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."
Jumptap just released its January 2012 mobile metrics report. There are a number of interesting things in the document. Among them, Jumptap saw a meaningful decline in iOS share of traffic over the course of 2011. This is consistent with what others have reported.
In general Android now has a little less than twice the market share of the iPhone in the US. However, December data show an surge in iPhone growth because of the 4S.
ComScore released the following market share data for smartphones in Q4. Android grew 2.5%, which was nearly matched by the iPhone on a percentage basis.
Here's previously released Nielsen data regarding smartphone share among recent US buyers.
Another very interesting datapoint from Jumptap is the relative CTR rates of ads on Android and iOS devices. According to Jumptap, with successive versions of the OS, CTRs have gone in opposite directions for iOS and Android. Jumptap had no good explanation for the trend.
Jumptap also presented a chart showing the relative usage of apps and the mobile web. In December they saw roughly equal shares of usage:
Compare comScore apps vs. mobile web share for December, 2011 (comparable in share):
Finally Jumptap offered some tablet traffic comparisons on its network as of December 31, 2011:
What this would suggest is that non-iPad tablets have a majority share of traffic (56% to 44%) in the US. This probably calls into question whether Jumptap's network is representative of the US mobile market as a whole.
Several years ago Dan Miller and I built a mobile advertising forecast that factored in display, search and pay per call. We haven't updated it in part because we've been extremely busy but also because the market is so dynamic. Beyond this there are scores of mobile ad forecasts out there, so it just seemed like adding more noise to the cocophany.
Here's what we projected in 2008:
There's a new mobile ad-revenue forecast out today from eMarketer, which upwardly revises to $2.6 billion (2012) the company's previous forecast. It's very close to our number above. EMarketer's number is somewhat larger -- but not by much.
While the eMarketer forecast isn't an "average" of third party data, it reviews and takes into account the other data in the market:
Generally speaking, most forecasts are either too conservative ("contrarian") or overly "optimistic," often in an effort to grab attention and coverage for the firms generating them.
If (or when) we re-do our mobile ad forecast above -- since this year is( the final year of the projection -- our methodology will likely change somewhat, because the market has changed so much in the past four years. Frankly, I'm surprised and pleased that our forecast has so closely tracked the actual growth of mobile ad revenues.
Millennial Media is out with its latest SMART report (November, 2011). As always it showcases advertiser behavior and tactics on Millennial's network. This month focuses on the Telecom industry and its mobile ad efforts. What's interesting to me is how advertisers are increasingly and self-consciously using mobile to send people into stores and local dealers.
There are a mix of advertiser objectives on display in the Millennial document:
However Millennial reports growth in the use of store locators and local market targeting:
We're still in a period of experimentation with mobile advertising and best practices have yet to clearly emerge (although there are obviously some). Eventually people will figure out the best uses of mobile and what scenarios are most effective.
I think however we'll see two almost paradoxical things emerge: mobile is great for driving online-->offline visits (a kind of direct response) as well as a great brand-awareness medium.
This morning Groupon and Deutsche Telekom announced a "strategic partnership" that will deliver Groupon deals to Deutsche Telekom customers throughout Europe. The deal is significant for both parties. Deutsche Telekom has a presence in 10 European countries.
According to the release:
The partnership marks the first time Groupon will partner with a multi-national service provider to distribute its products and services across a wide international network. It is also significantly enhances Deutsche Telekom's position as a leading provider of the latest applications for its customers.
Using a wide range of marketing and sales tools, varying from promotion activities to deeply integrating Groupon services in selected fixed and mobile services, Deutsche Telekom will offer Groupon services directly to its customers. Scheduled to be available in the first half of 2012 Deutsche Telekom mobile customers will enjoy Groupon's mobile services on their devices without the need for a separate download providing easy access to the best local deals in their area.
To those who dismiss Groupon as a business without a future, this deal is a powerful reminder of the strength of the Groupon brand and its near-global footprint.
The key to success will involve two things: deal coverage and execution. How much inventory is offered and how well presented are the deals?
Groupon Now, the company's mobile offering, in the US has so far not been a success. Accordingly that experience raises questions about how this might play out in a mobile context with Deutsche Telekom's subscribers. However it will not be limited to mobile.
