All News

Nielsen: Smartphones Now 64% in US Market

The first wave of iPhone 5S reviews have come out and they're essentially raves, exemplified by Walt Mossberg's superlative laden missive: “[T]he new iPhone 5s is a delight. Its hardware and software make it the best smartphone on the market.”

While there is some question about the early success of iPhone 5C pre-orders, the 5S is almost a sure sellout when it's released this weekend. According to a survey by Opus Research, the 5S is the most desired "next smartphone" available in the US market, while the 5C is in fourth place (after Galaxy and other Android devices). 

However according to new data from Nielsen, 61% of recent smartphone buyers chose Android devices vs. 34% who bought iPhones. We'll see how those numbers are impacted, if at all, by the launch of the 5S.

Overall Nielsen says that in the US 64% of mobile subscribers are now owners of smartphones. Those in the 25 - 34 age group have the highest smartphone penetration at 81%, with teens 13 -17 closing in at 70%. Feature phones are now concentrated among those over 55 years of age. 

Below is the current smartphone OS market-share distribution according to Nielsen:  


Google Wallet Moves Beyond NFC in Bid for More Consumer Adoption

As I wrote last week the advent of iBeacon and bluetooth low energy may effectively mean that NFC as an in-store mobile payments standard in the US market is dead. Google Wallet had placed a big bet on NFC payments but has been thwarted in its bid for adoption by two principal factors:

  1. The public doesn't understand or care about NFC and the NFC infrastructure is still piecemeal
  2. The major carriers other than Sprint blocked Google Wallet because they have a competing NFC intiative (this anti-competitive behavior was never investigated by the FTC)

Google Wallet 1.0 thus was a failure. Google is now out with a new Android version (and soon iOS) is making a renewed bid for consumer adoption with a range of new features and a partial move away from NFC. In-store payments still depend on NFC and so won't be happening at scale any time soon for the same reasons cited above.

However the new features add utility and breadth to the user experience. Here's what's new:  

  • Google has added the ability to send money via email from Wallet (following the ability to use Gmail to send money with Google Wallet). This is a great feature. 
  • The ability to enter/scan loyalty cards into Google Wallet. ("Google Now will notify you when you have a saved loyalty program nearby.")
  • Save and later redeem Google Offers via Wallet (showing the phone at checkout to redeem).

Exactly a year ago we surveyed 1,501 US adults and found the vast majority were not interested in the idea of mobile wallets: 71% said "I'm not at all interested . . . in using [my] mobile phone to pay for things and replace cash or credit cards." Another 15% said they had only "limited interest." Only 14% had some interest or significant interest. 

In specific contexts, where consumers see the tangible benefits of mobile wallets, these numbers change. But in the abstract the public remains largely uninterested in mobile wallets.  

Charting the Rise of the 'Mobile-First' Audience

This morning the Pew Research Center released new survey data about mobile internet access. According to the findings, 93% of smartphone owners (and 63% of all mobile phone owners) go online with their handsets. Tablet usage was not part of this survey.

The most interesting finding, however, was that 34% of all those who go online with their phones do "most" of their internet browsing via mobile:

One third (34%) of cell internet users say that they mostly use their cell phone rather than some other device such as a desktop or laptop computer . . . Half (53%) of cell internet users say that they mostly go online from a device other than their cell phone, while 11% say that they use both their phone and some other device(s) equally.

Pew told me in email this number was basically the same percentage for smartphone and non-smartphone users.

Those who are "mostly mobile" include "young adults, non-whites, the less educated, and the less affluent." This is highly analogous to those who have a mobile phone but not a landine (or who essentially don't use a landline).  

Nielsen's recent Mobile Path to Purchase study (sponsored by xAd, Telmetrics) found that in certain categories the "mostly mobile" or "mobile only" internet population was nearly 50 percent (or above 50% in the case of online banking). Indeed, in specific segments or verticals (e.g., Local) the numbers may exceed 50%. For example:

  • 59% of searches on Yelp are from mobile devices
  • 50% of search on YP’s network is from mobile devices
  • As of Q4 2012 Google Maps had more mobile than PC users
  • Nearly 50% of Groupon transactions in June (for North America) came from mobile 
  • More than 50% of search traffic on Zillow is from mobile devices

What we're witnessing is the rise of an audience that may not use the PC at all in certain cases or use it purely as a secondary matter. As a counterpoint, see the recent comScore-Jumptap data that show people prefer larger screens in many instances.

