This morning Google released the results of an extensive study conducted among US mobile users with Nielsen in Q4 2012. The survey explores mobile search behavior in particular and uses a combination of interviews, online survey data, diaries and search query logs to get a holistic picture of search activity on smartphones. Tablets weren't part of this research.
Among the many interesting findings there are two big ones that stand out: 77% of mobile searches happen at home or work, even when there's a PC nearby. And 55% of mobile-search related conversions (call, store visit, purchase) happen within "one hour or less" of query completion.
These two stats illustrate two larger "truths" about mobile. The first is that mobile devices are increasingly "primary" for people as a method of internet access. Speed and convenience were cited by respondents as reasons for substituting a smartphone for a PC in a search context.
Marketers need to be cognizant of the fact that large numbers of people will be using their smartphones (and tablets) at home to search for things, whereas before they might have used a PC. At work people may be motivated by other considerations, such as privacy, to use mobile devices vs. corporate-provided PCs.
The other "truth" is illustrated by the 55% figure: conversions often happen very quickly after a mobile search. This reinforces the notion of the focused, "need it now" mindset of many mobile search users. Mobile searchers take a variety of actions after completing their queries. They go to websites and do additional research, they make phone calls and they go into stores. They buy things.
But marketers can't see most of that activity, hence the complaints about mobile ROI. Most marketers get confused and "lose the trail" when users go offline. You can track calls and site visits, you can capture email addresses and you can monitor e-commerce transactions via mobile. However it's challenging to get complete visibility on all the ways that mobile is influencing purchase behavior.
The slide above illustrates the range of activities mobile search triggers. But more importantly, Google and Nielsen found that 45% of mobile search queries were undertaken to help make a purchase decision -- so-called "goal oriented" searches. And most of these will result in a conversion, often offline.
The totality of the data released in this study (download the pdf) show that mobile users are more focused and are typically farther down "in the funnel" than PC users. Mobile (search at least) is clearly driving lots of conversions. Marketers just need to open their minds about what constitutes a "conversion" and get creative about ROI and attribution.
Otherwise, they're not seeing what's really happening with their customers and how critical a role mobile is playing in the overall marketing and sales process.
Many of the Q4 reports released by the ad networks and major agencies showed the growth of tablet-related ad spending. That's a trend that will further accelerate under Google's new "Enhanced Campaigns" regime in which tablets are grouped with PCs for paid-search advertising purposes. In other words, marketers cannot separate PC and tablet paid-search campaigns.
Last week Adobe reported that tablets had passed smartphones for share of global traffic.
In many ways tablets are the new PCs, taking their place for many at home use cases. Tablet owners tend to behave more like PC shoppers, including displaying a greater willingness to covert online. By contrast, smartphone owners typically don't convert on the small screen making ROI harder to track for marketers targeting those devices.
Because online conversions are more likely and prevalent for tablet users, the "danger" is that marketers will neglect smartphones or that smartphones will be "ghettoized" and considered good for only a limited number of purposes. In fact mobile/smartphone advertising is great for both DR and branding purposes.
Mobile DSP Adfonic now offers data that show, across most categories, tablet advertising appears to outperform smartphone ads in terms of CTRs (though ultimate influence on conversions isn't measured).
As the chart above reflects, "tablets achieve especially strong CTRs for advertisers in the Style & Fashion, Lifestyle & Health, Entertainment & Media, and Travel verticals." Smartphones are stronger in other categories such as retail and automotive. People tend to use tablets in the evenings and on the weekends.
Over time marketers will determine which devices are better suited to which types of advertising. However companies need to have a comprehensive strategy that recognizes the "multi-screen" consumer, who will move from device to device before converting.
Although Kindle Fire and Nexus 7 are gaining, Apple tablets continue to dominate web traffic. The following chart shows North American traffic over the past three months, comparing the top-three devices on Chitika's ad network.
According to Adobe's marketing group tablet growth is outpacing that of smartphones. This trend also showed up in several Q4 reports from other online marketing firms such as Marin Software.
Adobe says that on a global basis, mobile devices (smartphones + tablets) generated 15% of all internet traffic. Of that 15%, tablets edged smartphones with 8% of traffic. The company also says that tablet users spend much more time and are much more engaged than smartphone users: "on average internet users view 70% more pages per visit when browsing with a tablet compared to a smartphone."
Among the countries measured, the UK is seeing the highest share of internet traffic from tablets followed by the US and Canada.
ComScore previously reported that about 36% of total US internet time is being spent on mobile devices, even though they're generating less than that in terms of overall traffic. Part of the reason for such a discrepancy may be apps, which are often not measured but where "9 out of 10" mobile minutes are spent.
