The Mobile Marketing Association has conducted a study about mobile ROI whose chief recommendation appears to be that advertisers should spend 7% of their ad budgets on mobile. Currently average spending on mobile advertising is about 1% of budgets.
That's all fine, except that time spent with mobile (if that's the guide) is already in excess of 10% of all time spent with media. Perhaps the MMA didn't want to be too aggressive and call for 10% of ad budgets.
The following chart from Mary Meeker indicates a 1% ad spent and 10% time spent with mobile media.
The next chart is from Flurry Analytics and relies on some of the same Mary Meeker data, but also Flurry's own app analytics and other third party data. It argues that consumers now spend 23% of their media time with mobile.
Finally ad network InMobi argues that 27% of daily consumer media time is spent with mobile -- more than TV (which is doubtful).
Accordingly, if one accepts these data as accurate, 10% is the floor and 27% the ceiling in terms of media time spent with mobile. According to most sources mobile media time now surpasses everything else except TV (and the PC Internet in some studies).
In that context it appears that asking for 7% of ad budgets seems like a very timid request.
Millennial Media is out with another vertical report. Last time it was travel; this morning the ad network released a report on Entertainment. It was generated in conjunction with comScore. From my perspective, there were two pieces of interesting data in the document -- although the case studies in the report are also interesting.
One was about mobile purchase categories. The other was Millennial's "post click" campaign data for the Entertainment category. This data reflects the objectives advertisers are trying to accomplish with their campaigns.
The report said that "convenience" was the chief motivation for buying something on a mobile device (vs. online or in-person). Roughly two-thirds (63%) of smartphone owners cited this as the rationale for m-commerce. Convenience (vs. price) is typically the major reason for buying online as well.
Between 20% and 35% of US smartphone owners have ever made a mobile purchase according to several studies released in 2011 and 2012. Paralleling the data in the chart above, digital content (books, movies, apps, music) leads m-commerce overall. However we will see a broader range of e-commerce transfer over to mobile over time.
The problem of entering credit card information is a major barrier to mobile commerce today. Those vendors that have stored credit cards (in other words direct relationships with consumers [i.e., Amazon]) will see much more volume than those asking consumers to enter 16 digits. A majority of mobile e-commerce efforts will need to find some third party solution (e.g., working with PayPal, Amazon or solutions such as Card.io) if they want to generate sales from smartphones. Tablets are a different matter; entering credit card information is not as much of a barrier on those devices.
The chart above reflects campaign objectives, comparing entertainment companies (including movie producers and theaters) with Millennial's overall customer base. As might be expected, driving to a video view (e.g., movie preview) is the most common campaign objective.
Video (assuming a decent WiFi or network connection) is a very effective ad format in mobile. This is especially true for movie previews, which are regarded as content and not ads by most consumers.
In addition to video views, the other two most common campaign objectives were: driving to a social media page/site and "m-commerce" (buying tickets). Those consumers that have movie ticket apps installed (e.g., Fandango), with a stored credit card, are going to be increasingly likely to buy tickets via smartphones over other methods.
Nokia is spearheading what's being called "The In-Location Alliance." The purpose of the new quasi-trade group is to "drive innovation and market adoption of high accuracy indoor positioning and related services." The assumption is that more accurate indoor positioning will create new markets and new revenue opportunities.
According to the press release out this morning: "The Alliance will focus on creating solutions offering high accuracy, low power consumption, mobility, implementability and usability. It will create an ecosystem that stimulates innovation, enhances service delivery, and accelerates the adoption of solutions and technologies that optimize the mobile experience."
There are 22 companies listed as founding members: Broadcom, CSR, Dialog Semiconductor, Eptisa, Geomobile, Genasys, Indra, Insiteo, Nokia, Nomadic Solutions, Nordic Semiconductor, Nordic Technology Group, NowOn, Primax Electronics, Qualcomm, RapidBlue Solutions, Samsung Electronics, Seolane Innovation, Sony Mobile Communications, TamperSeal AB, Team Action Zone and Visioglobe.
The release also indicates the alliance will promote open standards and systems to allow for broad participation by non-member vendors and third parties.
There are a number of companies already operating in the indoor positioning segment, including Google, Microsoft, Wifarer, Point Inside, Aisle411 and others. Interestingly none of them are on the list above. No carrier is part of this inagural group either. However, the alliance is inviting any and all interested parties to join.