Once more sites and internet experiences are better optimized for mobile devices, however, we may see an accelaration of this mobile-first/mobile-only trend. 

McDonald's Could Accelerate Mobile Payments Adoption

Last week news broke than McDonald's is considering rolling out mobile payments. Currently the McDonald's app is primarily a store locator. The app also offers nutrition information.

According to a Bloomberg report, the company has been testing mobile payments in Salt Lake City, Utah and in Austin, Texas. McDonald's has roughly 14,000 US stores and 35,000 globally. 

Mobile payments would allow McDonald's patrons to pre-order meals online and then pick them up at the drive-thru window. Other fast-food chains have tested, are testing or now using mobile ordering/payments. The McDonald's app will also feature deals and rewards according to Bloomberg.

A mobile ordering/payments capability may also help McDonald's attract younger users and Millennials, who are less inclined than others to visit the QSR chain. According to an AdAge write-up of an NPD Group survey

Millennials are indeed going to burger chains, but they are going less often. The hamburger category, which includes McDonald's, Wendy's and Burger King, still receives 29% of all millennials' quick-service visits, according to NPD, more than any other restaurant category. Fast casual, which includes chains like Chipotle, gets 6% of millennial quick-service traffic.

But hamburger chains have seen a 16% decline in traffic from Millennials since 2007, NPD said. In the year ended November 2012, Millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007. There was a 12% decline in quick-service restaurant visits by Millennials in the same time period.

Ultimately all QSR chains will offer mobile ordering/payments. And that will help acclimate a generation to using their smartphones as wallets to pay for things. 

Once people are familiar and comfortable with mobile payments in a specific context (e.g., ordering food) they will be more inclined to embrace them in other scenarios.

Time Spent Online: Mobile 51%, PC 49%

Jumptap (now part of Millennial Media) and comScore released a report last week on cross-platform device usage. The report contains considerable data about smartphone and tablet penetration, day parting and device usage by content category and demographic group.

Much of the data is from comScore and has already been released in other contexts. However there were a number of interesting data points in the report worth revisiting, including the fact that combined smartphone and tablet time online now exceeds time online with PCs.

As a general matter smartphones and tablets have increased overall time spent online rather than simply cannibalizing PC time, though there has been some of that (e.g., maps, local). 

Another interesting set of data in the document explore device share of online minutes by content category or vertical. The PC is dominant (more than 50% of time spent) in a little more than half the categories examined.

PC usage is highest in the automotive segment and lowest in "radio" (think Pandora). Retail sees slightly more mobile than PC time. 

The numbers above are aggregate data. Demographic segments are going to display different device behaviors. For example, those in the US under 30 are likely to be more involved and spend more time with smartphones than those over 50. That pattern has been repeatedly shown in our surveys and other third party data, including this report.

Below are the demographic groups profiled in the report:

Age 18 - 24: 

  • 69% own a Smartphone
  • 65% of digital users are cross-platform
  • 59% of time with digital is mobile

Women 25 - 49:

  • 69% are cross-platform
  • 67% own a Smartphone
  • 14% Mobile only (vs. 17% PC only)
  • Spend 63 hours monthly on Smartphone
  • 75% of time on social media is on Mobile

Men 25 - 49:

  • 74% of digital users are cross-platform
  • 62% own a Smartphone
  • 45% of time with digital is Mobile

Age 50+:

  • 39% own a Smartphone
  • 51% are cross-platform
  • Represent 31% of Tablet owners (only 25% of Smartphone owners)

There's quite a bit more data in the report, which can be downloaded for free.

As a broad takeaway marketers can now assume almost everyone above a certain income threshold is "cross platform." The minority are "smartphone only" or "PC only" (select younger and older users respectively).

Marketers can also reliably make the assumption that those under 45 are going to favor smartphones vs. PCs as primary devices in a wide range of categories. However people are also rational and prefer larger screens in many contexts (at least until mobile user experiences are improved).

By comparison tablet behaviors are still being established. However the tablet is typically used as a PC substitute (provided a larger screen) in the home.