While 6 and 7-inch tablets exist somewhere between a smartphone and a full-sized tablet (i.e., iPad Classic), tablets are increasingly replacement devices for PCs. PCs still have the largest installed base and a home in the enterprise, among business users and for more selected purposes in the home. But the centrality of the PC as the gateway to the internet is over.
Using Gartner data, USAToday chronicled the decline of PC sales (which aren't coming back):
The "problem" with tablets is that many marketers treat them like PCs (including Google AdWords) and don't give them special attention. A study released in Q4 last year found, for example, that only 7% of retailers' websites were tablet friendly.
Yet tablet-app mobile ad creative can be very effective. In general tablet ads (in apps) are much more engaging than smartphone ads right now.
As tablets continue to gain momentum as PC replacements we may see a very odd situation develop. That is: smartphones might be given perfunctory treatment as an ad platform or otherwise neglected in favor of tablets with their larger "canvas." However, as suggested, the bulk of marketers may treat tablets like PCs and not address them with specialized ad units.
Accordingly, as mobile devices take more and more consumer time and engagement "online advertising" could become considerably weaker than it is today.
This morning mobile ad network xAd released its year in review report. The document contains a range of information and data about the company's offerings, including the performance of ad campaigns on its network. The focus of the report is on national advertisers (rather than SMBs). And it presents a picture of marketers getting a great deal more sophisticated about local ad targeting on mobile devices.
As laid out in the report, xAd is now offering a range of local targeting flavors on mobile: behavioral, place-based, POI and event targeting.
In the graphic above you can see that from Q1 to Q4 the number of national advertisers using more sophisticated forms of geotargeting increased dramatically from 27% to 81%. In other words only 13% of xAd's national advertiser campaigns in Q4 were using "standard geo," (zip, city, DMA). The remaining 81% were using one of the other more complex targeting methods (all involving location) such as behavioral.
Of the 81% using a more precise form of location targeting, here's the breakdown:
In the report xAd offers performance metrics for these approaches compared to industry averages. The company says that its targeting methods provide a substantial performance improvement over traditional (non-location targeted) mobile search and display advertising.
In particular on the display side xAd breaks down how each of its more elaborate forms of location targeting perform. Behaviorial does the best, followed by place-based targeting.
Finally the following are the top consumer search categories for all of 2012 and the top advertiser categories on the xAd network. The latter are national advertisers and don't include small businesses. There's a general alignment across both columns but it's obviously not 1:1.
The company's advertisers tend to be more sophisticated about location and more inclined to experiment with it. It would be great if these advertisers were representative of the entire industry. However they're not. A recent CMO Council survey showed how many agencies and national advertisers still don't "get" location.
The CMO Council survey explored national advertiser "localization" tactics. The overwhelming majority of survey respondents (over 80%) didn’t make the connection between mobile and local:
Source: CMO Council/Balihoo (n=296 national marketers/agencies)
Perhaps once more national advertisers become aware of the performance lift and case studies associated with location targeting they'll wake up to its potential. In the interim those national advertisers using more sophisticated local-mobile targeting are "conquesting" their competition.
Move over TV, your time at the top of the media hierarchy is coming to and end -- at least outside the US. Last week ad network InMobi released its Q4 "insights" report. The document is based on survey data drawn from more than 14,000 respondents in multiple countries around the world. However many questions don't include answers from US and UK mobile users.
The "big finding" is that around the world (US, UK excluded) time with mobile has surpassed TV. In fact time with mobile beats all other media channels. The chart below reflects aggregate findings from 12 countries, though not the US and UK.
The survey also discovered that 62% of respondents "engage in mobile activity" during TV watching. Accordingly TV ads in general see diminished attention because of mobile (beyond ad skipping). However this also represents an opportunity for marketers to use mobile devices to measure their TV ads' effectiveness or to generate concrete actions in response to TV ads.
Another "big" finding is that internet users are now going online through mobile devices in numbers equal to the PC internet or primarily use mobile to go online. This phenomenon is most pronounced in developing markets, as one might imagine. But it's also true in the US according to the InMobi data.
According to the survey 38% of US respondents "mostly" use mobile to go online. This finding (and others) may well be biased because the survey respondents were found through the InMobi ad network: "Recruited via InMobi global mobile ad network between August and November 2012." This is therefore going to tend to be a more mobile-centric audience than the US internet population as a whole.
