Mobile Advertising

Millennial Seeing 'Hundreds of Millions' of Kindle Fire Ad Impressions

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.

http://www.retrevo.com/content/files/images/misc/pulse_11Dec15_chart2.jpg

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. 

http://www.retrevo.com/content/files/images/misc/pulse_11July13_1.jpg

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.  

Network xAd Raises $9M, Will Challenge AT&T for Local-Mobile Ad Crown

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):

  • LSN Mobile
  • Verve Wireless
  • Where.com
  • Marchex (PPCall) 
  • Chitika
  • CityGrid
  • Navteq
  • JiWire

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.

Is 'The Fattest City in America' Also the Most Mobile Savvy?

The IAB put out a list this week of the "Top Mobile Shopping Savvy U.S. Cities." Here is the list:

  1. Houston
  2. New York
  3. Atlanta
  4. Los Angeles
  5. Dallas/Ft. Worth
  6. Tampa/St. Petersburg
  7. Chicago
  8. Philadelphia
  9. Washington, D.C.
  10. Seattle/Tacoma
  11. San Francisco/Bay Area
  12. Boston
  13. Detroit
  14. Minneapolis/St. Paul
  15. Phoenix

In order to come up with its rankings the IAB considered four criteria:

  • Ownership of a mobile phone
  • Propensity to be influenced by mobile coupons
  • Ownership of a mobile retail app on handset or tablet
  • Ownership of a mobile social media app

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): 

  1. St. Louis
  2. Houston
  3. New York 
  4. San Francisco Bay Area
  5. Portland 
  6. Denver
  7. Memphis
  8. Seattle 
  9. Dallas-Ft.Worth
  10. Cleveland

These data were captured in Q1 2011.

xAD's Top Cities for Local-Mobile Search:

  1. New York
  2. Los Angeles
  3. Chicago
  4. Miami 
  5. San Francisco
  6. Denver
  7. Dallas
  8. Houston 
  9. Atlanta
  10. Jacksonville

Here are the top US DMAs (2010) according to Nielsen:

  1. New York
  2. Los Angeles
  3. Chicago
  4. Philadelphia
  5. Dallas-Ft. Worth
  6. San Francisco-Oak-San Jose
  7. Boston (Manchester)
  8. Atlanta
  9. Washington, DC
  10. Houston 

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.

Millennial Media: Local Targeting Grows on Percentage Basis

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.

Screen shot 2011-12-09 at 6.28.21 AM

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. 

Screen shot 2011-12-09 at 6.28.56 AM

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.

How Soon Will We See Smartphones with 'Special Offers'?

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).

Screen shot 2011-12-04 at 7.40.24 AM

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. 

Smaato vs. Jumptap and Why Mobile CTR Doesn't Tell Us Much

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.

(emphasis added.)

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.

Earlier this week Smaato and JumpTap both released CTR metrics as part of larger data releases. The numbers were dutifully and largely unreflectively reported by numerous blogs and media outlets.

http://www.smaato.com/img/metrics/Q32011/ctr_ww.jpg Screen shot 2011-12-02 at 8.09.58 AM

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. 

Screen shot 2011-12-01 at 11.51.34 AM

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.

http://insights.chitika.com/uploads/Clickthrough-Rate-by-OS.png

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. 

AdMob Dominant Ad Network on Android Devices

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.

Screen shot 2011-11-18 at 7.41.22 AM

Screen shot 2011-11-18 at 7.35.16 AM

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.

Free Webinar Tomorrow: The Convergence of Local & Mobile Advertising

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:

  • Smartphone and mobile Internet adoption
  • Local-mobile user behavior
  • Tablet adoption
  • Mobile advertising projections
  • SMB demand for mobile marketing  

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

Report: Local-Mobile Ads Dramatically Outperform Online

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: 

  • 75% of smartphone owners conduct local searches (other data reflect up to 95%) 
  • 62% of local-mobile users conduct at least two local searches per month, while 32% of users do at least five local lookups per month

 The top local search categories according to xAd data:

  1. Restaurants
  2. Gas stations
  3. Shopping
  4. Auto repair/dealers/rentals
  5. Fast food
  6. Cafes/coffee shops
  7. Travel & lodging
  8. Health & medical
  9. Bars & clubs
  10. Finance & legal

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. 

Millennial: Local Targeting Gains by 50%

Millennial Media has released its latest SMART report, which offers data about the campaigns running on its network. This edition has case studies and more data than most.

