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.
As I click on mobile ads in apps and around the mobile Web I notice that most mobile ad creative is simply lousy. Banners are difficult to read, the messaging and ad copy aren't compelling or innovative and landing pages are all-too-often not mobile friendly. There's a perfunctory quality to the whole effort in many of these instances.
One of the reasons why search forms a bigger slice of the mobile revenue pie right now is because search doesn't have to work as hard to make the transition to mobile, whereas display has to be completely reinvented. The lackluster nature of most of the mobile ads I'm noticing makes those ads almost completely ineffective.
Below are several examples drawn from the NY Times app this weekend. First an ad from optical retailer Site for Sore Eyes. The banner is tough to read and the call to action is washed out. But worst of all, the landing page is not optimized for mobile. It's all but impossible to read the text on the page, likely causing a user to click away.
There are similar problems with the following Lord & Taylor ad. The banner asks you to "text" to "stay in the know." What the heck does "stay in the know" mean? How about something a bit more concrete about the benefits of getting on their list.
Beyond this, while you're looking at the ad on your phone, you're unlikely to text at that moment. So you need to remember to do it later, which you probably won't because the benefits haven't been made clear.
Finally, as with the ad above, the landing page is difficult to read. It's probably a page from the retailer's PC website. The images are too small and you can't see the text or prices at all. And people aren't going to "pinch and zoom" too see them.
Those were two weak ads, the following one from Bank of America is not perfect but much more effective. Even though the banner text is small and hard to read the specific (and local) nature of the message motivates you to click through. The landing pages are mobile-friendly and geo-targeted (for greater relevance). There's also video, which is effective.
It's amazing to see so many weak mobile display campaigns. It seems like the agencies or personnel involved just aren't thinking very clearly about the user experience, despite the fact that they all probably own smartphones themselves and are equally "consmers" of mobile advertising.
Earlier this week Marin Software released some very interesting aggregated data on mobile search trends. The report sees dramatic growth for mobile paid-search. It projects that smartphones and tablets will combine to generate 25% of all Google’s paid-search clicks and 23% of paid-search spending in the US by the end of this year.
Among the other data the report assembles are click-through (CTR), cost-per-click (CPC) and conversion rates in mobile. It compares them to comparable metrics in desktop paid search. The numbers are averages based on client campaigns.
Smartphones show higher CTRs and lower CPCs than PC search campaigns. But they also show lower conversion rates and thus higher per-conversion costs than either tablets or PCs.
The smartphone conversion data appear lower likely because most conversions are happening offline and they're not being accurately tracked. Marin says as much in its recommendations for marketers about offline conversion tracking:
Mobile searches often result in conversions that happen via a call or a physical store. Unfortunately, most marketers lack the ability to glue these clicks together into a unified conversion funnel. Marketers should look to estimate their mobile-influenced revenue through the use of popular mobile ad formats such as click-to-call and store-locator. By combining the typical conversion rate for in-store and phone-based transactions with the average revenue per transaction, marketers can estimate a revenue per click for mobile devices, and adjust their mobile CPCs and budget accordingly.
Whether paid search or display ads, marketers need to track calls and have landing pages where "secondary actions" like store locator or map lookups can be tracked to see whether consumers are acting on the ads. If the tracking isn't set up properly then you're going to see fewer conversions or no conversions and the ROI data will be distorted.
The conversions are there, they're just not visibile in many cases.
Earlier this morning ad network Millennial Media released a 2011 year-in-review report that highlights top trends and data from last year. The company is planning to go public in 2012 and seeking to raise just over $100 million. In an updated filing it reported 2011 revenues of $103 million.
The top categories by ad spend in 2011 were the following:
Although technology was at the bottom of the "top" category it saw the highest year over year growth from 2010 to 2011, nearly 700%.
Millennial also explained what the top "campaign goals" were for its advertisers in 2011 (chart below). The top category, "sustained in-market presence," is not a single objective but has multiple meanings: "Campaigns with the goal of Sustained-In-Market Presence drove consumers to download applications and to play branded games to promote their products and services, while increasing their brand awareness and loyalty."
If we look at the above chart as "awareness" vs. "direct response," what we can infer that roughly 50% of the ad spend was for brand or awareness advertising.
Android was the dominant OS generating impressions on Millennial's network in 2011. Apple devices were dominant in 2010 by comparsion.