Another interesting result, this respondent pool says that it rarely clicks ads unintentionally. In contrast to some of the estimates and data floating around in the market (e.g., 40% of mobile ad clicks are "inadvertent") only a small minority said that mobile ad clicks were mistaken more than 10% of the time.
Though these findings may not be entirely representative of internet users or perhaps even US mobile users as a whole they're still striking in multiple ways.
Back to the TV vs. mobile time spent: most marketers' ad spending and behavior fails to recognize the profound shifts in the market captured by and reflected in these data. The idea that mobile now dominates TV in terms of time spent or that mobile captures attention from TV even during TV time will be unsettling -- if not shocking -- to most brand marketers.
And most right now will have no idea what to do about it.
Beyond the pure sales numbers -- tablets up, PCs flat or down -- there's a fair amount of anecdotal evidence that people are substituting tablet purchases for PCs. Adding to that, mobile ad network JiWire put out a Q4 report in which it surveyed more than 5,000 mobile consumers in the US and UK on a range of topics.
Among the findings in the report was the intention of existing tablet owners to by a second or additional tablets. The survey found that almost three-fourths of the respondents (existing tablet owners) intended to purchase another tablet.
It should be pointed out that the JiWire audience is not necessarily representative of the general mobile user population. It tends to be a slightly more "early adopter" profile. However I would imagine this finding is a kind of leading indicator of broader consumer sentiment.
HP's announcement of a $169 7-inch Android tablet earlier this week (putting more price pressure on the entire segment) argues that tablets will become an affordable and mainstream PC alternative for a broad consumer population, not just "affluents." Indeed, this result above suggest that many households will have two, three and even more tablets: one for each family member.
As I've argued before these devices (and smartphones) will be "primary," while the PC will be used for selected tasks and perhaps become a "secondary" Internet device in the home for large numbers of people. Developing markets may see even more dramatic patterns along these lines, with low-cost tablets simply taking the place of PCs in many instances.
An interesting, related finding in the JiWire report is the hierarchy of tablet preferences. The findings below reflect the international nature of JiWire's results. The Galaxy tablets have not done as well in the US but have done relatively well in Europe. In the US or North America, Kindle Fire has been the most successful Android device, followed by the Nexus 7.
What's particularly interesting is the position of Windows Surface machines in the third slot, above Kindle Fire. This indicates there's healthy awareness and interest in the device. However, we'll have to see in several months whether this translates into actual sales.
Social navigation app Waze and xAd announced a partnership at Mobile World Congress in Barcelona today. Waze intends to deliver ads to users "along [the] designated navigation path." The company is not the first to try and do this; Mapquest initiated something similar with national advertisers a couple of years ago but in an incomplete way.
Waze has a very engaged audience and has benefitted from the initial stumbles and challenges of Apple Maps. It was one of the alternative mapping and navigation apps recommended by Apple. Telenav also mixes location-based ads and navigation in an app.
According to the press release this morning:
Through the use of xAd’s proprietary technology, ads can be further targeted based on context factors such as past anonymous search behaviors while leveraging the unique functionality of Waze to serve ads at the most relevant time along their route – when the consumer is likely to see and engage with the offer…. at zero speed.
In addition to its own social data, Waze integrates social and location-specific content from Yelp, Foursquare, Facebook and YP into its app. Users can choose results from any of these sources when they conduct a local search via Waze.
According to the press statement xAd will be the exclusive provider of both search and display ads in Waze. I was unable to find any example ads this morning in the app. I'm sure the integration will be thoughtful however. Waze recognizes the need to preserve the integrity of the user experience. Too many or irrelevant ads would risk alienating its audience.
Metrics firm comScore is out with a couple of "Digital Future in Focus" reports. They collect the company's data from 2012 into a narrative about marketplace trends. In terms of mobile much of what's in there is familiar: smartphone penetration crossing 50%, tablet ownership growth, Android growth, the rise of apps and so on.
One stat, however, that caught my eye is in the graphic to the right: 37% of digital media time is now spent on smartphones and tablets. By contrast 63% is on the PC. This one data point shows how dramatic the shift to mobile/personal devices has been, in a relatively brief time frame. Most marketers have not fully caught up however.
Another interesting chart (above), previously released, is comScore's Top 25 digital properties. It shows PC vs. mobile usage (uniques) for the top sites, as well as the incremental lift provided by the mobile audience. The table also reflects substantial overlapping usage. However in selected cases (i.e., Pandora, Weather.com) there's a major boost in audience via mobile.
