There's plenty of data that shows people are on mobile devices while watching TV. Many Superbowl ads assumed and tried to play off this, largely without success earlier this year. But it may turn out that tablets (iPads) become the primary "second screen" during TV viewing.
According to a Q4 multi-country survey from Nielsen, "88% of US of tablet owners and 86% of smartphone owners said they used their device while watching TV at least once during a 30-day period." In addition Nielsen found that 45% of tablet owners used their devices along with TV "on a daily basis and 26% said they did this several times a day."
While checking email during commercials was a primary activity of the second screeners, the survey also found that there was engagement with TV content and products:
The most frequent tablet or smartphone activity across all countries while also watching TV was checking email — either during a commercial break or during the show. Yet device owners also seem to engage with content related to the TV as well, either by looking up information related to the show or looking for deals and general information on products advertised on TV.
While shows like QVC, American Idol and The Voice are already doing things with simultaneous TV-mobile use, we should see more formal incorporation of mobile devices into shows. (I'm sure there will be lots of interesting and creative implementations to come.) In a more mundane vein, advertisers may start to direct people to e-commerce sites or offer flash sale incentives to mobile users on the couch. It should be a very interesting trend to watch.
Tablets are much more likely, however, than smartphones to generate e-commerce sales. This is why they will be preferred by marketers. They'll be preferred by consumers because of their larger screens.
Make no mistake Google's augmented reality goggles are fascinating and "cool." I applaud Google for developing them (if they have actually been developed; I suspect there's no working prototype yet) but I also wonder if anyone would actually buy and wear them. Of course some people would; but could the product break out of cult status?
The effort, called Project Glass, is an initiative of Google's advanced products team ("Google X"). It represents a form of "wearable computing" and it's very interesting as an extension of the Internet beyond more conventional devices like smartphones.
Putting aside the fashion dimension, which I think is awkward in the images shared by Google, AR glasses might be useful while driving, shopping or in an art museum. However they might equally be distracting and annoying, removing you from the experience of being in the "real world."
There's already a backlash building against living your life with your nose in your smartphone. This would take the smartphone obsession one step further.
Pricing is uncertain. If they were expensive (more than $199) they wouldn't see much uptake I would imagine. And what about advertising? Imagine ads literally popping up in front of your eyes. That would be highly undesirable to say the least. Other issues include battery size and life, as well as data plans and costs.
Glasses are a logical place to put a wearable computer and at some point we will see wearable computers. However I'm skeptical that this product has mainstream appeal. But prove me wrong; I'd love to see it in action.
Nokia, AT&T and Microsoft are about to begin their "do or die" marketing blitz for the Lumia 900. Nokia (or someone on its behalf) has set up a site that tries at once to be humorous, viral and to take down the iPhone with actor-dramatized "hidden camera" videos that purport to show its weaknesses (e.g., "death grip"). The site proclaims "the beta test is almost over" and features former "SNL" actor Chris Parnell.
This site is merely one of a multiplicity of efforts and campaigns on behalf of Nokia and Windows Phones that are about to unfold.
Hundreds of millions of dollars will be spent in the coming year seeking to get North American mobile subscribers to pay attention to the Lumia and consider buying it. AT&T has priced the device at $99 and says it's going to put more marketing dollars behind the launch than any other device, including the iPhone.
Depending on whose numbers you believe, Windows has less than a 5% share of the US smartphone market and an even smaller chunk of "recent purchases."
For all the spending we're about to see I think US Lumia sales will only be modest. I could be completely wrong but I think that when the smoke clears a year from now the postmortem will be (once again) that marketing dollars can only go so far in shaping perceptions and getting people to buy a product.
Last May Tel Aviv-based mobile app/search engine do@ (pronounced “do at”) launched with high expectations. The company raised $7 million against the promise of delivering a search experience to smartphones that was both more efficient and more elegant than Google.
Rather than indexing pages, do@ showed live sites that were optimized for mobile. Sites were initially ranked by default but users had the ability to re-order results. It was a radically different and smart approach to mobile search -- and one that might have been expected to work at some level. However nobody used it, reflecting the power of Google's brand and its prominence on both the iPhone and Android devices.
You can see a video of do@ in action here.
Now the company has re-imagined do@ as a kind of mobile meta-search engine: Everything.me. You enter a query and can search "vertically" in any of the many different sites displayed on the screen. Logos replace Google's blue links.
Because Everything.me gives you access to familiar, branded sites (and some that are less familiar) it has a better chance than do@ did. However, many people have smartphone apps for common mobile search categories: restaurants, travel, shopping/price comparisons. Then, of course, there's Google for "everything else."
Accordingly I think the company is fighting the same battle it was before. And even though this relaunch is a clever adaptation of the company's underlying technology it will face the same challenges of adoption and usage.