Notwithstanding the promise of new business models, that's one of the central questions: how will some of these companies make money? The superficial response is "deals and advertising." Privacy is also another major issue. However I suspect that can be addressed with an opt-in approach, much in the way that Apple does with iPhone apps requesting to use location.
The Online Publishers Association has published some new survey data (n=2,450 US Internet users) which mostly duplicate pre-existing smartphone survey research: size of user population, activities, attitudes and so on.
While the data are generally consistent with prior research, a few of the findings appear to contradict or argue with earlier findings. For example, the OPA found that its respondents spent more time "accessing content" via the mobile Web vs. apps. Comscore, by contrast, has reported that more than 80% of consumer time spent on the "mobile Internet" is in mobile apps and only 20% of time spent is with the mobile web.
Beyond this there are a considerable number of findings in the study. Because they are largely duplicative of earlier work, they're not terrifically interesting to me. You can download the entire slide presentation from the OPA site. However I'll pull out a few items that are worth highlighting.
The first is that more than half of survey respondents said they preferred using a smartphone for certain types of content or online activities to PCs and tablets. The question was, "When doing the following activities, which type of device do you most prefer to use?"
The OPA found that smartphone users downloaded an average of 36 apps over the past year. The study also found that 56% of respondents used at least half of the apps they had downloaded on a regular basis. Only 14% of those apps were paid, however.
The survey also found that 70% of iPhone "content consumers" bought paid apps but only 34% of Android users paid for content-related apps. That smartphone content-buying population is more receptive to mobile advertising and more likely to take action in response according to the OPA findings.
Owners of the iPhone were the most positive about mobile ads and most likely to act in response:
At the highest level the findings underscore that there's a very large audience out there that in some cases is more interested in content on smartphones. While there were no earthshattering discoveries in the study, it adds to the growing body of research that reflects the importance of mobile distribution for both publishers and advertisers -- and the missed opportunity for those not currently participating in mobile.
Mobile ad network HipCricket released its latest mobile advertising survey. The poll of 650 US mobile phone owners asked a range of questions about mobile advertising and device ownership. Among the survey respondents, 73% said they owned smartphones while 43% reported owning tablets.
These percentages are higher than US national averages, which are closer to 50% and 30% respectively. Among smartphone owners, the HipCricket survey was comprised of 43% iPhones, 38% Android handsets and 16% BlackBerry devices.
The survey found that those with higher incomes were the most engaged with mobile advertising:
Younger users (25-34) were also more engaged with mobile ads than the overall group. Among this group, 70% "have made a purchase as a direct result of a mobile ad." In addition 48% of these users "think more positively about their favorite brands after interacting with them via their mobile device," which was "significantly more than any other age group."
Below are a selection of the charts from the survey. The first one indicates the most frequently encountered mobile ad categories. SMS ads come in at a surprising number two, just above ads in mobile apps:
Just under a third of these users had redeemed a mobile coupon, although a substantial number hand "never engaged" with a mobile ad.
The principal reason survey respondents did not click on or otherwise engage with mobile ads was due to a lack of perceived "relevance." Interestingly there were also several security related fears associated with mobile ads (spam, source uncertainty). This is an education problem for the industry.
Consistent with many past surveys, offers and coupons were a major incentive for consumers to respond to mobile ads. While many brands and agencies don't want mobile advertising to be "just about coupons," it's clear that offers drive engagement.
HipCricket also found that most respondents' "favorite brands" were not advertising in mobile. This is clearly a missed opportunity for the brands.
Finally, the survey found that a large majority of respondents had made a purchase after viewing a mobile ad.
While self-reported data must always be "taken with a grain of salt," these survey findings reinforce a considerable body of other data in the market showing that for younger, more educated and more affluent users mobile is now a critical medium. Yet brands and major advertisers continue to miss out on a significant opportunity to reach these audiences through their failure to aggressively pursue mobile.
Just like Amazon, Facebook is building a phone. This rumor has been around perhaps for two years but Bloomberg seems to confirm it. The hardware maker is said to be the struggling HTC. Previously HTC released the ChaCha (pictured at right), with a dedicated Facebook button.
The ChaCha was a failure. Will a dedicated "Facebook phone" equally bomb? The chances are very good that it would see limited demand.
