Facebook is testing mobile ads on third party sites, according to two published reports. Right now this is a "small" beta test and an extension with what Facebook has been doing with Zynga for several months. According to a statement provided to AdExchanger:
“We are going to begin showing some ads on mobile outside of Facebook,” the rep said. “We’ve been showing ads off of Facebook on Zynga for a few months, and we think showing ads on other sites outside of Facebook is another way to show people relevant ads and let them discover new apps.”
Facebook is using various mobile ad exchanges to serve ads (IAB standard units) in apps or on mobile websites. TechCrunch offers a nice explanation of how the Facebook-user data gets to the ad exchange and ultimately to the third party sites and apps:
On the back end, advertisers set a bid they’re willing to pay Facebook to reach a certain demographic of users. Meanwhile, Facebook syncs its anonymous user IDs with several mobile ad exchanges. When a Facebook user visits one the apps or sites where these exchanges have placements, the exchange instantly sends Facebook that user’s ID and asks if there’s a bid set to target them. If so, Facebook pays the ad exchange some portion of the bid, and the ad is shown to the user.
It appears that most of the targeting will be demographic. It doesn't appear that location will be an element of the targeting at this point.
For now it appears that Facebook won't have direct relationships with mobile publishers and developers. However it will own the advertiser relationships. If all goes well it this would offer Facebook a way to generate additional mobile ad revenue without compromising its Facebook mobile user experience with irrelevant ads.
There have been rumors of a "Facebook phone" for at least two or three years. Facebook clearly needs to figure out mobile, so it's logical that Facebook would be talking again about a branded device. According to the New York Times over the weekend:
One engineer who formerly worked at Apple and worked on the iPhone said he had met with Mark Zuckerberg, Facebook’s chief executive, who then peppered him with questions about the inner workings of smartphones. It did not sound like idle intellectual curiosity, the engineer said; Mr. Zuckerberg asked about intricate details, including the types of chips used, he said. Another former Apple hardware engineer was recruited by a Facebook executive and was told about the company’s hardware explorations.
It's worth mentioning that there have already been quasi-facebook phones, from INQ and HTC (Status). The Status had the distinction of being the first phone with a "dedicated share button." By most accounts these phones are not huge successes. The Status appears to be an outright failure.
Presumably the model for any coming Facebook phone is the Kindle Fire, a highly customized version of Android. Facebook could then have an app store, develop mobile advertising, have a mobile browser and so on. The logic is clear.
The problem is that a Facebook phone is likely to fail. Most people would not want to "commit" that fully to Facebook and would likely be concerned about privacy and how their contacts and other data were being used or exploited by the software. By the same token, the availability of Facebook apps on major smartphone platforms is going to be sufficient for the overwhelming majority of people.
There will be a small slice of the population that would appreciate deep integration of Facebook into a handset (those might be younger users). But it will be a minority.
We may ultimately see a "Facebook phone" but I don't think it would be competitive with the iPhone and other Android handsets -- at least not in North America.
This morning Facebook is trading below its $38 offering price. This reflects investor skepticism about the long-term outlook for the company. Indeed, there are many challenges ahead for Facebook -- one of which is mobile monetization.
This weekend the company bought yet another mobile site, Karma. Karma provides a streamlined way to deliver physical gifts to people through their smartphones, using the Facebook infrastructure. While this latest acquisition is undoubtedly about getting access to the team it is also about the business model and new ways to generate revenue from mobile devices.
I have argued one reason (clearly not the only one) that increasing numbers of people use smartphones to access Facebook is avoiding the clutter of the PC site and ads in particular. While Facebook has started to show Sponsored Stories in mobile users' newsfeeds it cannot simply duplicate the ad environment online in its mobile apps. Too many ads would alienate users.
So how does Facebook make money off mobile usage in a way that doesn't make users abandon its apps? Here are a few ideas:
Some or many of these ideas could come to pass. Regardless, Facebook will need a range of approaches and revenue streams in place to truly deliver the kind of mobile revenue performance that investors will want and will become imperative as more users access Facebook primarily via mobile devices.
On Friday the Pew Internet Project released survey data that showed significant usage of "real-time location-based information" by smartphone owners in the US. Earlier consumer surveys have shown that 90% or more of smartphone owners have used their devices to get "local" or location-based information (at one point or another).