Yesterday the Wall Street Journal published what amounts to a round-up of recent Google tablet rumors. None of the information was really new.
Previously Eric Schmidt confirmed that Google would be putting out a "highest quality" tablet at some point later this year. A Google-branded tablet (expected to be 7-inches) is intended to compete directly with the Kindle Fire. It's also a direct response to the failure of other Android tablets to date.
Here's are the quasi-factual nuggets extracted from the WSJ piece:
Earlier rumors suggested that the price might be $149. Either at $149 or $199 a decent 7-inch Google tablet is likely to be highly successful.
The Kindle Fire is actually quite a mediocre tablet compared to the iPad. It's well integrated with Amazon content but that's about it. Email and web surfing are quite painful on the device. Google almost certainly would make a more functional tablet for general purposes. It would also have the benefit of Google's voice actions.
Google also has nearly the content ecosystem that Amazon does (i.e., Google Play). It can also afford to subsidize the device because it will make money on search and mobile display advertising.
A $149 Google tablet would undermine Kindle Fire, compelling Amazon to lower its prices. Pricing here is a key variable. Regardless of whether it comes in at $199 or less, a cheap 7-inch Google tablet will be successful. The outlook for a larger tablet and direct iPad competitior would be more murky.
However I would predict that Google will sell millions of these smaller, highly subsidized devices.
Some US-based survey findings were released yesterday that show iPhone 4S owners use Siri regularly but only in limited ways. The survey of 482 iPhone 4S owners by Parks Associates reflected that people used Siri almost daily in many instances to send email, initiate calls and send texts. Other types of "more advanced" activities were not performed as often (e.g. setting up appointments or playing music).
Here's a very high-level overview of the findings:
Previously a ChangeWave survey in December found that Siri was the most "liked" feature of the new iPhone 4S.
Siri is clearly a work in progress; Apple has a "beta" label on it. Apple's chief mobile rival Google is working on its own "assistant" to compete with Siri. The rumor is that will include APIs for third party developers. So Google may out-Siri Siri if Apple doesn't keep moving.
The question now for Apple is how much to develop Siri into a broader utility and search or content discovery tool.
Apple removed Siri's earlier “transactional” capabilities, present in the app before Apple bought the company. Those earlier capabilities hint at what's possible. In other words, tapping directly into third party APIs to deliver content results and transactional pages without the interim step of a "search result." This was Siri's ambition when Apple bought the company. But will Apple press on?
In an ideal world Siri would develop into a kind of universal interface for finding and downloading apps, generating queries within apps on the handset ("Find me a flight from NY to Boston on Kayak on April 18") and perhaps initiating payments.
Clearly there are flaws in Siri's performance and it's imperfect, but it has enormous potential to be more than it is. I'm hopeful that Apple continues to invest in and develop Siri -- to help it realize its pre-Apple vision.
Even though increasing numbers of consumers are starting to transact on smartphones, m-commerce hasn't taken off. Trust, security and credit card entry issues still need to be resolved for most e-commerce merchants (though not Amazon).
But there is another way in which smartphones are helping e-commerce -- so-called "showrooming." That's where consumers visit stores to examine and verify products and then order online (mostly from Amazon). This problem has been especially bad for stores like Best Buy but it's a problem that all traditional retailers are starting to grapple with.
Recent survey data from ClickIQ (via Internet Retailer) confirms this pattern:
29% of consumers who use a smartphone to research a product while in a retail store end up purchasing the item online, many from. . .
Of consumers who used a smartphone to research in-store and then purchase online, 55% were men and 45% were women, says the survey of 406 U.S. consumers who have researched a product while in a store and purchased that product.
Recently the Pew Internet Project issued similar findings about Q4 smartphone shopping behavior.
Here's what the Pew survey data say about what happened after the smartphone/Internet was consulted by consumers in stores:
What this means, effectively, is that 64% of in-store smartphone users decided not to buy on the spot -- probably because of some piece of information they accessed then and there (price, reviews, etc.).
The 19% who purchased the product online is 10 points lower than the ClickIQ findings. But both these surveys show that consumer behavior is being affected by access to the Internet in stores, with some meaningful percentage of people buying online after confirming the product is the one they want.
There are a few things that retailers can do to combat this growing pattern:
However it's foolish for retailers to try and prevent smartphone use in stores or rely on unique SKUs that prevent barcode-scanning based comparisons.
According to a sweeping report from the Pew Reseach Center ("State of the News Media 2012"), 27% of the US adult population now gets its news on smartphones and tablets. The report says that "70% of desktop/laptop owners report getting news on their computers. Half of smartphone owners (51%) use their phones for news. A majority of tablet owners (56%) use the devices for news."
