in general and on Maps. I find that it's accurate most of the time.

One of the featured apps on the new myTouch 3G is called "Sherpa," a personalized LBS discovery tool. The company behind the app is Geodelic, which put out a release about the app this morning:

Created by Geodelic, in partnership with T-Mobile, Sherpa is a local discovery application that learns a user's favorite types of locations and preferences over time. The more it's used, the more it customizes itself to the user's taste, learning their likes and dislikes so it can prioritize recommended and relevant local retailers, restaurants and attractions. By combining a user's location and interests, with other contextual information such as time of day, Sherpa aggregates and presents contextually relevant, location-based information about the "real world" that surrounds a user at any moment.

Sherpa uses a learning engine called GENIE (Geodelic ENgine for Interest Evaluation) that automatically learns a user's favorite locations and lifestyle behavior. If a user eats out more than they shop, it modifies itself and tailors the experience to begin showing more restaurants and less retail stores. So no matter where a person goes, whether they are traveling or exploring their neighborhood, Sherpa prioritizes recommended locations and presents them to users.

Just as a browser allows Internet users to surf the web, the Geodelic application serves as a "geobrowser" for users allowing them to browse the "real world" through an interface optimized for a mobile experience. Geodelic's advanced technology searches the web, gathering the best public and proprietary information from sites like Yelp!, MenuPages, City Search, and a large number of specialized sources to supply the most complete content based on users' location and interests. The application's learning capability allows it to then automatically organize a user's environment by what is most important to them.

Accordingly, the app aims to present information to users, based on their location/context, and not require them to actively search for it (enter keywords in a query box and evaluate links). This is by no means the first app with such an ambition. Indeed, the interface and some of the features resemble those from other iPhone and Android apps: AroundMe, Earthcomber's mobile client, MapQuest4Mobile and Google's Places Directory. However Geodelic's Sherpa seeks to combine location awareness, recommendations, advertising and local data in a more comprehensive, "next-generation" sort of way.

I've spoken at some length with Geodelic founder and CEO Rahul Sonnad, but haven't yet used the app. So all of this remains abstract until I can actually test it out. 

geodelic

The Geodelic site offers a video of the user experience and some of the ad capabilities.

JumpTap Issued Potentially Sweeping Mobile Ads Patent

Mobile search provider and ad network JumpTap has been issued a mobile advertising patent (No. 7,548,915) that appears to have broad implications. Here's how it's described in the press release:

The patent relates to a method for presenting an advertisement in association with a web page displayed on a mobile communication facility, the method comprising the steps of:

  • determining a first relevancy score based upon a statistical association between at least a first advertisement and one or more keywords;
  • determining a second relevancy score based upon a statistical association between at least a second advertisement and the one or more keywords;
  • receiving a web page request from the mobile communication facility;
  • receiving contextual information from the web page, wherein the contextual information includes at least the one or more keywords; and
  • presenting the first advertisement in association with the web page to be displayed on the mobile communication facility based upon a determination that the first relevancy score is greater than the second relevancy score.

The patent application was originally filed in 2006 and is among more than 30 applications that the company filed that year. The patent appears to be focused on ads responding to mobile search queries (through a variety of input methods, including voice). Here's the "background" discussion from the application:

Online search driven by Web-based search engines has proven to be one of the most significant uses of computer networks such as the Internet. Computer users can employ a variety of search tools to search for content using different user interfaces and search methods. In some circumstances, mobile device users can also access Internet search tools to search for content. However, users of many mobile devices such as cell phones encounter difficulties using search technologies intended for conventional online use. Difficulties include the inability to display appropriate content, difficulty entering queries and taking other suitable actions such as navigation in an environment adapted to full screen displays, full-sized keyboards, and high-speed network connections. Furthermore, Internet search engines are currently unable to optimally deliver search results for a mobile communication facility because these search engines are specifically designed for the Internet and not mobile uses. A need exists for improved search capabilities adapted for use with mobile communication devices. 

