Mobile Advertising

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.

Screen shot 2011-10-06 at 6.56.21 AM

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. 

Screen shot 2011-10-06 at 7.01.57 AM

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. 

Screen shot 2011-10-06 at 7.02.17 AM

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

Screen shot 2011-10-05 at 3.20.25 PM

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

Screen shot 2011-10-05 at 3.21.34 PM

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. 

Screen shot 2011-10-04 at 9.02.28 AM

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. 

 Screen shot 2011-10-04 at 9.02.44 AM

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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. 

 Screen shot 2011-10-04 at 9.14.14 AM

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. 

Screen shot 2011-10-04 at 8.41.30 AM

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.