When you consider that Google Maps is either the top app or one of the top two apps on the iPhone and Android the Pew finding is obvious and not a surprise. Indeed, Pew never clearly defines the cluster of sites, apps or services that constitute the location-based information category. That may be because the question is asked in that way, without further definition, to consumers.
An additional finding from the survey is that 18% of smartphone owners are using "check-in" services like Foursquare:
In November 2010 Pew said that only 4% of survey respondents were using "geosocial" or "check-in" services.
We should see "location-based services" hit 100% usage or penetration among smartphone owners, depending on how the category is defined. That's because every smartphone owner is going to eventually use a map or check the weather or look up a restaurant.
Facebook has again updated its S-1. There are a few reasons for this, including the awarding of additional stock to employees. However there's a very interesting discussion of mobile in the revised document (pointed out by TechCrunch). On page 14 of the document Facebook reiterates uncertainty around its ability to make money off mobile users:
We had 488 million MAUs who used Facebook mobile products in March 2012. While most of our mobile users also access Facebook through personal computers, we anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook.
We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In March 2012, we began to include sponsored stories in users’ mobile News Feeds. However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.
The only mobile ad unit currently used by Facebook is Sponsored Stores, which put brand and advertiser messages in the user news feed. These units have proven to be successful on the PC but could become annoying to users on mobile devices. I have not yet seen any of these ads myself.
One reason why mobile usage is growing so rapidly for Facebook is a result of general smartphone adoption among Americans. There are also things about the user experience in mobile that are superior to the PC: the ability to take and immediately upload pictures, for example.
There may be another reason why usage is migrating to mobile: ad avoidance. People may be choosing the mobile version of Facebook over the PC site precisely because there are fewer ads; it's a "cleaner" experience. If my theory is correct then Facebook has a major problem on its hands. As Facebook puts more ads in mobile to make money it risks alienating users if the company is not very careful and thoughtful.
Mobile ads on Facebook will have to add value, be compelling (offers) or highly relevant (local) in order to work. For this reason I expect Facebook to make a major mobile ad-network acquisition. This would be for the "infrastructure," the expertise and the inventory. It would be analogous to what Google did with AdMob.
A couple of days ago local-social startup Glancee announced that it was being acquired by Facebook:
We started Glancee in 2010 with the goal of bringing together the best of your physical and digital worlds. We wanted to make it easy to discover the hidden connections around you, and to meet interesting people. Since then Glancee has connected thousands of people, empowering serendipity and pioneering social discovery. We are therefore very excited to announce that Facebook has acquired Glancee and that we have joined the team in Menlo Park . . .
Glancee, which is really just a 2.0 version of the original Loopt, adds to Facebook's growing arsenal of mobile assets. The social network has identified mobile as both an area of vulnerability and opportunity. In the Facebook IPO roadshow video COO Sheryl Sandberg calls out mobile as "a key area of growth for Facebook."
What she's talking about is revenue rather than usage. The company already has more than 500 million active mobile users. And Flurry Analytics recently said that social networking activities now consume as much daily mobile app munitues as games, the former number one category. Much of that activity takes place within Facebook.
The purchase price of Glancee was not disclosed but we can assume it was an "acquhire," rather than a technology acquisition -- though there may have been a bit of technology that motivated the purchase.
Glancee was part of a group of "passive" or "ambient" location startups that include the over-hyped Highlight and a dozen others. I have argued in the past that ordinary people (as opposed to those in the tech industry) don't want to continuously broadcast their locations even to close friends and colleagues. Accordingly these friend finding and pseudo-dating apps are destined to fail unless the offer some other angle or utilitarian functionality.
Facebook may choose to use some of Glancee's capabilities as part of a new version of its app. But my guess is that Glancee, like Gowalla, will be completely shuttered and that Facebook won't turn its app into a ambient friend finder. That would complicate the privacy picture for Facebook -- though I expect geofencing and geotargeted advertising to be part of what Facebook eventually develops for mobile marketers.
We're likely to see more acquisitions from Facebook as the company continues to build up its mobile capabilities. What the company hasn't figured out is how to make money in mobile, commensurate with its mobile usage. It now pumps Sponsored Stories through its users' news feeds, having just introduced mobile advertising. However that by itself won't fulfill the mobile ad revenue imperative about to be imposed on Facebook by its IPO.