By contrast UK carrier (Telefonica) O2's opt-in "O2 More" partnership with Placecast to deliver local coupons/deals has proven to be very successful. So there is a precedent that shows this could play out in a very successful way for both companies if well executed.
At CES today GPS provider Telenav is launching a new app (and a new brand in a way) called Scout. It's a website; there's also a smartphone app (iPhone for now) and an in-car nav capability. Accordingly, it's coming to Ford vehicles later this year according to the company.
Here's how Telenav describes Scout: "The first daily personal navigator that will be seamlessly accessible across the web, smartphones, and in-car systems – offering users an easy and consistent discovery and navigation experience no matter where they are."
Indeed, the cross-platform feature and personalization are key differentiation themes:
Scout opens to My Dashboard, a customizable start screen that allows users to quickly get personalized, real-time commute times to work or home – as well as instant access to local search for easy discovery of new places and saved favorites. My Dashboard was created to solve the need for an everyday navigation tool, even when driving to familiar destinations.
The website Scout.me enables users to conduct local searches (ratings are coming largely from Yelp), create favorite lists, get directions and share content with friends. That content can be later accessed on the Scout smartphone app or in-car.
Scout is free and will provide voice-guided turn-by-turn directions. Telenav also has free and paid apps for the iPhone and Android, which provide the same capabilities and most of the same content and local search features. The Scout app and site are supported by ads from Citysearch and xAd.
The "Scout" brand as well as its look and features are more consumer friendly than "Telenav," which came out of the enterprise navigation segment. That was probably the impetus behind the creation of the new site/app, which relies on the same infrastructure as Telenav proper. Telenav is also the provider behind many of the carriers' paid navigation apps.
My experience with the Telenav app for the iPhone since giving up my Android handset and Google Navigation has been very positive.
Out with its December "MobileSTAT" mix of network data, Jumptap confirms what others before it (most notably Millennial Media) have said about Kindle Fire -- that it's the most successful Android tablet out of the gate:
In the first two weeks after the Fire’s mid-November launch, Amazon’s tablet outpaced all of the other iPad competitors in traffic including the Motorola Zoom and Samsung Galaxy Tab. Kindle Fire traffic grew 270% in November.
Here are the top Kindle cities in the US, as reflected in ad requests on Jumptap's network:
Google’s Andy Rubin reported in Q4 last year that roughly 6 million Android tablets were in market. However there's not much evidence of actual usage. For example, see the following data from WiFi ad network JiWire (which also confirms Kindle Fire's surge):
The rumor is that Google will be producing a 7-inch tablet to compete with Kindle Fire and potentially undercutting it on price.
Finally, a few other pieces of data from the MobileSTAT report. Android handsets now have more than 2X share of other operating systems on its network (Android 52.7%, iOS 22.1%). Compare Millennial's numbers (Android 50% vs. iOS 30%).
Among ad-targeting methods, location/geo is by far more widely used than other forms. While 79% of advertisers on Jumptap's network use at least one form of targeting, 64% use only one. Jumptap anticipates that will increase however over the coming year.
Last week I put some mobile predictions for 2012 into a column at Marketing Land. However many people probably didn't see them given that it was still during the holiday. So here they are again in more compact form:
Very few people in the mobile industry are neutral about QR codes. People either love 'em or hate 'em and think they'll go away as soon as other (NFC, augmented reality) technologies take over. QR code boosters cite data that show scanning rates are increasing and promote successful case studies. Detractors cite surveys that show most people don't know what they are and generally ignore them.
AdAge covers Forrester data that argues "only 5% of Americans who own mobile phones actually used the 2-D barcodes in the three months ending July 2011 . . . and those 14 million early adopters tended to be young, affluent and male." Earlier comScore data confirmed this demographic profile:
More than half of all QR code scanners were between the ages of 18-34 (53.4 percent). Those between the age of 25-34, who accounted for 36.8 percent of QR code scanners, were twice as likely as the average mobile user to engage in this behavior, while 18-24 year olds were 36 percent more likely than average (index of 136) to scan. More than 1 of every 3 QR code scanners (36.1 percent) had a household income of at least $100,000, representing both the largest and most over-represented income segment among the scanning audience.
