Mobile gives Google "long-term growth insurance." That's how iSuppli's research group IHS Screen Digest describes one of three pillars enabling the Mountain View, Calif. tech company to continually grow revenue. Search, the cash cow, and video/display, which generate short-term revenue growth, remain the other two pillars. When Google releases year-end and Q4 earnings Thursday it will report a 20.2% lift in search ad revenue to $25.4 billion compared with the prior year, according to IHS. Revenue from display advertising will rise by an estimated 61% for the year. But some believe it's mobile that could become the cash cow in the future. On mobile, Google benefits from revenue generated by the increasing popularity of the Android operating system and the company's acquisition of AdMob. But the tech company isn't the only one profiting from mobile. The Partnership at Drugfree.org, a nonprofit organization that helps parents prevent and find treatment for child drug and alcohol abuse, launched a mobile advertising campaign on ChaCha. The campaign, which ran during the last three weeks in December, yielded more than 9.8% engagement rates from the best-performing ads. The Partnership at Drugfree.org measured success by the percentage of consumers clicking through the text message to the non-profit's Web site. SMS text user response rates had an average of 4%, according to Hilary Baris, digital media and marketing director for The Partnership at Drugfree.org. The campaign ran during the last three weeks in December, supporting SMS text messaging and mobile video advertising (MMS). It provides answers when asking about drugs, medication, alcohol and related topics. The goal is to prevent teens and tweens from abusing medicines through messages sent to teens and parents based on age and topic, aimed at helping educate them about the health risks posed by teen medicine abuse. ChaCha users ask more than 20 million questions per year related to medicine, drugs, alcohol and treatment. They range from "What is the most addictive drug in the world?" to "What is one of the best drug rehab centers in the U.S.?" to "What does marijuana do to you?" to "Can you get high from cough medicine?" Baris wants to keep running the mobile campaign, but doesn't have a marketing budget. All campaign media for the organization is donated to the non-profit. Last year the team of three at The Partnership at Drugfree.org managed to scrape up $80 million in advertising support. "We worked last year with Hulu, ValueClick, Women's Health," she says. "Mobile is just one of those things we're all tethered to, so it makes sense to reach out to parents through this type of campaign." Traffic to ChaCha's Web site grew 116% in 2010, according to comScore. ChaCha also closed $3 million of additional funding including $900,000 of outstanding warrants from new investor Qualcomm Ventures. This extends the round led by Silicon Valley investors VantagePoint Venture Partners and Rho Ventures in October 2010. In December, ChaCha.com hit 28 million unique Web visitors and mobile users, according to Omniture reports. It is estimated that more than 32 million unique users will visit the site by the end of January. In December, the company announced that it answered the billionth question: How do you say friend in Elvish according to the Lord of the Rings? The response: "'Mellon' is the Elvish word for 'friend' in Lord of the Rings."
In a surprising development, demand for digital media and advertising services appears to be ebbing among some clients of major advertising agencies, according to a recent survey conducted by media buying processing firm Strata. After reporting steady growth over the past two years, digital advertising demand has decreased for the first time between two consecutive quarters, falling to 21.1% of respondents in the fourth quarter of 2010 from 26.0% of respondents in the third quarter of 2010. Strata, which is based in Chicago and owned by Philadelphia-based media conglomerate Comcast Corp., said it also found that demand for mobile media services is "not yet living up to industry hype." "Agencies expressed the predominant obstacle with digital advertising is the lack of channel effectiveness," the Strata report said, adding, "Nonetheless, within digital advertising, social media continues to be a hot medium of advertising: 79% of agencies are looking to use Facebook as the dominant social media platform in their clients' campaigns, with Twitter second at 46%." Strata President-CEO John Shelton, noted that advertisers and agencies are "more confident" about the economy, but that most of that recent momentum is being reinvested in demand for traditional media services, especially TV, which has experienced the greatest uptick. "Concurrently, we see that the focus on digital has fallen off a bit. While still hot, it is used more in a solid media mix than more dollars heading its way," Shelton stated. The Strata survey also found that while mobile advertising is a hot subject in the industry, advertising budgets have not followed. Of all interactive advertising, mobile was a distant fourth in advertisers' minds (at 29%), behind online display (80%), social media (61%), and search (60%). The iPhone remains the top mobile device of interest to advertisers, with more than 80% expressing they are most interest in placing ads on the Apple device. Blackberry outpaces Android, at 51% to Android's 45.8%. Apple's iPad is slowly gaining momentum in the advertising realm, where 31% of advertisers say they are interested in placing ads on the new device - a 22% increase from the previous quarter. Over the past three years that Strata has been tracking demand for advertising and media services among the agencies it services, it has seen a steady uptick in overall demand, which grew from a low of 22.5% in 2008 to 51% in the fourth quarter of 2010.