In the report comScore also documents the erosion of PC usage in select "mobile centric" categories. In other words, there's a shift to mobile usage for some part of the audience:
We have begun to see a marked shift in usage patterns on the traditional desktop-based web. While most mobile content usage remains incremental to existing web behavior, certain content categories particularly well-oriented to mobile usage have witnessed material softness in top-line usage from desktop computers. Over the past two years, categories such as Newspapers (down 5 percent), Maps (down 2 percent), Weather (down 12 percent), Directories (down 23 percent), Comparison Shopping (down 4 percent) and Instant Messengers (down 52 percent) have seen declines despite a 5-percent increase in the total U.S. internet population over that time.
Again the categories that have seen some or substantial migration to mobile:
Browser-maker Opera announced that it's buying much smaller rival Skyfire for approximately $155 million in cash and stock. Skyfire's chief claim to fame is video optimization. Opera also said this week that it was approaching 300 million monthly users across all its platforms (computers, mobile phones, TVs and other connected devices).
The 300 million monthly uniques figure is very impressive; however it masks a downward trend in Opera's usage in mobile. As Android and iPhones push out feature phones (except in developing markets) and BlackBerry devices, Opera is seeing its global browsing share decline.
In the course of a single year Opera has gone from being the leading mobile browser around the world, with a 23% share, to number three and a 15% share. This rapid deterioration probably explains the company's recent decision to switch the core of its browser to WebKit as well as the Skyfire acquisition.
WebKit is behind both Safari and Chrome, though not IE. Opera's adoption of WebKit will enable its browser to remain relevant in a smartphone world dominated by iOS and Android.
Opera's business, since its 2010 acquisition of AdMarvel, also includes mobile advertising. And in its recent Q4 State of the Mobile Web report, intended to showcase the company's global scale and advertising chops, we discover that 64% of global ad impressions are still coming mostly from the US, though international is growing.
In the US Opera holds a less than 1% mobile browser market share according to StatCounter. In Europe it's roughly 7%. In Asia it's 24% but Opera was just passed by the Android browser. Africa is the only region where Opera continues to lead.
However Android's global growth is a direct threat to the company given that most users will rely on the device's own browser or Chrome. By the same token most users on the iPhone rely on Safari. Currently Opera has little to offer that will clearly differentiate it from either the Android or iPhone browsers. That's partly what the Skyfire bet is about -- mobile video optimization.
However by itself that's not going to be enough to keep Opera from continuing to lose usage.
Earlier this week ForeSee Results, which measures online consumer satisfaction, released a new "Mobile Satisfaction Index." Based on a survey of 6,000 US adults in Q4 2012 the company sought to rank retail mobile sites and apps. Amazon was the winner, followed by Apple.
Below is ForeSee's list of top 25 ranked retailers and e-tailers according to consumer mobile satisfaction:
There's nothing surprising on the list above. Amazon has a great brand and has made huge investments in mobile. What's perhaps surprising is the absence of eBay from the top 25.
ForeSee also found that 70% of survey respondents were using their mobile phones in stores during shopping. Other surveys have shown higher numbers. In addition, if smartphone users are isolated the numbers are certainly higher (above 80% or 90%).
Regardless perhaps the most interesting survey finding is that a majority of mobile users said they accessed the retailer's website (though mostly not their apps) while in the store.
How did you use your mobile phone while in retail stores this holiday season?
Again: 62% accessed the store's website on their phone. People have always assumed that in-store mobile usage is about buying on Amazon or getting competitive price information. It turns out, not exactly.
Many of these users are looking to a retailer's mobile website to perform traditional in-store sales or customer service functions. People want more information about products (e.g., reviews) and they're looking for it via the mobile web rather than trying to find a sales person or service rep in the store.
It means that retailers need to develop their mobile sites and apps with the idea that users are often in their own stores and these sites/apps are more likely to be in-store shopping aids than e-commerce sites. They need to think of the in-store experience now as multi-channel. Retailers should also aggressively be using their mobile sites to drive downloads of their apps which should offer an even better experience.
The app then becomes a mobile marketing and loyalty tool for the retailer.
This may not sound like anything other than self-evident information or advice. But the heavy in-store context of mobile app/site usage requires a shift in retailer thinking. Rather than a parallel or independent channel retailers must consider mobile as a kind of sales assistant that can and should augment the in-store experience as much as anything else.
Location-based ad network Verve Mobile announced a Series C investment this morning of $15 million led by Nokia Growth Partners. This brings to more than $21 million the funding raised to date by Verve.
The company is one of several location-based mobile ad networks. An incomplete list of others includes xAd, YP, LSN Mobile, Telenav/ThinkNear, Marchex. In addition, all the major mobile ad networks offer varying flavors of geotargeting.
