Mobile Advertising

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.

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

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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).

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

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

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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:  

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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. 

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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. 

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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.
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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. 

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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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Survey: 67% Want Local-Mobile Offers, but 45% Concerned about Location Tracking

Prosper Mobile Insights released data from a recent US consumer survey (n=348 smartphone and iPad owners), conducted last month. The survey questions ask a range of things about mobile usage and mobile subscriber attitudes. Below I highlight a few coupon-related findings from the survey. 

Q: To what extent do you agree with the following statements about location-based coupons on your mobile device?:

They are very convenient and useful

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Those that fall into the "Somewhat/Strongly Agree" category equal 67% or 2/3 of respondents. These data simply confirm many other survey findings that have found consumers are interested in mobile coupons. 

Interestingly marketing newsletter MarketingVox focused on the 18% (below) who said they didn't want coupons on their mobile devices, using the contrarian headline: "1 in 5 Mobile Users Don’t Want Coupons."

Q: How would you prefer to receive coupons on your smartphone or tablet? (Check all that apply)

Screen shot 2011-10-05 at 3.21.16 PM

One could group responses in the slide above generally into two categories: push and pull. Any category that requires "affirmative action" on the part of the consumer (e.g., search, QR code scanning) would fall into the "pull" category. Push categories would include email, SMS, geofencing ("automatically when I am near a store").

Social media check-in is more ambiguous but probably falls into the push category more than pull. Here the user is being presented with an offer as incentive to come to a location/store or is being shown an offer after checking in (e.g., "nearby offers"). 

Respondents were allowed to "check all that apply," so the numbers exceed 100%. Basically these responsdents appear to be saying they want to access coupons in multiple ways, actively and passively.

Using the percentages as points here's how the push vs. pull preferences broke down:

  • Push: 118
  • Pull: 64.1
  • No coupons: 18.1 

Even as many people are interested in searching for deals -- which is about inventory, relevance and control -- they're more interested in getting deals presented to them. Email was the preferred method of receiving deals information. This may be more about familiarity than anything else.

I am concerned about security issues and my location being tracked

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Those who expressed moderate or strong concern about location tracking constituted 44.8% of respondents. This is generally consistent with other survey findings. For example, in Q2 WiFi ad network JiWire found that "53% of all respondents are willing to share location information in exchange for relevant content." That means 47% had concerns about location awareness or tracking.

Accordingly nearly half of the mobile users popular has some ambivalence or concern about giving up location information. 

US Mobile Ad Revenues to Exceed $1B in 2011

Earlier this month JumpTap released a mobile advertiser and publisher survey, which shows both the growth trajectory of mobile advertising and some of the pain points for marketers.

The survey data, collected from 611 agencies, advertisers and publishers, showed that 79% of respondents were doing some form of mobile advertising but most were spending less than 5% of their budgets; the average was 6%. However they expected to increase spending significantly in the coming year. 

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Targeting capabilities were the number one thing that advertisers were seeking in mobile, with local/geo and contextual the most desired forms. Most advertisers, seeking reach, went first to ad networks and then to publishers. 

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This week for in New York at Advertising Week Millennial Media is hosting a panel discussion that ask the question: Will mobile eclipse online? Eventually it may. Earlier this month Flurry Analytics showed that available mobile app inventory/impressions would in fact eclipse PC display if those impressions were fully monetized:

USappInventory vs USonlineDisplayAdSpend resized 600

This morning eMarketer released new mobile ad projections that estimate US mobile ad revenues to hit $1.2 billion this year. 

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That's gratifying to me because the mobile ad forecast that Dan Miller and I did in 2009 ago showed North American mobile advertising to reach $1.4 billion in 2011 -- pretty close to the eMarketer forecast. 

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It's clear that mobile advertising is ramping very quickly, lead by search marketing but mobile diplay is a big driver of revenue and a money maker for many mobile publishers.

BIA/Kelsey has predicted that 70% of mobile advertising will be locally targeted. I have disputed this assumption; although it gets quickly into the question of "what is a local ad?" If it includes location on a landing page or a store finder, yes most ads will offer something like that. Local ad creative is a different matter, however. 

At the Borrell Local-Mobile event yesterday publishers spoke about not making much money on mobile but it being a huge growth area and opportunity. The JumpTap survey data illustrates the challenges to publishers -- especially local publishers -- in providing reach and efficiency to advertisers in mobile. 