Again the implications appear to be very broad, however we're in a period of flux with patent law and it would be foolish to make any definitive statements at this point. However a strong IP portfolio makes the company more attractive as an acquisition target or potentially gives it another (licensing) revenue stream down the line if it remains independent. 

Millennial Mobile Advertising Scorecard for May: Instinct No. 1?

Having spent some time with it, I can tell you that the Samsung Instinct is a vastly inferior phone to the iPhone. However, according to Millennial Media's Mobile Advertising Scorecard for May, "the Instinct replaced the iPhone as #1 on the list of the Top 20 Mobile Phones across our network."

This created something of a mystery in my mind because it's inconsistent with most other data in the market. 

The following chart shows the hierarcy of devices across the Millenial network: 

Millenial May

The traffic above doesn't include iPod Touch devices. Although the Instinct has sold reasonably well for Sprint, it has not sold numbers that approach the iPhone. How then do we explain this result? 

Like all mobile platforms and providers putting metrics into the marketplace, these data are based on activity on Millennial's own network. AdMob's data are based on traffic it sees on its network and Opera's data are drawn from the Opera Mobile and Mini browsers. While they may be reflective of trends across the mobile Internet, they're not an "objective" view of the marketplace.

The answer to how the Samsung Instinct beats the iPhone lies in a closer examination of Millennial's network itself, which over-represents Sprint traffic vs. AT&T and other carriers relative to their actual shares in the US market. 

If there are 270 million wireless subscribers in the US this is how the numbers break out on a percentage basis (numbers are approximate):

  1. Verizon: 30%
  2. AT&T: 28%
  3. Sprint: 18%
  4. T-Mobile: 12%
  5. Other: 10% 

However the traffic distribution on Millennial's network's is as follows:

Millennial's network

In terms of the mobile Internet, until the Palm Pre the Instinct was the most user friendly Sprint device and the one driving the highest engagement among Sprint users. But as you can see from the comparison, AT&T is considerably under-represented (not counting WiFi) and Sprint is somewhat over-represented on Millennial's network.

It's likely that Sprint users who want a smartphone and wish to remain with Sprint will opt for the Pre, which supersedes the Instinct in almost every respect. 

Another Ad Forecast: Mobile Advertising Revenues $1.5 billion in 2013

Parks Associates released its mobile ad forecast, which predicts that mobile advertising revenues will reach $1.5 billion in the US and Canada by 2013. Those dollars are mostly going to be US based because of the relatively small size of the Canadian market. The IAB recently said that in 2007 Canadian mobile ad revenues were $2.7 million.

The Parks forecast reportedly includes apps, SMS, search, display and video. Our previous mobile ad forecast, which is being substantially refined, predicted ad revenues of $2.3 billion in North America by 2012.

Parks mobile ad forecast

Parks also estimated that there were 62 million smartphone users in North America in 2008, with user penetration to reach 239 million in 2013. If the combined mobile user population of the US and Canada is roughly 290 million, 62 million smartphones would represent just over 21% of the current market. That number is about 7 points too high. Smartphones are selling well and represent a key growth driver of mobile Internet adoption, but the number is closer to 14% of the market. 

ChaCha Announces Big Q&A Milestone

There are a wide range of companies that have been dancing around a user experience that combines search, machine algorithms and human editorial input. Companies such as Yahoo! (Answers), ChaCha, Mahalo, Mosio, Amazon (Askville), kgb, Vark -- and now arguably Facebook and Twitter -- among others are playing in this space. Whether we call it "social search," "social DA," "Q&A" or something else it's an effort to scale human discrimination and input into unstructured queries and questions over the Internet or mobile networks.

ChaCha, one of the pioneers in the space, just announced it had hit "150 million questions" since the January, 2008 launch of its mobile offering ChaCha Answers: 

ChaCha ranked among the top 10 short message services with the most traffic -- including Facebook, Twitter and American Idol -- according to the newly released Q1 Mobile Messaging Report from The Nielsen Company. Providing answers for the Sundance Film Festival to the history-making Presidential Election, ChaCha is growing faster than any other SMS answers service, including Google SMS and Yahoo! SMS. Since its launch 18 months ago, ChaCha has answered more than 150 million questions via mobile cell phones and the web . . .

