Two more developments from Mobile World Congress yesterday that are noteworthy: HP's new 7-inch Android tablet and Samsung's Galaxy Note 8.0 tablet, which also makes calls. Yes, it's a giant 8-inch phone.
The new HP Slate-7 Android tablet looks and acts very much like Google's (ASUS-made) Nexus 7. The device itself is unremarkable. What's significant is that HP has created a new low price point for 7-inch Android tablets.
The Kindle Fire and Nexus 7 retail for $199. The new HP tablet will cost $169.
While there have been lower-priced Android tablets in the past they've all come from "no name" device makers and had little success with the North American public. The HP brand and low price of the Slate 7 should make it a big hit and put pressure on both Google and Amazon to further lower prices to match it.
Apple opted-out of price competition for the iPad Mini when it priced the device at $329. That decision, which was heavily criticized, now looks smart as Android OEMs crank out devices whose margins will be essentially non-existent. We'll probably see ZTE and Huawei make even cheaper Android tablets in the near future.
Samsung also released a new tablet yesterday except, as mentioned, that it's also a phone. The Galaxy Note 8.0 joins a growing range of tablets and giant phones being put out by Samsung under the Galaxy brand. Pricing hasn't been released but it probably will not be much higher than the iPad Mini. If that's correct it could potentially successfully compete with the iPad Mini, with the phone part as the differentiator ("best of both").
Many people are mocking the device for being a phone (and thus ridiculous held up to your ear). However there is a segment of the population that wants the combination -- and would probably use a headset to talk on the phone.
Microsoft has talked a great deal about Windows Mobile being the "third ecosystem" in the smartphone universe. Of course BlackBerry would also like that distinction. And while some argue it's too little too late, it's also possible that Mozilla's HTML5-based Firefox OS will have a meaningful seat at the mobile platform table -- at least in selected markets.
Yesterday at Mobile World Congress, the company announced a wide range of mobile operators that had made a "commitment" to Firefox OS. Those carriers include: América Móvil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telefónica, Telenor, TMN and VimpelCom.
Mozilla announced that the first group of FOS handsets will go on sale in Brazil, Colombia, Hungary, Mexico, Montenegro, Poland, Serbia, Spain and Venezuela. Hardware makers Huawei, LG, ZTE and Sony have all embraced the platform -- though Samsung has publicly said it isn't interested.
While it's unlikely to appeal to existing high-end smartphone users, it's quite possible that FOS could displace Android at the smartphone entry level in developing markets. Many carriers and OEMs are hungry for Android alternatives, which partly explains the long list of operators on board.
Related: Twitter said that it will support FOS with an HTML5 app.
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.
Google today introduced some major changes to AdWords to both make it easier to manage campaigns across multiple screens and to enabled more "nuanced" bidding and targeting. There's a very complete discussion at Search Engine Land.
A cynic or skeptic would argue the changes are directed primarily at bringing more advertisers into mobile and bringing mobile revenues up for Google (although advertisers can effectively still opt out of mobile).
One of the major changes is that advertisers can now make mutiple bids ("bid adjustments") for a single ad based on variables such as device, location and time of day. Mobile bids will be set at desktop/PC levels -- mobile CPCs are lower than desktop CPCs -- and advertisers will have to actively reduce them if they want to bid less for mobile clicks.
Some may see this as "strong arm tactics" by Google to raise mobile search revenues. However the company believes it's simply adapting AdWords capabilities for a new multi-screen environment.
Below are some of the main bullets (slightly edited) from the Google Inside AdWords blog explaining the new features:
Bid adjustments: With bid adjustments, you can manage bids for your ads across devices, locations, time of day and more — all from a single campaign.
Example: A breakfast cafe wants to reach people nearby searching for "coffee" or "breakfast" on a smartphone. Using bid adjustments, with three simple entries, they can bid 25% higher for people searching a half-mile away, 20% lower for searches after 11am, and 50% higher for searches on smartphones. These bid adjustments can apply to all ads and all keywords in one single campaign.
Dynamic creative: People on the go or near your store may be looking for different things than someone sitting at their desk. With enhanced campaigns, you’ll show ads across devices with the right ad text, sitelink, app or extension, without having to edit each campaign for every possible combination of devices, location and time of day.
Example: A national retailer with both physical locations and a website can show ads with click-to-call and location extensions for people searching on their smartphones, while showing an ad for their e-commerce website to people searching on a PC — all within a single campaign.
New conversion metrics: Potential customers may see your ad and download your app, or they may call you. It’s been hard for marketers to easily measure and compare these interactions. To help you measure the full value of your campaigns, enhanced campaigns enables you to easily count calls and app downloads as conversions in your AdWords reports.
