All News

Conflicting Claims: Which Smartphone Is More 'Satisfying'?

Last week the American Consumer Satisfaction Index (ACSI) released findings asserting that the Samsung Galaxy S3 and Galaxy Note II beat the iPhone 5 for customer satisfaction. The Galaxy S4 was not part of the study, which was conducted before the device's release. Somewhat Ironically, Korean consumers said the opposite: that they preferred Apple devices to Samsung's. 

Here are the US ACSI scores by device: 

Smartphone Customer Satisfaction 2013

Survey questions addressed the following areas:

  • Design (including weight and screen size)
  • General handset features
  • Video and audio quality
  • Software and ease of use (including OS and UI) 

What's interesting is that Apple rates higher than Samsung overall in the ACSI company scores -- though Samsung has closed the gap vs. 2012: 

 

Apple more handily beats Samsung in the JD Power ratings, where the iPhone 5 contributed to Apple's overall 2013 smartphone win. In the JD Power satisfaction scoring, Samsung is at the bottom of the group. How can these conflicting scores (within the ACSI and between ACSI and JD Power) be reconciled?

 

The ACSI report offers no real explanation for the Galaxy and Galaxy Note wins. Other than screen specs, Samsung's phones are not the highest quality Android devices on the market. Arguably HTC, LG and perhaps Motorola have stronger offerings from an overall quality perspective. However Samsung outspends them all (combined) on marketing, which has been the chief driver of the Galaxy line's success. 

My suspicion is that consumers are responding to screen size more than any other single variable or factor in rating the Galaxy S3 and Note II above the iPhone. This underscores the larger-screen imperative that Apple now confronts. The company needs to produce an iPhone with a larger screen. And according to multiple rumors, that will happen with the iPhone 6 though not the "5S," which is supposed to retain its current screen of just over 4 inches.

The new Google-Motorola Moto X chose not match the S4 and go to 5 inches after the company did considerable consumer research and arrived at 4.7 inches as the optimal screen span. Accordingly, an ideal screen size for a smartphone is probably right in-between the current iPhone 5 (4 inches) and the Galaxy S4 (5 inches). 

Moto X: Google Turns the Whole Phone into a Personal Assistant

There are a number of interesting things about Googlerola's just-released Moto X. First, it emphasizes design over specs. The latter had always been the hallmark of Motorola's previous Android ("Droid") phones. The new phone also allows for an unprecedented degree of customization:

  • 22 phone back covers (including wood)
  • 7 trim-band colors
  • White or black front/face

In fact, the way the phone is presented on the Motorola site makes it effectively into a fashion accessory. However that's how many people do treat their smartphones today. The customization, which is smart, is apparently made possible because the phone is manufactured in Texas (rather than China). 

But beyond those things, the phone can be activated or invoked without touching it. Users can speak commands to the phone and get responses or create reminders, set alarms and so on. Like Google Glass, Google Now can be initiated with a "wake up" phrase: "OK Google Now." This effectively turns the entire phone into a personal assistant. The TV spot linked below demonstrates this positioning and the functionality in action.

Previously Google Now and voice actions on Android devices had to be initiated by touching the screen: swiping up or touching the microphone icon. That's not required here (I haven't had a chance to use the device). Google/Motorola are using this "always ready" assistant capability to make the device stand out from both the iPhone and other Android devices. Below is one of the new TV commercials for the Moto X, which showcases how Google Now is now being "personified" -- much more like Siri than in the past.

Moto X is priced at $199 with a two-year carrier contract in the US. There will be a Google Play edition but there's no word at this point on unlocked pricing.

Facebook Winning App Game, Where's Google Maps?

There's considerable data (see, e.g., comScore) that indicate Facebook is the most popular mobile app in the US market. That extends beyond unique visitors to engagement and time spent.

Time spent with the Facebook mobile app outstrips every other individual app by a large margin. Earlier this year comScore found that 23% of all time spent with mobile apps was on Facebook. Nielsen has similar figures.

Facebook & Google: Mobile Apps by Share

Source: comScore (Q1 2013) 

Confirming just how popular Facebook's app is relative to other mobile apps are new survey findings from Consumer Intelligence Research Partners. The company asked 500 smartphone users and 1,000 tablet owners in the US about which mobile apps they used most often. 