However compare ad network and Millennial competitor InMobi which had a different split, showing that Apple had overtaken Android on its network in North America:
The February 2012 report unveils that iOS’ lead over Android has increased, with iOS holding at 35% and Android now at 31%. This is further supported by the fact that the top three handsets in February 2012 are all Apple devices, which now make up 23% share of total handset impressions.
Flurry Analytics has become an in-app ad meditator with new platform AppSpot. It's seeking to use its analytics data to enable advertisers to target specific audiences across apps. And Flurry hopes to generate more revenue for publishers as a mediation layer, with premium targeting. Flurry is also doing ad serving and says it will represent publisher inventory with its own sales force:
AppSpot is powered by Flurry's Big Data, which has audience insights gathered from more than 500 million app users. Flurry's Big Data drives better ad relevance, more accurate demographics and the ability to segment audiences into the interest categories that advertisers want . . .
Why pay for adserving and network mediation when Flurry can deliver the capabilities, scale and reliability you want for free? Reduce your operating costs and pay us only when you use premium targeting to earn additional revenue. A lightweight SDK makes integration easy.
Flurry is giving away the ad serving and mediation -- the company says it works with all the major mobile ad networks -- it will make money on premium ad targeting, using its data. It will allow "geographic and language targeting" for free and will charge an additional $0.10 CPM for "analytics event targeting" and $0.50 for "age and gender targeting."
There's no discussion of how precise the location targeting is and whether it goes below a city level. In-app location targeting would hypothetically be able to go to the lat-long level, but the fact that it's "free" suggests that location isn't going to be consistently precise.
Last year Flurry estimated that if all in-app impressions were monetized at a hypothetical $2.50 CPM, mobile ad revenue would be worth considerably more than online display advertising. The scenario was intended to illustrate the huge volume of in-app ad inventory.
More recently Flurry calculated that mobile advertising saw the largest gap between consumer time spent and ad dollars of any medium:
Other mobile ad mediators include Smaato, Mobclix (Velti), Nexage and AdMarvel (Opera) among others. The terminology becomes muddy sometimes in the discussion of ad networks, ad mediators, DSPs/SSPs and mobile ad exchanges. The simple difference is that a network has direct relationships with advertisers and/or publishers, while others bring more "liquidity" to the market or help "optimize" ad performance and boost inventory fill rates.
Today the Pew Internet Project put out some research arguing pretty unequivocally that consumers don't want to be tracked or targeted even if it might mean that the ads and content they see are more "relevant" or aligned with their interests. A survey released at the end of last month by Upstream and YouGov (US and UK respondents) also contains a warning of sorts to publishers and developers about advertising overload.
In this survey consumers expressed frustration over the volume ads and promotions they were receiving. Two-thirds said they received too many ads, while slightly less than a quarter of respondents said they saw the "right amount" of advertising.
Consumers found ads on their phones to be the "most unacceptable" vs. other media channels or devices. This is consistent with lots of survey data that show consumers are ambivalent or hostile to mobile advertising. However mobile ads typically outperform PC advertising, which is a paradox: people don't want it yet they respond to it.
Q: Which ONE of the following electronic devices would you find it MOST unacceptable to receive unwanted advertising on?
Interestingly these survey respondents were much less hostile to ads on their tablets. In fact, they more were accepting of ads on their tablets than they were ads on their PCs. However when a version of the question was asked in a more positive way, PC or laptop where the top choices.
Q: How you would prefer to receive an offer or promotion through an electronic device that you use / own?
In terms of positive features that consumers said would make them respond to advertising, the top answers were:
Q: Which, if any, of the following would make you MORE likely to respond positively to marketing messages?
In terms of ad units or types, email was the most favorably received among several categories that included SMS, paid search, display, QR codes and augmented reality. By implication email advertising was the least intrusive of the types presented to these respondents.
Q: Which, if any, of the following types of message would you be likely to respond positively to if you received these adverts or promotions?
In the Pew survey consumers were willing to sacrifice ad and content relevance to avoid tracking and targeting. Put another way, they declined the idea of improved relevance through tracking and personalization. In the YouGov survey respondents said they would be most inclined to respond to ads "clearly tailored to their personal interests" and that were specific to their locations.