While local-mobile advertising holds enormous promise, most mobile display revenue forecasts associated with the segment are overblown for many reasons. They often contain overly simplistic assumptions or fail to recognize the complexity of the space and challenges that must be first overcome to realize its potential.
In addition to local "infrastructure" challenges and the difficulty of proving ROI from mostly offline conversions, a major challenge facing local-mobile advertising is poor or sloppy mobile ad creative. Weak mobile creative is a problem with mobile advertising in general but it's especially true in the local space. The following are a few examples of the "current state of the art."
Beyond the fact that there's no call to action on the Tiffany's banner above, the landing page showcases various types of jewelry for e-commerce sales. However it's highly unlikely that a consumer would click on the ad and then buy a necklace or other jewelry item within the ad. People might go to the Tiffany's site later and buy there.
However, what's much more likely is that someone would peruse the jewelry online but buy later in a local store. Unfortunately the store locator is yet another page down and generally buried. It should be much more prominently displayed on the landing page and connected to maps and directions.
The ad above was presented on the AP news app. One problem is that the ad copy is small and challenging to read. However, what's more problematic is the way that the ad dumps users into an HTML5 version of Google Maps without any context, branding or additional information.
It's a map to lead you to a dealer (one infers) but you don't actually know what you're looking at or how it connects to the ad clicked on.
Immediately above is a Radio Shack ad that appeared in a local newspaper app. Like the Tiffany's ad it's really promoting e-commerce. Radio Shack has hundreds of local stores but nowhere -- not anywhere -- in the ad is there an obvious store locator. Again, the majority of users are unlikely to buy directly through the ad. The lack of a store finder is a missed opportunity.
These are just three recent examples among many others of the many problems with mobile display and local-mobile display advertising in particular.
I've written here and elsewhere about the fact that Samsung is increasingly the dominant global Android OEM. Samsung has ridden the Android wave to huge profits and near-global domination of the smartphone market. However the company is ambivalent about Android.
As Benedict Evans points out Samsung isn't promoting the Android brand and doesn't really mention Android in its multi-billion dollar "Next Big Thing" marketing campaign. Accordingly Evans contends that Samsung's Galaxy brand has greater recognition than Android itself. This conclusion is based on Google Trends search data, which may or may not be accurate as a reflection of actual brand recognition or demand.
There's plenty of other evidence in the market to support Evans' argument, however, including the above Android OEM comparison chart from ad network Millennial Media. Another data set from AppBrian also supports the same conclusion:
With the possible exception of Huawei all the other Android OEMs are in decline (re market share) including and especially HTC, which is shifting its strategy to focus on emerging markets because it can no longer compete effectively in North America and Europe.
What happens when Samsung so totally dominates the Android landscape that it can start using that leverage against Google or creating its own "forked" version of Android independent of Google (as Amazon has done with Kindle Fire)? That's presumably why Google is working on the "X-phone" through Motorola -- to try and create a viable rival to the Galaxy. But will Google be willing to go toe-to-toe with "partner" Samsung in terms of marketing dollars?
No is the short answer. Samsung reportedly spends roughly $12 billion annually on marketing its mobile devices. That fact alone makes it hard for any other Android OEM, even Google-Motorola, to compete. Only Apple is really in a position to compete with Samsung.
Online measurement firm comScore released data from a new survey about digital wallet awareness and acceptance among US consumers. The survey was conducted in November 2012. It underscores familiar themes in the existing coversation about digital wallets: most consumers are largely unaware of the offerings, but those that are have security concerns.
In the context of this research "digital wallet" means online and mobile. To that end, the survey data showed that PayPal and Google Wallet were the only two payments products that enjoyed meaningful consumer awareness. In terms of usage, only PayPal has seen any real adoption -- largely because of its long established online history.
Echoing many other surveys the comScore data found that security was a concern for many users. Like almost every one before it, the study concludes that consumers need to be educated about the overall benefits of digital wallets and the features that make them more secure than conventional credit card payments.
In a Q3 2012 survey we found very limited interest in mobile payments.
How interested are you in using your mobile phone to pay for things, and replace cash or your credit cards?
Source: Opus Research (August, 2012; n=1,501 US adults)
From a demographic standpoint, people under 45 were considerably more interested in mobile payments than people who were older. Similarly, a recent survey (n=1,155 US adults) by the Raddon Financial Group found that that younger adults (Gen Y) are most likely to be interested and most likely to see value in mobile wallets.
Source: Raddon Financial Group (2012)
A recent survey from Harris Interactive is more bullish on the outlook for mobile payments than was ours:
“How interested are you in being able to use your smartphone to process in-person payments via tapping a special receiver, rather than using cash or payment cards?”