The question was: "What are the three apps you use most frequently?" There were no suggested responses (no multiple choice answers). The question was completely open-ended. Below are the results: 

Among other interesting things Google Maps doesn't make an appearance in the surve results. Yet Nielsen and comScore data reflect that Google Maps is one of the most popular apps and the most popular location-based app. Mysteriously it doesn't appear here at all -- unless it's considered part of "Google." There's no clear explanation why.

Top US Mobile Apps Ranked by Unique Visitors

Source: comScore (Q1 2013)

Why the Future of Mobile Payments Looks More Like OpenTable than ISIS

Yesterday the Wall Street Journal reported that carrier-backed and NFC-based mobile payments venture ISIS would begin rolling out nationally:

The nearly three-year-old venture, known as Isis, plans to announce Wednesday that it will launch the payment service nationwide later this year after nine months of testing . . . 

Isis said that the pilot tests' findings will be incorporated into the latest version of the system. Among other things, the test showed that active users tapped their phones for payment more than 10 times a month. Two-thirds of active users chose to receive offers and messages from specific brands, according to the test results.

While mobile payments will eventually be widespread -- different global markets are seeing varying rates of development and adoption -- the near-term future of mobile payments in the US looks less like ISIS and much more like OpenTable's new (vertical) payments offering.

The NY Times yesterday reported that the restaurant reservations app will soon incorporate no-frills mobile payments:

The payment process, still in testing, will be straightforward, Matthew Roberts, chief executive of OpenTable, said in an interview. At the end of a meal, the diner would open the OpenTable app and pay the check with the tap of a button. The diner can review the check, adjust the tip and finish the payment.

“There’s no scanning, there’s no bar codes, there’s no geeky stuff,” Mr. Roberts said. He said that OpenTable would not take a cut of each transaction if a diner paid with the app. The restaurant would be charged the typical interchange fee for a credit card transaction. The simple transactions through the app are another way to attract people to use OpenTable, which charges restaurants for reservations made through the service as well as a monthly service charge for using its equipment.

In individual store and specific vertical contexts mobile payments are starting to take hold in the US. That's because consumers see concrete value or convenience in using mobile apps to pay (parking is my favorite example). Arguably the most successful example of mobile payments in the US to date is the Starbucks app.

As a general matter, however, credit cards remain very easy to use and there's no common standard or experience available across merchants. Most US consumers don't see a justification for mobile payments in the abstract. But "in the moment" or in very specific situations consumers can recognize their value. 

The transition to NFC-based payments will probably still take years in the US market -- unless the next iPhone enables them (ISIS wants to expand to iOS). But there's a significant, immediate opportunity for vertical apps like OpenTable to cultivate consumer mobile payments usage. Mobile payments through the OpenTable app also may create more loyalty and frequency vs. competitors such as Yelp or TripAdvisor.

I believe that these very concrete use cases will help train consumers to trust and adopt mobile wallets/payments, which will eventually pave the way for services such as ISIS or Google Wallet. However it will be 3 - 5 years before there's strong, national consumer usage (and merchant adoption) of these "horizontal" payments offerings. 

By contrast people will be using OpenTable payments as soon as OpenTable flips the switch. 

Mobile Credit-Card Scanning Should Be Ubiquitous

Dan Miller and I took a briefing with Jumio this morning. Jumio is an authentication and identity management platform (mischaracterized originally as "augmented reality"). The company has been around since 2010. 

It has two major products that rely on the same technology. Netswipe helps facilitate transactions on mobile apps and Netverify enables accurate remote identity authentication for fraud prevention. I'll focus on the former but the latter is very impressive and worthy of its own discussion later.

Jumio works in the same way that Card.io did. Using an SDK developers embed the Jumio solution within their apps. When the consumer is ready to complete a transaction or check out (book a room, flight or make another kind of purchase), she merely scans the desired credit card and enters the CVV number manually. The transaction takes a fraction of the time that would otherwise be required if she were to key in 16 digits, enter her address information, etc. 

If you've already got your credit card and related information on file (see, e.g., Amazon, iTunes) there's less of a need for this approach. However developers should offer it to new customers as a way to generally eliminate barriers for consumers, and capture credit card details for faster checkout next time.

Jumio competitor Card.io was acquired by PayPal one year ago, leaving Jumio as the lone independent vendor of this type card-scanning technology. Every mobile publisher and developer should be using Jumio or Card.io to improve conversion rates and the customer experience. Beyond mobile transaction-abandonment, frustrating users reflects poorly on the brand according to many studies.