Mobile news consumers, especially users of news apps, are more engaged than their PC counterparts: "People spend more time per session with news on mobile devices than they do on computers, and read more articles per session and more articles per month."
The data were collected through various surveys earlier this year. They show that people are accessing news on multiple devices, more frequently. Mobile news consumption appears to generally be "additive" to consumption on the PC, although there's evidence that smartphone and tablet owners are shifting some of news reading to those devices.
Pew also says that "mobile news consumers are even more likely to turn to news organizations directly, through apps and home pages, rather than search or recommendations — strengthening the bond with traditional brands."
Although people are getting news on multiple devices, 82% of survey respondents get their digital news primarily on a computer. Pew adds, however, "But much of that may mainly come from the computer being their only digital option . . . 43% of all desktop/laptop owners [do not] own another device."
Pew observed that for people with multiple devices some amount of their news consumption is shifting, "[A]s we have seen with other technology shifts, consumers are drawn to newer forms and may even make them their primary mode, but they are not abandoning older forms altogether. Instead their news experience widens and deepens."
Smartphone owners who read news on their handsets are evenly split, "46% still get most of their news on the desktop/laptop; 45% get most on their smartphone." For iPad and Kindle Fire owners, "47% still get most of their digital news via desktops or laptops, while a third, 34%, have already transitioned to consuming most of their news on the tablet."
On the PC Web most news publishers were largely "disintermediated" by search (Google). Their brands were diluted and weakened as they were presented among hundreds of news sources for a given story. They were often out-maneuvered by aggregators and others more skilled at SEO. Mobile news apps and the move away from search as universal content gateway (in mobile) gives publishers an opportunity to reestablish a more direct relationship with the consumer -- and with that capture more digital revenue.
JD Power and Associates yesterday put out its 2012 handset customer satisfaction survey findings, covering both smartphones and non-smartphones. The iPhone won the smartphone category (for the "seventh consecutive time"); LG and Sanyo were at the top of the non-smartphone handset category.
HTC was second in the smartphone category. Android market leader Samsung was third but "below industry average."
JD Power used a range of criteria to measure satisfaction, which were slightly different in each category. For smartphones the weighted criteria were: performance (35%); ease of operation (24%); features (21%); and physical design (20%).
The iPhone rankings are not a surprise. The much more interesting aspect of these survey results is the low score of Nokia. On both lists it was second from the bottom.
If this survey were conducted in Europe or developing markets Nokia might get higher marks. But the low scores in the US survey reflect the poor performance of its existing products and the weakness of its brand. That brand weakness is further diminished by the scores themselves.
It will be very challenging, even with its new Lumia Windows Phones, for Nokia to "climb out of the basement." Indeed, the existing weakness of Nokia in the US/North American market creates a "deficit" for Lumia devices as both Nokia and Microsoft seek to market them to North American consumers.
Related: iPhone Grabs Camera Market From Sony
Today the iPad pre-orders arrive and the iPad becomes available in stores. Yesterday reviews of "The New iPad" come out and overall they're very positive. Based on the success of iPad pre-orders, financial analysts have boosted their estimates of iPad sales for 2012. Some are now saying that Apple may sell a combined total of 65 million iPads or more this year.
One question is whether this lead will be so overwhelming that rivals will be shut out. So far the only successful Android tablet is the Kindle Fire and that success is largely based on its price. It's an inferior product, whose sales could be affected by the reduced price iPad2 ($399).
Yet IDC has projected that the iPad will be overtaken by Android tablets in 2016. IDC estimated that Amazon sold 4.7 million tablets in Q4 of last year.
The chart above reflects "shipments" and not actual sales. The logic behind this forecast showing Android overtaking the iPad is based on a simplistic analogy to the iPhone, and Android's growth over a period of years to a dominant market-share position. However, as several others have pointed out, the better analogy might be the iPod, which established a dominant market share and was never challenged.
In the US, Apple maintained an exclusive iPhone relationship with AT&T for three years after launch. That allowed Android to develop huge momentum. People were more inclined to buy an altenative smartphone than change carriers. The iPad has no such carrier constraints.
There have so far been well over 100 Android tablets and all but the Kindle and Nook have fallen flat. It's unlikely there are any new tablets on the horizon that will have great success -- Google's rumored 7" inexpensive tablet could be an exception. As I've written before, Android tablet OEMs are "boxed in" on pricing by Kindle on the one end and the iPad on the other. The lower-priced iPad2 makes their lives even harder.
The next test for the iPad will be the arrival of Windows 8 tablets, the first of which will probably show up for holiday shopping at the end of the year. But for at least three quarters the iPad will have little or no competition. That could enable Apple to sell 45 or 50 million more tablets.