ComScore extrapolated from its survey that 14 million Americans had scanned a QR code. Most scanning occurred on traditional media ads or product packaging, though many had scanned QR codes online.
Last year marketing firm Russell Herder conducted a survey (n=500) that confirmed the demographic profile of QR code scanners presented above, and also that it was a minority use case. The majority of mobile users have not scanned one.
According to the survey almost 75% of respondents had seen QR codes. However a dramatically smaller percentage had actually scanned one.
Most significantly the actual experience of scanning a QR code was generally mixed. Respondents said that doing so only delivered value "sometimes" for most people (although 80% had a positive experience one could argue).
Beyond the "how-to" problem, most marketers in my experience aren't delivering a sufficient reason to scan codes. If all QR codes offered discounts, for example, many more people would scan them. But in most ads the reason to scan a code is unclear; only occasionally is there a specific QR call to action.
As a practical matter, for the time being at least, QR codes amount to a way to make a "tech-forward" branding statement and not much more. If marketers put more "meat" behind QR codes they could develop some staying power and become more mainstream. However if they're not used thoughtfully then they will be swept aside when NFC or some other "new, new" mobile marketing vehicle comes along.
Millennial Media is out this morning with its latest "Mobile Mix" devices report. The report reflects the distribution of devices and corresponding operating systems on Millennial's network. Over time the percentage of smartphones on Millennial's network has grown dramatically and now stands at 70%. By contrast smartphone penetration in the US is about 44% according to the latest Nielsen figures. The other 30% of devices on the Millennial network are feature phones (14%) and so-called "connected devices" (16%): iPod Touches, Kindles, iPads and other tablets.
Connected devices are the main focus of Millennial's newsletter this time, in particular the Kindle Fire. Millennial confirms the popularity and apparently significant sales of the Kindle Fire, saying that the company is seeing a "monthly run rate of hundreds of millions of impressions":
Since its release in mid-November, the Kindle Fire has made an impact on the connected device market right out of the gate with early signs of strong consumer adoption.
On the Millennial Media platform, impressions from the Kindle Fire have grown at an average daily rate of 19% since its launch several weeks ago. We’re not just seeing millions of impressions, we’re seeing a monthly run rate of hundreds of millions of impressions.
The Kindle Fire’s impression growth on our platform has slightly outpaced that of the iPad when the iPad launched in early 2010. Though the Kindle Fire has been introduced into a more mature tablet market than the market which greeted the original iPad, the integration of Amazon’s robust digital entertainment library and the $199 price point may also have helped drive this early use by consumers. (emphasis added.)
The question raised in the excerpt above is whether "the $199 price point may [ ] have helped drive this early use by consumers." It's pretty clear the answer is "yes." The Amazon brand has certainly been critical, but it's mainly the $199 price that is responsible for the device's huge sales. The iPad created the new market for tablets and Kindle unlocked demand among those who we're more price sensitive and resisted buying "no-name" lower-priced Android tablets.
Among the smartphones on Millennial's network, 50% are Android based handsets. However, save the Nook and Kindle Fire, Google/Android tablets have had almost no success for reasons of price and quality.
Retrevo presented some interesting survey data yesterday showing consumer tablet demand is greatest for the iPad, followed by the Kindle Fire and then the B&N Nook. Retrevo shows that there is a market for Android tablets -- the Kindle Fire has already confirmed that -- provided the price is right and at least $100 less than the iPad.
Putting aside quality for a moment -- Android Honeycomb was a major disappointment from a UX perspective -- price is the major variable that consumers are responding to in Kindle Fire (but with the confidence of the Amazon brand behind it). The problem is that it's almost impossible for most tablet OEMs to get prices low enough to make any margin on them and be price-competitive.
If they match the iPad pricing they're perceived as imitators (e.g., Motorola Xoom, Samsung Galaxy Tab). But mobile carrier subsidies, which bring down the prices of smartphones, have not worked so far stimulate Android tablet demand -- mainly because consumers don't want another two-year carrier contract and the associated data fees. They're buying WiFi tablets instead.