From Facebook's perspective the logic of its own device is understandable:
The problem is that iPhone and Android devices have dedicated Facebook apps. This will be sufficient for all but the most dedicated Facebook users.
The additional integrations and "cool things" that Facebook could do with its own version of Android won't be enough incentive for most people to buy the device. Younger users and first-time buyers making the switch from feature phones to smartphones might be enticed to buy such a device if the price were right.
The other major issue is privacy and data-mining. I'm making a bunch of assumptions when I say that a Facebook phone would likely collect even more data about individuals and their behavior (calls with contacts, sites visited, apps used, physical movements) than the existing mobile apps or online experience do. Thus concern that "your phone is watching/tracking you" would cause many to stay away and could even lead to regulatory investigations -- depending on how aggressive Facebook wanted to be with tracking/monitoring.
However I know that Facebook is more cautious about privacy these days and so it might be more restrained.
Although the rumors have been around for a long time, Facebook probably saw Amazon's success with Kindle and Kindle Fire and decided there was little or nothing to lose in making its own device. I just don't think many people will be very interested.
Update: On the Facebook Q2 earnings call this afternoon CEO Mark Zuckerberg said that it didn't make a lot of sense for Facebook to create its own phone. But we'll see early next year.
Auntie Anne’s Pretzels, the Coca-Cola Company, mobile ad network Millennial Media and Sparkfly have teamed up to test mobile advertising with tracking to the point of sale. Here's how it works:
Sparkfly is integrated with multiple POS systems and enables the purchase/redemption to be reported accordingly. That gets combined with Millennial’s analytics and the client gets a "cradle to grave" view of what happened with the campaign.
This methodolgy isn't new; offers with tracking codes have been used ocassionally in PC-based ad campaigns for some time (search, display). And tracking to the POS or check-in is going on now in mobile. But this trial may establish a model for others to emulate.
Millennial said in its press release that the campaign will run in Atlanta and will feature a range of different ads to test messaging and creative:
The mobile ad campaign will be running during the heart of Back-to-School shopping season. The mobile ad creative will test different combinations of Auntie Anne’s and Coke items for purchase at ten Atlanta-area Auntie Anne’s locations, and each ad unit will contain a unique redemption code from Sparkfly that enables the item-level tracking of individual consumer sales and the revenue impact of the promotion.
If this kind of methodology and approach becomes more standard in mobile campaigns it will not only give marketers a much better sense of "what works" they'll get more accurate data about conversions. Currently smartphone "conversions" are perceived to be much lower than tablets and PCs. That's generally because offline conversions aren't being tracked.
Widespread adoption of offline tracking might also usher in more CPA billing models as well.
The early success of Google's Nexus 7 tablet sales, on the heels of Kindle Fire's success in Q4 last year, establishes that the 7-inch tablet category is here to stay. Before Kindle Fire there were no successful Android tablets of any size. Kindle Fire's combination of rock-bottom pricing ($199) and Amazon content helped drive several million in unit sales. Now Google's new device is off to a blazing start.
The company just released its first TV commercial for the tablet (a very Apple-like spot).
As I previously discussed, the new Google tablet (starting at $199) is vastly superior to Kindle Fire. It now puts enormous pressure on Amazon to pull a rabbit out of the hat with its "2.0" release. Yet Amazon wants to release "five or six" new mobile devices (mostly tablets) of various sizes.
Apple is rumored to be releasing a smaller, lower cost tablet later this year. This is a defensive move for to prevent the iPad from being under-cut by lower-priced, almost-as-good products. A 7-inch iPad (or larger iPod Touch), combined with the Nexus 7, will likely dampen Amazon mobile device sales unless quality is dramatically improved.
Regardless, the rise of the 7-inch tablet category now creates additional options for consumers and additional complexity for advertisers and to some degree publishers. I suppose it's an argument for "responsive web design."
With Kindle Fire 2, Nexus 7 and the coming Apple 7-inch tablet (and the accompanying low price of these devices) we should see 7-inch tablets sell millions of units. Many people will now have smartphones, small tablets for travel and "on the go," and 10-inch tablets for home. PCs will largely be used for "work" or become secondary devices for most consumers.