Flurry: Mobile Apps' Reach Rivals or Exceeds TV

Earlier this week Google released data showing daily usage patterns of PC, tablet and smartphone users. The data revealed that PCs are used throughout the day but usage peaks between 4pm and 6pm. Smartphones are also used throughout the day but usage steadily climbs and peaks between 9pm and 11pm. Tablets are primarily used at home during the evening.

Flurry Analytics recently compared similar platform usage trends but threw in TV. During traditional "prime time," between 7 pm and 11 pm, TV has the greatest reach. However iOS and Android app usage exceeds TV throughout the day: "compared to relative TV viewing and Internet usage, mobile app usage is higher from 6 am to 6 pm." 

Flurry Dayparting TV v Internet v MobileApps v2 resized 600

Flurry adds that "the combined number of active iOS and Android devices in the U.S. is approximately 110 million." This is a striking number.

Nielsen has said that 43% of US mobile subscribers now have smartphones. If we assume a US audience of roughly 250 million mobile phone users the Nielsen number would put the estimated mobile Internet audience at about 107 million. By contrast comScore assumes a mobile Internet audience of about 82 million based on a total audience of 235 million (35% with smartphones). 

The total US Internet audience is roughly 216 million according to comScore. The mobile Internet audience is now about half the total PC audience. However from the data above it appears that mobile users are more active and engaged throughout the day. 

What Exactly Is Flurry Saying and What Does It Mean for Mobile Advertising?

Yesterday mobile analytics company Flurry presented data that was both compelling and potentially confusing. And the way it got reported was misleading: the value of mobile ad inventory to surpass PC display inventory. I want to take a closer look at what Flurry said and its implications for mobile advertising.

Here's what Flurry said verbatim: 

Flurry focuses on the size and growth of available advertising inventory within iOS and Android applications . . . The chart below shows that U.S. app inventory is not only growing at a staggering rate, but also poised to absorb the equivalent of the entire U.S. Internet display advertising spend by the end of this year.

USappInventory vs USonlineDisplayAdSpend resized 600

This is confusing. It's also hypothetical.

What Flurry means is that mobile app usage is growing and thereby creating opportunities for advertising ("inventory"). The actual ads aren't there yet. Although some networks and exchanges promise publishers/developers near 100% fill the existing monetization doesn't match the growth of page views. 

Flurry assigns a value to that growing "inventory" ($2.50 CPM), which is how they project out the hypothetical mobile spend. Accordingly if there were advertisers sufficient to fill all the potential mobile "inventory" it could potentially exceed the value of online advertising. However the discussion is all about consumer behavior, creating opportunities for advertising -- not about actual monetization.

According to Nielsen, two-thirds of (Android) user mobile Internet time is spent in apps vs. one-third spent on the mobile Web. 

Android smartphone apps-vs-web

By comparison mobile search occupies relatively little time, whether in-app or through a browser. However it's currently driving more revenue than display by some estimates.

Regardless, the implications of the Flurry data are significant. Beyond the fact that they show consumer adoption and massive revenue potential accordingly, they also show that mobile display is likely to be a larger part of the mobile advertising pie than many forecasters had imagined. 

With that assumption, the second question is: how much of that ad inventory will be geotargeted or local? Some have assumed that "local advertising" would dominate mobile because of the better targeting options on mobile devices vs. PC. However local ads many not be a dominant part of the ad spend. Location may play out on landing or secondary pages rather than in the ad creative itself.

Local deals may be pervasive in the display space but so will brand and national ads. 

Millennial: Windows Phones a Rowboat on the Android Sea

The iPhone vs. Android meme is getting very tired yet it persists. That's the thrust of the coverage surrounding Millennial Media's "Mobile Mix" report for July 2011. Among other data, it ranks handsets and market share on the Millennial network by device type and operating system. Here are the "quick facts":

  • iOS and RIM impressions were relatively flat month-over-month
  • Android impressions grew 31% month-over-month
  • Symbian impressions grew 11% month-over-month
  • Windows Phone 7 impressions grew 71% month-over-month

The Windows Phone growth is noteworthy for the fact that that there is growth/life. By contrast comScore shows Windows/Microsoft losing share month over month. However high percentage growth from a very small base is, in actual handset numbers, not particularly meaningful. Several months of such growth would be significant however. We'll need to wait for the first Nokisoft phones to appear to see whether Windows will "make it" as an OS.