Accordingly, every mobile developer should be using a mobile card-scanning solution as one way to remove friction from mobile transactions. It's not clear why they might not, except for perhaps for ignorance, lethargy and inertia. I could also imagine this approach as an alternative to card swipes in stores, although that's less necessary.  

Jumio has adopted a flat-fee SaaS model. Customers pay a fixed monthly fee for an unlimited number of transactions. 

It's rare instance where consumer and merchant interests are entirely aligned. But here they are: more secure and faster transactions for the merchant and consumer, as well as fewer charge backs and fraud. It's kind of a "no brainer." 

Below is a promotion video that explains the Jumio Netswipe offering: 

Facebook Mobile Ad Revs Now 41% of Total

Facebook announced its Q2 2013 revenues a few minutes ago. Overall the company beat analysts' expectations with $1.81 billion in total revenue. Advertising supplied $1.6 billion of that total with payments and fees providing $214 million.

The big suprise was mobile, which was responsible for 41% of total ad revenue (or $656 million) -- up from 30% last quarter. Here are the mobile numbers: 

  • Mobile monthly active users grew to 819 million
  • Daily mobile users in Q2 were 469 million
  • There were 219 million mobile only users

Facebook monthly mobile users

The company said on its earnings call that it's investing in "mobile, measurement and product innovation." The company said it has the most effective mobile ad products and is in a position to lead the mobile ad market. Indeed the company is second only to Google now in mobile advertising revenue. 

Apple's $35.3 billion Quarter Visualized

Apple just reported a $35.3 billion quarter, which was somewhat better than a year ago and beat financial analyst expectations -- largely on the strength of iPhone sales. The company also announced profit was $6.9 billion (vs. $8.8 billion a year ago). Sales outside North America accounted for 57% of revenue.

The company sold 31.2 million iPhones (vs. 26 million a year ago). But it sold fewer iPads than expected:14.6 million. Mac sales were down but Macs outperformed the PC industry as a whole, which is slumping badly. 

Below are two charts that show the distribution of revenues by segment/geography and by product line (figures in $billions): 

Unit sales of iPads were a concern for many financial analysts. The company sold 14.6 million tablet devices compared with 17 million last year and more than 19 million last quarter. While this implies market share erosion or shift away from the iPad, today Chitika released data showing that in North America at least, the iPad's web traffic share had grown since April and now stands at just over 84%. 

June iPad traffic

Source: Chitika

While Apple continues to generate huge quarterly revenues growth has slowed or declined in some cases. Accordingly there's enormous pressure from investors to bring out new products or create new product categories: TV, wearables, etc. On the earnings call Apple CFO Peter Oppenheimer said, “We are on track to have a very busy fall" though he wouldn't elaborate.

New iPads and iPhones are expected to be introduced. There may even be "surprise" products such as the rumored iWatch. 

Report: Apple Considering Building a 'Phablet'

The term "phablet," used to describe devices that operate like a phone but approach the size of small tablets, is horrible. But what may be more horrible is that Apple is reportedly considering creating one, potentially mimicking Samsung's strategy of a range of devices of differing screen sizes. 

Samsung is throwing a lot of mobile device spaghetti at the refrigerator, metaphorically speaking, to see what sticks with consumers. One might even describe its strategy as "incoherent." Nonetheless Apple may be moving toward introducing more devices with various screen sizes. That's according to an article in the Wall Street Journal:

The tests with suppliers seem to suggest that Apple is exploring ways to capture diversifying customer needs when many mobile device makers offer smartphones and tablets in various sizes.

In addition to potentially developing a device in-between the iPhone and current iPad mini, Apple is also apparently experimenting with larger screens for iPads. Most of these prototype experiments probably won't come to market.  

The huge-screened Samsung Galaxy Note has proven popular; however it's unclear how many units have sold. Indeed, Samsung has been the primary creator of market demand for larger-screen smartphones. And now Apple is feeling pressure to respond with a larger-screen iPhone. However that's not likely to be the 5S, due out later this year.

It might make sense for Apple to offer two iPhones: one with the current screen (small) and one with a 5-inch screen (large). However beyond that it makes little sense for Apple to go.