Indeed, the device market is moving much faster than publishers and marketers. Publisher content and ads generally don't look particularly good on the 7-inch form factor. Tiny mobile banners are barely noticeable and landing pages look awkward filling only part of the screen. In addition, right now there are only a few apps optimized for 7-inch tablets. Smartphone apps look OK but often appear stretched or out-of-proportion.
All this will have to change -- and relatively quickly.
The PC market, where the attention of most publishers and marketers is still largely concentrated, is not going to grow. And by Q1 of 2013 there will be millions more tablets in people's hands. In fact, I believe that there will be 100 million tablets in the US market much more quickly than anyone is predicting: by the end of 2014.
With sales driven by competitive prices many of these will be 7-inchers, which don't play well with ads and content designed for smaller smartphones and which can't render apps, content or ads created for 10-inch tablets.
Despite all the promises of digital marketing, data and analytics most marketers remain confused about how to manage the increasing complexity of digital channels, devices and tactics -- let along integrate them coherently. In particular, two recent surveys from email marketing services provider StrongMail and IBM show that marketers and CMOs conceptually embrace mobile marketing but are generally stumped by tactics.
The IBM survey was conducted in 2012 and had a sample size of roughly 350 "marketing practitioners." The StrongMail survey was conducted in Q1 and had 802 respondents, described as "business leaders." Just under half (46%) of the StrongMail respondents technically qualify as small businesses, with fewer than 100 employees. The IBM survey was more representative of enterprises and had respondents from multiple countries.
Among StrongMail survey respondents, only 55% had an existing mobile presence or were engaged in any form of mobile marketing. And 57% said they'd been doing it for only a year or less. Although 43% of those without a mobile presence or strategy planned to implement one within the next year.
What did they plan to do? In roughly equal numbers the StrongMail respondents planned to build mobile sites (30%) and mobile apps (26%), followed by SMS/MMS marketing (15%). Impressively, 70% of StrongMail survey respondents planned to increase their mobile budgets in the next 12 months. But there's a difference between "talk" and action.
For those still not doing anything, the top three answers to the question "Why aren't you leveraging mobile marketing?" were the following:
Confusion over strategy and tactics similarly plagues the marketers at the larger organizations surveyed by IBM. In answer to the question, "Which three of the following market factors will be the biggest challenge for your organization over the next 3 to 5 years?" they responded that the proliferation of channels and devices was the biggest challenge:
Like the marketers in the StrongMail survey, the emphasis in the IBM survey was on mobile sites and apps. In response to the question, "Which of the following mobile marketing tactics is your company using or planning to use?" they said:
In this case, however, mobile email, SMS and local ad targeting were also being (at least conceptually) embraced. In the StrongMail survey the top current marketing methods reported were the following:
Interestingly only 13% of the mostly small business respondents in the StrongMail survey said they were using "location-based mobile marketing." And among those not currently doing any mobile marketing, only 3% indicated they were planning to implement it.
By contrast the larger companies represented in the IBM survey were more interested and bullish about location. This is almost the opposite of what you might expect. SMBs could be expected to be more interested in location-based mobile marketing while one would anticipate that enterprises would be more skeptical. But the opposite appears to be true, drawing inferences from the data in these two surveys.
This morning the IAB released estimates of mobile advertising spending in 2011 on a global basis. Previously the trade group said that US mobile advertising was worth $1.6 billion in 2011.
According to the IAB mobile search advertising made up the largest component of US and international mobile advertising -- much like PC ad spending. It constituted 62% of global mobile ad spending in 2011 according to the IAB. That compares with roughly 46% of total ad spending (if memory serves me) on the PC. Almost all this money goes to Google.
Below is the IAB chart showing the breakdown by region and ad unit category.
We had previously forecast that combined North American and European mobile advertising revenue would be worth just over $5 billion in 2012. Assuming these IAB numbers are based on some sort of actual empirical evidence and not simply vague estimates the combined North American and European mobile ad markets were worth $2.3 billion last year. Our estimate for 2011 was $3.1 billion, about $800 million too optimistic.
Still not bad.
I suspect by this time next year we'll see some impressive revenue growth, making our 2012 numbers pretty close to actuals. Again, Google is the biggest single beneficiary of all this mobile spending on a global basis.
Former Wall Street analyst Mary Meeker just did one of her famous data dumps at the D10 conference. The 100+ slide deck is a discussion of "Internet trends." However I just want to focus on three slides.