I zeroed in on a statistic that has also been reported in several other articles: location targeting increased by 50% quarter-over-quarter. Among campaigns on Millennial's network using any form of targeting, local targeting (which is at the city level) represented 66% percent of 45% of campaigns employing any form of targeting.

Screen shot 2011-11-10 at 9.51.59 AM

I took a look back at a previous report covering July 2011 and discovered that 44% of campaigns were then targeted and 67% of those campaigns used what Millennial calls "Local Market Targeting." So the 50% growth figure doesn't entirely make sense to me. But I'm glad to see more advertisers recognizing the value of location targeting. 

Millennial highlights, among others, a Benjamin Moore paint campaign that sought to drive consumers into retail stores with a special offer. According to Millennial, "the campaign drove a consumer engagement rate that is more than double the network’s average for home furnishings and produced unique analytics for Benjamin Moore on consumer behavior around couponing."

Millennial also touted "triple-digit growth" across a range of verticals. Clearly we're in a hyper-growth period for mobile. In addition, Millennial announced earlier this week that they were expanding their operations to the Asian market. 

Why QR Codes, NFC and Augmented Reality Will Disappear into 'Visual Search'

QR codes are proliferating yet it's not clear that consumers are "getting it." ScanLife, it is Q3 trends report, says that 2D or QR barcode scanning is growing dramatically:

  • We have seen over 20 million scans in 2011, and that represents a 440% increase from 2010 through the same time period.
  • The number of countries scanning in a single day increased by 66% in a year. Users are now scanning from 128 different countries daily, a testament to the expanding global footprint of this technology.
  • The aggregated growth is also translating into a significant rise in the individual scans per code. As an example, the single largest marketing campaign this past quarter saw over 400,000 scans, compared to 65,000 a year ago. 

However US and UK consumer surveys indicate that most consumers don't know what a QR code is and only between 6% and 11% have ever scanned one (in the UK it appears to be 19%). According to comScore data, QR code scanners are mainly men and younger people (18-34) vs. other market segments.

Screen shot 2011-11-07 at 8.03.01 AM

Somewhat strangely, QR codes seem to polarize marketers. There are some very vocal and aggressive QR code detractors that consider the technology a failure. And many see QR codes as some sort of interim step before NFC technology become mass market. 

In a parallel vein there's augmented reality ("AR"), which is a "cool technology" chasing a mass market use case. AR continues to be more of a novelty than something really useful to consumers -- or marketers. But it has potential in many non-commercial and commercial situations.

Then there's NFC, which has been written about extensively in connection with the launch of Google Wallet and mobile payments. Beyond payments, NFC is also a marketing tool and can deliver content and marketing messages to a handset with a simple touch of the device on an NFC-enabled surface or receiver. Given that very close proximity is required to invoke NFC it's not a substitute in all situations for AR or QR codes, which can both work from a distance.

A category that will likely subsume and incorporate all these technologies and tools is "visual search." Exemplified by Google Goggles or Amazon's new "Flow" app, it simply asks consumers to position the handset/camera over or in front of an object and then delivers information: reviews, prices, nearby stores, additional content and so on.

The notion of "visual search" is conceptually simpler and much more consumer friendly than "Augmented Reality," "QR codes" or "NFC." For that reason I believe that visual search will become the metaphor or category name for a range of approaches and technologies that are collectively about getting information or content (whether commercial or non-commercial) into the handset through the smartphone lens. 

NFC, AR and QR Codes all wear their complexity on their proverbial sleeves, while the term "visual search" buries the technological complexity behind a very descriptive and easy to understand concept. 

Google's HTGM Site May Help SMBs Go Mobile

This morning Google has launched a new site (HowToGoMo) intended to educate marketers large and small about the importance of mobile, and direct them to vendors that can build sites for them. I've written up the announcement and initiative generally at Search Engine Land.

The site offers mobile case studies, data on why you need a mobile site ("61% of users are unlikely to return to a site that’s not mobile-friendly") and the ability to see what your site currently looks like on a smartphone.

Screen shot 2011-11-01 at 8.04.33 AM

The most interesting part of the site from my perspective is a vendor marketplace together with a set of filters that help you choose one. The questions or filter fall into three categories: 

  • Do you want to build it yourself? 
  • How much do you want spend annually (less than $1K or more than $75K)?
  • How quickly do you need one (one day, week or month)?  

There are 12 vendors that are likely to see a bunch of new leads from this site (Google isn't making any money from the leads). It will definitely help SMBs and enterprises accelerate mobile site adoption. As I wrote yesterday, In March of this year Google reported that the overwhelming majority (79%) of its top advertisers didn’t have a mobile-optimized site. But a new report from a firm called the Acquity Group found that 37% of the Internet Retailer 500 now do.