When Steve Jobs rejoined Apple as CEO 1997 one of the first things he did was to simplify Apple's product lineup, which had become cluttered and confusing to consumers. This is the danger if Apple tries to follow Samsung and create multiple device screen sizes.

Consumers do want a larger-screen iPhone but they haven't been asking for multiple devices of incrementally larger screens. It's also not clear that anyone wants or cares about a larger iPad. Maybe one with a slightly larger screen would be interesting but that would need to entirely replace the current iPad.

It makes sense for Apple to have four devices at most: iPhone (two screen sizes perhaps), iPad Mini and iPad. Beyond this the product lineup becomes muddled and confusing. And to the extent that Apple seeks to imitate Samsung's approach it may indicate the company has lost confidence in its vision. 

Nokia Sells More Lumia Handsets but Not in North America

Nokia's results this morning are something of a Rorschach test. You either see them as evidence that Nokia has stalled and Windows isn't going to save the company or you can see some momentum and success -- as a promise of more future success. 

Nokia's Q2 revenue was €5.7 billion ($7.5 billion), which was down vs. last quarter (3%) and last year (24%). Lumia sales were up 32% vs. last quarter to 7.4 million units. Overall the company sold 61 million phones, almost 90% of which are not smartphones however.

Nokia said the 7.4 million Lumia unit sales reflected strong demand for the Windows Phone based handsets. However in North America the company sold roughly 500,000 devices vs. 600,000 last quarter. Accordingly demand in North America is flat, while Windows remains under 5% in terms of market share. Nokia has had more success in Europe and other markets where its brand is stronger.  

Yet Nokia has now pulled into the number three smartphone slot after Android and iOS. BlackBerry reported selling 6.8 million phones last quarter. Becoming number three was an expressed goal when Nokia selected Windows as its exclusive OS. However the question now becomes can it do better?  

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. 

Update: The Verge reports that Nokia CEO Stephen Elop was concerned that if the company chose Android that it would lose to Samsung. Thus it chose Windows Phone as its exclusive OS. That has been a very mixed experience for Nokia, obviously. I believe that Nokia with its brand and marketing resources would have been in a position to challenge Samsung for Android dominance. 

But the early window of opportunity, so to speak, has now closed for Nokia. 

Study: 97% of Mobile Search in Gas & Convenience Category Happens in Apps

In honor of the blazing US summer and road trips, xAd and Telmetrics have released more data from their "Mobile Path-to-Purchase Study," this time on consumer behavior in the "Gas & Convenience" category. The study, which combined a mobile user survey (n=2,000) and consumer behavior data (n=6,000), was conducted by Nielsen earlier this year.

As might be expected the study reflects the very mobile-centric nature of the category, which includes convenience store visits, gas purchases and minor automotive service (i.e., oil changes). 

Below are the study's key findings:

  • 85% of time in the category "is spent on a smartphone with most conducting gas price comparisons/searches"  
  • 97% of mobile search happens within an app vs. mobile web (e.g., GasBuddy)
  • 80% of smartphone search and 40% of tablet search happens on the go (out of home) 
  • 88% plan to buy within the same day (2/3 within the hour) but only 10% have a specific place/business in mind
  • Location and price were the two factors that most influenced conversions (75% sought a location within five miles)

Interestingly, the study reported that "Gas & Convenience searchers spend an average of 6 minutes per mobile search session," which is 50% more than "the average Retail mobile search session." 

The study also found that Gas & Convenience users were very open to influence and receptive to mobile advertising, especially if the ad pertains to a nearby location and/or offers a deal or coupon. 

Chinese Smartphone Maker TCL Selects Nuance's Swype as Default Keyboard for U.S. Market

As the global market for smartphones matures, it is clear that the default keyboard platform is going to be key for product differentiation. That's why it is so interesting that up-and-coming Chinese OEM, TCL Communications Technology Holdings Ltd, has expanded its licensing agreement with Nuance, making Swype the default keyboard for its line of Android-based smartphones sold in the U.S. In its latest report of device shipments, TCL claims sales volume of smartphones grew 126% in June, when compared to the same month last year, exceeding 1.3 million units. Of the nearly 21 million phones sold globally in the first six months of 2013, over 18 million were sold outside the Chinese domestic market. 4.3 million were smartphones, selling under the he Alcatel OneTouch brand as well as TCL's own Idol X branding.