The first shows that mobile Internet traffic in India just this month has surpassed PC Internet traffic. This is a trend that will replicate itself in markets all over the globe as time goes on. It will take longer for this to happen in developed countries than developing markets but it will happen.
Marketers are going to be shocked by this as in market after market the PC Internet will become subordinate to mobile.
The second slide shows that CPM rates in mobile are much less than on the PC. This is bad news for everyone except advertisers as more users migrate to mobile devices for much of their Internet usage.
However compare our recent ad network test, which showed that the local networks (xAd, LSN) were able to command a much higher CPM.
This shows us that premium or highly targeted mobile inventory will be able to deliver PC-like, or potentially higher, CPMs.
The final Meeker slide I wanted to discuss is one of those familiar monetization vs. time spent slides. Flurry Analytics has a good one as well. Meeker points out a potentially $20 billion digital advertising opportunity over time, as PC usage migrates and ad spending catches up to consumer usage.
The "X variable" is time, however. The logic is sound but the timeframe is less certain.
It took many years for the PC Internet to start to equalize time spent and digital ad spend. Mobile is evolving faster than the PC Internet but it may well be several years before mobile advertising begins to approach user engagement/time spent levels.
Clearly what's going on right now is that advertisers are not valuing mobile impressions as much as PC impressions. In fact mobile impressions are much more valuable than PC impressions -- for both awareness and direct response.
As mobile becomes the primary Internet access vehicle for many more people marketers will be compelled to wake up, and competition should intensify for mobile ad impressions, especially well targeted impressions. In the interim it's a buying opportunity for smart marketers who right now can get high quality eye balls at a fraction of the cost of the PC Internet.
This morning Facebook is trading below its $38 offering price. This reflects investor skepticism about the long-term outlook for the company. Indeed, there are many challenges ahead for Facebook -- one of which is mobile monetization.
This weekend the company bought yet another mobile site, Karma. Karma provides a streamlined way to deliver physical gifts to people through their smartphones, using the Facebook infrastructure. While this latest acquisition is undoubtedly about getting access to the team it is also about the business model and new ways to generate revenue from mobile devices.
I have argued one reason (clearly not the only one) that increasing numbers of people use smartphones to access Facebook is avoiding the clutter of the PC site and ads in particular. While Facebook has started to show Sponsored Stories in mobile users' newsfeeds it cannot simply duplicate the ad environment online in its mobile apps. Too many ads would alienate users.
So how does Facebook make money off mobile usage in a way that doesn't make users abandon its apps? Here are a few ideas:
Some or many of these ideas could come to pass. Regardless, Facebook will need a range of approaches and revenue streams in place to truly deliver the kind of mobile revenue performance that investors will want and will become imperative as more users access Facebook primarily via mobile devices.
Last year survey data were released that asserted "47% of mobile app users . . . click/tap on mobile ads more often by mistake than they do on purpose." In the subsequent write-ups that often turned into the broader claim that "half of all mobile ad clicks are unintended."
With all the touchscreen smartphones out there a high level of accidental clicks isn't hard to imagine.
Now comes a kind of parallel but stronger finding from Marchex that argues 76% of all calls coming from mobile display ads are bad calls: pocket dials or otherwise accidental. The data aren't based on survey information but an analysis of more than 200,000 calls on the company's network. These calls were part of advertising campaigns to company runs for clients.
Marchex also analyzed the percentage of new and existing customer calls by channel. Below is a chart the company generated to illustrate these findings:
Online and mobile directory sites generated the highest percentage of new leads/customers. Marchex added that directory sites work best for advertisers with physical stores or business locations (perhaps an obvious point). Mobile display, according to the report, generated the lowest percentage of new customers and had the highest percentage of non-qualified calls, as previously indicated.
Search engines had the lowest percentage of spam but the highest percentage of existing customer calls. This suggests people repeatedly use mobile search to find phone numbers for businesses they already know.
Marchex's report also best practices advice for (national-local) marketers. One of the recommendations is that marketers look more deeply at whether calls have generated desired outcomes (e.g. sales) to determine their true ROI, and not simply rely on the top-level data:
Monica Ho of xAd confirmed that when call buttons are in top-level display ad creative the number of accidental calls is high. However she said that calls coming from mobile landing pages are "98-99% valid and of very high quality."