Android-based tablets that have been priced at or below $200 in the past have been made by companies that are unfamiliar to consumers and received poor quality ratings from experts and consumer reviewers alike. Even though Kindle Fire has had its share of problems and disappointed many reviewers, consumers know and like Amazon.
It was also shown that Amazon was taking a loss on the sale of every Kindle Fire, to establish a beachhead in the tablet market and because the company figured it could make up the loss and much more on content sales.
There are rumors that Apple will introduce a 7" tablet next year to compete with the Kindle Fire, just as Amazon will go "up market" and deliver a 10" tablet.
Google, for its part, has suggested that it will respond to lagging Android tablet sales by bringing its own "higest quality" tablet to market next year. We'll see whether this is with an OEM partner or Google-branded (i.e., Chrome or Nexus tablet). Google is clearly another company -- one of the very few -- that could offer the combination of brand-instilled consumer confidence and subsidized pricing.
Local-mobile ad network xAd has announced a new $9 million round of funding. The money comes from Emergence Capital Partners, SoftBank Capital and Palisades Ventures and Silicon Valley Bank. Roughly a year ago xAd raised about $4 million from Emergence Capital.
The company supports search, display and pay-per-call advertising. It also owns the Go2 mobile directory properties.
xAd says it's the "largest mobile-local advertising network in the U.S." Recently AT&T has laid claim to that crown saying it serves a billion mobile ad impressions monthly. AT&T offers mobile display ads, while xAd has text-based search ads as well. In May xAd announced that it had served more than 2 billion ads.
In November, xAd reported 10 billion monthly ad impressions and 90 million monthly local-search requests.
While ad networks such as Jumptap, Millennial, InMobi and AdMob all offer geotargeted ad inventory (to varying degrees of geo), xAd and AT&T specialize in locally relevant advertising. AT&T contends its ads deliver a much higher CPM than "remnant" ad networks. Previously xAd said that it can deliver a $30 CPM to publishers (not all inventory).
In addition to xAd and AT&T, there are other local-mobile ad networks (mostly display):
xAd both aggregates third party (e.g., yellow pages) advertiser inventory and sells directly to national and local businesses. In September xAd said that it had 1.2 million advertisers in its network, which represented "about 30% to 40% of [total] local mobile search traffic and reach" in the US.
The IAB put out a list this week of the "Top Mobile Shopping Savvy U.S. Cities." Here is the list:
In order to come up with its rankings the IAB considered four criteria:
Anticipating reactions such as, "How can Houston, the 'Fattest City in America in 2009,' also be the most mobile savvy, while San Francisco is #11?" the IAB said the following about Houston and San Francisco:
Weighting and aggregating these data and indexing the results against the U.S. national average reveals that Houston was the most mobile-shopping-savvy city in the U.S. Houston scored high across all four metrics included in the IAB index (see Appendix), and in particular had the highest mobile device ownership level of any major U.S. city. However, high rates of mobile device ownership were not sufficient to make a city mobile shopping savvy. The San Francisco Bay Area had high mobile ownership but scored low on the savviness index, while Tampa-St. Pete went the other way.
The IAB said that the mobile devices measured where "primarily" smartphones and tablets. However I guarantee you that the penetration of smartphones in Houston is not greater than in San Francisco. Ownership of feature phones, still the majority (56%) in the US, should have been excluded.
In addition "propensity to be influenced by mobile coupons" is not an indication of savvy necessarily. More likely it's an indication of budget consciousness. And finally the presence of a retail app on one's smartphone or tablet is an indication of loyalty or brand affinity more than savvy. (I have zero retail apps on my smartphone and tablets, but over 140 apps overall). Indeed, overall number of apps or apps used on a regular basis is a greater indication of savvy than the presence of particular retail apps.
Here are two alternative views of mobile "top cities" using other critera (Houston still ranks):
Verve Wireless' Top DMAs for Mobile Ad Spending (on its network only):
These data were captured in Q1 2011.
xAD's Top Cities for Local-Mobile Search:
Here are the top US DMAs (2010) according to Nielsen:
Most of the lists one might generate around things like smartphone penetration/device ownership or mobile ad spending are going to correspond to population and media spending more generally.