The two surveys taken together reflect that consumers want advertising and content that is relevant but doesn't rely on data mining. In mobile -- where consumers were least interested in ads -- there's a higher burden of relevance than on the PC. But that can be achieved in ways that don't require behavioral targeting or data mining but rely on location and context.
Marketers and publishers must be careful to respect user desires for privacy as they try and fulfill the demand for relevant and "tailored" information. This is a bit of a tightrope to walk. However the industry must walk it.
Singapore Telecommunications Ltd. (SingTel) announced earlier today that it will buy Amobee for $321 million. Amobee, which is based in Silicon Valley, will remain intact and headquartered there. The acquisition is a bid to become a global player in mobile advertising and generate new sources of revenue, at a time when traditional telco (even wireless) carrier revenues are flattening and even stagnating.
Rather than a mobile "ad network," Amobee is a mobile advertising marketplace not unlike Velti.
SingTel has an office in Silicon Valley and has been making investments in US companies for some time.
Along with the acquisition, SingTel announced that the company would be reorganized into three groups, focused on consumers, "digital life" and communications technology. SingTel has mobile customers in 25 countries. It also has 36 offices in 19 countries throughout Asia Pacific, Europe and the United States. The company claims over 400 million subscribers globally.
Next Wednesday Apple will reveal the iPad3 (and potentially a new Apple TV), with an improved display and Siri among other features. Mobile ad network InMobi released consumer survey data last week finding that 29% of respondents were intent on buying the new iPad, with half of those reporting they don't currently own a tablet. Many people (44% of those intending to buy one) also said they wouldn't consider another brand.
Whether or not these survey findings turn out to be accurate they reflect the momentum and mindshare of the Apple tablet, which has sold nearly 60 million units on a global basis. However, when the first iPad was introduced in Q1 2010 it was met with considerable skepticism and predictions of failure. It was seen as an "unnecessary" product, delivering a "watered-down" Internet experience; it was also "too expensive" and "wouldn't fit in your pocket."
A year later Dell also predicted that the iPad wouldn't succeed in the enterprise. However in Q3 2011 Apple reported that 93% of the Fortune 500 were testing or deploying the iPad. By comparison Dell recently announced that it's exiting the consumer PC business. This juxtaposition is essentially a metaphor for state the PC industry as a whole.
Increasingly, instead of buying a second computer or laptop, US (and non-US) households will choose tablets. While there's still growth in the enterprise PC market the consumer PC market is flat-to-declining. Many analysts expect Apple to sell 50-60 million iPads this year. When iPads are considered "PCs" (which they are not), Apple becomes the largest "PC" vendor surpassing HP.
Mobile display advertising outperforms PC display according to considerable research from InsightExpress and Dynamic Logic. Beyond this, ads on the iPad and other tablets further outperform conventional mobile dislay advertising. Engagement with tablets is higher than PCs and consumers have shown a willingness to buy things through tablets in far greater numbers than they have on smartphones. There's also mounting evidence that people are spending more time with mobile devices and tablets than on the PC Internet and even with TV (in some geographies), according to recent data from Flurry and InMobi.
The totality of all this data leads to the inevitable conclusion that PCs will be outnumbered by smartphones and tablets within a year or two. PCs and the PC-Internet experience will merely be one form of Internet access and not the primary way people access the Internet (except at work). We truly are in a "post-PC" era. (That was a Steve Jobs marketing slogan that is becoming factually true.) Microsoft hopes to change the trend with the introduction of Windows 8 of course. But Windows 8 will also work on tablets. Moreover its consumer success, however, is far from certain.
Publishers and advertisers that fail to recognize these trends and act on them in the near term will be at a significant disadvantage. (Flash should be abandoned right now, for example.) Indeed, publishers and advertisers should shift the bulk of their attention and development resources away from the "PC Internet" and toward smartphones and tablet-optimized sites. Mobile and tablet site design should guide PC website design (as recently happened with the redesign of Kayak.) This is especially true for certain categories such as retail and travel.
The notion that mobile is just an extension of the PC-centric Web, which still prevails in many companies, is completely misguided.
If Facebook has its way "advertising" will be a thing of the past. Facebook wants brands to tell engaging "stories" instead, and turn all us passive "fans" into passionate brand advocates. Facebook wants brand and marketer content to be as good or better than any content or messages that your friends or family might generate. The content is the ad campaign and vice versa.