This was the full mobile-user population. The following were the smartphone-only responses:
While the benefits of "horizontal" wallets and mobile payments solutions (e.g., Google Wallet) are often unknown or ambiguous to consumers, what will drive (and is now driving) mobile payments adoption are "point solutions" that are highly specific. In these scenarios the benefits are concrete and self evident:
Amid all the hand wringing over Apple's "impending decline," it's interesting to note new traffic metrics from StatCounter that show Apple driving more mobile Internet traffic than any of its rivals. This is partly a product of the iPhone 5's success during the holiday quarter.
The StatCounter data reflect mobile OEM market share based on actual Internet traffic. This stands in marked contrast to most smartphone and tablet market share estimates (from IDC, Gartner, comScore and others) that are based on shipments or consumer surveys. There are a few actual traffic measurements out there (e.g., Chitika) but not many.
That's why StatCounter's data (as a reflection of actual user behavior) are so interesting. Shipments is an inherently flawed metric that may or may not correspond to actual sales to end users.
The "headline" being used along with this new StatCounter OEM data is that Apple has overtaken Nokia as the company driving the most Web traffic on a global basis. Samsung is third. In the US Apple is much farther ahead of rivals, including Samsung. Nokia by comparison drives just over 3% of mobile Web traffic in the US market.
Top 10 Mobile Vendors (Global)
Top 10 Mobile Vendors (US)
It's interesting to compare the above numbers to "mobile OS" and mobile browser figures from StatCounter. The vendor and OS numbers are essentially identical in Apple's case, as they should be. The browser numbers are not. They suggest that roughly 10% of iOS users in the US market are using browsers other than Safari.
Top 10 Mobile Operating Systems (US)
Top 10 Mobile Browsers (US)
On a global basis the Android OS has a greater share of traffic in the aggregate than iOS: 37% to Apple's 26%.
Top 10 Mobile Operating Systems (Global)
It's not clear to me whether StatCounter captures and includes apps in its traffic estimates -- I believe it's just conventional Web traffic. Regardless, traffic is a much better metric to discuss than handset or device shipments in terms of the influence and importance of the competing mobile platforms.
While a few ads shown during yesterday's Super Bowl were noteworthy most were a bust -- and largely a waste of the nearly $4 million it reportedly cost to buy airtime during the game. Matt McGee at Marketing Land did a nice job of tracking and reporting on social media mentions or "calls to action" on most of the ads (Twitter and hashtags were most common).
Oreo is emerging as one of the big winners, with its fast reaction to the game's 30+ minute power outage.
Yet for all the energy put into associating ads with hashtags and social media, there was an almost total absence of explicit mentions or references to mobile. The only mobile app mention that I was aware of came on a quickly shown credits screen during an ad for the forthcoming Star Trek sequel (upper right image). Exact Target confirmed my own informal sense of that yesterday.
A large percentage of people watching the game in the US were smartphone owners. As you already know, and as Nielsen and others have confirmed, there's a very high level of "second screen" behavior among smartphone owners. These Super Bowl ads were a huge opportunity to drive app downloads for brands. And other than the Star Trek mention, which raced by in less than a second, nobody talked about apps at all.
One might have expected real estate company Century 21 to mention its mobile site or app in its several mediocre commercials given that so many people use mobile during their house hunting. But they did not. I could go on with numerous other examples.
Perhaps the assumption among the agencies that produced these commercials was that people would be using Twitter or Facebook on their smartphones or tablets and the mobile call to action was thus implied. Yet it's more likely that marketers didn't really know what to do with mobile specifically and so were simply silent on the subject.
The digital advertising industry opposes "Do Not Track" (DNT). No surprise there. Indeed, the industry went "ape shit" (to use the vernacular) when Microsoft declared that IE 10 in Windows 8 would be set to DNT by default. Yahoo and the The Digital Advertising Alliance, a trade group comprised of the American Association of Advertising Agencies, the IAB, the DMA, the Association of National Advertisers and the American Advertising Federation, said they would simply "ignore" IE 10's DNT default settings.
The rationale ostensibly was: "Microsoft is making a decision for the consumer; this isn't the consumer's decision." However another reason was that DNT fundamentally threatens behavioral targeting, profiling and retargeting.
A widely held view in the online advertising industry is that consumers, if they fully understood the benefits of targeting, would willingly accept it in exchange for more relevant ads. There's mixed evidence on this point.