Just nine months ago, the overwhelming majority of small business (SMB) owners didn’t consider mobile an important marketing channel. In February 2011 we found that SMBs had very limited understanding and usage of mobile. Roughly 83% said they were not doing any form of mobile marketing.

However a more recent survey by Borrell Associates, among 484 small business owners, found that “four out of every five plan to spend money on mobile marketing this year; [and] on average these businesses expect to devote more than 20 percent of their ad budgets to mobile initiatives.” The survey also reported that 56% of these SMB respondents had been pitched mobile marketing solutions by “vendors or media outlets.”

In the larger context of yellow pages publishers and other SMB sales channels pitching mobile, as well as widespread adoption of smartphones by small merchants, this Google initiative -- especially its vendor marketplace -- will help speed SMB mobile site adoption. 

Study: 37% of Retailers Now Have Mobile Sites

Earlier this year Google reported that the overwhelming majority (79%) of its top advertisers didn't have a mobile-optimized site. However, a new analysis from the Acquity Group found that a substantial number (37%) of the Internet Retailer Top 500 companies now have a mobile site.

This is up from a level of 12% last year and only 4% in 2009. Those are dramatic increases, reflective of retailers responding to massive consumer adoption of smartphones. The study also reported that roughly 26% of retailers have at least one mobile app; and 18% had both a mobile site and an app.

Screen shot 2011-10-31 at 11.40.01 AM

While 37% have a mobile site, about 26% have one or more apps -- with the iPhone leading the way:

Screen shot 2011-10-31 at 11.43.28 AM

The "Top 10" mobile retailers were: Amazon, Armani Exchange, Barnes & Noble, Buy.com, Cabela’s, Gilt Groupe, The Home Depot, Newegg, Walgreens and Wal-Mart. Here's the hierarchical ranking according to Acquity's scoring: 

Screen shot 2011-10-31 at 11.43.13 AM

An interesting question is whether mobile revenues for these retailers are at all commensurate with their investments in the user experience. With Amazon at least, we know that has been true. 

Survey: Mobile Consumers Interested in LBS Offers, Loyalty Programs

Mobile marketing platform HipCricket recently released findings from its annual online survey of mobile users. The US-based survey was conducted earlier this month and had 607 responses. There are a number of issues and areas explored. I've pulled out a couple of slides tied to mobile loyalty and location-based offers. 

One third of respondents expressed interest in participating in a mobile loyalty program operated by a "trusted brand" (key phrase).

Screen shot 2011-10-25 at 12.05.10 PM

Yet a relatively small number of people had ever participated in such a mobile loyalty program, indicating an opportunity for brands and retailers.

Screen shot 2011-10-25 at 12.04.59 PM

Another piece of interesting data, confirmed by other surveys (especially JiWire) reflects growing openness or demand for time and location-based offers:

Screen shot 2011-10-25 at 12.04.43 PM

My "takeaway" is: use contextually relevant offers to enroll mobile consumers in loyalty programs and then engage/retain them with push notifications either via SMS and/or branded apps.

Millennial: Android Share Now Double iOS on Network

Millennial Media's latest SMART report is out and the story is familiar: Android is the top platform, while the iPhone is the top individual device. RIM is still holding its own in the top 20 devices and Windows Phones still haven't shown meaningful growth. 

In July of 2010 smartphones constituted 49% of the devices on Millennial's network (immediately below). Now smartphones represent 72% of all devices on Millennial's network. While they'll never reach 100% (because of tablets and other "connected devices"), by Q1 of next year the number of smartphones on the network will probably be closer to 90%. 

July 2010: 

Screen shot 2011-10-25 at 5.57.33 AM

Android devices represent 56% of all the handsets showing up for Millennial, while iOS has a 28% share. Accordingly, Android's share is now double iOS on Millennial's network. However Apple outperforms its relative share in terms of monetization, while Android under-performs: Apple devices generate 41% of monetized impressions on Millennial's network vs. 49% for for Android. 

September 2011:  

Screen shot 2011-10-25 at 5.57.54 AM

Facebook Mobile Inventory Potentially Worth $2.5B

If Facebook wanted to turn on mobile advertising it would instantly become the largest "mobile ad network" on the planet. Indeed, I believe after the IPO Facebook will be all but compelled to run ads on its mobile apps and HTML site. But how much money might Facebook stand to gain from such a move?