Like Samsung, TCL is a well-diversified consumer electronics manufacturer with a major presence in the flat-screen TV market. Its management expects the geographic expansion of its smartphone sales to fuel growth and profits in the coming years. If it does so, it will be at the expense of Samsung, HTC and Google's own Motorola brand. Matt Revis, Vice President of Dragon Devices at Nuance, points out that the company had its choice of a number of less expensive alternatives to Swype to support touch-based input, including the "free" default keyboard that ships with the Android operating system.

"This is representative of a situation where you have a company that is positioned to grow globally and looking for an innovation partner to make it a category leader," Revis explained. "They are working with Nuance."

Indeed, it is a signal event for Nuance and Swype, which is already available for free download from Google Play. While Nuance would not provide revenue estimates for the licensing agreement, the impact can be expected to be significant, given TCL's ambitious growth expectations in the coming year. A virtuous circle has been established whereby an aggressive manufacturer recognizes that innovation will be key to growth and has recognized the need to cement a relationship with a firm that has been steadily investing in improving the technologies that support touch-based and multimodal input - both through internal development and acquisition.

PCs in Q2: 'Worst Performance in 11 Years'

Against the backdrop of a sweeping reorganization at Microsoft, intended to promote greater collaboration and faster time-to-market, hardware tracker IHS reported that PCs "delivered the worst second-quarter performance in 11 years."

The firm said that global PC shipments were down 7% vs. a year ago. IDC reported in Q1 that PC shipments were down 14% year over year. I suspect that when the IDC and Gartner hardware figures are released we'll see greater declines for Q2 than what IHS is reporting. 

IHS said that during the first half PC sales, globally, suffered "a harsh 11.2% contraction compared to the same six-month period a year ago." 

Tablets and smartphones have clearly eaten into the PC market and put downward price pressure on PCs. PC replacement cycles are getting longer. A more intangible thing has also happened: PCs have ceased to be shiny new objects coveted by consumers.

They've become instead pure utilitarian items without the ability to evoke the device-desire they once had. 

Retailers Fail to Connect with Customers Via In-Store Technologies

While countless retailer apps and mobile websites are designed specifically to deliver an "omnichannel" experience -- tracking a customer through the lifecycle of a purchase -- retailers are missing out on opportunities to engage customers through in-store technologies, says a new report by EKN Research.

A survey of more than 60 large retailers found just 13% of retailers are offering in-store features for mobile apps indicating a significant gap in leveraging the use of smartphones or mobile devices for customer engagement.

In terms of providing the infrastructure for ubiquitous connectivity, only 1 in 5 retailers currently offer free in-store wi-fi, with 42% of retailers having no intention of ever offering free wi-fi in stores.

InStore_Technologies_Jul8

Mobile technologies may offer new opportunities for customers but many retailers are not willing to make the investment. The report finds that IT spending on store technologies will remain relatively flat in the next three years, representing 31% of the total IT budget in 2013. Though the share is expected to increase to 35% by 2016.

"In 2013, increasing store operations efficiency remains retailers’ top goal from investments in store technologies. Running an efficient store should be table stakes for mature retailers, and their top goal should focus more directly on improving customer engagement. EKN views this as evidence that the focus hasn’t yet shifted for a majority of the retailers."

This news comes on the heels of a recent comScore report that found consumers are open to communications from retailers on their mobile devices with 47% of shoppers willing to have a retailer to send a coupon to their smartphone when they are in-store or nearby.

And previous data suggest a majority of mobile users are accessing retailers' websites for in-store sales or customer service functions.

We'll be exploring the current pulse of retailers and in-store marketing technologies at our upcoming Place Conference this October in San Francisco.

IAB: Mobile Advertising Worth $8.9 Billion Globally in 2012

The IAB released a global mobile advertising report for 2012 this morning. It reflects ad share by region and ad format. The IAB sizes the global mobile advertising market at $8.9 billion (€6.9 billion) in 2012.

The North American mobile advertising market was worth $3.5 billion in 2012. It lagged just behind APAC and should overtake that region this year. 

The following are the values of the other global-regional markets: 

  • Asia-Pacific: 40.2% ($3,558 million/€2,769 million)
  • Western Europe: 16.9% ($1,499 million/€1,167 million)
  • Central Europe: 1.3% ($112 million/€87 million)
  • Middle East & Africa: 1.2% ($109 million/€85 million)
  • Latin America: 0.6% ($50 million/€39 million)

Mobile paid search (read: Google) is the dominant form of mobile advertising on a global basis and in most individual regional markets according to the IAB:

With the possible exception of Latin America, with its more limited smartphone penetration, SMS-based advertising is shrinking around the globe. 