When I first read about a new device that scans your face and then suggests which products you might want to put on the family dinner table that night, an oxymoron worthy of an Austin Powers movie immediately crossed my mind: diabolically brilliant. And that's just the cookie around the filling. Having sized you up as a sure-fire sugar and cocoa addict, it can spit out a few Oreos just to make your acquaintance. Fast Company's Linda Tishler has a fascinating piece about the Kraft Meal Planning Solution, which was part of Intel's two-story, 2,400 square-foot Connected Store concept that made its debut at the National Retail Federation BIG Show in New York last week. It combines Intel's new AIM Suite video analytics technology powered by the Core i5 processor with Kraft's recipe database to lasso consumers wandering by, make a demographic assessment by scanning his or her face, and then offering recommendations for dinner using, of course, Kraft brands. In a short video posted to YouTube earlier this month, Donald King, vp of retail experience at Kraft, laid out the rationale for the Food Planner. "This tool will delight shoppers by helping them prepare delicious, nutritious meals for their families, will help retailers engage consumers in a unique way to increase basket size and also to increase store visits and it will be filled with proprietary content to provide an infotainment experience for consumers in the store." As a consumer, I did a quick calculation in my head. Increased basket size + increased store visits = increased girth. But that doesn't mean I'm not fascinated by the technology behind this top-down approach to the family meal. Like I said, it's diabolically brilliant. Explains King to Tishler in a video accompanying the piece: "The average consumer has a catalogue of about 10 recipes that he or she is familiar with to make for their families. Additionally, the average consumer enters the store and 70% of the time not exactly sure what they're going to make for dinner that very evening." So, after determining the subject's age and gender, the software determines a likely menu based on options such as weekday meal or Football Sunday Party. Then there are options within the options, such as "Healthy Living" or "Manager's Specials." And once you've got the ingredients, you can download them to your smartphone's shopping list by scanning the barcode. In a flyer for the trade, Intel outlines five "unique" attributes of the technology:
Online media buyers expect their budgets to expand 11% during 2011, according to a survey conducted by the equities research team at Deutsche Bank. The survey, which was conducted recently among 31 media buyers representing more than $5 billion in annual online ad spending, indicated that budgets should continue to expand at "double digits over the foreseeable future" for both paid search and display ads, and that other emerging digital media platforms such as mobile, social and group buying communities should also "ramp nicely" supporting the overall growth of digital media advertising budgets. The Deutsche team, led by lead Internet analyst Jeetil Patel, said the outlook should hold at least through 2015, and that based on the outlook it is recommending four Internet stocks to investors: Google, InterActiveCorp, comScore and MediaMind. "As has been the theme over the past few years, online advertising would continue to grow, gaining share from traditional media," the analysts said in the report sent to investors late Monday. Noting that traditional print media appears to be "most vulnerable" from the reallocation of advertising budgets to online and digital media, the Deutsche team projected that mobile advertising would likely become a "billion dollar segment" in 2011, more than doubling its 2010 base. "Advertisers are increasingly dedicating separate budgets for mobile, indicating that mobile ad spend is slowly moving out of the 'experimentation' phase," the analysts said. "Online media buyers are keeping tabs on new themes within online advertising such as radio, social, mobile and group buying," they continued. "As these new business strategies flourish online, it does appear that online advertising growth would remain robust for the foreseeable future. While currently a limited number of players (ad networks and publishers) have the critical mass with these emerging ad formats, we do anticipate these categories to evolve into much bigger opportunities, likely expediting the share gains from offline ad spending. Just as important, online data analytics remains an important area of focus for media buyers in their daily online toolset."