If Facebook has its way "advertising" will be a thing of the past. Facebook wants brands to tell engaging "stories" instead, and turn all us passive "fans" into passionate brand advocates. Facebook wants brand and marketer content to be as good or better than any content or messages that your friends or family might generate. The content is the ad campaign and vice versa.
At Facebook's FMC event in New York today the company introduced its highly anticipated "premium ads," which include mobile distribution. Mobile ads will not be separate from ads/content on the PC site; they will be an extension of the same campaign. There won't be a separate media buy or separate targeting (at least now).
New "premium ads" and existing "sponsored stories" will be distributed in Facebook's mobile apps as well as through its site on mobile browsers. These pieces of content or "ad units" will simply show up in users' mobile news feeds based on Likes and friend Likes, etc.
One of the company's ambitions is to remove complexity from advertising on Facebook. A Ben and Jerry's marketing executive is quoted in a promotional video saying, "We really don't have to worry about separate media." Accordingly the same brand post/story will thus appear in the "organic" feed, as a mobile ad or as a conventional Facebook Ad on the right rail.
Also earlier this week, Twitter revealed it's very similar plan for mobile advertising.
Promoted Tweets will now show up in users' feeds in mobile. Initially only those advertisers you follow will be allowed to promote tweets in your feed. However, over time, the program will expand to allow all advertisers to reach non-followers as well.
These two parallel programs may help one another and speed adoption (or at least testing) of mobile marketing by brands (and to a lesser degree small businesses). The widely discussed danger for both, however, is that mobile consumer-users might potentially feel spammed by brands and advertisers that are inept or too aggressive. This danger is greater for Facebook than Twitter.
Another potential issue is how all these new mobile impressions will impact mobile ad pricing. There's already an imbalance of supply and demand: too many mobile impressions chasing too few advertisers today. More competition generally equals lower prices for buyers. AdAge discusses that question in an article published on Monday.
The suggestion in the article is that like online, where social networks flooded the market with cheap display impressions, there's a similar potential risk in mobile. Prices are already coming down because there's too much supply: "That ad kitty will stretch even thinner when Facebook starts selling mobile advertising against its more than 425 million monthly active mobile users," speculated AdAge.
Facebook and Twitter ads are unique to those platforms, however. In effect these new mobile ads won't simply be fungible new impressions, interchangeable with those of a dozen other mobile networks. Facebook and Twitter compete more directly with each other than with Jumptap or Millennial or InMobi.
However it's quite possible that brands could choose to invest in Twitter and Facebook and divert resources (money, time, attention) away from other mobile display networks. Might that compel the other networks to lower prices to compete? Apple lowered prices considerably in response to competitive pressure on iAd from AdMob and others.
While the entry of Twitter and Facebook into mobile could push prices down for other ad networks, that outcome is not guaranteed of course. But we should know soon enough.
This morning Groupon and Deutsche Telekom announced a "strategic partnership" that will deliver Groupon deals to Deutsche Telekom customers throughout Europe. The deal is significant for both parties. Deutsche Telekom has a presence in 10 European countries.
According to the release:
The partnership marks the first time Groupon will partner with a multi-national service provider to distribute its products and services across a wide international network. It is also significantly enhances Deutsche Telekom's position as a leading provider of the latest applications for its customers.
Using a wide range of marketing and sales tools, varying from promotion activities to deeply integrating Groupon services in selected fixed and mobile services, Deutsche Telekom will offer Groupon services directly to its customers. Scheduled to be available in the first half of 2012 Deutsche Telekom mobile customers will enjoy Groupon's mobile services on their devices without the need for a separate download providing easy access to the best local deals in their area.
To those who dismiss Groupon as a business without a future, this deal is a powerful reminder of the strength of the Groupon brand and its near-global footprint.
The key to success will involve two things: deal coverage and execution. How much inventory is offered and how well presented are the deals?
Groupon Now, the company's mobile offering, in the US has so far not been a success. Accordingly that experience raises questions about how this might play out in a mobile context with Deutsche Telekom's subscribers. However it will not be limited to mobile.