At Facebook's FMC event in New York today the company introduced its highly anticipated "premium ads," which include mobile distribution. Mobile ads will not be separate from ads/content on the PC site; they will be an extension of the same campaign. There won't be a separate media buy or separate targeting (at least now).
New "premium ads" and existing "sponsored stories" will be distributed in Facebook's mobile apps as well as through its site on mobile browsers. These pieces of content or "ad units" will simply show up in users' mobile news feeds based on Likes and friend Likes, etc.
One of the company's ambitions is to remove complexity from advertising on Facebook. A Ben and Jerry's marketing executive is quoted in a promotional video saying, "We really don't have to worry about separate media." Accordingly the same brand post/story will thus appear in the "organic" feed, as a mobile ad or as a conventional Facebook Ad on the right rail.
Also earlier this week, Twitter revealed it's very similar plan for mobile advertising.
Promoted Tweets will now show up in users' feeds in mobile. Initially only those advertisers you follow will be allowed to promote tweets in your feed. However, over time, the program will expand to allow all advertisers to reach non-followers as well.
These two parallel programs may help one another and speed adoption (or at least testing) of mobile marketing by brands (and to a lesser degree small businesses). The widely discussed danger for both, however, is that mobile consumer-users might potentially feel spammed by brands and advertisers that are inept or too aggressive. This danger is greater for Facebook than Twitter.
Another potential issue is how all these new mobile impressions will impact mobile ad pricing. There's already an imbalance of supply and demand: too many mobile impressions chasing too few advertisers today. More competition generally equals lower prices for buyers. AdAge discusses that question in an article published on Monday.
The suggestion in the article is that like online, where social networks flooded the market with cheap display impressions, there's a similar potential risk in mobile. Prices are already coming down because there's too much supply: "That ad kitty will stretch even thinner when Facebook starts selling mobile advertising against its more than 425 million monthly active mobile users," speculated AdAge.
Facebook and Twitter ads are unique to those platforms, however. In effect these new mobile ads won't simply be fungible new impressions, interchangeable with those of a dozen other mobile networks. Facebook and Twitter compete more directly with each other than with Jumptap or Millennial or InMobi.
However it's quite possible that brands could choose to invest in Twitter and Facebook and divert resources (money, time, attention) away from other mobile display networks. Might that compel the other networks to lower prices to compete? Apple lowered prices considerably in response to competitive pressure on iAd from AdMob and others.
While the entry of Twitter and Facebook into mobile could push prices down for other ad networks, that outcome is not guaranteed of course. But we should know soon enough.
Ad network InMobi today released what it’s calling the "first wave” of a mobile media consumption study spanning 18 countries and 20,000 consumer-respondents. The results, generated in Q4 of 2011, were not broken down by region or country however.
Accordingly they should be seen as global averages and are relatively less meaningful. However they have symoblic value in highlighting the rise of mobile.
InMobi says that time spent with mobile now trumps TV:
Again, these figures are global. So in any individual country the data may look very different. Indeed, data from Flurry Analytics and other sources contradict the findings above for the US market, with TV capturing almost twice the amount of media time spent as mobile.
In addition, according to Flurry (drawing upon third party data as well), time spent with mobile apps now trumps PC-online. That contradicts the InMobi finding above in the context of the US market once again.
What's clear is that users are spending more time with mobile and the mobile Internet. The InMobi findings are thus directionally accurate across countries/regions.
InMobi also reported that “66% of mobile users are just as comfortable with mobile advertising as they are with TV or online advertising.” That may well be in many instances. However a recent UK and US survey from YouGov found something quite different.
Consumers were much less tolerant of ads on mobile phones than in other media:
[The] Digital Advertising Attitudes Report warns that consumer openness to advertising is lowest on mobile phones versus any other device such as PC, laptop or tablet. The vast majority of Brits (64%) and Americans (67%) would find it most unacceptable to receive unwanted advertising on their mobile phone/smartphone over other electronic devices.
There is a further warning that mobile display advertising is not the way to go. Less than one in six (11%) Brits and 15% of Americans who have surfed the internet on their mobile phone have ever clicked on a mobile banner advert and only one in every 100 Brits who surf on their mobiles and 1 in 50 Americans click on banner adverts frequently. The vast majority of those who surf the internet on their mobiles (79% in the UK and 72% in the US) find banner advertisements on their mobiles or smartphones irritating. . .