Microsoft Bought Nokia to Block Android Lumia Phones

Nokia's Lumia handsets represent about 80% of Windows Phone's sales. However Nokia was continuing to lose share to Android and iPhone in key markets across the globe. By the same token Windows Phones had failed to enable Nokia to re-enter the US smartphone market in any convincing way. 

Since the inception of the Microsoft-Nokia deal in early 2011, we had been arguing it was a serious mistake for Nokia to not offer an Android phone. However the terms of the agreement between the companies precluded that. In 2014 the deal was set to expire. But before that deal was renegotiated, Microsoft acquired Nokia's phone hardware business for roughly $7.2 billion.  

In the middle of last year we speculated that Microsoft might be compelled to acquire Nokia for defensive reasons. When the acquisition was announced a little over a week ago, I argued had Nokia embraced Android it would not have been so weakened and forced to sell itself. I also speculated this summer that Nokia would be compelled to come out with Android handsets if it wanted to survive:

My view is that Nokia will be compelled -- notwithstanding contractual exclusivity with Microsoft -- to adopt Android at some point in the not-too-distant future or remain stuck in what amounts to neutral.

Now the NY Times is reporting that Android Lumia phones were in development: 

A team within Nokia had Android up and running on the company’s Lumia handsets well before Microsoft and Nokia began negotiating Microsoft’s $7.2 billion acquisition of Nokia’s mobile phone and services business, according to two people briefed on the effort who declined to be identified because the project was confidential. Microsoft executives were aware of the existence of the project, these people said.

There are two overlapping potential scenarios: Nokia was developing Android handsets in part to add leverage in negotiations with Microsoft (for renewal or acquisition); and/or Nokia was developing Android handsets in earnest and would have rolled them out -- forcing Microsoft to avoid that outcome through an acquisition.

Regardless it appears that the idea of Nokia marketing both Android and Windows Phones was a potential disaster that Microsoft sought to avoid at great cost -- literally. As I've written elsehwere, however, it remains unclear that Microsoft's $7.2 billion have been well spent.

Microsoft Readies Its Answer to Siri: 'Cortana'

Microsoft is reportedly readying its answer to Siri and Google Now: Cortana. Named after a central character in the game Halo, Cortana aims to go beyond both Siri and Google Now by being a more comprehensive way to interact with Microsoft devices.

According to Microsoft watcher Mary Jo Foley:

Cortana, Microsoft's assistant technology, likewise will be able to learn and adapt, relying on machine-learning technology and the "Satori" knowledge repository powering Bing.

Cortana will be more than just an app that lets users interact with their phones more naturally using voice commands. Cortana is core to the makeover of the entire "shell" -- the core services and experience -- of the future versions of Windows Phone, Windows and the Xbox One operating systems, from what I've heard from my contacts.

A comprehensive personal assistant powered by AI across all Microsoft systems and devices is a very ambitious plan. It remains to be seen whether Microsoft can do it. 

Yet in order to not be perceived as more than a me-too product Microsoft will have to roll out something truly impressive and more utilitarian than Siri or Google's mix of voice-enabled search and personalized data features.  

Update: TheVerge offers a series of relatively bland Cortana screenshots.  

Apple Shunned NFC, Has Anointed BLE for Indoor Location

I wrote several days ago on my Screenwerk blog about PayPal's new Beacon payments and indoor location initiative. I explained that Apple's decision not to include an NFC chip in the new iPhone means essentially that NFC is marginalized if not dead in the US market. In its place Bluetooth Low Energy (BLE) may become the mainstream alternative to what NFC would have enabled (e.g., mobile payments).

PayPal Beacon relies on BLE. At those businesses where a Beacon device is plugged in PayPal users simply check-in. Beacon identifies them and payment is automatically transferred from the default account. Payment happens “hands free” without a tap, swipe or other app interaction. 

Beacon is also PayPal’s entry into indoor location. PayPal will obviously know you’re in a venue and then can do any number of things, including delivering highly specific, indoor marketing messages or ads. PayPal is also making Beacon available to third party developers, who will be able to do similar things accordingly.

Apple's iOS 7, which will be available on September 18 (to older iPhones as well), will permit all eqipped devices to interact with BLE iBeacons in malls, airports, stores and other venues. 