In a Q1 2012 survey of roughly 2,000 US adults the Pew Internet & American Life Project found that 68% of respondents didn't want to be tracked and targeted while 28% were comfortable with it "because it means I see ads and get information about things I'm really interested in." Thus two-thirds of these people were explicitly rejecting the notion of trading privacy for more relevant ads.
This morning the US Federal Trade Commission released a report on mobile privacy. It makes a boatload of recommendations to developers, OEMs/platform providers and ad networks. Without listing them out in detail, they mostly focus on education and disclosures. However the FTC also recommends that platforms (iOS, Android, Windows, etc.) adopt a global DNT capability that would block third parties from collecting information about them (including location).
Here's what the FTC says about DNT in the report:
Some consumers may not want companies to track their behavior across apps. Indeed, one survey found that 85% of consumers want to have choices about targeted mobile ads. A DNT mechanism for mobile devices could address this concern.
Accordingly, Commission staff continues to call on stakeholders to develop a DNT mechanism that would prevent an entity from developing profiles about mobile users. A DNT setting placed at the platform level could give consumers who are concerned about this practice a way to control the transmission of information to third parties as consumers are using apps on their mobile devices.
The platforms are in a position to better control the distribution of user data for users who have elected not to be tracked by third parties. Offering this setting or control through the platform will allow consumers to make a one-time selection rather than having to make decisions on an app-by-app basis. Apps that wish to offer services to consumers that are supported by behavioral advertising would remain free to engage potential customers in a dialogue to explain the value of behavioral tracking and obtain consent to engage in such tracking.
Apple has already begun to innovate with a DNT setting on its platform. Apple’s iOS6 allows consumers to exercise some control over advertisers’ tracking activities via the “Limit Ad Tracking” setting. Although the setting could be more prominent, this is a promising development, and we encourage Apple and other platforms to continue moving towards an effective DNT setting on mobile devices that meets the criteria we have previously articulated for an effective DNT system: that it be (1) universal, (2) easy to find and use, (3) persistent, (4) effective and enforceable, and (5) limit collection of data, not just its use to serve advertisements. We will continue to have discussions with stakeholders in the mobile marketplace on this important issue.
If such a platform-level DNT capability was available -- and obvious -- to smartphone and tablet users, I suspect that a majority of them would adopt it, as the Pew data above suggest. Perhaps a meaningful minority percentage of users would accept tracking/profiling as the price of more relevant advertising. But I still believe it would be less than 50%.
Of course one of the things that users don't understand is that they'll get ads regardless -- just lower-quality ads.
A new Pew survey (n=1,003 US adults) found that 58% of all mobile phone owners (feature + smartphones) used their handsets as part of in-store shopping during holiday 2012. More specifically, 72% of smartphone owners did so. Google research and InsightExpress have found even higher smartphone numbers: 82% to 90%+.
What kinds of things did these mobile phone owners do in stores? Mostly they called other people, but they also checked prices and product reviews.
Pew says 46% of all mobile users called others to get input on a purchase; 28% looked at product reviews and 27% compared prices on their phones (presumably there was some overlap among the categories). Of those who conducted price comparisons, roughly 48% didn't buy in the store, while 46% did make a purchase:
Interpreting these data is tricky. That's because we don't really know the mindset of these people when they entered the store. Accordingly we don't know the full impact of the pricing information they discovered.
We can make the assumption that 64% of these respondents (of the 27%) had some level of existing purchase intent when they went to the store -- because they ultimately did make a purchase. As mentioned, 46% percent bought at the store and 18% bought elsewhere (another store, online).
Another way to interpret these data is to say that 48% of the the people who did in-store mobile price checks decided not to buy there (my headline). It's probably safe to infer that at least 18% of these people were negatively swayed by the price data they saw on their phones -- they bought online or at another store -- although the actual number may be quite a bit higher and include some or all of the 30% who decided not to buy at all.
We don't have any sense of how this price-check group compares with the larger survey population. Did the larger group buy at higher or lower rates than the price checkers? We don't know.
One can see what one wants in these data. Without a sense of what people were thinking ahead of time we can really only guess at the full impact of in-store mobile phone usage. Yet it's clear from the totality of available information that "showrooming" is a real thing and that retailers need to aggressively address it.
For users who updated their iOS devices to 6.1 yesterday Fandango is now the commerce partner for movie ticket sales via Siri. If you look up movies using Siri you get the Rotten Tomatoes powered list with an option to buy using Fandango. If you don't have the Fandango app on your device you'll be prompted to install it to complete the transaction.
Fandango has reported that mobile now accounts for more than 30% of ticket sales. That will undoubtedly increase with Siri and iOS integration.