Unfortunately Millennial doesn't put much historical context into its individual reports. So I always like to take a look at the data from several months or a year ago to compare the figures. Accordingly here are several charts from this month's report and July 2010:

Top handsets on the network (7/10 then 7/11):

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The iPhone has maintained its top position and RIM is holding on with three handsets in the top 20 vs. four a year ago. But otherwise it's all Android.

Operating system share (7/10 then 7/11):

 Screen shot 2011-08-24 at 8.10.24 AMScreen shot 2011-08-24 at 8.09.51 AM

As you can see smartphones have grown from 49% to 68% on the network. In the US market smartphones are about 40% of all handsets now according to Nielsen. As you can also see, the relationship between iOS and Android has flipped in a year with Android handsets now representing 61% of all impressions. 

In terms of monetization and revenue, however, Android continues to underperform its share while Apple devices outperform their relative share. 

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Finally, as PaidContent has pointed out, one of the more interesting pieces of data surrounds "carrier" usage. Over the past year WiFi access has grown from 26% to 33%. This is probably a direct result of the use of "connected devices" (e.g., the iPad) more than any other variable. 

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However as carriers eliminate unlimited data and throttle speeds on their networks, on the go users will increasingly seek alternatives that offer cheaper and/or faster access to their applications and the mobile Internet.

Placecast ShopAlerts Now App-Ready

Placecast announced today the availability of ShopAlerts push notifications for retailer mobile apps. Previously Placecast ShopAlerts enabled geographically relevant SMS or MMS messages after a consumer opt-in. This new announcement means that geofenced alerts can be integrated into existing retailer apps to boost the effectiveness of those apps.

In the conventional scenario, users need to launch a retailer app and affirmatively search or browse for content. The new program enables consumers to receive LBS alerts that use promotional messages to direct consumers to the nearest local store or outlet, once inside the geofenced area. It's not clear whether the app-based ShopAlerts would require explicit consent to LBS notifications. (On the iPhone notifications require acceptance in general.) Best practices suggest at least a disclosure if not an opt-in. 

Push notifications aren't new but this combination of app + alerts could prove effective for retailers and help boost app usage. Examples of companies already working with Placecast ShopAlerts include North Face, Subway, Kohl’s, Kmart, Starbucks and JetBlue, among several others.

The efficacy of geofenced ShopAlerts has been demonstrated in the UK with O2 and in various tests and trials in the US.

Related Placecast posts: 

QR Codes Replacing SMS Marketing in Some Contexts

As I wrote in a post at Search Engine Land, we don't know yet whether QR codes are here to stay or whether they’re an interesting experiment on the way to something else, such as NFC-based marketing. But in the near term at least they appear to be gaining and increasingly used by publishers and marketers.

Comscore has come out with some interesting new data on usage patterns. Demographically the heaviest users of QR code scanning are 18-34 year old males who make more than 100,000 per year. Most scanning is done in the home (newspapers, magazines) or in retail or grocery stores. 

Several years ago I wrote a white paper about the virtues of SMS based marketing that argued SMS was a highly versatile tool that could be utilized in many ways: on traditional ads, in digital ads, on product packaging and so on. I also argued at the time that consumer response to SMS calls to action also provided compelling analytics for traditional media. 

That's exactly the way that QR codes are now positioned. Accordingly they'll probably replace SMS in some contexts as a mobile marketing tool -- if QR codes survive. But QR codes don't really do CRM loyalty marketing as well as SMS.

Millennial's 50th SMART Report Charts Growing Sophistication of Mobile Campaigns

Millennial Media is out with its monthly SMART report. Yesterday the company hosted an in-depth webinar to review the data in advance of the report's release and in honor of this being the 50th such report. Familiar data points about campaign tactics and devices were discussed. For example, in June, Android retains its platform leadership (53% of impressions), while the iPhone remains the top individual device (27% of impressions).

Here are some of the things I "tweeted" yesterday during the webinar: 

  • More than 70% of Millennial ad impressions are coming from in-app activity
  • 40% of mobile consumers' usage time spent inside the home (based on InsightExpress data)
  • Local market targeting continues to gain traction to drive consumers to brick and mortar locations
  • Feature phones are no longer in top 20 handsets on the Millennial network

But the most interesting thing about the report to me is the comparison of June 2011 findings with those in the first report more than two years ago. Here are several graphics that reflect the market's growth and evolution:

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The broad themes reflected in the graphics above are: the rise of touchscreen smartphones (Android and the iPhone in particular) and the growing sophistication of mobile advertisers and their campaigns. I don't have the vertical categories chart among those above. However Millennial has seen explosive, quadruple-digit growth in verticals like Finance, Retail/Restaurants, Automotive, Entertainment, Travel and Pharma. 