Apple acquired indoor mapping company WiFiSlam earlier this year. That was the "wake up call" for many people to take indoor location seriously. One of the first and obvious applications of iBeacon is indoor mapping. But it doesn't stop there. 

Just as with PayPal's BLE initiative, iBeacon will enable Apple to move into payments and indoor marketing and allow third party developers to leverage those capabilities. With its more than 600 million credit cards on file I've got to believe that Apple will enter mobile payments eventually and BLE will be the way in all likelihood.

More broadly I suspect that iBeacon will popularize and jumpstart indoor location for a host of third party developers. 

For a comprehensive introduction to the indoor location and marketing opportunity, and its broader implications, come to Place 2013.

iPhone 'Touch ID' Is the New Siri

The Apple iPhone event just concluded. Everything that was announced at the event had been leaked or written about beforehand, including:

  • The cheaper iPhone 5C in 5 colors
  • The gold iPhone 5S
  • The faster 5S processor
  • iTunes Radio
  • The biometric fingerprint sensor that unlocks the phone ("Touch ID")

However that last item, the "Touch ID" fingerprint sensor, was the stand-out announcement in my view. It will enable users to both unlock their phones and confirm iTunes purchases instead of entering a password: 

Put your finger on the Home button, and just like that your iPhone unlocks. Your fingerprint can also approve purchases from iTunes or the App Store.

What I mean by the headline is that Touch ID is to the 5S what Siri was to the 4S: a kind of "wow" feature that helps it stand out from other smartphones. It partly compensates for the fact that Apple didn't introduce a larger screen, which everyone now wants. That's coming with the iPhone 6. 

Twitter Buys Mobile Exchange MoPub for Ad Tech, Network

MoPub presents itself as the "world's largest RTB exchange for mobile apps." Arguably, MoPub emerged over the past couple years as the leading mobile-publisher/developer exchange.

In May the site announced it had reached a $100 million "run rate." That of course is tiny compared to the major mobile networks and publishers such as Google and Facebook.

Today one of the other major mobile ad platforms, Twitter, announced that it had acquired MoPub. TechCrunch estimated that the purchase price was $350 million. MoPub said nothing would change for the publishers in its network: 

It’s important to underscore that our commitment to you, the publisher, will not change. In fact, it will be strengthened. Twitter will invest in our core business and we will continue to build the tools and technology you need to better run your mobile advertising business.

In addition to investing in new capabilities for our publisher platform, we believe there are opportunities to bring better native advertising to the mobile ecosystem. With the support of the team and resources of Twitter, we’ll be able to move even more quickly towards the realization of our original vision.

MoPub CEO Jim Payne likened Twitter's acquisition of MoPub to Google's acquisition of DoubleClick. He argued that Twitter's resources would enable MoPub's to get even stronger and serve its publishers better. Indeed Twitter's brand strength and clout may attract more mobile advertisers to the platform.

For its part Twitter was pretty transparent about what it was after in buying MoPub: 

The MoPub team has built a leading mobile ad exchange, and their focus on providing transparency to advertisers and publishers aligns with our values. We’ll continue to invest in and improve their core business. In particular, we think there is a key opportunity to extend many types of native advertising across the mobile ecosystem through the MoPub exchange.

We also plan to use MoPub’s technology to build real-time bidding into the Twitter ads platform so our advertisers can more easily automate and scale their buys. We’ll maintain the same high quality standards that define our platform today. Our approach is to show an ad when we think it will be useful or interesting to a user, and that isn’t changing.

This acquisition gives Twitter a significant new mobile asset and ad network. This follows Millennial's acquisition of Jumptap for technology and more scale. It may also indicate that a new wave of mobile network consolidation has begun. 

Splashy New Apps from Yahoo, Opera Make a Play for iPad Usage

Both Opera and Yahoo introduced splashy new apps for the iPad today. Opera introduced a new browser called Coast. On first glance, the browser has some nice features. In particular users can pin icons to the home screen, much like they can on the iPhone and close pages by swiping them away (like the old PalmOS and Android today). Most of the nagivation is based on swiping or the touch of a single button. 