Several years ago I met with someone working for PayPal and we talked about how the company could more deeply penetrate the small-business market. We talked about various ideas but everything seemed "hard." Cut to the arrival of Square; the solution is now obvious.
Square has blazed a trial that has been followed and copied by Intuit and now PayPal, with PayPal Here, a similar but triangular dongle that also fits into smartphones and iPads. In Q4 last year Square announced that it was processing $11 million in payments per day.
How will PayPal's service differentiate from Square? PayPal Mobile VP David Marcus (who came via the Zong acquisition) explained in a blog post:
So, you’re asking, how is this different from other small business mobile payment solutions? The key differentiator is that it comes from PayPal, a trusted brand in the online payments industry with more than 100 million customers around the globe and years of proven payment innovation, driving growth for millions of businesses globally. PayPal Here comes with our world-class fraud management capabilities, and our 24×7 live customer support. In addition to accepting more payment methods, PayPal Here offers a simple flat rate of 2.7% for card swipes and PayPal payments. Merchants are also given a business debit card for quick access to their funds and 1% cash back on eligible purchases – which means if you use the debit card, your fees are actually just 1.7%!
In other words:
Square's transaction fees currently stand at 2.75%. However I suspect Square will respond to PayPal's reduced rates.
Beyond the (somewhat smaller) transaction fees, if PayPal Here can deliver on its promises of security and customer support it could impact Square's growth opportunity. Yet Intuit has had a competitive solution for some time, and that hasn't really affected Square. More likely, PayPal's entry into the market will grow the overall payment-dongle market and affect banks and existing vendors that make money from merchant accounts and credit card processing.
Separately, payments startup BOKU received another substantial infusion of capital to focus more on the offline market. Companies like Zong and BOKU initially focused on virtual goods and online transactions. However the real action is offline -- a market that is many times larger than e-commerce and virtual goods.
The $35 million received by BOKU brings to roughly $75 million (per TechCrunch) the total funds raised to date. Spanish telco giant Telefonica is one of the investors in this latest round.
In the SMB segment, the growing number of payments options and startups will likely create confusion. PayPal and Square (and maybe Intuit) are the companies that will be able to rise above that noise given their brands. While Square doesn't have the same brand equity as Intuit and probably PayPal, it does have more momentum than either in the SMB mobile payments segment.
See related posts:
Mobile payments companies, apps and trials are launching so quickly -- a new company appears seemingly every week -- that it's tough to keep track of them all. Despite all the activity most consumers are basically ignorant about the entire mobile wallet phenomenon. Among those that are aware, many are simply not interested; 53% to be precise, according to a mid-2011 Retrevo survey, with another group (26%) who don't know enough to respond yea or nay.
Nonetheless there's a kind of land grab going on, as companies compete for commercial relationships, visibility and mindshare. There are basically three or four major categories of players: the carriers, the credit card issuers, the major independents (Google, Apple, eBay) and the startups. In almost every case the wallet or payments app/tool/platform backs onto a credit card account.
There's also a good deal of spin in the space. For example, LevelUp (the successor brand of check-in service SCVNGR) recently claimed to be "the nation's second largest mobile payment network (behind Starbucks) with 100,000 users across 8 U.S. cities." But that ignores Square, which is the true breakout company in mobile payments.
Source: Retrevo (Q4 2011)
Ultimately mobile payments will be relatively mainstream (probably in 5-7 years). But in the interim consumers and merchants must do the work of adopting a solution before that can happen. The motivation is there on the merchant side; less so for consumers.
Major retailers, grocers and brands will adopt mobile payments for the data, efficiency and potential loyalty and marketing opportunities. Smaller merchants will only adopt mobile payments if there's greater convenience, simplicity and/or reduced costs, which is starting to happen.
For consumers usability, trust and security are major issues. There have been several surveys indicating consumers have many concerns about mobile payments and don't necessarily see the benefits. (Time savings, convenience are benefits but people haven't yet experienced them.)
Ironically the users most concerned about mobile payments are some of the most sophisticated ones. That's according to a recent US consumer survey from Radius Global Market Research (2012, sample size not disclosed):
Interestingly, the segment most likely to make purchases via smartphone, consumers under 35 and those identifying as digitally savvy, are also the most likely to be concerned with security and fraud issues. Fifty-four percent of consumers under the age of 35 are concerned with fraud. That figure rises to 62% among digitally savvy consumers.
Again: 62% of "digitally savvy consumers" are concerned about security with mobile payments. By comparison the survey found that "only 14% say security and fraud don’t influence their future likelihood to make those purchases."