A couple of weeks ago the MMA annouced 6 standardized mobile ad formats intended to reduce friction around mobile ad creation and media buying. The formats were directed toward smartphones and tablets alike. They didn't address the SMS/MMS market or rich media.
These MMA ad unit standards were the by-product of widespread industry input and comment. Below are the "final," recommended formats:
I asked when these units were announced whether it was premature to try and standardize ad formats for mobile. Ironically, today, competing trade organization the IAB released its own preliminary mobile ad unit standards. Guess what: they're not identical to those generated by the MMA -- though I have not sought to carefully identify areas of conflict and overlap.
Below is the IAB mobile ad units list, which will be subject to comment and then presumably "codified" among in the IAB Standard Advertising Unit Portfolio.
What we have now are like House and Senate versions of the same bill, which need to be reconciled in a conference committee. That is, unless the IAB is making a powerplay and ignoring the MMA's previously announced standards.
The two competing sets of standards will be self-defeating as "standards" unless the two trade groups come together and hammer out their differences. Current MMA CEO Greg Stuart was the previous head of the IAB.
While mobile payments is certain to become a multi-billion dollar market in the next several years, it's getting more difficult to predict who will gain traction. That's partly because there are now so many competitors jockeying for consumer and merchant attention that it's clouding and confusing the market. Indeed, we could see delays in adoption given the absence of any apparent standards or common platforms.
NFC could be one of those standardized plaftorms however most consumers in North America don't have handsets that are NFC-enabled. It will take one or two replacement cycles (2-4 years) for meaningful NFC-handset penetration to be reached.
In the non-NFC payments category, this morning JPMorgan Chase-backed GoPago launched. GoPago is a mobile app that offers mobile payments but also provides a range of additional services, including online ordering and a number of small-business marketing capabilities. The company has developed a cloud-based POS system that interfaces and integrates with existing POS systems. If the local business doesn't use a POS GoPago has other ways to work with merchants. The app is conceived as a holistic mobile storefront for SMBs that will enable ecommerce and not simply a payments solution like Square.
The JPMorgan partnership helps GoPago establish credibility and gain notice, which otherwise might elude the ambitious startup. However the JP Morgan backing doesn't guarantee adoption by consumers or merchants, especially given that eBay, Google, Visa, Amex, Intuit, Mastercard, Square and others are similary seeking adoption of their mobile payments tools and systems. GoPago said however that JPMorgan would help market and educate consumers and merchants about the service.
During the call with GoPago I discussed how the major players (PayPal, Google, Square) had effectively marginalized earlier mobile payments companies such as Bango (which just announced a deal with Facebook) and Boku. Another mobile payments vendor Zong was acquired by eBay. Somewhat ironically, Boku has made a renewed bid for relevance through a just-announced deal with Mastercard that involves its NFC-PayPass system:
BOKU, Inc., a leading global provider of on-line mobile payments, announced today a partnership that will enhance the shopping experience for consumers by allowing them to make payments, receive discounts and targeted offers, and monitor spending -- all via their mobile phones anywhere MasterCard PayPass is accepted . . .
Offered through a mobile subscriber's mobile network operator BOKU Accounts with MasterCard Prepaid gives consumers a convenient way to pay while on the go. Account holders use a MasterCard Prepaid card or PayPass-enabled device to make purchases anywhere MasterCard is accepted with a simple swipe or tap . . .
Boku also offers merchant loyalty and marketing tools in addition to payments functionality. Given all that's now happening I remain very skeptical of Boku and its ability to gain much adoption in this very noisy payments market.
Similarly LevelUp (from SVNGR) is trying to evolve into a payments provider as well. LevelUp (which used to be a couponing and loyalty program) links a credit card to a QR code that merchants then scan at the point of sale. LevelUp also offers a physical card in addition to apps. PayPal and Boku also offer physical cards -- which strikes me as strange. Why link a plastic card to another card or a checking account when one can use a credit or debit card at all the same merchants already? It's redundant.
There are value-added features for both merchants and consumers in using these systems but those features are probably not enough to justify adoption, especially given that they're being offered by "no name" brands. Here consumer trust is a significant issue and there are only a small number of companies, credit card issuers, handset makers and carriers, that consumers trust (to varying degrees) to handle payments.