Opera calls Coast a totally new tablet experience: 

The result is a completely designed-for-iPad browser, subtly elegant, made to fit tablet users in every respect. Crafting Coast meant redesigning the complete experience. We focused on how iPad users actually interact with their tablets. Coast is the perfect companion for your iPad, allowing a more relaxing and lean-back browsing experience when you are on the go or just hanging out on the couch.

The iPad is nearly buttonless; why shouldn’t the apps for it be? Elements such as back and forward buttons are gone from Coast. All navigation is done by swiping the way you naturally would on an iPad – just like in a good iPad app. A single button takes you to the home screen, and another shows the sites you have recently visited – that’s about it for buttons in Coast.

When using touch-based navigation, small buttons that work on a regular computer don’t work well on a tablet. It’s not about just enlarging already existing elements; it’s about making the design interesting and uncluttered . . .

Designing for iPad means rethinking everything. Tablets have a lot of screen real estate, and we thought it was about time to put it to good use. Coast does way more than merely migrating the lessons learned from desktop computers to a tablet.

Yahoo has a new tablet-centric video app (though it also works on the iPhone). Called "Yahoo Screen," the app features video from multiple sources, including Comedy Central and SNL, among numerous others. It's not YouTube but an attempt to created a video destination, with lots of clips that can support video pre-roll ads. There's quite a diverse array of content from food and instructional video to sports and movie clips. 

Yahoo has done a nice job with the user experience. Content is the key to success however. The company will continue to need to feed content to the app if it wants to build and sustain an audience. The company had sought to buy Hulu at one point. And now it's moving ahead with its own video product and increasingly original web-only programming. 

While Opera's iPad app is part of a bid to remain relevant in a mobile-centric world -- its mobile browser has largely been sidelined by Android and the iPhone -- Yahoo is hoping to create a way to generate more mobile revenue from lucrative video ads.

Aisle411 $6.3M Round Shows Growing Investor Focus on Indoor Opportunity

A few years ago companies like aisle411 or PointInside were mobile apps in search of an audience and a business model. In the past couple of years, however, everything has changed.

The proliferation of public WiFi, the adoption of smartphones (now 62% in the US) and the recognition among hospitals, malls, airports, stadiums, grocery and retail stores that indoor location could bring better customer experiences (and compelling data) has radically altered the landscape. The principal business model also went from being an ad/coupon-supported one to a technology licensing model, with indoor analytics leading the way.

Today aisle411 announced a $6.3 million Series A round (Cultivation Capital, Google’s Don Dodge, St. Louis Arch Angels, the Billiken Angels, and the Springfield Angel Network). The total the company has raised since being founded in 2008 is roughly $10 million. 

Most major US retailers (e.g., HomeDepot, Macy's, Wal-Mart, Target, Nordstrom, etc.) and malls across the US are now adopting indoor location, to reap the "big data" and offer more personalized, locally relevant and engaing customer experiences. We're only just at the beginning of a huge wave of indoor innovation.

One of the featured sessions at the Place Conference will showcase aisle411. I'll also be "in conversation" with Google's Don Dodge on why he believes indoor location and marketing will be bigger than outdoor maps and GPS. 

The conference will also present other in-venue and retail case studies from PointInside, ByteLight and Meridian (Aruba). If you haven't yet registered for the October 8, 2013 event do so today

Samsung Smartwatch ($299) Appears Right on Time

As expected today at the IFA conference in Berlin, Samsung announced its anticipated Galaxy Gear smartwatch. The device, which can make calls when connected to a phone via bluetooth, is currently only compatible with the new Galaxy Note 3 and Galaxy 10.1. Both were introduced today and both run Android 4.3, which is required.

More Galaxy phones will be updated to 4.3 in the near future, thus making them compatible with the Gear watch. Below are some of the relevant details and specs for the device:

  • Availability: September 25 outside US; October for US market
  • Price: $299 
  • Battery life: day of "regular use"  
  • Voice control: Gear runs S Voice, powered by Nuance
  • Screen: 1.63-inch Super AMOLED
  • Camera: 1.9-megapixel (can also take video) 
  • Apps: 70 partner apps to start with more promised
  • Processor: 800MHZ
  • Storage/RAM: 4GB of storage; 512MB of RAM

The $299 price tag may be costly to some consumers, especially given the fact that you've got to have a Samsung smartphone to fully utilize it.