Another 2012 consumer survey from Market Strategies International (n=2,000) found that consumers considered their own banks the most trustworthy to deliver mobile payments solutions:
The fact that PayPal ranked higher than Amex and Mastercard surprised me here. I had previously argued that the PayPal brand would stand in the way of an otherwise compelling vision for mobile payments. Perhaps I'm wrong and consumers' simple familiarity with the PayPal brand provides the company with a major boost over no-name competitors and even credit cards.
Regardless of the provider, consumers will need to be provided with "zero liability" assurances to use mobile payments. In addition, any solution adopted by large numbers of people will need to be simple and generally ubiquitous. We're still a long way away from that.
Today the Pew Internet Project put out some research arguing pretty unequivocally that consumers don't want to be tracked or targeted even if it might mean that the ads and content they see are more "relevant" or aligned with their interests. A survey released at the end of last month by Upstream and YouGov (US and UK respondents) also contains a warning of sorts to publishers and developers about advertising overload.
In this survey consumers expressed frustration over the volume ads and promotions they were receiving. Two-thirds said they received too many ads, while slightly less than a quarter of respondents said they saw the "right amount" of advertising.
Consumers found ads on their phones to be the "most unacceptable" vs. other media channels or devices. This is consistent with lots of survey data that show consumers are ambivalent or hostile to mobile advertising. However mobile ads typically outperform PC advertising, which is a paradox: people don't want it yet they respond to it.
Q: Which ONE of the following electronic devices would you find it MOST unacceptable to receive unwanted advertising on?
Interestingly these survey respondents were much less hostile to ads on their tablets. In fact, they more were accepting of ads on their tablets than they were ads on their PCs. However when a version of the question was asked in a more positive way, PC or laptop where the top choices.
Q: How you would prefer to receive an offer or promotion through an electronic device that you use / own?
In terms of positive features that consumers said would make them respond to advertising, the top answers were:
Q: Which, if any, of the following would make you MORE likely to respond positively to marketing messages?
In terms of ad units or types, email was the most favorably received among several categories that included SMS, paid search, display, QR codes and augmented reality. By implication email advertising was the least intrusive of the types presented to these respondents.
Q: Which, if any, of the following types of message would you be likely to respond positively to if you received these adverts or promotions?
In the Pew survey consumers were willing to sacrifice ad and content relevance to avoid tracking and targeting. Put another way, they declined the idea of improved relevance through tracking and personalization. In the YouGov survey respondents said they would be most inclined to respond to ads "clearly tailored to their personal interests" and that were specific to their locations.
The two surveys taken together reflect that consumers want advertising and content that is relevant but doesn't rely on data mining. In mobile -- where consumers were least interested in ads -- there's a higher burden of relevance than on the PC. But that can be achieved in ways that don't require behavioral targeting or data mining but rely on location and context.
Marketers and publishers must be careful to respect user desires for privacy as they try and fulfill the demand for relevant and "tailored" information. This is a bit of a tightrope to walk. However the industry must walk it.
Next Wednesday Apple will reveal the iPad3 (and potentially a new Apple TV), with an improved display and Siri among other features. Mobile ad network InMobi released consumer survey data last week finding that 29% of respondents were intent on buying the new iPad, with half of those reporting they don't currently own a tablet. Many people (44% of those intending to buy one) also said they wouldn't consider another brand.
Whether or not these survey findings turn out to be accurate they reflect the momentum and mindshare of the Apple tablet, which has sold nearly 60 million units on a global basis. However, when the first iPad was introduced in Q1 2010 it was met with considerable skepticism and predictions of failure. It was seen as an "unnecessary" product, delivering a "watered-down" Internet experience; it was also "too expensive" and "wouldn't fit in your pocket."
A year later Dell also predicted that the iPad wouldn't succeed in the enterprise. However in Q3 2011 Apple reported that 93% of the Fortune 500 were testing or deploying the iPad. By comparison Dell recently announced that it's exiting the consumer PC business. This juxtaposition is essentially a metaphor for state the PC industry as a whole.
Increasingly, instead of buying a second computer or laptop, US (and non-US) households will choose tablets. While there's still growth in the enterprise PC market the consumer PC market is flat-to-declining. Many analysts expect Apple to sell 50-60 million iPads this year. When iPads are considered "PCs" (which they are not), Apple becomes the largest "PC" vendor surpassing HP.
Mobile display advertising outperforms PC display according to considerable research from InsightExpress and Dynamic Logic. Beyond this, ads on the iPad and other tablets further outperform conventional mobile dislay advertising. Engagement with tablets is higher than PCs and consumers have shown a willingness to buy things through tablets in far greater numbers than they have on smartphones. There's also mounting evidence that people are spending more time with mobile devices and tablets than on the PC Internet and even with TV (in some geographies), according to recent data from Flurry and InMobi.