A great deal is the short answer. Let's do some simple math to find out. 

Facebook now has more than 1 trillion monthly page views on a global basis. In the US the number of monthly page views is 300 billion. According to an analysis by Hubspot in May, 2011 roughly 33% of Facebook's traffic was coming from mobile devices. 

Screen shot 2011-10-20 at 10.16.51 AM

If that formula is correct, then approximately 99 billion of Facebook's monthly US page views come from mobile devices. This is mind boggling. 

If we use a $2.50 mobile CPM ($2.50 per 1K impressions) to value this inventory it would mean that Facebook would be in a position to instantly add $247.5 million in US ad revenue to its coffers -- assuming 100% fill.

On a global basis, using the same crude formula, Facebook's inventory would be worth approximatley $2.5 billion, the annual mobile ads run rate that Google announced last week

Is Mobile Better for Branding or Direct Response?

Is mobile better suited to branding or direct response? The answer is, of course, "neither" or "both." Why should advertisers need to choose? Surely you've heard the terms "branded response" or "performance branding." 

Strong brand creative can be accompanied by direct calls to action (offer, dealer, store locator). But will better tracking of mobile users -- including to the point of sale -- push mobile advertising toward direct response billing and business models? If advertisers can pay on a per-customer, per-call or per-lead basis won't that move the medium in the DR direction?

PC advertising has struggled to attract brand advertising dollars. The "transparency" and "performance-based" nature of online marketing has in part created a culture of direct response and made it more challenging for online publishers to capture brand advertising budgets. Online video has boosted brand spending online but brand advertising dollars are still not commensurate with consumer time spent online.

Oniine vs. mobile branding

Now as mobile advertising is taking off in earnest this question of branding vs. direct response is timely and relevant. Again it's a false choice: both can co-exist even in the same ads. But I believe that because mobile offers potentially greater "transparency" even than online there will be natural movement toward direct response models.

(As an aside, the click is the wrong metric to assess the effectiveness of mobile or online display campaigns.) 

I've written about this before but it's becoming abundantly clear that mobile is a much stronger branding medium than online. Numerous studies from both InsightExpress and Dynamic Logic reflect this in fairly dramatic form. The graphic above, for example, shows that mobile delivers against key brand metrics (awareness, purchase intent and others) much better than online.

This has been confirmed to me anecdotally time and again. Part of it is lack of ad clutter as well as the "intimacy" of the medium. There are even suggestions that mobile is a better branding medium than TV.

However because you'll be able to pay on a per-X basis, advertisers, agencies and industry associations will need to be vigilant to ensure that mobile doesn't, by default, go the way of online and remains a tool for brand advertising as well as direct response. 

Mobile + POS Data Will Transform "Online Marketing"

There are now a range of companies working on connecting online activity and ads with action at the POS using mobile devices. NFC-enabled mobile payments is just one of many initiatives going on. For example, Shopkick just announced a deal with Giant Eagle supermarkets that connects the mobile app with Giant Eagle loyalty accounts:

Shopkick's first partnership with a supermarket, and more importantly, co-founder and chief marketing officer Jeff Sellinger said that it allows the startup to "close the loop." Now, by tying user accounts to Giant Eagle loyalty cards, Shopkick will have data on what users actually purchase. That means brands can offer rewards not just for scanning products, but for buying them too.

Google Wallet just expanded its features, as well as the roster of participating stores and merchants. Now with a "single tap" Google Wallet users can pay, redeem coupons and get loyalty points. Currently Google doesn't see the transaction value or other details in the way that Shopkick and Giant Eagle will through their arrangement. But eventually Google will probably get access to more data and make that available to marketers.

Deal vendor Bloomspot has a system that uses registered credit cards to close the loop with daily deal buyers and determine whether they spent more than the face value of the deal in restaurants and stores. Placecast is working on something that matches offers and in-store transactions through credit card accounts. LSN Mobile has a relationship with First Data.

There are several other such examples I could use to illustrate what is a growing and very important trend. 

Mobile devices will allow marketers to see who showed up in stores and, in the very near future, what they bought and how much they spent. There are some significant privacy issues and implications of all this and I don't want to dismiss or minimize them. However the effort to track the influence of ads and offers from online (or traditional media) to the point of sale is a trend that is starting to gain momentum.

We're not that far away from a time when agencies and marketers will have considerably more visibility into what online ads drove what in-store purchases, as well as user profiles based on purchase behavior and response to ads. This data has been collected for years in the offline world but now, through mobile devices, online marketers are going to get some new visibility on the dominant online-offline shopping paradigm. 