Bonnier made a splash last April when it unveiled an iPad edition of Popular Science, built with its Mag+ digital magazine platform. Since then the publisher has turned out iPad versions of 10 other titles including Popular Photography, Flying and Babytalk. Now Bonnier is turning its attention to advertising on the iPad and rival devices -- teaming with storied creative agency CP+B to develop new ad formats for tablet magazines. "In developing Mag+, we were first focusing on the needs of editors and designers and did a lot of work to make the reading experience terrific for users," said Megan Miller, Bonnier's R&D program director, who is leading the tablet ad project. "The next natural phase is to focus on advertising." With nearly 100 new tablets launching earlier this month at the Consumer Electronics Show in Las Vegas, she noted that the category is poised to expand rapidly in 2011 with new Android-based and other devices. "The tablet market is about to explode and when many more consumers have devices in their hands it's important that we're dialed in on the monetization side as well as on the editorial side," she said. Technology research firm IDC projects the tablet market will nearly triple to 44.6 million units shipped this year, with the U.S. representing nearly 40% of the total. By next year, worldwide shipments are expected to grow to 70.8 million. While Motorola, Research in Motion, Samsung and other manufacturers are launching new tablets, as of the third quarter 2010 the iPad was still dominant, with 90% market share, according to IDC. The initial stage of Bonnier's ad effort, already underway, involves research focused on how consumers use print and iPad versions of magazines as well as getting feedback from advertisers and individual publishers within the media corporation. By mid-February, the company expects to have research results to publish, followed by a series of ad concepts created by CP+B for the Mag+ platform across Bonnier titles, starting with Popular Science in late spring. Until now, the publisher has created customized iPad ads using Mag+ for advertisers including American Express, Sprint, and GE. The two features that marketers have been most focused on in iPad ads are video and embedded links back to their sites or for information on products, according to Miller. "But we don't think just adding a TV spot is going to be as good as adding features native to the platform," she said. That means creating units that take full advantage of digital interactivity, social media and APIs for online services from Google or other companies. Bonnier selected CP+B to partner with on the tablet project because of its track record for innovative digital work. That includes its Whopper Sacrifice campaign on Facebook for Burger King, its crowd sourcing of another client's logo and redesigning its own home page to be fully socially integrated. "[CP+B] always seems to push the boundaries with their campaigns. For every client they work with, they really go outside the box for new solutions," said Miller. Bonnier is hoping the agency does the same in inventing tablet ad formats. "Tablets have enabled publishers to re-imagine the magazine, and over the last year there have been newsworthy advancements in the space, but advertising has not kept up," says Winston Binch, partner/ managing director at CP+B, in a statement. Bonnier and other publishers including Conde Nast and Hearst are still trying to figure out pricing for iPad versions of magazines and how to balance up-front charges with advertising. A Knowledge Networks study released this week showed that 86% of iPad users preferred receiving magazine and other content free in exchange for viewing advertising. Only 13% said they were willing to pay. Bonnier's flagship Popular Science app for the iPad has averaged about 10,000 to 15,000 downloads a month -- only a fraction of its print circulation. After initially charging $4.99 per issue, the company in December lowered the price to $2.99 as part of its experimentation with publishing on the Apple tablet. Bonnier is also looking forward to when Apple will allow publishers to offer subscriptions more widely on the iPad instead of having to sell each issue separately -- a limitation that has frustrated magazine publishers for whom subscriptions are a crucial part of their business. "The subscription model, pricing and figuring out how best to serve ads is all part of the strategy," said Miller.