The totality of all this data leads to the inevitable conclusion that PCs will be outnumbered by smartphones and tablets within a year or two. PCs and the PC-Internet experience will merely be one form of Internet access and not the primary way people access the Internet (except at work). We truly are in a "post-PC" era. (That was a Steve Jobs marketing slogan that is becoming factually true.) Microsoft hopes to change the trend with the introduction of Windows 8 of course. But Windows 8 will also work on tablets. Moreover its consumer success, however, is far from certain.
Publishers and advertisers that fail to recognize these trends and act on them in the near term will be at a significant disadvantage. (Flash should be abandoned right now, for example.) Indeed, publishers and advertisers should shift the bulk of their attention and development resources away from the "PC Internet" and toward smartphones and tablet-optimized sites. Mobile and tablet site design should guide PC website design (as recently happened with the redesign of Kayak.) This is especially true for certain categories such as retail and travel.
The notion that mobile is just an extension of the PC-centric Web, which still prevails in many companies, is completely misguided.
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.
We've known for several years how important and influential smartphones are in finding local business information, especially "on the go." However the latest Local Search User Study from Localeze, 15 Miles and comScore documents, among other things, the increasing role of tablets in the process of finding offline information.
Consistent with other consumer data in the market, the survey of 4,000 US adults found that the top reason for conducting a local business lookup on a mobile device/smartphone is the immediate need for information. Interestingly, the survey discovered that nearly half (49%) of smartphone and tablet owners were using apps for local business searches (e.g., Yelp, Urbanspoon, YP.com) vs browser-based search (e.g., Google).
The Local Search Study also found that while tablets were used "throughout the [local search] process," usage was concentrated in the early and middle stages (research + consideration) of the purchase process. This might be expected because of the analogy to PC usage. However comScore found that among the three groups (PC, smartphone, tablet users) tablet owners are the most engaged and active: "most tablet users conduct local business searches at least once a week . . . more frequently than PC/Laptop users and mobile phone users."
Another interesting finding: tablet owners had increased their usage of the devices over the past year. That wasn't equally true of smartphone owners. Part of the higher levels of tablet engagement can be attributed to the fact that tablets are more "immediate" than PCs but offer a larger display for "more complete information" -- as the graphic above reflects.
Consistent with this heightened engagement the study found that tablet owners were more likely to make purchases after local search activity (which in this case largely mean offline transactions) and spend more money on average.
ISIS, the as-yet-unlaunched US mobile payments inititative from T-Mobile, AT&T and Verizon has added new partners to its stable of credit card issuers and banks (BarclayCard, Capital One, and Chase), according to CNET. ISIS has been described as "Hulu for mobile payments."
I have been openly skeptical of the carriers' ability to mount a successful mobile payments intiatitive. But ISIS may turn out to be the tortise to Google Wallet's hare. The latter has been met with carrier resistence (which may be anticompetitive), security problems and limited consumer availability.
Google has been ahead of the market somewhat. But there are now also rumors that Google is internally disappointed with its Wallet initaitive and may be putting less effort into it. If so, it would be premature to "give up" on Google Wallet.
In two related mobile payents developments, PayPal (through its Zong acquisition) is launching what it calls PayPal Carrier Payment Network; and InMobi and Opera have joined for digital goods payments. The PayPal effort is designed to build on top of the Zong-carrier infrastructure (eBay acquired Zong last year) and expand carrier billing to encompass more types of transactions and larger dollar amounts:
Historically, carrier payment has been utilized primarily by online game developers and publishers to provide a fast and easy way for users to purchase goods directly in-app or in-game. While convenient for consumers, this method of payment has inherent challenges for other digital goods merchants – such as digital books, music, dating and content – to adopt as a primary payment method. Among the challenges is the cost of doing business – sometimes upwards of 40 percent – since transactions are processed through the carrier, merchants must share part of their revenue.
Similary InMobi and Opera announced that the latter will integrate InMobi's payments platform to enable virtual goods payments and purchases through Opera:
InMobi SmartPay will enable Opera users to pay seamlessly for digital goods in key markets around the globe, when they make purchases with some of the leading publishers that partner with InMobi. The two companies are committed to providing choice to consumers, mobile content developers and app developers, by building viable third-party monetization solutions in the mobile browsing and computing space.
Most US consumers have no experience with mobile payments and still need be educated about their benefits. However, large numbers of smartphone owners will eventually adopt mobile payments over time. Four tenents of success will be: simplicity, ubiquity, rewards and security.
The convenience of not having to sign credit card slips will be a welcome imrovement in the retail and restaurant worlds. The abandonment of signature requirements for transactions under $25 in many places has created demand and some experience with a simplified transaction experience. Merchants have incentives to adopt mobile payments as well for greater efficiency at the point of sale and, if don't correctly, greater security too.