The IAB has released a fascinating report on mobile shopping and user attitudes. The study wasn't a simply survey. Instead the research involved 260 US adults who agreed to participate in a two-week "mobile diary" project. It thus got an in-depth look at their behavior. Below are some of the findings that I found most interesting and noteworthy.
One finding that illustrates simple assumptions about mobile behavior cannot be made was the fact that most "mobile commerce" activity happened at home:
Specifically the study also found that most product searching happened at home and not "out and about." Store location searching did happen mostly on the go. But these findings suggest that behavior many marketers assume is happening on the go is actually taking place at home.
In a majority of cases "mobile commerce" (shopping) activity was stimulated by the presence of other media. This fact is relatively well known but still needs to be pointed out. Too many marketers think about mobile in a vacuum. Specifically 46% of these users were watching TV or on their computers when they used their smartphones to look up information.
What stimulated their mobile commerce (shopping) activity? The largest group said that mobile was the "easiest way" to accomplish the particular task. In other words, it was easier for them to do a mobile lookup than it was to go on a PC. Beyond this, mobile advertising was a major "stimulant" of subsequent research or mobile shopping behavior.
One of the most interesting findings, which is an outlier compared to other data in the market, is the overwhelmingly favorable perception of mobile ads, which were viewed by 70% of these study participants as "a personal invitation." That's an incredibly positive finding for mobile advertising.
Another very interesting finding is that mobile users who click on ads are mostly not immediately interested in buying. They want to learn more about a product or service. Many also want to see related products or services (presumably to see what their options are).
All this suggests that mobile (display) advertising exists somewhere between pure awareness and direct response. Most people -- at least in this sample -- are not prepared to buy immediately in response to mobile display ads. Search is a different matter because of the directed nature of the consumer behavior vs. display.
Finally the study indicates that the best way to make mobile ads relevant to users is to localize and personalize them. Personalization is OK, according to the study, with permission (hard to execute for marketers). But localization can more easily be done without capturing personal or behavioral data.
Facebook has again updated its S-1. There are a few reasons for this, including the awarding of additional stock to employees. However there's a very interesting discussion of mobile in the revised document (pointed out by TechCrunch). On page 14 of the document Facebook reiterates uncertainty around its ability to make money off mobile users:
We had 488 million MAUs who used Facebook mobile products in March 2012. While most of our mobile users also access Facebook through personal computers, we anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook.
We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In March 2012, we began to include sponsored stories in users’ mobile News Feeds. However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.
The only mobile ad unit currently used by Facebook is Sponsored Stores, which put brand and advertiser messages in the user news feed. These units have proven to be successful on the PC but could become annoying to users on mobile devices. I have not yet seen any of these ads myself.
One reason why mobile usage is growing so rapidly for Facebook is a result of general smartphone adoption among Americans. There are also things about the user experience in mobile that are superior to the PC: the ability to take and immediately upload pictures, for example.
There may be another reason why usage is migrating to mobile: ad avoidance. People may be choosing the mobile version of Facebook over the PC site precisely because there are fewer ads; it's a "cleaner" experience. If my theory is correct then Facebook has a major problem on its hands. As Facebook puts more ads in mobile to make money it risks alienating users if the company is not very careful and thoughtful.
Mobile ads on Facebook will have to add value, be compelling (offers) or highly relevant (local) in order to work. For this reason I expect Facebook to make a major mobile ad-network acquisition. This would be for the "infrastructure," the expertise and the inventory. It would be analogous to what Google did with AdMob.
During the past two or three weeks a trio of reports came out about paid search trends, with considerable information about mobile. Agencies Marin Software, IgnitionOne and Performics each put out "Q1" reports. What they uniformly show is that mobile keeps gaining and that CTRs are better than for comparable ads online.
Performics says it's not seeing any cannibalization by mobile of PC search, which it says is still growing. The agency says people are simply searching more: PC at their desks, smartphones on the go and iPads at night on the couch. And none of this reflects or counts in-app search as an alternative to the mobile browser.
First from Marin (top) and IgnitionOne (second) the following two graphics offer a comparison of paid search clicks on the PC, tablets and smartphones. Marin and IgnitionOne are very consistent with each other (based on aggregated client data):
Given that there are scores of clients and hundreds of campaigns reflected in the two charts above we can take these metrics as definitive (for now) regarding the relative CTRs on each of these device platforms.