Raise your hand if you have been to Starbucks in the last week. Now raise your other hand if you have an iPhone or BlackBerry. Now, drop everything, because whether you think of it this way or not, Starbucks launching mobile payments is huge news for location-based social -- even if it doesn't, yet, allow you to get an automatic check-in with your chai latte. In case you haven't read it already, as of today, Starbucks is launching mobile payments nationwide, thus changing, with one last swipe of an old-fashioned Starbucks card, the way we handle small amounts of money, and the so-far niche behavior of location-based social.< Think I'm exaggerating? Here's why I'm not. The ubiquity of Starbucks locations and iPhones (not to mention the near-term coolness factor inherent in saying, "I'll buy it with my phone"), make it so. Tens of millions of us both go to Starbucks and use an iPhone -often while in line at Starbucks -- every single day. Thus, an app that marries the two -- and builds on it with a layer of almost frictionless commerce -- is destined to reach critical mass. In turn, as Business Insider points out, this will spawn demand for mobile payments. If Starbucks has it, why can't McDonald's? This surge in mobile payments, in turn, will consummate another marriage, also in a more frictionless way: the union of where we are to our device. As Starbucks and Foursquare are already partners in commerce, imagine a default that automatically generates a Foursquare check-in when you transact a mobile payment. No work required. No having to append your location when you tweet, or anything like that. That's exactly what I've been looking for! Being able to check in without doing a damn thing! Maybe that sounds lazy, but we all know that the less work required by the user, the more palatable something becomes. Not only does the potential of marrying mobile payments to check-ins make this a more popular behavior (or non-behavior, since you're not doing anything), it also makes the road just a little smoother to my inevitable claiming of the mayorship of my local Starbucks, with all of the perks that come with it. Seriously though, making check-ins automatic with mobile payments, for those who opt-in, will obviously drive loyalty programs, including ones targeted to those who frequently publicize they are at a local store, becoming an ad vehicle, if you will. There are more ramifications, to be sure, but that's the primary one that jumps to my mind. Perhaps you see this as only so much exaggeration. But when I think about mobile payments in the context of the nonprofessional circles in which I travel, it doesn't seem so at all. Anecdotally, I would say that many, many of the adults in my community use iPhones and BlackBerries. They are fully versed in the world of apps. They can also be frequently seen with a Starbucks cup in hand, and probably, if they were to open their wallets, would display a Starbucks Card. What you won't see them doing very much is using Facebook Places or Foursquare. If they know such things exist, they don't see the rationale for the behavior. As I've said before, it's not as though a mom with three kids has time to hang out with friends on-the-fly. However, add in mobile payments, and the promise of rewards for checking in, and the whole thing starts to make sense. (BTW, I'll be moderating the panel "Mobile Social: Unlocking Its "Killer App" Badge" at the upcoming Social Media Insider Summit. Be there!)