Almost all of these mobile payments systems and platforms back onto a credit card. However, it's still early to pick winners and losers. As I indicate above, Google could wind up a loser and ISIS a winner -- though that's a bit counter-intuitive (given the challenges carriers face in execution generally). There are still others (e.g., Apple) that could enter the race at any point.
While mobile payments is certain to become a multi-billion dollar market in the next several years, it's getting more difficult to predict who will gain traction. That's partly because there are now so many competitors jockeying for consumer and merchant attention that it's clouding and confusing the market. Indeed, we could see delays in adoption given the absence of any apparent standards or common platforms.
NFC could be one of those standardized plaftorms however most consumers in North America don't have handsets that are NFC-enabled. It will take one or two replacement cycles (2-4 years) for meaningful NFC-handset penetration to be reached.
In the non-NFC payments category, this morning JPMorgan Chase-backed GoPago launched. GoPago is a mobile app that offers mobile payments but also provides a range of additional services, including online ordering and a number of small-business marketing capabilities. The company has developed a cloud-based POS system that interfaces and integrates with existing POS systems. If the local business doesn't use a POS GoPago has other ways to work with merchants. The app is conceived as a holistic mobile storefront for SMBs that will enable ecommerce and not simply a payments solution like Square.
The JPMorgan partnership helps GoPago establish credibility and gain notice, which otherwise might elude the ambitious startup. However the JP Morgan backing doesn't guarantee adoption by consumers or merchants, especially given that eBay, Google, Visa, Amex, Intuit, Mastercard, Square and others are similary seeking adoption of their mobile payments tools and systems. GoPago said however that JPMorgan would help market and educate consumers and merchants about the service.
During the call with GoPago I discussed how the major players (PayPal, Google, Square) had effectively marginalized earlier mobile payments companies such as Bango (which just announced a deal with Facebook) and Boku. Another mobile payments vendor Zong was acquired by eBay. Somewhat ironically, Boku has made a renewed bid for relevance through a just-announced deal with Mastercard that involves its NFC-PayPass system:
BOKU, Inc., a leading global provider of on-line mobile payments, announced today a partnership that will enhance the shopping experience for consumers by allowing them to make payments, receive discounts and targeted offers, and monitor spending -- all via their mobile phones anywhere MasterCard PayPass is accepted . . .
Offered through a mobile subscriber's mobile network operator BOKU Accounts with MasterCard Prepaid gives consumers a convenient way to pay while on the go. Account holders use a MasterCard Prepaid card or PayPass-enabled device to make purchases anywhere MasterCard is accepted with a simple swipe or tap . . .
Boku also offers merchant loyalty and marketing tools in addition to payments functionality. Given all that's now happening I remain very skeptical of Boku and its ability to gain much adoption in this very noisy payments market.
Similarly LevelUp (from SVNGR) is trying to evolve into a payments provider as well. LevelUp (which used to be a couponing and loyalty program) links a credit card to a QR code that merchants then scan at the point of sale. LevelUp also offers a physical card in addition to apps. PayPal and Boku also offer physical cards -- which strikes me as strange. Why link a plastic card to another card or a checking account when one can use a credit or debit card at all the same merchants already? It's redundant.
There are value-added features for both merchants and consumers in using these systems but those features are probably not enough to justify adoption, especially given that they're being offered by "no name" brands. Here consumer trust is a significant issue and there are only a small number of companies, credit card issuers, handset makers and carriers, that consumers trust (to varying degrees) to handle payments.
Merchants, especially small merchants, are also being bombarded by marketing services and will be reluctant to implement a system that has little or no consumer scale. It's the classic chicken and egg problem: you need merchants to get consumers and vice versa.
A system like Square is simple and elegant and doesn't require any changes in consumer or merchant behavior. It simply removes much of the friction of accepting credit cards for small merchants. However, the many moving parts and seeming complexity of payments systems like those offered by Boku, GoPago and LevelUp means they will probably be slow to gain adoption -- if they succeed at all.
IHS iSuppli released estimates for tablet market share (using shipments as the operative metric). However in the case of Apple and Amazon shipments is the same as sales to consumers.
Apple previously announced that in Q4 it had sold 15.4 million iPads and a total of 55 million to date. But we didn't know the number of Kindle Fire devices that had sold. Some analysts estimated it was between 4 and 4.5 million. Now iSuppli estimates it was 3.9 million.
With strong Kindle Fire sales in Q4, Amazon zoomed past Samsung to become the number two player in the tablet market. Overall in 2011 Samsung "shipped" more tablets; however shipments does not equal sales to end users. Below are iSuppli's global tablet estimates, showing Amazon with 6% of the market at the end of Q4.