By contrast UK carrier (Telefonica) O2's opt-in "O2 More" partnership with Placecast to deliver local coupons/deals has proven to be very successful. So there is a precedent that shows this could play out in a very successful way for both companies if well executed.
Very few people in the mobile industry are neutral about QR codes. People either love 'em or hate 'em and think they'll go away as soon as other (NFC, augmented reality) technologies take over. QR code boosters cite data that show scanning rates are increasing and promote successful case studies. Detractors cite surveys that show most people don't know what they are and generally ignore them.
AdAge covers Forrester data that argues "only 5% of Americans who own mobile phones actually used the 2-D barcodes in the three months ending July 2011 . . . and those 14 million early adopters tended to be young, affluent and male." Earlier comScore data confirmed this demographic profile:
More than half of all QR code scanners were between the ages of 18-34 (53.4 percent). Those between the age of 25-34, who accounted for 36.8 percent of QR code scanners, were twice as likely as the average mobile user to engage in this behavior, while 18-24 year olds were 36 percent more likely than average (index of 136) to scan. More than 1 of every 3 QR code scanners (36.1 percent) had a household income of at least $100,000, representing both the largest and most over-represented income segment among the scanning audience.
ComScore extrapolated from its survey that 14 million Americans had scanned a QR code. Most scanning occurred on traditional media ads or product packaging, though many had scanned QR codes online.
Last year marketing firm Russell Herder conducted a survey (n=500) that confirmed the demographic profile of QR code scanners presented above, and also that it was a minority use case. The majority of mobile users have not scanned one.
According to the survey almost 75% of respondents had seen QR codes. However a dramatically smaller percentage had actually scanned one.
Most significantly the actual experience of scanning a QR code was generally mixed. Respondents said that doing so only delivered value "sometimes" for most people (although 80% had a positive experience one could argue).
Beyond the "how-to" problem, most marketers in my experience aren't delivering a sufficient reason to scan codes. If all QR codes offered discounts, for example, many more people would scan them. But in most ads the reason to scan a code is unclear; only occasionally is there a specific QR call to action.
As a practical matter, for the time being at least, QR codes amount to a way to make a "tech-forward" branding statement and not much more. If marketers put more "meat" behind QR codes they could develop some staying power and become more mainstream. However if they're not used thoughtfully then they will be swept aside when NFC or some other "new, new" mobile marketing vehicle comes along.
I've argued in the past that Facebook would be compelled to monetize mobile once it went public. I envisioned that monetization taking the form of more-or-less straight ahead display ads that were targeted in some way. I also recently performed a very loose calculation of what Facebook's global mobile ad inventory might be worth (at a $2.50 CPM) and determined it could be up to $2.5 billion.
What Bloomberg reported yesterday, however, was that Facebook was considering launching mobile ads that were more integrated into the Facebook feed:
Facebook Inc. plans its first push into mobile advertising by the end of March, giving the company a fresh source of revenue ahead of a possible initial public offering . . . An idea being considered is putting Facebook’s Sponsored Stories ads, which feature friends’ interactions with brands, within the mobile News Feed, said the people, who declined to be identified because the plans aren’t public.
Sponsored Stories in the mobile news feed would be like "promoted Tweets" on Twitter in some respects. Sponsored stories allow advertisers to show Likes from people in your network (brands, products, stores) in the ad copy. They reportedly dramatically improve CTRs. Below is an example from Facebook online:
Earlier this week Nielsen reported that Facebook has the greatest "active reach" of any app across the Android OS (after the Android market). Facebook's most recent official mobile-user number is 350 million globally, out of more than 800 million total users.
My guess is that Facebook will be experimenting with various mobile advertising units/types before it launches anything officially. It already has a quasi-advertising vehicle in mobile "check-in offers." However Facebook itself currently doesn't make any money off these deals. Eventually that will probably change.
Nielsen has published data on the Android apps with the greatest "active reach" by age group (US market). Active reach means "percentage of Android owners who used the app within the past 30 days." After the Android Market app itself, Facebook is dominant across age categories.
After Facebook, Google occupies the next four slots with slight differences by segment. But basically it goes: GMail, Google Maps, Google Search and YouTube. In the top 100 free apps in the iTunes store, Facebook comes in at #24, Twitter at #48 and Google at #61.