Merchants, especially small merchants, are also being bombarded by marketing services and will be reluctant to implement a system that has little or no consumer scale. It's the classic chicken and egg problem: you need merchants to get consumers and vice versa.
A system like Square is simple and elegant and doesn't require any changes in consumer or merchant behavior. It simply removes much of the friction of accepting credit cards for small merchants. However, the many moving parts and seeming complexity of payments systems like those offered by Boku, GoPago and LevelUp means they will probably be slow to gain adoption -- if they succeed at all.
For years online marketers and agencies have complained that they're not getting their fair share of ad spending, based on estimates of consumer time with media. The assumption has always been that ad spending would, as a rational and practical matter, catch up with time spent -- and it has started to after many years.
Now Flurry Analytics has developed an analysis, using its own data and third party sources, that does the same thing for mobile. Among the media channels examined, the greatest discrepancy between consumer time spent and ad spending is in mobile.
While that's to be expected because mobile is the newest and most immature of all the media looked at it's still dramatic. Consumer adoption is growing quickly while mobile ad spending (for several reasons) has not kept pace. According to Flurry's analysis, consumers are spending 23% of their media time with mobile but only 1% of ad spending is going to mobile.
Traditional media of all kinds (TV, print, radio) are getting more money "than they deserve" based on time spent. Digital media get less than their "fair share" according to Flurry.
As the chart above and experience over the past 5-10 years have shown, brands, marketers and agencies don't always (or perhaps I should say rarely) act rationally. If they did, there would be closer alignment between consumer behavior and ad spending. Accordingly, the 23:1 gap illustrated above may not close for quite some time -- years in all probability.
Flurry also talks about audiences and their value to publishers in its post. The company discusses publisher eCPM rates earned by age, gender, education and income. Those data are also very interesting.
Based on all of the data examined, the following is Flurry's analysis and conclusion regarding mobile advertising's "sweet spot":
As a total snapshot, our analysis shows that females and males, between the ages of 25 and 34 years old, who have higher levels of disposable income and a bachelors degree or higher, more strongly interact with mobile ads. Leading sociologists William Thompson and Joseph Hickey define this class as “the rich” or “upper middle class,” comprised of highly educated salaried professionals whose work is largely self-directed. Typical professions for this class include lawyers, physicians, dentists, engineers, accountants, professors, architects, economists and political scientists.
A report was just released by the US Federal Trade Commission about apps directed at kids. It's about privacy and data collection and it comes right in the wake of the iPhone contacts upload scandal involving multiple app developers.
Undertaken under the enforcement umbrella of the Children's Online Privacy Protection Rule, it contains a number of intesting findings and observations. One could argue the findings are limited to the special needs and circumstances of children. However in my view the FTC is seeking to establish principles that would apply more broadly to apps and developers in general. Accordingly there may be implications for in-app advertising if formal rules around data sharing disclosures and user controls are established. (Location-sharing permissions are a kind of model here.)
The FTC report found more than "8,000 results in the Apple App Store and over 3,600 in the Android Market" that resonded to the search query "kids." The FTC then analyzed 480 of the top kids' apps from both iTunes and Android Markets. The basic finding of the analysis is that kids apps do little to explain what functions of the phone they access or what data they capture (and share with third parties):
[A]cross the wide range of “kids” apps examined in the survey, staff found very little information about the data collection or sharing practices of these apps. Apple’s and Google’s mobile operating systems and app stores provide limited notice to users regarding app capabilities, and leave the bulk of disclosure to individual app developers. In most instances, staff was unable to determine from the information on the app store page or the developer’s landing page whether an app collected any data, let alone the type of data collected, the purpose for such collection, and who collected or obtained access to such data . . .
The FTC expressed disappointment with the paucity of information about "permissions" and data collection:
Of the 182 Android apps indicating they were intended for use by kids, only 24% specified that the app required “no special permissions to run” – i.e., that a child could use the app without the app accessing any information or capabilities from the mobile device. Conversely, 76% indicated that the app required at least one “permission” to run . . .
[The] Apple app promotion pages that staff examined provided almost no information on individual developers’ data collection and sharing practices. Similarly, the Android app promotion pages that staff examined provided little information other than the mandatory “permissions.” Only three (1.5%) of the 200 Android apps even attempted to convey information about the purpose for the “permissions.”