Remember that e-commerce is only about 5% to total US retail but the Internet influences billions of dollars in offline transactions. Accordingly the growing visibility that marketers will have in just a few years about who responded to ads and what they spent will have a profound impact on the future sophistication and tactics of "online marketing." 

Google Announces $2.5B in Mobile Ad Revenues

Google announced a "blockbuster" quarter yesterday: revenues of $9.72 billion which was an increase of 33% vs a year ago. Google handily beat analyts' revenue expectations.

There was also a blockbuster of a statement around mobile advertising. Google CEO Larry Page said that mobile had grown from an annualized run rate of $1 billion to $2.5 billion.

Here are the mobile-related comments and discussion from the earnings call:

Google CEO Larry Page: 

I'm super pleased with Google Maps, it's a favorite with our users, especially on mobile devices. In August, we launched in 40 new countries, taking our total to 130 countries. The growth of Android is mind-boggling too. Over 190 million devices have now been activated globally. I'm super excited about the soon-to-be released new version of Android called Ice Cream Sandwich, that's right, Ice Cream Sandwich. You won't believe what we managed to get done in this release.

We're also seeing a huge positive revenue impact from Mobile, which has grown 2.5x in the last 12 months to a run rate of over $2.5 billion.

Nikesh Arora, Senior Vice President and Chief Business Officer:

Larry mentioned $2.5 billion as a run rate. Our revenue growth continues to accelerate even in Mobile, driven primarily by mobile search. This growth, obviously, is driven both by the underlying expansion of Android devices and of tablets, as well as stellar performance of our sales teams who are working closely with our customers to help them craft compelling mobile advertising solutions. Many advertisers have greatly increased the size and frequency of their mobile campaigns. Mobile is becoming a must-have. This includes clients like InterContinental Hotels Group, which spans pretty much across our entire portfolio of properties, including Mobile search, Mobile GDN and AdMob. 

To repeat the nuggets:

  • 190 million Android activations globally
  • $2.5 billion annualized mobile ad run rate, which is being driven by mobile search revenue growth (of which calls are a big part).  

Report: Android Dominates but iOS the CTR King

Ad networks Jumptap and Millennial Media are out with their respective data newsletters today. The Millennial missive this time focuses on CPG companies and their campaigns. According to Millennial, most of its CPG advertisers' focus was on branding and awareness, rather than driving people into stores to buy products or app downloads.

Yet one of the primary "post click actions" of CPG campaigns involved sending users to a Facebook page or other social media account. "Mobile Social Media represented 78% of the Post-Click Campaign Action Mix for CPG Advertisers in August," according to Millennial. "CPG advertisers utilized mobile campaigns to drive customers to social media outlets where they could engage with the brands and provide feedback on products."

Consistent with their branding objectives, CPG brands also over-indexed on mobile video as well. 

Screen shot 2011-10-06 at 6.51.39 AM

Jumptap presented data on a fairly broad range of topics, from CTR rates by OS to demographics and device marketshare. Jumptap now says that Android devices now deliver almost 50% of the impressions its network and that the Google OS is close to having more than twice the share of the other operating systems combined.

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For comparison purposes, here's what comScore said yesterday about smartphone OS share in the US: close but not identical to the Jumptap figures. 

Jumptap points out that despite Apple's smaller market share its iOS generates higher CTRs, while Android under-indexes vs. the average on Jumptap's network.
Screen shot 2011-10-06 at 7.01.16 AM

Most Jumptap campaigns (see below) appear to be sending people to the mobile Web ("click to Web"). What's not clear from the data is whether these campaigns are sending people to mobile-optimized sites/landing pages or whether they're simply going to conventional PC websites. More likely than not it's the latter, given Google's previous comment than nearly 80% of its top advertisers didn't have a mobile-optimized presence. 

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Jumptap said that "mobile users age 45-74 have the highest CTR" and that men have 2X CTR of women. Those earning over $50K click on ads 5X more than those under $50K, which Jumptap attributes to higher rates of smartphone ownership among more affluent consumers.  

Among targeting methods -- and this is echoed by Millennial's data -- the top tactic was location targeting followed by device/handset targeting and demographic targeting. 

Screen shot 2011-10-06 at 7.02.04 AM

Finally, Jumptap compared the top-spending verticals by CTR. The X-axis in the chart below shows spending and the Y-axis shows relative CTR. Entertainment is the vertical that sits in the sweet spot of both, followed by automotive, insurance and technology/electronics. 

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