The latest Millennial Media SMART report shows growth of location targeting among retailers and brands. Among other data presented in the October report, Millennial said that retailers and telecom advertisers (e.g., AT&T, Verizon) used store locators on landing pages to drive people into local outlets:
Store Locator experienced growth of 5% month-over-month, with 23% of the Post-Click Campaign Action Mix in October (Chart C). Retail and Telecom advertisers increased their usage of Store Locator as a Post-Click Campaign Action to drive customers to stores for fall sales or to buy new mobile devices.
The use of the store locator on a mobile landing page will be the primary way that brand and national advertisers "localize" for the foreseeable future. This is in contrast to the use of dynamic creative that inserts locations into the ad copy itself. Google mobile search results will be (and are already) an exception.
According to Millennial, "local market targeting" was the dominant component (66%) of the company's "Targeted Audience Mix" (40% of its overall campaigns). However, very interestingly, the use of targeting on Millennial's network has actually declined from six months ago.
In April 48% of campaigns were targeted (vs. 40% in October). Of those, 56% of impressions served by Millennial were directed toward local markets.
In absolute terms, then, the amount of locally targeted impressions being served by Millennial in April and October was almost identical. So while there's growth on a percentage basis, which is significant, overall local targeting in real terms remained flat.
The fact that fewer campaigns on Millennial are targeted overall makes me wonder whether that money, especially locally oriented ad dollars, are fleeing to other networks.
The notion of ad-subsidized smartphones or mobile service has existed for years. Way back in 2006 then Google CEO Eric Schmidt argued that mobile phone service could be entirely subsidized by advertising. A couple years later in the UK Blyk brought the idea to life, providing free service to its youthful audience as an MVNO.
However the company changed its model and is no longer in the MVNO business. One could readily see the pivot as an admission of the limited opportunity associated with providing ad-supported cell service. However in an adjacent market (eReaders/tablets) Amazon has had great success with its ad-supported Kindles.
After the Kindle Fire, which is the top-selling device on Amazon, the bestselling electronics are all Kindles "with special offers" (ads).
Ads on Kindles appear in the form of idle homescreen ads and banners. The idea of idle homescreen advertising on mobile phones has been around for a long time in the halls of mobile marketing. Mobile Posse has implemented it with some evidence of success. However the practice is far from mainstream.
In a recent article in DM News Bizo CEO Russell Glass, seemingly unaware of prior history, says: "Look for the first completely ad-supported cell phone in the next 12 months and dozens to follow in the coming few years." Putting aside Blyk and Mobile Posse's mixed track records the Amazon example may be paving the way for such an opportunity.
While it's very unlikely that we'll see "completely ad-supported" mobile phones any time soon, we may see Amazon-style ad-subsidized hardware or phone service. The latter is a much more likely scenario given how heavily subsidized the hardware already is. And this is where carriers might get involved in mobile advertising in a bigger way. (I still think that a parallel opportunity exists in the model of the Placecast-AT&T or O2 relationships.)
One can imagine that many people would jump at reduced monthly charges in exchange for ads on their idle/home screens, as Amazon seems to have shown with hardware discounts. And carriers could potentially develop fairly large ad networks in short order. Execution is a major problem for carriers but the concept has now become more interesting and viable.
The click is a "lazy metric." Much has been written by comScore, Nielsen and others about why clicks (or the lack of clicks) are not necessarily predictive of real-world success or conversions. Recently Nielsen issued findings that argue how little clicks correlate with sales, in an online display advertising context:
Advertisers looking to build their brands online will need to look beyond traditional web metrics to determine if their investments are paying off, according to a recent study by Nielsen. In a new report, Beyond Clicks and Impressions: Examining the Relationship Between Online Advertising and Brand Building, there is emerging evidence that brand metrics – which show attitudinal response to online campaigns – can predict offline sales. The research further shows that there’s virtually no relationship between click-through rates and brand opinion or offline sales.
Let's be clear that CTR matters in search because you can't buy anything or find additional information without a click to a landing page. But the click has for too long been the currency of online advertising across the board. It has also been used in mobile to demonstrate "success" or performance in situations where that's clearly dubious.