There are many Siri critics out there but the process of looking up a movie and (now) buying a ticket is pretty compelling. In fact this may well become the primary way that many iOS users buy movie tickets in the future. Once a credit card is on file with Fandango it's going to be faster and easier than conducting the same transaction even on the PC.
In addition, there's Apple Passbook integration post purchase.
This is yet another "mobile payments" point solution (it's really e-commerce on a mobile device) that will get people comfortable with the idea of using their phones to conduct transactions and pay for things. The convenience and value here are obvious to consumers.
Yesterday Yahoo reported Q4 2012 earnings and full-year results. In several respects company did better than expected in Q4, though display revenue was down 5%. Search revenue was up 14%. Display advertising is the single biggest source of revenue for the company.
On the earnings call CEO Marissa Mayer discussed the company's strategy. Among other things, Mayer is focused on improving Yahoo's mobile sites, apps and products, branding them consistently and upgrading them in those areas where Yahoo wants to concentrate. Improved Yahoo Mail and Flickr apps were two recent product upgrades for mobile.
Mayer is very focused on modernizing Yahoo user experiences and generating more usage and engagement accordingly. She believes that will bring more revenue opportunities including in mobile.
Below are some of her verbatim remarks about mobile from the earnings call transcript:
Yahoo! is focused on making the world's daily habits inspiring and entertaining . . . Essentially, we need to start a chain reaction . . . To start that chain reaction of growth, we've identified approximately a dozen products to focus on, each a daily digital habit. When taking multiple platforms into consideration for each product, desktops, mobile web, mobile apps and tablets, there's a lot of work to be done . . .
Focusing more on the pure advertising and monetization standpoint, there's greater opportunity with the big 4: Search, Display, Mobile and Video . . .
In 2012, we saw our Mobile adoption grow to more than 200 million unique monthly users. From a monetization perspective, this is still a very nascent source of revenue for us. With any platform shift, revenue always follows users, and Mobile will be no different . . .
Obviously, we have a large mobile web offering and people tend to use things like Yahoo! Finance, omg! on their mobile browsers on their phone. They also tend to use some of our applications . . .[M]ost of our applications and our mobile web experiences have Yahoo! Search boxes . . .
In terms of having 50% of our engineering workforce on Mobile, I think that this is something that will ultimately happen. I think you start looking many years in the future, it's hard to imagine that there are going to be technology companies where that isn't true. To date, we have started to shift some of our engineering teams to be more focused on Mobile. We need to get to a critical mass on that.
Just a few years ago Yahoo was well ahead of Google in terms of mobile advertising and revenue. Today that's hard to believe. Cleary, however, Mayer "gets it" and is working with her team to address Yahoo's current mobile deficiences. And the 200 million monthly unique users is a very encouraging figure for the company. By constrast Facebook, Yahoo's biggest display rival, has 600 mobile uniques on a global basis.
Even though Yahoo is building out its mobile assets, I would expect the company to make several mobile acquisitions -- perhaps on the consumer side but also of a mobile ad network or exchange. In fact, I would be surprised if Yahoo didn't make a meaningful acquisition to bolster its mobile advertising business.
Some people have described the competition for business owners in the mobile payments segment as a "race to the bottom" in terms of credit card processing fees. Indeed, there are now at least 10 mobile payments or POS vendors targeting small businesses that are undercutting traditional credit card processing fees. The include LevelUp, Groupon, Square, PayPal Here, GoPago and others.
Clearly this is not the company's long-term strategy. It's trying to create more bar "inventory" for consumers in the hope of driving app adoption and expanding beyond San Francisco, it's only current market. However the zero credit-card processing fee is a major incentive for bars to sign up and use the system.
Coaster is another example of something I've written about multiple times: vertical or point solutions that offer self-evident value to consumers and will drive adoption of mobile payments. My favorite example is mobile parking payments but Coaster is a pretty good example.
By using Coaster smartphone owners can order, pay and tip at bars without giving over their credit cards directly or waiting in line. I've not yet used the app myself. However Coaster offers concrete and obvious value for bar patrons (and bar owners).
These kinds of vertical scenarios or "point solutions" will educate consumers and get them comfortable with mobile payments, paving the way for broader adoption of "horizontal" solutions such as Google Wallet. Exposure to a positive veritcal payments experience will tend to accelerate broader payments adoption.
By contrast people often don't see the reason or need for "mobile wallets" in the abstract.
How interested are you in using your mobile phone to pay for things, and replace cash or your credit cards?
Source: Opus Research (August, 2012; n=1,501 US adults)