Performics argues that the present is a buying opportunity in mobile search (and display) because prices are lower than for PC campaigns, even as performance is superior to the PC. The graphic below shows the relative cost of paid search clicks for smartphones and tablets indexed against comparable PC campaign costs.
Mobile advertising platform Tapjoy released survey data about mobile user attitudes and behaviors surrounding engagement with in-app advertising. The online survey had 2,000 US adult respondents who owned smartphones and/or tablets and used apps. The major finding was that users respond best to ads in apps that offer rewards of some kind.
Respondents were grouped in age and psychographic categories and profiled accordingly. The survey discovered that adults in the 25-34 age group "are more likely to value the influence of advertisements, they generally recall seeing more ads while using mobile apps." In addition during each app session people in this group recalled a larger number of ads vs. the total population.
These individuals had more paid apps on their devices than other age groups. In addition, once they saw an ad "50% choose to click on it, compared to only 45% of typical app users." These numbers are huge: half of those who noticed an ad clicked on it.
Here are some of the other top-level findings:
Stepping back, none of this comes as a surprise. (There's also lots of discussion of virtual currency in the survey.) Mobile users tend to respond to ads more than PC users and in-app users perhaps more significantly than users of the mobile web. It also makes sense that ads containing some sort of incentive, deal/discount or call to action would see higher response than in the absence of those things.
We've written previously about how many -- indeed a majority -- of mobile ads suffer from bland or perfunctory ad creative and copy and are merely shrunk-down versions of PC campaigns rather than created specifically for mobile audiences. When mobile ads are well conceived they can be enormously effective.
One of the keys to estimating mobile ad revenue is making valid assumptions about consumer-user behavior. Mobile search advertising (mostly benefiting Google right now) is currently the single largest mobile ad revenue category in the US market. The key drivers of mobile search revenue are CPC pricing, advertiser volume and user query volume.
In data revealed during the the Google-Oracle litigation, Google (in Q1 2010) projected mobile ad revenues based on an assumption of 1.1 mobile searches per day per user, or roughly 30 searches per month. However additional data released suggest that Android users are actually conducting 2.65 mobile search queries per day, or more than 60 mobile searches per month.
Estimate how many times EACH MONTH you search Google on your mobile phone?
Source: Opus Research (4/12 n=1,522 US adult mobile users)
However this mobile search volume is inconsistent with what user surveys reveal about query volume. For example our most recent survey indicates that a majority of mobile users don't search Google on their handsets. This sample included non smartphone users so the numbers are more skewed than if this sample was smartphone users exclusively.
Other surveys report that most smartphone owners conduct fewer than 20 mobile searches per month, though a meaningful minority are power users and do more than 20 or 30 mobile queries on a monthly basis. In our survey above, 81% said they performed fewer than 20 searches per month and most performed fewer than 10.
Accordingly there's a disconnect between Google's apparently actual 2010 behavioral data about Android user mobile search volumes and what users report on surveys about their mobile search activities.
Each of the ad networks presents somewhat different data on the question of who's got more market share iOS or Android. Nielsen reported that recent sales of iPhones have been "closing the gap" between Apple's handset and the "Android army." However networks Millennial Media and JumpTap show Android impressions being roughly 2:1 what iOS impressions are on their networks.
This morning inMobi released new data (for February and Q1) showing that the iPhone has a greater share of impressions on its network vs. Android. According to inMobi, "iOS has maintained its dominant market position over Android in North America since January this year, with iOS total share of impressions for the quarter at 37%, against Android at 34%."
The top three devices on inMobi's network in North America are:
The network also reported that on a global basis, Nokia still had the largest percentage of ad impressions (35%), "although its OS share of impressions decreased slightly over the last quarter."
The IAB is out today with its full year 2011 digital advertising report. There are a number of interesting things in the report, among them the mobile ad revenue estimates. According to the IAB mobile advertising in the US was worth $1.6 billion in 2011.
Of all the ad formats mobile showed the greatest growth, as one might expect. Below is a comparison of digital ad categories. Search increased its share of digital revenues and was by far the largest single category.
We haven't revised our mobile ad forecast for a couple of years, but it was very close to the IAB figures. I'm pretty happy with that.