In September here's what Nielsen said about overall active reach of Android apps:
Below is a chart (UK data from 12/10) that shows how dominant Facebook is in terms of time spent in aggregate minutes:
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.
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.
According to a survey by CloudTalk the mobile phone public prefers texting and browsing to real time "voice" conversations using their mobile devices. While the composition of the sample (and its size for that matter) are unclear, the survey respondents were very clear in their preferences. Nearly 90% said they prefer texting or "messaging" over voice conversation. In practice the numbers were slightly different as those sampled cited their overall usage of smartphones:
In order of priority, phone users reported:
By this measure, talking on the phone is on a par with "surfing the web," with under half the sample citing it as a priority. According to David Hayden, the chairman and CEO of CloudTalk (which provides a "platform" for multmodal and asynchronous mobile communications), this provides evidence of the evolution of mobile phone from an "intrusive" interruptor of everyday life into a more nuanced "communications tool."
There's something missing in this analysis. As Greg has cited in many other posts here at Internet2Go, we see mobile phones as far more than communications devices. By focusing solely on the communications capabilities, this survey misses the uses of the smartphone that are more like a wallet, with contact lists, calendar items and ultimately payment vehicles.
But their are insights to be gained by observing how readily the general public is adopting new modes of communications while at the same time recognizing that, in many cases, voice is the most appropriate way to communicate.
Many people (including some analysts) make simplistic assumptions about the mobile market: for example that mobile and local are all but synonymous. I'm obviously a big advocate of local but I see mobile usage as quite complex and defying easy conclusions about usage or the future direction of the market.
There are lots of functions and activities that people perform and do on mobile handsets that have nothing to do with their immediate surroundings or local. For example: games, news, entertainment, music, sports, social networking and so on.
A new set of Nielsen data about app downloads/usage in the past 30 days reflect that mobile is a platform that is complex and diverse in its usage. While local content and apps are well represented in the hierarcy a large number popular app categories have nothing to do with location.
Instead they probably reflect that people are using mobile as a "generic" Internet access tool. Games, the most popular category, is a phenomenon unto itself.
Most purchases occur in the physical world. So most mobile ads will either direct people to actual stores or, in the case of most future display campaigns, offer a dealer or store locator -- at a minimum. Mobile will be a huge branding medium, irrespective of any localization component. And there will be many awareness ads that have a location component as secondary or perfunctory matter.
Moreover we get into an "accounting" problem in defining what is a "local" ad in mobile.
Is a Klondike Bar ad that contains a store locator buried two clicks down a "local ad"? What about mobile click-to-call ads for a florist network, which sends users to call center to place an order fulfilled locally? Is a mobile-video brand campaign for Hilton Hotels that can direct you to the nearest property if you initiate a search or lookup?
There's a lot of gray in determining what is a local ad. We might want to "require" localization in the ad creative before we consider mobile ads as "local." Just a thought.
But just as people often fail to recognize how local or offline purchase intent permeates a great many things that happen on the PC it's equally the case that non-local activity/interest is very much tied up in mobile activity. The chart above nicely illustrates that.
I've got to hand it to Loopt; every few months the company tries something different to rise above the noise in the LBS-SoLoMo market. Sometimes these efforts are very creative. The latest effort, "U-Deals," is a little bit of "back to the future."
The central idea is this: you identify a business and potential discount, publicize and get others on board and then Loopt tries to sell it to the business with some guarantee of participation.
This is a variation on the original "group buying" or reverse auction model that existed in the late '90s. The twist here is that the deal doesn't exist unless or until the consumer suggests or requests it. MerchantCircle also had similar functionality built into its platform, although it was mainly intended for individuals communicating with local businesses rather than for groups.
As I mentioned, this is a very creative twist on daily deals. However there's probably too much work involved for consumers for it it succeed on any kind of scale. To that end, Loopt has tried to automate the process as much as possible through its app: check in, request the deal at specified deal tiers or price points (see at left) and then promote on social networks.
It's much easier for consumers to simply find deals through customary channels like Groupon. (Loopt is a Groupon syndication partner as well.) We may see some adoption of this but I would be very surprised if U-Deals took off.
Right now this is only available in the San Francisco Bay Area on the iPhone and Android platforms. Here's a video that quickly explains the program and how it works.