Despite mobile paid-search's global dominance, search and mobile display are seeing comparable growth rates:

Google is clearly one of the beneficiaries of these trends but so will be Facebook, Twitter and a few ad networks. Fewer than 10 companies are in a position to control three-fourths of the global-mobile ad marketing in 2013. 

Report: iPhone Closing Share Gap with Android in US

Yesterday Kantar Worldpanel ComTech reported that the iPhone has gained on Android in the US market. The firm said the relative market shares of Android, iPhone and Windows Phones are now as follows:

  • Android: 52%
  • iPhone: 41.9%
  • Windows Phone: 4.6% (up 0.9% YoY)

The iPhone is the bestselling individual smartphone in the US, though not across the globe.

Kantar asserts that its survey data are more accurate than other sources because it operates "the largest continuous consumer research mobile phone panel of its kind in the world, conducting more than 240,000 interviews per year in the U.S. alone."

For comparison purposes comScore reports the following (May, 2013) smartphone market share in the US: 

  • Android: 52.4%
  • iPhone: 39.2%
  • BlackBerry: 4.8%
  • Windows Phone: 3.0

Comscore shows Android and the iPhone gaining in the US and all other operating systems losing share vs. last quarter.

While the iPhone may have gained in the US that trend does not appear to be global. Kantar reports that Android's share is now nearly 70% in Europe and even higher in China.  

Catalina and 4Info Offer a Glimpse into the Future of Mobile Advertising

A once-impossible objective for digital marketers was 1:1 matching between online ad exposures and offline store visits and purchases. Hence the historical focus on e-commerce, which was much easier to track.

But tracking and matching users is getting a lot more sophisticated notwithstanding the decline of the cookie. For example, Facebook is matching "hashed" users (Facebook ID, email, phone) with offline actions and purchases through data partnerships such as Acxiom, Epsilon and Datalogix.

These data partnerships also allow for more flavors of demographic or audience targeting to occur online on Facebook. This is part of Facebook's Custom Audiences program.

In mobile specifically one of the things that has held back mobile ad spending has been the inability to show ROI on a per-campaign basis. However that's starting to change with efforts from PlaceIQ, Placed, xAd and others. Placed and PlaceIQ are starting to measure store visits in response to mobile ad exposures to show lift (this is something we'll be exploring in detail at Placed in October).

Indeed, online-to-store tracking will be mandatory for mobile ad networks within 12 months. Networks will need to be able to offer agencies and marketers a sense of the "Place Visit Rate" (a PlaceIQ metric) resulting from the campaign. Already today, however, there are examples of programs that represent the future of mobile marketing -- and one that achieves the formerly impossible goal of near 1:1 matching.  

 

Earlier this year Catalina introduced BuyerVision Mobile. It was created in partnership with 4Info and offers marketers the ability to target mobile shoppers based on purchase history (using store loyalty card data) and then "close the loop" through in-store purchase reporting. 

Over the course of the past 24 months 4Info -- formerly an SMS marketing platform -- has created a database of "110 million devices in 97 million households." The company claims that it has achieved a "90% direct match to NCS, DLX and Acxiom data sets." That's also true of the Catalina purchase history data.

Catalina and 4Info know exactly who their consumers are but have "hashed" IDs, yet matched these individuals in their respective databases. Thus when Huggies wants to target buyers of Pampers (smartphone moms), it can be done with almost 100% certainty. And when those individuals appear in stores and make purchases, those data are captured by Catalina and matched with the 4Info data to show whether the mobile ad exposure provided an actual in-store sales lift -- for each campaign. 

There are a number of privacy concerns that are immediately raised, though both 4Info and Catalina say there's no individual/PII targeting. Putting aside the privacy discussion for the moment, the Catalina-4Info model is pretty clearly the future of mobile targeting and ad measurement. 

And it's a future that is a great deal more nuanced, sophisticated and "closed loop" than 90% of current digial ad paradigms. 