ChaCha's audience extends to the web, too. According to Quantcast, www.chacha.com (http://www.chacha.com) ranks among the top web sites in the United States with more than 2.3 million monthly unique users. With more than 14 million searchable questions and answers and thousands of new answers published to the site every day in categories such as sports, entertainment, health, beauty and travel, ChaCha has increased its traffic 1,000 percent since its launch in January 2008.

Like all mobile marketing firms ChaCha is seeking to educate marketers about the value and ROI of mobile. The firm uses sponsorships, contextual and geotargeted advertising to monetize up to three SMS messages that a user may receive during an individual session.

Digital OOH Company Danoo Adds Mobile to Mix

Danoo refers to itself as a place-based media network. The company puts screens (1,000+) in local stores, airports, retail sites and cafes, providing content and advertising to those locations. There are other companies doing this as well. But Danoo recently added mobile marketing to the mix -- or rather is using its screens to validate their worth as well as get people to take action (i.e., downloads) with their mobile devices.

According to the press release:

 Danoo, which delivers relevant, entertaining and localized media to highly mobile, upscale audiences in coffeehouses, cafes and airports, announced the results of its first mobile content download campaigns. Initial trials were conducted in 39 venues in Los Angeles, with each advertiser leveraging Danoo’s web-connected HD screens to drive discovery of and engagement with a mobile content download opportunity. Visitors to Danoo locations viewed video content on Danoo’s digital screens accompanied by an on-screen prompt to download exclusive content such as sneak peeks and ringtones from their Bluetooth or Wi-Fi-enabled devices via the Danoo network.

Results show that Danoo’s audience is particularly receptive to downloading content to their mobile phones while in a Danoo venue. On average, 10% of Danoo’s audience had their mobile device set to “discoverable”, nearly one-third above the national average, and of those viewers, 28% opted-in to receive the mobile content download. These numbers translate into to a net download rate of nearly 3% of total venue traffic, which could result in more than 200,000 downloads per two-week campaign as this product rolls out to the rest of the Danoo network.

Again, Danoo can report on action rates and advertisers get immediate response. ADCENTRICITY and Impact Mobile recently partnered to bring mobile and digital OOH together as well. Other companies such as HipCricket are using SMS with traditional media (radio, TV) to both measure and extend the value of the traditional media buy. 

This combining of media types, especially with mobile as a metrics tool and extender, will become more and more common in the next couple years and may be one of the primary ways that agencies and traditional brands enter mobile marketing. 

Some time ago I wrote about Danoo and place-based media at Screenwerk. 

Smartphones Are the New Print

A number of years ago I thought that print newspapers would remain relatively "safe" because commuters still found them more user-friendly than trying to read news on a laptop on a train or standing on public transportation. Cut to 2009 when smartphones are rapidly gaining mainstream acceptance. (See also, the Kindle and forthcoming e-readers from all quarters.)

Over on Screenwerk I posted a link to a video interview with Rob Samuels, director of mobile product development for the NY Times. Samuels says there were more than 60 million mobile page views for the NY Times in April, 2009. The Times has an iPhone app (1M downloads and "tens of millions" of monthly page views) and a couple of mobile Web sites (40M monthly views). 

News is already a huge category on mobile and represents a critical opportunity for publishers to extend their reach and the reach of their advertisers. It also represents a more viable subscription or paid opportunity than trying to turn back the clock online and get people to pay that they're used to getting for free. 

iPhone 3Gs: Location in the Browser

The new iPhone 3Gs is a lot more location savvy. For example: 

  • TomTom is now an app
  • It's got a new compass function that orients the map view to the user's direction/position
  • It allows turn-by-turn directions
  • Third parties can embed maps in their apps
  • Location is now available to the Safari browser (this will be true of Android's browser going forward as well)

In particular, on the last point, location in the browser means that publishers and websites can localize their content, functionality and potentially ads through the browser. They no longer have to build apps to capture the phone's location awareness. This is a big deal for both the user experience and for publishers/marketers potentially.