Update: In fairness to Loopt and U-Deals I have to admit that I purchased the first deal, a discount voucher on Virgin America Airlines. We'll see how the program proceeds; I could be very wrong. However this was not a consumer-initiated deal I'm sure. That's what I'm critical of: not deals but the reliance on consumers to generate and promote them.
Last year Pew and Forrester both came out with reports arguing that LBS check-ins (e.g., Foursquare) were being embraced by only a small fraction of the mobile audience. In July Forrester asserted that "geolocation applications like Foursquare" were only occasionally being used by 4% of all Internet users.
In November Pew released findings from a telephone survey (n=3,001) that argued a similar 4% of PC Internet users and 7% of mobile Internet users were on LBS services. However 4% of online adults actually turns out to be a big number. It's roughly 8 million people, using the ~200 million online audience base of comScore.
In the aggregate, in 2010, there were probably several million people in the US checking in on Foursquare, Gowalla, MyTown, Whrrl and others, including Google Latitude.
Today Foursquare says it has 8.5 million users alone and many others, including Yelp and Facebook, offer check-ins. Facebook has not released official numbers but claims it is "by far" the largest check-in site out there. So the numbers are clearly growing.
ComScore released data yesterday asserting that, now, nearly 17 million mobile users are engaged to some degree with "check-in services":
16.7 million U.S. mobile subscribers used location-based “check-in” services on their phones in March 2011, representing 7.1 percent of the entire mobile population. 12.7 million check-in users did so on a smartphone, representing 17.6 percent of the smartphone population.
ComScore defines this category to include Facebook Places, Foursquare and Gowalla. It's unclear what the full list of sites was or whether beyond a couple of examples, the definition of check-in sites was left up to user interpretation.
As one might expect smartphones were the primary source of check-ins, constituting 76.3% of all usage. Here's the smartphone "check-in" OS breakdown:
Overall comScore says that these check-in users "showed a high propensity for mobile media usage, including accessing retail sites and shopping guides, and displayed other characteristics of early adopters, including a stronger likelihood of owning a tablet device and accessing tech news, when compared to the average smartphone user."
One surprise according to the survey data is that women overall outnumber men on check-in services, in contrast to last year's Forrester findings that showed a wide gap favoring men.
Anecdotal evidence, notwithstanding the growth comScore proclaims, suggests that a large number of early users of check-in services have walked away and are no longer using them on a regular basis.
Deals and loyalty programs -- such as one just announced between SPG and Foursquare -- are the key to keeping check-ins alive. In the absence of such rewards or incentives the check-in will either die or have to dramatically evolve and deliver some other type of value to survive.
HubSpot's new Dan Zarrella conducted an interesting analysis of "more than 70,000 Facebook public posts" and found that "32.69% of those posts were created from mobile devices." Apps collectively account for roughly 13% of mobile updates, while facebook's mobile website (m.facebook.com) constitutes roughly 19% of mobile posts.
Facebook has more than 250 million active daily mobile users around the world. And it is the most "engaging" mobile property in terms of time spent (see below). At some point the company we can expect that the site will turn on mobile advertising. There's a version of that today in the form of "check-in deals."
Source: Dan Zarrella
Source: GSMA UK, 12/10
This past weekend Foursquare announced a deal with Amex, which was first reported in the Wall Street Journal. The partnership essentially offers discounts and rewards for checking in at participating local businesses:
Under the arrangement, AmEx customers can register their cards in the Foursquare system to get access to special offers from merchants who are also Foursquare participants. Customers who shop at those merchants with an AmEx card will receive credits and electronic notification that they have redeemed the offer. Merchants who participate in the program would potentially see more sales. . . .
The Foursquare partnership is AmEx's latest offering aimed at people who are roughly a generation younger than the company's traditional customer. AmEx has introduced several new cards targeted at the hip and tech-savvy generation in recent years, with mixed success.
It's going to be initially tested at the SXSW conference coming up next week in Austin, Texas: "Sixty local merchants will honor the 'spend $5, save $5' promotion."
It's great PR and a great high-profile deal for Foursquare, which now has more than 8 million users globally. Amex claims, however, this isn't simply about younger users but about new forms of loyalty and cardmember engagement.