My first (entirely vicarious) impression of the watch, which comes in multiple colors, is that the UI and overall design are not as elegant as they might be. That's especially true of the UI. The camera is awkwardly positioned on the band as well. 

It will be interesting to see how all this lines up with Apple's iWatch (especially pricing), which is expected to be announced on September 10. Google is also working on a smartwatch reportedly.

Making the iPhone 5C Good but Not Too Good

Apple's iPhone launch event is confirmed for September 10. It will take place at Apple's HQ in Cupertino, California. The company is expected to announce multiple devices at the event, including a new iPhone 5S, potentially an iPhone 5C and possibly an iWatch wearable device. There may also be new iPads.

The iPhone 5C is real and may come in a variety of colors (5 is the rumor) -- hence the colorful bubbles in the invitation. The forthcoming 5S is supposed to come in a champagne or gold in addition to traditional black and white. Pricing of these devices is uncertain, though the 5S will likely follow past pricing ($199 with 2-year contract, etc.). 

Some reports have suggested the 5C will cost between $400 and $500 unlocked. Carrier subsidy pricing is TBD. The real question surrounding the 5C is how appealing will it be? How "good" wil it be?

Apple is walking a tightrope.

The 5C is intended to make Apple more competitive in developing markets and at the "lower end" of the market where there's more price sensitivity. If the phone is "good enough" and cheap enough -- does the "C" stand for "cheap" or "China" or "color"? -- it could potentially cannibalize sales of the 5S. But if the phone is not of sufficiently high quality it will fail and Apple's brand will suffer.

I suspect that Apple will include a previous-generation chip in the 5C (perhaps the current 5 chip), whereas the 5S will get a new more powerful processor. There may also be memory limitations with the 5C. However the apps and app ecosystem should be the same.

The primary differentiators will thus likely be price, color, materials (plastic) and processing power/speed. But how does Apple build an attractive product that is competitive but doesn't overshadow its more profitable flagship product? That's the dilemma. 

As BlackBerry Falls, Windows Phones Make Gains in Europe

Kantar Worldpanel ComTech reports that Windows Phone has made gains across major EU markets and now stands as the solid #3 platform behind Android and Apple. Windows Phone success in Europe is largely due to its association with Nokia, which remains a strong brand in Europe. 

Germany, UK, France and Italy are Windows Phones' strongest markets. Gains in those countries helped elevate the Microsoft OS's share of the smartphone market in the "EU5" to 8.2%, up from 4.9% a year ago. That's an impressive gain. Mexico and Australia are also big markets for Windows Phones, according to Kantar. 

Here are a comparison of the Kantar smartphone market-share data for the US, China and EU5 markets:

As indicated above, Kantar says that Windows Phone has a 3.5% share in the US. However, comScore shows a smaller gain and share (as of June 2013):

smartphone market share june by OS

The Kantar data show a significant loss of share in the US for Android -- nearly 8%. Given this I'm skeptical that the data are truly reflective of the broader US market. However Kantar boasts that its panel is the largest and its data are the most accurate in the industry. 

In Europe, BlackBerry and Symbian have lost a combined 7.4%. That's more than the gains enjoyed by Windows Phones. Accordingly the question arises: to what extent are those defecting BlackBerry, Symbian and "other" adopting Windows Phones? The Kantar data strongly imply that's where Windows Phones' EU gains are coming from. 

26 Reasons to Attend Place 2013: The Indoor Marketing Summit

On October 8 in San Francisco, Opus Research will host Place 2013: The Indoor Marketing Summit. The first event of its kind devoted to the implications of indoor location, it's shaping up to be one of the most interesting events of the year.

The Place Conference will feature Keynotes from Google and Dick's Sporting Goods (+ aisle411), as well as multiple indoor location case studies and demos (existing deployments). Panels will take on consumer privacy, in-store analytics, the implications of indoor location for ROI measurement, online-to-offline ad tracking, in-store marketing to consumers and a range of other topics of interest to all digital marketers, agencies and merchants.

If you haven't already registered, do so today. The early bird rate is gone but if you attend our upcoming webinar, Beyond CTR: Tracking Mobile Ad Impact on Store Visits, you can get access to a new discount code that will save you money off the full rate. 