Users will still need to opt-in to share their location. However the experience will be simple as with the current "X would like to use your location" message for apps. 

Rather than driving or boosting "local search" this will allow location to be more seamlessly integrated across mobile sites and into the broad user experience. 

MMA: Mobile Ad Spending to Grow to $2.16B Next Year

Coming out of its conference last week the MMA offered estimates that mobile ad spending would grow from roughly "$1.7 billion this year to $2.16 billion in 2010," according to coverage of the event in MediaPost. The MMA simultaneously released a survey in which it found that 50% of brands and agencies were doing some advertising or marketing in mobile:

  • 66% were doing some form of SMS advertising/marketing
  • 53% had mobile websites
  • 33% said they were doing "mobile email marketing." (It's not entirely clear to me what that is unless it's through th carriers and/or email marketing opened/received on a mobile device and optimized accordingly.)

Brands have reportedly embraced mobile more than agencies, half of which still view the medium as "experimental" according to the survey findings. However, despite very strong ROI metrics in the market, most respondents said they were only having "average" success with the medium according to the MediaPost coverage.

Perceptions of "average" success represent generally bad news for mobile, which has to sell itself either as a superior medium or perhaps more realistically as a way to extend other advertising and/or reach tough-to-reach audiences.

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A related story coming out of the conference was this one about the need for more than clicks (or calls) to define ROI in mobile: Brands need to reinvent ROI metrics for mobile: MMF panel.

The danger in mobile is that because the click or CTR is the currency of online marketing (and so familiar and accepted by marketers) it will creep over into mobile -- it already has. But the click is generally a myopic measure of the success of a campaign and should only be used to define ROI in purely direct response contexts. 

AdMob Enriches iPhone Ad Units

AdMob has benefited tremendously from the success of the iPhone and has introduced formats and innovations specific to the device. Most recently the company unveiled an "exchange" that enables developers to use excess ad inventory to drive more apps downloads. Now the company is adding new, richer ad units for the iPhone based on advertiser feedback and requests, according to AdMob VP Jason Spero.

The new units enable marketers to add a search box to banners or to send users directly to social media sites such as Facebook or Twitter. In a screenshot provided by AdMob, here's an example of a Zappos ad that sends a user to its Twitter account to follow the company:

Picture 2

The same thing can be done for fan pages on Facebook. That makes for some very interesting "cross platform" possibilities in terms of customer acquisition and loyalty (e.g., "follow us on Twitter to receive offers and deals").

A second new type of ad unit enables consumers to search directly within a banner. While this has been done for some time in rich media units on the Internet it's novel in mobile display. Here's another screenshot from AdMob showing an eBay ad: 

Picture 3

One could imagine this being used very effectively in a vertical context as well: think travel, automotive, real estate. When I spoke to Spero yesterday I immediately thought of Bing, the new Microsoft search engine, which might want to use these units to get people to try search from their iPhones. Online Microsoft is in fact using rich media that invite peole to search Bing within the ad unit (I saw these last night but couldn't find examples this morning).

Spero agreed with my hypothetical regarding Bing but didn't confirm that Microsoft was an advertiser. It would be fascinating (for several reasons) if Microsoft were to use AdMob ad units on the iPhone to try and attract new search users to Bing. Let's wait and see. 

The new ad capabilities are tied to iPhone OS 3.0.The ad units will be available for marketers in roughly a month. 

Tetherball Brings RFID to Mobile Couponing

Coupons, deals and offers are consistently regarded with more consumer interest and less "hostility" than other forms of mobile advertising. When you ask consumers in the abstract whether they're interested in ads on their phones they typically say "no" or "not at all." More experienced or sophisticated users with smartphones are more open to mobile advertising and generally more engaged. However the concept of mobile advertising (vs. the experience) is often distasteful to users. 

In previous research Jupiter (now part of Forrester) found that 30% of consumers had some interest in mobile coupons. Last year in our own survey, we found that closer to 43% were either "somewhat interested" or "very interested" in mobile deals/offers. And SMS marketer HipCricket had almost identical results to ours in its own survey last year. 