"Does that fancy damned movie app of yours rate audiences along with the film?" my partner asked as we suffered through "True Grit" a few weekends back. Oh, the film was just fine. Surprisingly good, in fact. It was the audience that almost had us walking out. There was more grey hair in this audience than I had ever seen at a modern film, and many of them seemed to think they were in their living rooms. The exchanges among the couples and groups in this theater were louder and more irritating than I had experienced since I took my daughter to Saturday afternoon screenings of "Jimmy Neutron" with gangs of seven-year-olds. "I don't think any of these people have actually been in a movie theater since they came to see 'the Duke' in the first version of this film," I guessed. Literally, there seemed to be a gang of drunken 50-somethings in the back row having full conversations throughout the film. I shushed them myself a few times, only to get mocked as they loudly quieted themselves later. This is something I did not know. Apparently, if you are 50, wear a visored cap everywhere and use smokeless tobacco, you are allowed to act like a 13-year-old until you retire... or kill your liver. "I think we're the hippest two people in the audience," she said. "And we're not even vaguely hip. I am hearing emphysema-like sounds all around me. What time warp did your iPhone lead us to?" Flixster, one of the most popular movie apps available for smartphones, got us there. But the integrated Rotten Tomatoes and user reviews never warned about "True Grit" attracting redneck audiences in northern Delaware. Audience ratings (maybe a quick demographics check?) would be a nice feature. Since when did the Coen brothers become a big draw with this segment...let alone Jeff Bridges -- "the Dude!" But Flixster already has its hands full just streaming video, according to its Chief Revenue Officer James Smith. "We stream many millions of movie trailers every weekend," he tells me. "The numbers exceed the Web." This is one online genre that is finding its sensible place on handsets rather than browsers. To wit: Flixster boasts over 20 million app installs just in the U.S. market. Those apps help generate over 10 million monthly uniques to the brand overall, and at times over 5 million will come in just over a weekend. That puts the movie discovery genre in the same league as sports and weather on the mobile platform. On most weekends the apps are streaming 3 million to 5 million trailers in the U.S alone. The trailer is apparently the selling point - the deal-sealer. People want to get a sample before they go to the theater, and the smartphone has become the natural platform for the movie-goer's purchase process. In our family, food comes before all else, so the typical use case involves which movie times match the end of dinner. We're usually in a restaurant making a final choice, and it is my job to decipher the movie choices dispassionately for partner and daughter. It is hard to imagine a use case where marketers don't have a better opportunity to influence a choice. Flixster still gets the majority of its ad revenue from the Web, "but that equation is changing," Smith says. "Mobile is increasingly the lead force in terms of positioning as a company. We are looking to be movie discovery everywhere." The brand really started a number of years ago as a social movie site with strong ties to Facebook. But mobile has the momentum now. Last year, Flixster bought the Rotten Tomatoes review aggregation site, which it is using deftly to differentiate itself from competing movie locators. In fact, the app's content is both a value-add for the user and an opportunity for advertisers. Most ad deals with the studios combine custom social and engagement units with the usual pre-rolls, banners and takeovers. Movie maven that I am, I got sucked into a half hour with Flixster's movie trivia contests. But the basics continue to be most effective. On most weekends there is a full-screen takeover announcing a film opening that leads to trailers. "Consumers are interacting with that at a very great rate," Smith says. The current stage of development is toward the non-endemic advertisers. Sega, Yahoo, Vitamin Water, Verizon, TV networks and even Old Spice have bought placement on Flixster. Half of the company revenue is already coming from non-studio clients. The key is the use case and the situation, Smith says. "It is interesting to be in front of consumers while people make plans," he says. The latest big campaign I keep seeing is a localized effort for the daily deal publisher LivingSocial. My Flixster app loads with a banner teasing me with a cupcake deal. "Look it knows you are a freak for icing," my partner chides. And it knows my market, as it offers Wilmington, Delaware deals. "We are driving a lot of people with that," Smith tells me. Tip to marketing creative. Use more icing in the ads. Flixtser apps are also early arrivals on just about every new platform, from the Google Chrome App Store and Mac App Store to my Google TV. Ultimately, the brand wants to be the ever-present movie review engine informing all manner of choices, including the digital downloads on your TV. But I wish they would add an audience evaluation rating to this app, because I really did not see that I would have issues with the crowd at "True Grit." I couldn't resist following the grey-haired gang of drunks into the parking lot after the film. As if in a grade-B crime drama, the gang was in plaid flannel shirts, trucker caps and down vests. They peeled into three sub-groups, all of whom were headed toward -- "Oh this is too good to be true," my partner whispered -- three massively oversized pick-ups with grills that resembled cougar maws. The beer bottles literally clanged in the paper bags they toted. We looked at each other with that comfort that comes from knowing how many of us typecast ourselves into our own movie-lives. "Think we'll l make it home in time for Jon Stewart?" I ask. "I need some high-cocoa-content dark chocolate," she answered.