Unlike Mobile Payments, Consumer Behavior for Indoor Marketing Well Established

The mobile payments space is a little like the local market: lots of promise, lots of money but very hard to crack. Yesterday a young entrepreneur and his payments startup Clinkle received a $25 million vote of confidence from a group of celebrity investors.

This was reported to be the "largest seed round ever." Whether it is or not $25 million is a lot of money for yet another mobile payments app. While it's true that nobody in mobile payments has "broken through," Clinkle will have a tough slog as it tries to build both merchant adoption and consumer usage.

Once again it's the "cold start" or "chicken and egg" problem. 

However, according to the NY Times, there's no merchant hardware requirement for Clinkle and the go to market strategy involves a Facebook-like focus on college campuses and surrounding businesses. That may be a key decision and help the startup gain some quasi-critical mass in selected markets among students. 

Beyond the hardware issues surrounding NFC adoption, the central issue with mobile payments has been a lack of perceived need among consumers. Mobile payments are being used in selected contexts and commerce situations (e.g., Starbucks) but the public at large hasn't seen the need to replace plastic payment with app-based payment that relies on stored credit cards or bank accounts. 

That brings me to indoor location and marketing. When discussing these topics, and the absence of technology standards, I often use mobile payments as an analogy. Yet there is a critical distinction. The difference between the two segments is that while mobile payments still largely requires a shift in consumer behavior, indoor marketing does not.

Large majorities of consumers are already using their smartphones in stores to look for price information, product reviews and coupons. The idea of brands and retailers communicating with them in stores will be built on this existing behavioral foundation. Accordingly indoor marketing won't require consumers to adopt new technology or approaches to shopping -- unlike mobile payments. 

The "heavy lifting" in indoor marketing is on the merchant side, where WiFi or other sensor infrastructure needs to be in place. Fortunately in most major retail environments the rudimentary infrastructure already exists.

But don't take my word for it. We'll be discussing the competing indoor location technologies and hardware requirements for indoor marketing (as well as their accuracy) at Place: The Indoor Marketing Summit this fall in San Francisco. It will be an event anyone in the mobile or location-based marketing space won't want to miss. 

BlackBerry Posts Fiscal Q1 Loss: Is It All Over?

BlackBerry posted a "suprise loss" (based on analyst forecasts) in fiscal Q1 of $84 million. The company announced that it had shipped 6.8 million smartphones. However of those only 2.7 million were BlackBerry 10 handsets (Z10 and Q10). 

The much-touted Z10 all-touchscreen phone seems to be a complete flop. The more "traditional" Q10, with its hardware keyboard, may wind up being more successful; it has only been on the market a few months.

These phones, it now seems clear, won't save the company. And BlackBerry is becoming increasingly marginalized in the smartphone and tablet world -- even in the enterprise it's traditional stronghold.

In terms of tablets BlackBerry said that it shipped 100,000 Playbooks in the quarter. BlackBerry CEO Thorsten Heins has dismissed tablets as mere fashion. He doesn't think the devices will exist in five years. While the iPad may not reign forever tablets will continue to exist certainly. Heins is mistaken.

The Playbook won't be getting an OS update and is effectively dead in the water. In North America it delivers less than 1% of overall tablet traffic, according to ad network Chitika. The chart above reflects the "tier 2" tablets that lag the iPad, Kindle and Galaxy in terms of web traffic. (The iPad delivers 82% of North American tablet traffic.) 

Gartner's global OS projection for 2014 shows BlackBerry having an almost non-existent market share.

Device share by OS 2014

Source: Gartner (6/13)

The hard question to answer now is "what next?" The transition-turnaround story clearly won't play to investors anymore. The stock is off 27% following the earnings releas.

Selling the company or taking it private are two options. But who would buy it? (Certainly BlackBerry would be acquired at the "right price.") Microsoft has flirted with the idea but it probably wouldn't serve Redmond because BlackBerry hardware isn't prized in the market and would be unlikely to advance Windows Phones.

Another "nuclear" option would be to start putting out BlackBerry Android-powered phones. However that would turn the company into a commodity provider of Android handsets without any meaningful differentiation. That was what Nokia was concerned about (although Nokia would have had more success with Android.) And it would be almost impossible to compete with Samsung globally. 

The company is almost out of options. 

Superman Can't Save Nokia, But Can Iron Man Help HTC?

Nokia paid for product placement in the wildly popular Dark Knight films and released a special Batman-themed Lumia 900 when The Dark Knight Rises was released. The short answer: no, it didn't really "work."