If you're not already convinced, here are 26 additional reasons to attend the event:

  1. Alexei Agratchev, Co-Founder, RetailNext
  2. Laura Berger, Senior Attorney, Division of Privacy and Identity Protection, Federal Trade Commission
  3. Cormac Conroy, VP, Mobile, Location and Computing, Qualcomm Atheros
  4. Don Dodge, Developer Advocate, Google
  5. Jeremy Geiger, CEO, Retailigence
  6. Jeff Hardison, Vice President, Meridian (Aruba Networks)
  7. Monica Ho, Vice President of Marketing, xAd
  8. Michael Healander, General Manager, GISi Indoors
  9. Waleed Kadous, Android location team lead, Google
  10. Asif Khan, Founder, Location Based Marketing Association
  11. Joseph Leigh, Head of Venue Maps, Nokia
  12. Duncan McCall, Co-Founder & CEO, PlaceIQ
  13. Dan Miller, Senior Analyst, Opus Research
  14. Patrick Moorhead, Vice President - Mobile, Catalina Marketing
  15. Neg Norton, President, Local Search Association
  16. Sarah Peterson, Product Manager, Google Maps
  17. Nathan Pettyjohn, Founder & CEO, aisle411
  18. Jules Polonetsky, Executive Director & Co-chairman, Future of Privacy Forum
  19. Jon Rosen, Executive Vice President, iInside (Wireless Werx)
  20. Todd Sherman, Chief Marketing Officer, Point Inside
  21. David Shim, Founder & CEO, Placed
  22. Ben T. Smith, IV, Chief Executive Officer, Wanderful Media
  23. Will Smith, CEO, Euclid Analytics
  24. Greg Sterling, Senior Analyst & Program Director, Internet2Go
  25. Melissa Tait, VP of Technology, Primacy
  26. Derek Top, Research Director, Opus Research

Forecast: Google Mobile Revenue to Exceed $11 Billion in 2013

Last year Google brought in ad revenues of $43.7 billion. This year, thus far, the company has made roughly $24 billion. For the full year 2013 Google is likely to earn $50 billion in advertising revenue. That may be a low projection, however.

EMarketer today released some estimates on the breakdown of PC vs. mobile and search vs. display revenues for Google. According to the estimates, search will generate 82% of Google's overall revenue this year with just under 20% of search revenue coming from mobile.

By comparison 2% of display ad revenue will come from mobile. 

Over time the data aggregator sees more than 40% of Google's total ad revenues coming from mobile (search + display). 

Let's look at what these breakdowns (if accurate) would mean in real terms, assuming $50 billion in total projected ad revenue for 2013:

  • Search: $41 billion
  • Display: $9 billion

The other way to view those revenues is the following:

  • PC:  $38.5 billion
  • Mobile: $11.5 billion

If the standard US (45%) vs. international (55%) ad revenue distribution holds for mobile then the following will be the rough figures for Google mobile ad revenue by geography (approximately): 

  • US: $5.1 billion
  • International:  $6.3 billion 

Despite the above, Google's US mobile ad revenue is likely to be somewhat stronger than its mobile revenues from outside the US. Accordingly I would probably flip those percentage figures when it came to mobile. 

Last year the IAB reported that mobile ad revenue in the US was $3.4 billion. This year it's likely to hit $7 billion according to our estimates. If that's correct then the Google figure above is too aggressive.

Facebook on Track for $3 Billion in Mobile Revenue This Year

In roughly two years, Facebook has rapidly become the second most successful ad "network" (after Google) both in terms of overall revenue and mobile advertising specifically. According to its most recent quarterly data 41% of Facebook ad revenues were attributable to mobile ($656 million). It's not unreasonable to assume that by the end of Q4 nearly half of Facebook's ad revenue will come from mobile. 

Facebook's overall ad revenue in 2013 is likely to be somewhere between $6.2 and $6.5 billion (not all Facebook's revenue is from advertising). Assuming 48% of Facebook's ad revenues are from mobile that would mean between $2.9 and $3.1 billion in mobile revenue for 2013. 

Data aggregator eMarketer projects that Facebook overall ad revenue will come in at $6.36 billion this year. By contrast, Google will control more than 50% of global ad revenue in 2013 ($39 billion). Google will capture 53% of total mobile ad revenue, whereas Facebook will grab roughly 16% of the global mobile market according to eMarketer's projection. 