As a result the FTC wants more disclosures and more parental controls. It wants app stores (Apple, Google) to do a great deal more in the way of providing information to end-users:
- All members of the "kids app ecosystem" – the stores, developers and third parties providing services – should play an active role in providing key information to parents.
- App developers should provide data practices information in simple and short disclosures. They also should disclose whether the app connects with social media, and whether it contains ads. Third parties that collect data also should disclose their privacy practices.
- App stores also should take responsibility for ensuring that parents have basic information. "As gatekeepers of the app marketplace, the app stores should do more." The report notes that the stores provide architecture for sharing pricing and category data, and should be able to provide a way for developers to provide information about their data collection and sharing practices.
Even though this all comes under the specific banner of protecting children I see it as a template for something broader in the future that would potentially apply to all apps and developers.
If I'm correct a troubling aspect of all this, hypothetically, for app developers and publishers would be the required disclosure of ad-related data sharing and any requirement that consumers be given the option to block or opt-out. My guess is that most consumers, if they knew how, would probably block any such data sharing accordingly.
That option would compromise the efficacy of ad networks and their targeting capabilities. And while this is speculation on my part I don't think it's all that wild.
A flurry of hardware-growth projections have recently come out and, though I seem to repeat myself frequently on this point, their implications are quite profound. Accordingly, here are some of the numbers being pumped out . . .
Forrester projected this week that there would be 1 billion smartphones globally by 2016. The company also estimated that there will be 126 million tablets in the US by the same date. NPD said this morning that Android handsets with sub-$150 USD price tags will claim 80% of the smartphone market in Africa, India and China by 2015.
Cisco recently estimated that by 2016, "one-quarter of mobile users [on a global basis] will have more than one mobile-connected device, and 9 percent will have three or more mobile-connected devices."
Meanwhile the general PC market is likely to remain flat, especially in the consumer segment according to various estimates released in the past several months. Finally below are the Gartner 2011 mobile device and Q4 smartphone sales figures. Android's share is a little more than double that of the iPhone according to the IT consulting firm, although Apple had the top-selling smartphone in Q4. Microsoft lost share but the expectation is that it will still be one of the "big three" when the dust settles.
Though tablets are alternately classified as PCs and mobile devices by different firms, they are not traditional PCs. And given their reliance on apps and the absence of a traditional keyboard they're more like smartphones than PCs in most respects. Regardless, the proliferation of "mobile" Internet devices is accelerating. It thus won't be long (3 years) before PC Internet access is something of a sideshow or secondary tool for large numbers of people.
As mobile devices reach parity and then exceed PCs for Internet access, the cross-platform fragmentation described by Google in recent Q4 survey data (written up here) will be quite common. In other words, consumers will be using multiple devices throughout the day and week. It will be more complicated to track and market to those customers.
Source: Google-Ipsos (Q4 2011 survey data)
Most advertisers and marketers are, still tinkering in mobile, are ill-equipped to confront a future where the primary exposure to their brands and products is via smartphones or tablets and their PC websites are merely a secondary, "utilitarian" resource.
Last week I moderated an evening workshop about mobile ad exchanges and mobile advertising more broadly. The event was sponsored by DataXu and intended to introduce agencies to the concept and mechanics of mobile ad exchanges. It featured a mini-ecosystem of company representatives:
There were lots of interesting questions and issues discussed. It was a great event.
However I was struck by a comment made by Groupon's Iryna Newman during the session. I'm paraphrasing but she essentially said that she would pay a premium for as many lat-long mobile impressions as she could get her hands on -- but there simply aren't enough of them.
This seems a strange comment given the much-touted location targeting capabilities of mobile apps and ad networks, and the frenzy around LBS and "hyper-local" advertising.
There are still numerous barriers to delivering lat-long information to advertisers. Privacy is one, especially on iOS. But many mobile ad networks are offering location only at the country, state or DMA level, without any precision beyond that.
Some networks and publishers represent they can offer a lat-long but may in fact be "faking" it.
On the mobile Web you're typically only getting IP-based targeting; and that faces the same accuracy challenges in mobile that it does on the PC. There's also a perceived lack of demand from advertisers for "hyper local impressions." However, the Groupon remark contradicts that very clearly.