In our most recent survey (3/09) we found that 57% of respondents agreed "strongly" or "somewhat" with the statement: "I'm interested in any ad that offers me a discount or way to save money."

ValPak found dramatic results when it revamped its mobile site to make it more user-friendly. And coupon interest on the PC has been growing remarkably this past year. So there's no question in my mind about consumer interest. However, there have been many challenges with mobile couponing on the merchant side, both from an infrastructure perspective and in terms of a practical POS sale entry. There are also some residual merchant concerns about fraud, although those will disappear over time.

Mobile loyalty marketer Tetherball has just introduced something unique in the US market: RFID-based mobile loyalty/couponing. There's some complexity here but the system is very interesting. Here's how the press release explains it:

Tetherball’s unique 360˚ approach helps clients "tether" their brand to target audiences by identifying what their customers want and delivering mobile campaigns that interact with the ultimate call to action through permission based mobile coupons, mobile rewards, mobile sweepstakes and mobile notifications. Integrating traditional marketing methods such as in-store advertising, customers are engaged to sign up for mobile loyalty rewards programs offering promotional discounts. Upon joining, customers are given a Tetherball Tag™, a tiny RFID chip that is easily affixed to their 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 RFID point of sale terminals or stand-alone RFID kiosks provided by Tetherball.

Mobiquitous™, a patent-pending real time web-based reporting system, delivers detailed visibility and analytics into coupon redemption rates and overall program performance. Whether it’s reporting at a campaign level, geographical level or for a specific period of time, Mobiquitous provides clients with “real time visibility” so that they can adjust quickly and leverage the real time nature of mobile marketing.

Essentially a customer is prompted to sign up for a mobile loyalty program (as part of that s/he affixes an RFID tag to his/her phone). She later gets an SMS message (targeted based on a range of parameters) and is given an incentive to visit a local quick service (fast food) restaurant -- a coupon. The user swipes their phone with the RFID tag in front of a physical kiosk and gets a paper coupon, which is printed out, to present at the register. 

In one sense this isn't a "mobile coupon" program because the coupons themselves aren't mobile. The prompt and notification of the deal is however. 

I spoke last week with Jay Highley, formerly of ChaCha, who is now President of Tetherball. He conveyed some of the results of the program, which has been quite successful and been running for some time. He said that the company has tried all the existing approaches to mobile couponing and is convinced that this addresses the deficiencies that they've found. Quoted in the release, Dairy Queen said: 

Due to the success of our program, we now average over 900 members per store and continue to see solid growth in membership and redemption rates - which is making a measurable difference in our year over year traffic and revenue.

Highly says the program is really about loyalty and not about couponing. When I asked him about the challenges of getting all these kioks installed, Highly said that the cost was inexpensive and the merchants liked the kioks because it removed the confusion of mobile coupon redemption from the register line and simplified the process. He added that the kiosks themselves in the stores become marketing vehicles for the program: people wonder what they are and investigate. 

Highly stressed also with me that this solves all the current challenges of mobile couponing: fraud, tracking, redemption. There can be no fraud because the system knows whether the user has already taken advantage of the offer and so on. 

We're likely to see lots of innovation around RFID and mobile marketing in the next few years. But this is a pretty interesting example already in the market.

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Related: Here's CBS News' piece on Tetherball. 

CBS Adds SMS to Outdoor Ads

We've written in the past about how text messaging (or barcodes) can add both tracking and a dynamic promotional element to traditional media, including newspapers, radio, TV and, in this case, outdoor. Yesterday CBS announced a new program called txt2go:

The program, called txt2go, will include a text keyword on advertiser signage that the public can use to access marketing messages from the client, including special offers and promotions. The interactive feature enhances an advertiser's ability to connect with prospects and deliver messages with more relevance and a measurable ROI, in addition to building a long-term database of interested consumers.