Nokia Windows Phones (Lumia 925) also appear several times in the also extremely popular Man of Steel. Apparently in the alternate reality of Metropolis Nokia-made Windows Phones are the only smartphones in existence. However even the Man of Steel with all his remarkable alien abilities and strength probably won't do much for Lumia handset sales. 

The Superman film is opening in China this week and Nokia is offering a Chinese "Superman Limited Edition" Lumia 925 with the "hope" (S) insignia on the back. Depending on how excited the Chinese are by Man of Steel there may be some sales lift. However the Chinese market is dominated by Android devices. 

Meanwhile over in the Marvel universe (Superman is a DC Comics character), Iron Man's Robert Downey Jr. is reportedly being paid $12 million in a two-year deal to promote HTC smartphones. It doesn't look like the Iron Man character is part of the deal or will appear in the ads. 

Downey is a recognizable and popular celebrity but he probably isn't powerful enough -- at least without the Iron Man suit -- to compete with Samsung's Galaxy juggernaut (The Avengers might collectively have a shot at defeating it). The Korean company spent over $400 million in 2012 to achieve and maintain its Android smartphone lead. That compares with HTC's $46 million and Nokia's almost non-existent $13 million. 

Report: Google 'Enhanced Campaigns' Raising the Cost of Mobile Ad Clicks

If you're not already aware, Google is compelling all AdWords advertisers to adopt Enhanced Cam­paigns by July 22. It's mandatory. And it signals big changes for Google and for search marketing in general. Google dominates paid-search, which is the biggest single chunk of online advertising.

The high-level shifts brough about by Enhanced Campaigns, if you don't already know, are the following:

  • Tablets and PC ads are grouped together and cannot be separated or segmented in campaigns
  • Neither smartphones nor PC ads can be excluded in any campaign
  • Mobile bids are adjusted as a percentage (higher or lower) of PC AdWords bids 

Google's rationale is simple: simplification. Google told us a few months ago that it wanted to make cross-platform campaigns easier to execute and easier to manage. But that means marketers give up some amount of control over bidding and can no longer implement mobile-only campaigns. 

There are many people who accept and agree with that justification. However there's a much more cynical view circulating in parallel, which is that Google is mostly trying to boost mobile CPCs and thus overall mobile revenues -- to compensate for declining desktop CPCs in some cases. 

Increase in CPCs for tablet and mobile campaigns on Google 

 Reversal of negative desktop CPC growth

 

Like all such competing explanations, the truth lies somewhere in-between.

Historically mobile and tablet CPCs were lower and thus a better value for marketers. Now Adobe's digital marketing arm is saying that will definitely change under the new Enhanced Campaigns regime. Adobe based these remarks on "the lat­est search mar­ket­ing and cost-per-­click (CPC) trends across nearly 100 major US adver­tis­ers rep­re­sent­ing more than $100 mil­lion in ad spend from March through May 2013."

The data come from the clients of the former Efficient Frontier, which Adobe acquired in late 2011 for roughly $400 million. 

As the graphs above reflect, mobile CPCs have already begun to rise for advertisers implementing Enhanced Campaigns, while desktop CPCs are stabilizing. According to Adobe:  

With the intro­duc­tion of Enhanced Cam­paigns, the his­tor­i­cally lower CPCs for tablet cam­paigns should increase to reflect desk­top CPCs. We’re only just begin­ning to see this trend mate­ri­al­ize . . . The over­all CPC trends across all devices includ­ing desk­tops also show strong growth. Google CPCs increased more than 6% over the last three months alone — a sig­nif­i­cant jump . . .

One other trend we noticed is that CPCs on Google have sta­bi­lized. For the past two years, Google CPCs fell on a year-­over-­year (YoY) basis due to the increase in mobile and tablet traf­fic where CPCs were lower. How­ever, for the first time in seven quar­ters, the CPCs on Google are flat YoY and we antic­i­pate that CPCs will rise on a YoY basis again start­ing next quar­ter . . . 

Seeking to rebut the perception that the company has successfully manipulated the system to boost its own revenues, Google disputes the assertion that rising prices are inevitable. The company told Search Engine Land earlier this week: 

There have been many speculative reports, but it's far too early for any of them to be reliable. Advertisers will choose their bids and adjust their spend based on the value they see in their campaigns.