In response to a question during the webinar about the sophistication of advertisers Millennial SVP  Mack McKelvey responded, "The vast majority of our advertisers are very savvy and challenge us all the time."

Mobile Users Prefer Coupons and Opt-In SMS to Other Types of Ads

A press release based on research from Upstream (conducted by Luth Research) carries the following headline: "Personalized Messages Four Times More Effective than Time-, Lifestyle- or Location-Based Offers . . ." This came to me in an email last night.

The headline and the presentation of the data in the release are somewhat misleading, however. And with so many companies releasing data for PR reasons (and the market awash in numbers) no one should rely on a single piece of data or single study. There are some interesting findings however. 

The Upstream study involved a consumer survey of just over 2,000 US adults (both smartphone and feature phone users); there's no behavioral data here. Below is the hierarchy of ad preferences based on the categories in the survey:

Users ranked personalized offers at 59 percent over those focused on timing (18 percent), lifestyle (16 percent) or location (8 percent). Smartphone users responded in similar fashion, with 60 percent preferring personalized offers over promotions based on timing (17 percent), lifestyle (10 percent) or location (14 percent).

Screen shot 2011-08-10 at 9.23.10 AM

This stands for the idea that personalization trumps dayparting, lifestyle and location. Lifestyle is a vague concept that seems less relevant than "my tastes and interests." Indeed, this phrase implies greater relevance than these other aided-response categories. The verbatim question is: "In your mind what constitutes the best basis for an offer to be relevant to you?"

Location by itself doesn't mean an offer or ad is relevant, neither does timing. Timing and location are "hollow" in the above list. An ad directed ad people in San Francisco may or may not have any application to my situation. However an ad or offer that has to do with "my tastes and interests" may require location to be relevant and actionable. I can't attend a movie premiere or retail sale happening in another city.

Timing is also an important variable. A discount offer for a restaurant or bar may be more or less relevant depending on time of day and/or day of week.  

The larger point is: multiple variables help make ads more actionable and relevant. And most transactions are conducted or fulfilled offline, so location becomes a way to lead people to a transaction unless it's a pure ecommerce event.

An ad for a new product -- a sound system for example -- needs to show me where I can hear, see and possibly buy the product (location) to make it more than simply a less-than-optimal awareness ad. An ad for a holiday retail sale on my phone is going to be a lot more effective if it comes with a store locator vs. taking me to a crappy mobile shopping experience on my handset. 

Some of the other data among the findings reveal that consumers often assume offline action or local fulfillment. For example, smartphone owners valued the following categories as those they were most interested in (re ads/offers): 

  1. "Content" for my mobile device (it's unclear but this might be apps, music)
  2. Movies/entertainment, including tickets (all fulfilled locally)
  3. Offering from my mobile service provider (perhaps hoping for a discount)
  4. Retail store (95%+ offline purchase probability)
  5. Computers and technology
  6. Travel or vacation (likely e-commerce transaction that pertains to location)

So when we "peel back the onion" on the data, what we see is that people want relevant ads and offers but that location is very much in the background or an assumed feature of the offer.

Perhaps the most interesting and significant data form the survey concerns the most desired marketing "channel" or ad delivery mechanism. The survey question asks, "Which of the following channels for delivering ads to your mobile phone about a product/service would make you more likely to learn more about or purchase the product/service?"

Screen shot 2011-08-10 at 10.42.55 AM

Among smartphone owners the top responses were the following:

  1. Mobile coupon
  2. Text message (after opt-in)
  3. Mobile email
  4. Ad on mobile site 

Amazingly smartphone users were more interested in SMS marketing messages than feature phone users.

The big conclusion I draw from the data above is that mobile users are interested in saving money (coupons) and essentially want control over the marketing messages they receive (opt-in SMS, or email). Thus these types of ads are likely to be most effective. However, again, the survey is measuring attitudes and not behavior. 

Report: SonyEricsson Android Owners Click Ads Most, HTC Least

Ad network Jumptap released its latest "MobileSTAT" data dive for July. This month's newsletter focuses on Android but also contains general metrics from the Jumptap network. There's a link to a write up of the June data at the bottom of this post.