I was told by someone in a position to know that only about 5% to 10% of mobile ad impressions currently carry a lat-long. If accurate, and I assume it is, it's somewhat shocking given the rhetoric of mobile advertising and its targeting capabilities.
There are various ad forecasts now in the market that argue that a substantial minority or a majority of mobile ads will be geo-targeted in the very near future. The analyst firms that developed these forecasts may be largely unaware of these fundamental "plumbing" and infrastructure challenges (mostly on the display side). In search it's a completely different situation and the same is true for individual apps.
Google, with the advent of Chrome for mobile, is seeking to remedy this for Android-based handsets. It will follow users from PC to mobile and also have much more data about them when they're mobile.
As a general matter, there are display workarounds involving landing pages that can generate more location precision. But the industry currently faces a gap regarding what it says it can do and what it can actually deliver at scale.
Eventually there will be alignment. But I was quite surprised to learn about all these limitations.
Earlier this week Google brought the Chrome browser to Android handsets (Android 4.0 only). It's reportedly faster than the current Android browser. Beyond this it promises consumers a number of benefits. Among them integration with the PC version of Chrome -- if you're signed in to your Google Account.
This was the vision for mobile Firefox, before the arrival of mobile Chrome: tabs and bookmarks on the PC browser would automatically be available on your smartphone. But Firefox mobile has very limited adoption in mobile. A full version of the Firefox browser isn't permitted on the iPhone and Chrome is likely to marginalize its chances for adoption on Android handsets.
The integration of PC and mobile browsers clearly offers convenience for consumers. It also offers competitive and strategic value for Google, as well as powerful potential features for Google advertisers.
All Android owners must have Google accounts. All Google account holders are being required to create profiles online. And Google is increasingly seeking to connect the dots.
We may collect device-specific information (such as your hardware model, operating system version, unique device identifiers, and mobile network information including phone number). Google may associate your device identifiers or phone number with your Google Account.
To receive the full benefits of mobile Chrome, users will have to be signed in. This will allow Google to see their movements from PC to mobile and all the corresponding activity on each platform. That data will provide Google with an incredible trove of information.
Google search and display advertisers will be granted a never-before-available cross-platform view of users and be able to target them as they move between screens. Users who begin product research on the Web and continue on smartphones in stores would be largely invisible to the majority of sites and online advertisers. But under the new system Google (and by extension its advertisers) will be able to "see" that movement, and consider the larger context and history in deciding which ads to serve.
Clearly the targeting and tracking capabilities of a cross-platform view of consumer behavior are very powerful. They may result in a better experience for many users but may also "creep out" others. It will also be difficult for competing ad networks and platforms to duplicate the data and targeting that Google will be able to deliver. Facebook is the only other entity, perhaps, with the capacity to match this personalized, cross-platform view of its users.
After a 30-day comment period the Mobile Marketing Association (MMA) has announced a new "mobile ad package" that seeks to standardize mobile advertising around six ad unit types and formats. According to the MMA's press release there were "60-plus ad unit sizes" previously. The standardized mobile units are intended to simplify ad creation and buying across smartphones, feature phones and tablets.
The standardization decision came after input from companies such as AT&T, Google, InMobi, Microsoft, JumpTap, Millennial Media, CBS Interactive, the Interactive Advertising Bureau, The 4A’s, Newspaper Association of America and others. The MMA also says that rigorous data analysis went into deciding which six types of units to approve:
To create the Universal Mobile Ad Package v.2.0, the MMA, with support from ImServices Group, analyzed hundreds of billions of mobile ad impressions delivered across the global mobile advertising marketplace in 2Q 2011. The data – sorted by smart phone and feature phone, networks and publishers, and including mobile Web and app – helped determine the six unit sizes that serve as the standard Mobile Universal Ad Package v.2.0.
The MMA added that mobile video and rich media are not covered or included in the new standardized formats and previous guidelines around SMS and MMS marketing remain in effect. Below are the newly announced standardized ad-unit formats:
While the trade group has certainly been thoughtful and inclusive in its approach -- and standardization will indeed speed mobile ad adoption -- the standardization of online ad creative was later blamed for later stifling ad creativity. That in turn prompted the Online Publishers Association in 2009 to develop a number of new, larger non-standard formats to reinvigorate PC display advertising and provide a "larger creative canvas for agencies, advertisers and publishers."