What's striking is how a handful of companies (publishers) are dominating mobile advertising, while dozens of others capture relatively small shares of the mobile market (which still may be over $100 million annually). 

Emarketer also projects that by 2017 mobile will be nearly half of all US display ad revenue.

By the end of the year total US mobile ad revenue (search + display) could reach $7 billion according to our estimates. The mobile display revenue figure in the chart above ($3.81 billion) is thus probably a bit aggressive. Search continues to dominate mobile advertising (55% to 60%) and nearly all of that revenue belongs to Google. 

Google's enhanced campaigns is a wild card that could boost mobile search revenue -- it's mandatory -- and raise overall US mobile ad revenues to over $7 bilion.

Data Smackdown: Two Views of M-Commerce (Smartphones vs. Tablets)

E-commerce hosting and services provider MarketLive released a mid-year benchmarketing report yesterday, covering digital marketing and commerce trends through the lens of its many clients. There are many interesting findings. I'll focus however on the mobile aspects of the report, which appear to directly contradict a comScore m-commerce report released today.

The comScore data argue that there are many more e-commerce transactions happening on smartphones vs. tablets. This was something of a surprise to me. Accordingly, comScore puts the total value of US mobile-drive e-commerce at $10.6 billion for 1H 2013; 6% is from smartphones and 3.5% is from tablets.

mobile commerce

These numbers contradict everything I've seen about conversions and commerce on smartphones and tablets. One potential explanation may be that there are nearly 2X the number of smartphones as tablets in the US market.

However the MarketLive data, as mentioned, show something much more consistent with earlier findings I've seen from many sources: tablet e-commerce conversions are higher and tablets are driving a greater percentage of overall revenue than smartphones. 

According to the very busy MarkeLive slide below, smartphones drive more overall traffic but tablets generate considerably more revenue. MarketLive says that roughly 12% of e-commerce revenue for its clients are coming from tablets, whereas only 2.7% is coming from smartphones. However 19% of traffic comes from smartphones vs. 13% of visits from tablets. 

Tablet conversions are 3X conversions on smartphones. 

I cannot reconcile the comScore data with the MarketLive data. The weight of evidence is on the side of MarketLive however. 

Kindle Tablets Lose Half Their Traffic from 12 Months Ago

Given that Jumptap has now sold itself to Millennial Media it's not clear whether we'll get many more of the company's monthly Mobile STAT reports. The August report focuses on device market share by traffic on the Jumptap network. 

It's interesting to contrast the Jumptap traffic figures with survey based market-share data from comScore. First the Jumptap numbers: 

Jumptap sees Apple devices (iPhone + iPod Touch) generating 56.8% of smartphone traffic on its network. Collectively Android devices are responsible for roughly 35% of traffic according to the slide above.

By comparison comScore (based on consumer survey data) says that Android has a US smartphone market share of 52% vs 40% for Apple -- almost the reverse of the Jumptap numbers. Millennial ad network data are more consistent with the comScore figures below.

smartphone market share june by OS

The tablet traffic data provided by Jumptap show the iPad remains well ahead of other competing devices, though the Galaxy Tab and Nexus 7 have grown since last year. The "headline" from the chart below is the dramatic decline in Amazon Kindle traffic in the past 12 months.

Compare tablet traffic data from Chitika, another mobile ad network. It shows an even greater margin (June 2013) between the iPad and its rivals.

June iPad traffic

Finally Jumptap reflects the relative traffic split between the mobile web and apps. The Jumptap data show that ad requests from apps now generate 84% of the traffic it sees vs. 16% from the mobile web. This is consistent with data from both Nielsen and comScore that show a roughly 80-20 split between apps and mobile web traffic in favor of apps. 

However 2012 survey data from Nielsen, xAd, Telmetrics reflect differing levels of app usage by category. And in retail the mobile web is used more than apps as a general matter. So despite app dominance in the aggregate, in particular verticals the story may be quite different and much more nuanced. 

Source: xAd-Telmetrics “mobile path to purchase” study conducted by Nielsen (Q2 2012), n=1,500 survey respondents and behavior observed from 6,000 Apple and Android users