In the latest issue of its newsletter Jumptap has created a map that shows where Android, iOS and RIM handsets "overindex" by state. This aspect of the report is getting lots of coverage. However the data are little more than a curiosity with few practical or actionable implications. These data may also not actually reflect the sales distribution of the various OS handsets because the Jumptap network is not necessarily representative of the mobile Internet as a whole or used equally by a representative group of mobile subscribers.

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More interesting are the other metrics in the report. For example, Jumptap showcases Android handset CTRs by device type and by carrier. CTRs for Android devices are generally consistent across carriers (averaging about 20%). But there appears to be wide variability in display ad CTRs according to handset type. There's no satisfactory explanation offered for the variation in CTR performance by handset.

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Jumptap says the following about why Android SonyEricsson handset owners generate the highest CTRs:

We speculate Sony’s relatively high CTR is due to their positioning as a premium brand, but don’t rule out the role that usability, hardware and interface may have.

By contrast I would speculate that LG and SonyEricsson handset owners are late Android adopters, while HTC and Motorola handset owners are earlier adopters and so less inclined to click on ads than Android neophytes.

The following is Jumptap's CTR chart by age, showing that those between 55 and 75 click the most. 

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Compare the data from June: 

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These data are likely impacted by a higher number of "unintended clicks" and/or lower mobile sophistication levels in these older age groups. 

Jumptap also said that 61% of the campaigns on its network are targeted in some way (vs. 49% in June). The chart below shows the breakdown of targeting methods. Note that "location" is only used by about 18% of advertisers using any form of targeting. 

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Finally most advertisers on Jumptap's network appear to be sending people to mobile websites or landing pages. Jumptap speculates that this reflects growth in the number of mobile websites. It's a safe bet however that the entire "click to Web" group is not sending users to optimized mobile sites or landing pages.

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A substantial number of these "click to Web" mobile marketers may be unsophisticated, however, and simply sending users to their PC sites -- incorrectly assuming that the smartphone browser does a good job rendering them.

See also: Selective Zip-Level Targeting Produced 85% Lift.

HipCricket Acquired by Little-Known Augme

Yesterday Augme Technologies, which recently purchased 2D barcode marketer JAGTAG, announced the acquisition of SMS mobile marketing pioneer HipCricket. The purchase price of was $44.5 million ($6 million in cash and $38.5 million in Augme stock). There's also an earnout that could yield an additional $27.5 million.

The HipCricket team will be retained by Augme, which has been until now an off-the-radar mobile marketing company. The addition of HipCricket, together with the JAGTAG assets, will provide a revenue boost and a new client base, as well as a broad array of tools and new capabilities. 

HipCricket began as an SMS-based marketing platform in 2004 but more recently started to offer a wider array of mobile marketing capabilities, as well as launching an ad network. HipCricket clients include Nestle, Macys, ClearChannel, Coors and others. 

The structure of the deal (mostly stock from a little-known company) suggests that HipCricket was actively trying to sell itself.

Placecast Opens Up Geofenced Marketing to Self-Service

Placecast has introduced a self-service version of its SMS and MMS ShopAlerts marketing platform. The platform enables template-driven campaign creation, with extensive control over the radius of geofenced areas as well as the time and dates of message delivery.

This means that any merchant, franchisee or small businesses could potentially utilize the Placecast platform to deliver geographic-based push messages and promotions to opt-in consumers. It's going to be challenging for small businesses as a practical matter. But it's particularly well-suited to franchise businesses and can handle multiple locations with ease. Distribution is up to the business or entity, which would need to capture the opt-ins (similar to follow us on Twitter or Like us on Facebook).

Messages or promotions can be built around deals and offers but don't have to be; there are many other types of content that can populate these messages.  

Placecast works with O2 in the UK and AT&T in the US, as well as individual retailers. The O2 program has seen great success in the UK; the AT&T program is still in very early stages. Unless carriers are going to buy ad networks, the ShopAlerts/O2program is the model for carrier-based advertising -- although it's not apparent that the carriers see that clearly.

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The original beta version of the ShopAlerts program, tested with selected retailers in the US in late 2009 and early 2010, yielded impressive results:

  • 60% of participants found the location-triggered messages to be cool & innovative
  • 79% said it increased their likelihood to visit a store
  • 65% made a purchase as a result of a ShopAlerts message (though not necessarily in real time after receiving the SMS)
  • 73% of participants would definitely or probably use the service in the future

Agencies and companies often neglect SMS as a marketing medium and CRM tool. Even with smartphone penetration nearing 40% in the US that still means that 60% of users don't have them. SMS penetration and usage are nearly 100%. 

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