On paper it all makes sense; however there are some potential challenges with the deal. I couldn't find empirical data but my understanding is that on average Amex cardholders are generally older than the bulk of Foursquare users, although there will be some overlap. According to Pew, here's the demographic breakdown of "location based services" users:
This "generic" LBS user profile cuts more broadly than Foursquare specifically. And Google's Ad Planner (as well as Quantcast and Alexa) shows a user base that is somewhat older than Pew's profile. It also shows more female users on Foursquare.
Beyond the "demographic" challenge, is the fact that most local businesses don't use Foursquare to promote themselves. In addition many don't take Amex; you remember the Visa ads. ("They won't take no for an answer, and they won't take American Express.")
In our recent SMB survey about 8% of respondents said they were using Foursquare to promote themselves. This number cannot be generalized to the entire population of SMBs. That would effectively mean about 2 million SMBs actively on Foursquare marketing themselves. The 8% figure is larger than in previous surveys, reflecting Foursquare's growth and increased visibility. However the number of businesses using it to acquire new customers or as a loyalty platform is relatively small.
Accordingly you have to find SMBs or national-local entities that are on Foursquare (and take Amex), together with Foursquare users who have Amex cards to use in those establishments. This slices the potential pie pretty thinly. Yet this is the right direction for Foursquare, which will have enormous difficulty monetizing via SMB self-service. It needs to make big deals with channel partners and do national-local deals with retailers to generate meaningful revenue.
Loopt was an early friend finder and social network for mobile devices that has been forced to reinvent itself and try different things repeatedly because of the entry competitors and better-known brands into its space: e.g., Yelp, Foursquare, Facebook, Google.
The most recent effort to do that is with its new "Reward Alerts," which are limited-time offers that are pushed to users based on location. This is similar to an AT&T-Placecast ShopAlerts initiative that was also announced this week. In that case AT&T handset users opt-in to receive deal alerts and they're pushed to users via SMS/MMS depending on location.
Initial advertisers for the Loopt program include Participating companies include Altec Lansing, FOX Broadcasting, Gilt City, Jawbone, Microsoft, OkCupid, Southwest Airlines, TabbedOut, Twelve South, TiVo and Yurbuds.
In order to participate, users must download the new version of the app, turn on "rewards" then the deals start flowing based on where users are. Loopt has had a deals/coupons product for some time in Loopt Star; however this is a more interesting and potentially successful implementation.
Deals have become immensely popular and the opt-in/push dimension of Placecast's and now Loopt's programs will make them compelling to marketers. For Loopt scale will be key. The company has more than four million users (compare Foursquare's 6+ million). However the Placecast program, because it's text-based, has an addressable audience of 95 million hypothetically (the entire AT&T subscriber base).
WHERE also offers location-based push couponing.
GSMA, the organization behind the Mobile World Congress, commissioned research in January that showed mobile apps generally beating the browser for time spent. The research had a global scope and was performed by European mobile analytics company Zokem.
However apps vs. browser access differed by category according to the findings:
News, search and commerce apps and sites receive much more usage still from mobile web browsers, with 86%, 85% and 66% of mobile web browser users using them monthly. Only 22% of web browser users access web-based email services, and only 18% use games through a web browser. For email, native apps reach 76% of smartphone users monthly, and games reach 45%.
Multimedia related services, like online music and video, are predominantly used through native apps rather than a smartphone web browser. Apps and web browsing usage patterns, therefore, are quite different, and the usage balance between browsers vs. native apps is driven by the type of app in question.
Mobile apps are responsible for 667 minutes of use per user each month according to Zokem. Compare messaging (671 minutes), voice (531 minutes) and web browsing (422 minutes).
Social networking apps (the category is not clearly defined) consume "almost 10 percent of all smartphone 'face time.'" Facebook and YouTube are the most heavily penetrated social media apps. (I disagree with YouTube being characterized as social media.)
The study found that iPhone and Android owners used roughly 15 apps per month; BlackBerry and Nokia owners used about half that number (8). The iTunes store and Android Markets enjoyed 95% reach with their users, while Blackberry App World has 50% reach and Nokia's Ovi store reached less than 30% of Symbian users. The data also showed that "iPhones generated more than 200 percent more traffic per month on average than Android devices."
Contradicting some other data and claims in the market the study found smartphone usage declined on weekends but "averaged more than 70 minutes per day with apps capturing more face time than any other activity at weekends."