In launching txt2go, CBS Outdoor becomes the nation's very first out-of-home media company to provide a complete text messaging solution for its clients. The add-on feature creates an affordable new avenue for advertisers looking to package into their media features like digital couponing, sweepstakes, direct response and point of purchase. The technology will allow advertisers to track responses to their marketing in real time.

Expect other outdoor media companies to follow suit. (This is also being done with digital OOH.) Eventually most traditional media will use mobile to track effectiveness (much like call tracking has historically been used). But the interactive element adds something truly compelling, the ability to associate dynamic promotions with otherwise static media.

NearbyNow has also been doing something similar with some of its retail customers on their outdoor ads. 

Coupious: Mobile Coupons, CPA Billing

Ahh the coupon space . . . Newly resurgent online it represents both danger and opportunity.

I just discovered another mobile coupon provider: Coupious. The company is offering location-enabled mobile coupons as a marketing vehicle for local businesses. Right now it's only in a single market: West Lafayette, Indiana.

With slick apps for the iPhone and Android, the company's "infrastructure" is way ahead of its model/marketing. The model is CPA; local businesses only pay when coupons are redeemed. While that model is relatively easy to sell as risk free and is easy to track and prove value accordingly, the challenge is going to be sales and inventory. Cellfire (focused on nationals) has had mobile coupons forever but has yet to really gain traction because it's had very few vendors/companies providing coupons, although that may be changing. More recently it's beefed up its coupon inventory with CPG content. 

Many companies have tried to crack the SMB market with coupons and it's very tough. To name just a few examples, there was Zixxo (now done, acquired by MSFT) and more recently there was Dizgo (Boulder, CO; not sure the status) and 8coupons in New York (still at it). The problem that all of these and others who cater to SMBs confront is scale. Sales generate inventory, which gets distribution and consumer attention. 

Even Google has fumbled local coupons pretty badly. 

Larger, more established companies are at a big advantage in the segment. Companies such as ValPak and RetailMeNot are in a much stronger position. ValPak deals with SMBs but it has what amounts to a national "feet on the street" sales force (though the business is franchised). Smaller companies need to align themselves with established companies or piggyback on others' sales channels. 

There's no question regarding the opportunity and consumer demand. I recently wrote about ValPak's early findings in mobile:

I was told that for every four site visitors to ValPak.com on the PC the company sees one coupon print (25% response/conversion) on average. But in April, with a smaller base, the company saw four coupons selected/downloaded for every mobile site visitor (400% response/conversion). This grew from 200% in March. 

Coupious needs to do distribution deals both for its advertisers and as a way to get other content into its apps in the near term. That's because people won't go to a party when nobody's there yet. 

Newspapers and the Mobile Imperative

The Associated Press put out a release summarizing data from a year of being on the iPhone and more broadly in mobile. Here are some of the numbers from the release:

  • 55 million local stories have been read on AP Mobile, www.apnews.com, since its May 2008 launch.
  • AP member participation has grown 887% with more than 1,000 trusted local sources choosing to distribute their news on AP Mobile -- compared to 107 AP member news organizations that signed up at the May 2008 launch

Demographics:

  • Age - 63% of AP Mobile users are in the coveted 18-34 age bracket.
  • Income - 53% of AP Mobile users earn more than $75,000 per year.
  • Gender - Men represent 78% of traffic to all subject areas, and 82% for sports.
  • Ethnicity - AP Mobile users include members of virtually all ethnic groups.
  • Education - More than half of AP Mobile users have bachelors or advanced degrees.
  • Employment - 80% of AP Mobile users are currently employed.

Usage:

  • On average, AP Mobile users spend 17 minutes per month interacting with AP mobile applications and apnews.com.
  • More than 50% of AP Mobile news accessed fall in the content category of Top Stories, followed by Local News (21%), Entertainment (9%) and Sports (7%).
  • iPhone and BlackBerry users both average 7 page views per visit to AP Mobile.
  • AP Mobile users access news consistently throughout the week - just as much, if not slightly more, during the first half of the week, including Sunday.

We wrote about the AP iPhone app when it launched (Verve Wireless provides infrastructure).