Example: You can count phone calls of 60 seconds or longer that result from a click-to-call ad as a conversion in your AdWords reports, and compare them to other conversions like leads, sales and downloads.
All of these enhancements are designed to make search advertising both easier and more effective for marketers in a larger, more fragmented device universe. By the same token Google is trying to generate more money from its mobile advertisers and clicks, something it has struggled somewhat to do.
In its last quarterly earnings Google reported that average CPCs decreased 6 percent vs. Q4 2011 (attributable almost exclusively to mobile).
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.
Facebook delivered the goods this afternoon. The company beat analysts' estimates and reported quarterly revenues of $1.56 billion and $5.09 billion for the year. Advertising revenue for the year was roughly $4.3 billion.
Despite the beat, Facebook shares were down after hours.
Advertising revenue for Q4 was $1.33 billion, or 84 percent of total revenue. Impressively mobile advertising represented 23% of total ad revenue, which is up from 14% the previous quarter.Even more significantly Facebook said that mobile daily active users exceeded web daily users in Q4 for the first time. CEO Mark Zuckerberg characterized Facebook as "a mobile company" accordingly.
There were 680 million mobile monthly active users in Q4 (compared with just over 1 billion in total). Of those 157 million were mobile only users.
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.
I keep reading very aggressive projections about local-mobile advertising from BIA and others. Rather than grounded in reality today, these forecasts are built on a set of "optimistic" but simple assumptions about how the market will inevitably develop. For example, one assumption is that national ad dollars from brands and retailers that sell locally will pour into mobile and that their mobile ads will necessarily be geotargeted or localized.
While all forecasts must make assumptions about the future, my belief is that many of the assumptions being made about mobile are crude at best or simply incorrect. I'm a big proponent of location-based marketing and have written extensively about how geotargeted ads and ads with localized creative outperform conventional or "generic" national advertising. There's no question about consumer demand for local information. The question is whether and how advertisers can match or exploit that demand.
There remains a great deal of friction and many challenges to overcome before these big local-mobile forecasts can come true. There are also several "unexpected" things that may change the direction of the marketplace. I go into a few of those things below. In truth the majority of the localized mobile advertising today is happening in search. The platform is mature, the demand and the tools are there. The value is obvious to all involved. That's why Google is making the most money in mobile advertising today. (Facebook is also going to make a lot of money in mobile, some of which will be localized.) By contrast, local-mobile display is in its infancy.
There are two mobile ad networks generating and syndicating a large percentage of the local display inventory that you're likely to encounter: xAd and YP. CityGrid is out there and so are Verve, LSN, Telenav/ThinkNear and a couple of others. Marchex is there too with pay-per-call; however much of that is driving mobile callers to national call centers. Among the major ad networks Millennial, JumpTap and AdMob (Google) all offer local targeting. Often that targeting doesn't extend beyond state or DMA-level precision.
The emerging exchanges and RTB platforms all offer location as part of a laundry list of targeting capabilities. Indeed, location is likely to simply become one of many targeting variables on most networks and exchanges.
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)
Russian-based search engine Yandex this morning released a new mobile app called "Wonder." It's currently only available for the US market and right now only on iOS. It uses speech recognition from Nuance and social data from Facebook, Instagram, Foursquare and Twitter to provide search results refracted through social networks.
The kinds of queries Wonder envisions are those such as "tech news stories liked by my friends" or "restaurants near me visited by my friends." The app can only be used in landscape mode. It offers a visually polished UI but generally poor search and user experience (it would be better on the iPad). Unless there are some dramatic changes it won't be widely adopted by consumers.
Indeed, Wonder is no substitute for Google or Yelp or Facebook's new local and general search capabilities. What's interesting and significant is that it does illustrate broader adoption of social data as a filter and mechanism to personalize search results. The app is also consistent with the embrace of voice as a primary UI and capability.
Wonder offers a hint of a personality there but it's not a full blown "assistant" like Siri or Speaktoit. However Amazon's acquisition of text-to-speech specialist Ivona is a move to bring a Siri-like assistant feature to Amazon's Kindle tablet devices. (Amazon previously purchased speech provider Yap.)
Amazon already had text-to-speech for Kindle but Ivona offers a smoother, human-sounding voice capability that can be deployed for a range of purposes and use cases. And like Wonder it reflects the degree to which speech has become a critical "must-have" function on mobile devices.
By itself, however, speech is not enough. Increasingly there must also be a "personality" (assistant) to go along with the raw speech-processing capability. This is the impact of Siri on the broader marketplace.
My colleague Dan Miller brings a different perspective to the Ivona acquisition. He sees it in the larger context of speech-industry consolidation.
Update: TechCrunch says that Facebook has blocked Wonder's access to its user data while the companies negotiate about access.