In January Harris (on behalf of Pontiflex) issued findings based on survey research that said nearly 50% of mobile clicks were unintended: "47% of mobile app users say they click/tap on mobile ads more often by mistake than they do on purpose." This was research with an agenda but it does reveal the uncertainty surrounding the CTR as a mobile success metric.
While an argument can be made that higher CTR on mobile ads is better than lower CTR, the connection to ultimate sales or success is questionable. We really need to see "secondary actions" in mobile: map lookups, calls, sign-ups, check-ins/visits, etc. to get a true sense of whether campaigns are working.
Beyond the fact that the data disagree (compare iOS on both charts) they don't tell us much of anything. The Smaato data argue by implication that Windows and RIM are better platforms for andvertisers because of higher CTRs/response rates. However yesterday I wrote about InsightExpress findings that argued Windows users were less engaged and sophisticated in many respects than other smartphone users.
Now compare 2009 data from ad network Chitika showing mobile OS CTRs. What can we infer from this? Android is a better ad platform than iPhone? What about Palm at the time? In fact, we can't infer much of anything, just like the charts above.
Are Windows Phone or Symbian owners better prospects or more engaged vs. owners of Android? What is the real performance of mobile advertising on these various platforms? We really can't answer that question and don't know unless or until we have visbility into "secondary actions."
So while a CTR number may directionally indicate success or be suggestive that something is working it's not transparent enough to really declare success. Mobile offers analytics capabilities that PCs do not.
While mobile is still young the industry should learn from the mistakes of online and develop a set of alternative metrics that can be used to evaluate the true success or influence of a mobile campaign.
App store Xyologic released some interesting data yesterday about publisher/developer adoption of ad network SDKs for the Android platform. What the charts below reflect are the percentages of the top apps that have installed the identified ad networks to deliver advertising.
Many of these apps access more than one SDK so there's no way to precisely extrapolate revenue from these figures. However they directionally reflect market share and revenue trends. The column on the right in the second chart below shows the percentage of all downloads in October among the top apps with mobile advertising.
According to Xyologic, the "others" category includes "AdMarvel, Smaato, Burstly, Mopub, Nexage, Fiksu, and mobile ad network Jumptap who each make up less than 3% each of the overall market share." The tiny share of Jumptap is a bit of a surprise.
Once again, iAD doesn't appear in this list because this is about the Android OS and not the iPhone.
Tomorrow at 1 US Eastern, 10 Pacific is our free webinar: The Convergence of Local and Mobile Marketing. I'll be providing a broad market overview on the following issues:
AT&T Interactive’s Executive Director of Product Management Matthew Goldman will offer their view of the mobile market "on the ground." What are consumers really doing in mobile and what are they looking for? How are they responding to mobile ads? And, beyond surveys, is there truly demand among SMBs for mobile marketing? If so, where is that demand concentrated?
We'll also take questions from the audience on these and related issues. If you're operating in the local-mobile segment or selling to small business advertisers you won't want to miss it.
To attend you must first register here.
Local mobile ad network xAd has released its first quarterly report on local mobile user behavior and ads. I've done a general write-up at Search Engine Land. The company collected the data from its 10 billion monthly ad impressions and 90 million monthly local-search requests. The data in the report were captured between July and September.
A couple of highlights:
The top local search categories according to xAd data:
Most interesting to me was the discussion of ad performance and "secondary actions." CTRs on ads in apps were 8% vs. 5% for ads appearing in the browser.
When you consider that average online display ad CTRs are 0.09% you see that this performance is dramatically better. Indeed, InsightExpress and Dynamic Logic have both documented how mobile display outperforms online across all metrics.
In addition to browser vs. apps differences, xAd documents ad performance variations between iOS and Android. While CTR rates on the iPhone and Android are roughly comparable, "secondary actions" are greater on iOS: calls, map/directions lookups and review drill downs. Interestingly calls are happen more frequently in a browser context. But they're also the most popular "post-search" secondary action (62%) across the board, followed by maps and directions lookups (35%).
Previously xAd reported that its CPMs average $30. Other specialized US-based local-mobile ad networks include CityGrid, AT&Ti, Verve Wireless, Navteq, JiWire, LSN Mobile, Chitika, Marchex and Where.com.