Steve Smith in his "Mobile Insider" column this week writes about newspaper and magazine opportunities to "re-establish" themselves in mobile:

[M]edia brands have a golden opportunity on mobile to reestablish some of the brand equity and loyalty they may have lost in the commoditized content environment of the Web.  There are aspects of mobile that actually replicate the disappearing print world very effectively. 

I agree and wrote something similar regarding newspapers in 2007:

Mobile now offers an opportunity for newspapers to get out in front of the market and establish the kinds of relationships with mobile consumers they probably wish they had done more proactively online . . . The analogy between the state of mobile and "the early days of the Internet" is a strong one, although there are some key differences. But getting out in front of mobile now gives newspapers a chance to rectify mistakes of the past.

In the past year most major news organizations have established themselves in mobile and even have iPhone apps in many cases. 

Yahoo 'Opens Up' SmartAds; Dynamic Ads Key to LBS

Yahoo announced that it was going to incorporate third party ad technologies into its dynamic "Smart Ads" platform. The first two partners are Teracent and Tumri. As explained in the press release:

Yahoo!`s new Smart Ads program will help marketers to develop Smart Ad campaigns quickly and execute them at scale across personal computers and mobile phones in North America. Yahoo! will consider expanding the program to international markets in the future.

Smart Ad campaigns use ad-optimization technology to create a near-limitless variety of creative executions through a combination of offers, colors, images and messaging in real time. These combinations can be finely tuned to match customized messages with users, helping marketers to find the right ad for the right set of users and the right time. Testing of this initiative has already helped advertisers significantly improve campaign performance based on a variety of metrics, including click performance, conversion and overall return on investment.

For example, Yahoo! and Tumri worked with Hewlett-Packard to create a Smart Ad campaign that generated more than 20,000 unique creative experiences, reaching more than 140 million US users. This campaign documented a return on ad spend that was more than 20 times higher than their traditional display campaigns. HP has developed separate Smart Ad campaigns with Yahoo! and Teracent, also producing higher results than traditional campaigns.

While this is all part of Yahoo!'s YOS movement toward openness, it's not entirely clear to me why Yahoo! needs the third parties. Smart Ads was supposed to be able to do dynamic creative and targeting on the fly (from a 2007 release):

Yahoo! SmartAds is powered by Yahoo!'s leading behavioral, demographic and geographic targeting capabilities and aim to connect users with what they are looking for based on their distinctive, expressed interests. For example, if a user is browsing for hybrid cars in Yahoo! Autos and has selected San Francisco as their default location in Yahoo! Weather, Yahoo!'s SmartAds platform can assemble and deliver a display ad in real time that showcases a hybrid vehicle from a major auto brand, as well as local dealer information and current lease rates. This provides a relevant experience to the user and allows the marketer to reach a user who is likely to become a customer.

Smart Ads is also being used in mobile by Yahoo!. And is doing dynamic creative and targeting in the products context via a partnership with ShopLocal

Dynamic creative and ad delivery is also being done by Placecast and is the key to truly delivering on the promise of LBS. Agencies and marketers can't create 300 separate ad units for every major city and ad copy permutation. Thus being able to deliver the right ad with the right copy on the fly is critical to creating the "inventory" required to capitalize on LBS whether online or, even more importantly, in mobile. 

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Here's more on how SmartAds works, with some examples, from the Yahoo! Search Marketing Blog

Kelsey Mobile Forecast Gets It Wrong

From MediaWeek:

In five years, more than half of mobile advertising, or 56 percent, will be spent on local search, even though local search will make up a little over 35 percent of all searches, according to [The Kelsey Group].

As bullish as we are on local/LBS and search, unless you define "search" in the most expansive way possible these numbers are incorrect. Mobile is going to see a broad and diverse array of ad and marketing spending, some of which will fall into search but it will run the gamut:

  • Display
  • Search (using several types of inputs)
  • Apps (ads w/in apps and ads as apps)
  • SMS/MMS
  • Voice (very small) 

Local/offline will be a component of many if not most mobile campaigns but that doesn't mean "search" exactly.