I simply don't believe that Samsung has actually "outsold" Amazon. It may have "shipped" more devices but those devices have largely sat on retailer shelves. Furthermore, Samsung's recent announcement of the Galaxy Tab 2 (7"), with Android 4.0, may be another miscalculation. While it appears to be a nice device, a reported $400+ price tag all but guarantees it won't sell. At that price people will opt for iPads.
As I've repeatedly argued in the past no 7" tablet maker can charge more than about $250 now and expect to compete with Kindle Fire. Samsung would likely be taking a loss if it were to do so. Another way to potentially compete and still preserve margins is to get carriers to subsidize tablets. However this strategy has not worked and consumers have largely shunned carrier-subsidized tablets in favor of WiFi-powered devices. (People simply don't want to give any more money to carriers.)
One of the interesting observations that iSuppli makes is that in Q4 people may have been choosing between the iPhone 4S and iPad. In other words, more iPads would have sold if the 4S hadn't just been released. If that's correct some number of people who actually wanted to buy an iPad may have opted instead for the Kindle Fire because of price sensitivity. Indeed, the Kindle Fire is a vastly inferior device but that inferiority is masked to a degree by Amazon's content ecosystem.
In a related piece of news, Nielsen released some survey data on how parents and kids use tablets: games, education, entertainment in that order.
Notwithstanding all the sophisticated technology being used today, most customer service just stinks. Most companies still don't understand the relationship between marketing and customer service.
Historically companies have practiced "call avoidance," trying to save money by discouraging live-agent access and sending people to the Web for "self service." The strategy has been about saving costs rather than delivering good service. Sometimes it works and sometimes a customer can't get satisfaction. But then again, sometimes the live agents are indifferent or incompetent.
Indeed, recent survey data from speech services provider Nuance indicate that a substantial number of people actually would prefer to "self-serve" because of long and frustrating hold times as well as other challenges in dealing with call center agents.
Today AdAge profiles evolving approaches to customer care in the airline industry. The article juxtaposes Southwest's people-centric approach with Delta's technology driven strategy. It also discusses how smartphones and apps can be used to improve customer service and reduce costs at the same time:
Consider the frazzled traveler running through security to catch a flight. At Southwest, gate attendants are instructed to keep an eye out for those red-in-the-face customers. Once spotted, Southwest employees are supposed to approach and reassure them, said Teresa Laraba, senior VP-customer services.
For Delta, however, the goal is to save that same traveler time and provide peace of mind by putting his or her boarding pass, flight status and bag-check information directly on his or her smartphone. PCWorld magazine named it the top tech-friendly airline in the U.S.
This discussion is at the center of a recently published report written by my Opus Research colleague Dan Miller. The document is called "Mobile Customer Care: New Paradigms and Practices" (.pdf summary). It devotes considerable time to how smartphone apps can at once do a better job of enabling self service, saving agent costs and time and improving the overall customer care experience.
Here are the key findings:
Customer care and e-commerce must accommodate mobile - There’s nothing distinctively “mobile” about care but a significant percentage of interactions originate from mobile devices and that provides customers with more options and requires companies to support multiple channels.
Smartphones + the cloud = better user experience – Downloadable smartphone apps offer a demonstration of the power of deep integration between mobile devices and the customer-care infrastructure. Smartphones coupled with cloud-based resources have also put more power into the hands of customers. This is serendipitous and a potential “win-win” for both sides -- if properly executed.
Customers often prefer self-service - Contact centers have long sought to erect barriers to live agent access for reasons of call and cost avoidance. Many consumers, put off by rigid IVR, extended hold times, poorly trained CSRs and repeated transfers have come to prefer self-service in many situations. Moreover, the promotion of speechenabled apps from Apple, Microsoft, Google and Nuance are conditioning the general public to expect to be able to use their voices to get results, not always with the help of live customer service representatives.
Customer control defines emerging best practices - This moment creates an opportunity to combine the cost savings of online self service with selective access to live agents where truly needed to resolve more complex problems or provide a higher level of service. Not just a small-screen substitute for the Web, smartphone apps offer more functionality and a potentially better experience than websites or live agents can independently. As we’ve tried to document in this report, there are a number of emerging “best practices” examples: Groupama, Genesys, Nuance, Fonolo, Lucyphone, HoldFree and others.
Time to “Flip the Model” (from B2C to C2B) - An app on smartphone that is tailored to help a person take control of the conversation is ideal. It provides mobile users with tools to indicate where they are, what they’re looking for and how they want to be reached. Brands and enterprises should enthusiastically embrace smartphones (and tablets) as a primary customer service platform