A new forecast from Strategy Analytics projects mobile ad spending worldwide will grow 85% in 2012 from $6.3 billion to $11.6 billion. In the U.S., the technology research firm predicts mobile advertising will grow even faster, more than doubling (up 128%) to just under $4.2 billion. If that projection proves accurate, the total would nearly triple the $1.6 billion estimate the Internet Advertising Bureau released last week for mobile ad revenue in 2011. Advertising is expected to grow much faster than consumer spending in mobile. Strategy Analytics projects that consumer outlays on mobile media will grow 13.4% from $121.8 billion to $138.2 billion globally in 2012. In the U.S., the corresponding figure will increase 15.5% to $33.7 billion. The majority of consumer dollars (60.2%) worldwide will go toward carrier data plans and mobile Internet services. But the study anticipates that strong, continued demand for apps will also play a key role in driving growth. The number of apps downloaded in 2011 surged 38% from 23 billion to 32 billion, making them the second-largest revenue category for both consumer and advertiser spending. In-app display ad revenue, for example, has overtaken mobile Web advertising in the U.S. and major Western European markets by $1.7 billion, to $935 million. Apps are expected to account for 18.9% of mobile consumer spend in 2012, rising 30.7% to $26.1 billion. American mobile users are expected to spend $6.7 billion on apps in 2012, up 24.6%. That total would represent 20% of all U.S. consumers' mobile spend. At the same time, U.S. ad revenue on mobile apps is projected to more than double to $1.2 billion. That’s more than twice the $556 million that Strategy Analytics estimates for mobile Web display advertising. Like apps, mobile video use is expected to rise sharply this year, with the number of videos watched almost tripling to 280 million. But unlike apps, the research firm found the uptick in mobile video viewing is translating into comparable revenue gains. Despite 23.8% sales growth, video is likely to account for just 2.4% ($3.6 billion) of total mobile media dollars in 2012. Of that amount, advertising will account for only about 20%. David MacQueen, Strategy Analytics’ director of wireless media strategies, explained that mobile video is either often free and ad-supported (YouTube) or bundled without extra charge into services, such as Sky Go in Europe and AT&T U-verse in the U.S. So despite a global audience of 271 million users, mobile video only generated $223 million in ad sales last year. Mobile music hardly generates any advertising either. But it is said to account for $16 billion in consumer spending on the strength of subscription revenue going to music streaming services like Spotify, Pandora and Deezer. Gains by the new crop of mobile music brands have come at the expense of ringtones, whose revenue is declining fast. By contrast, social networking is a growing force on mobile devices. Just consider that Facebook has more than 400 million mobile users, and that more than a third (36%) of U.S. mobile consumers accessed a social networking site in February, according to comScore. For its part, Strategy Analytics predicts that 125 million Americans will use their handsets to social network. But again, advertising and other types of revenue have yet to catch up with consumers. So related U.S. revenue will reach $412.7 million, or $3.48 per mobile user. Globally, however, revenue related to social networking content, apps and services is expected to increase 16.1% to $17.6 billion, making up 11.8% of overall mobile media revenues.
Discovery Communications is touting its own online video and mobile initiatives during upfront season. Leading that effort is Jean-Briac (JB) Perrette, who joined Discovery last fall as chief digital officer from NBC Universal, where he headed digital and affiliate distribution. Discovery has steadily expanded its online presence over the years, from homegrown companion sites such as Discovery.com and TLC.com to acquisitions like Petfinder.com, TreeHugger.com and HowStuffWorks.com, to iPad and other apps for its core brands. The aim is to lure marketers with a 360-degree media experience for their ad dollars. “We want to take the range of sites and products in our portfolio -- roughly at 24 million uniques overall--and make it work for advertisers,” said Perrette in a recent interview. A particular focus is continuing to build up its online video inventory. With video streaming on its owned-and-operated Web properties up 70% in 2011, Discovery wants to capitalize on the growing demand for its online programming. A foundation for extending TV shows to the Web has been its “after-shows” for popular series like “Mythbusters” “American Chopper” and “Gold Rush,” in which show participants discuss the most recently aired episode each week. In the case of "Gold Rush," Discovery in December aired a one-hour version of re-edited aftershows for the program that became the highest-rated show among men on the Friday before New Year’s Day, according to Perrette. “It was a cool sort of integration," he said. Discovery wants to create similar Web extensions and integrations for more of its shows. In that vein, TLC’s new competition series “Craft Wars,” produced and hosted by Tori Spelling, will include a series of after-shows in which she gives her take on the latest episode and tries her hand at some of the tasks that contestants face. Beyond the desktop screen, Discovery is also trying to tap into the two-screen viewing phenomenon, using tablets while watching TV. Last year, it debuted apps for the iPad and iPhone dedicated to its long-running “Shark Week” franchise. This summer, it will launch an updated version of the app that lets people interact with added content and features including a live “Shark Cam.” Likewise, TLC plans to introduce a new social TV app later this year to foster co-viewing on mobile devices. Perrette said Discovery wants to focus on creating its own two-screen products rather than relying on various social TV vendors, like Viggle, Shazam or Miso. “We’re trying to simplify all that and have it on a native TLC experience and make it seamless from a consumer standpoint,” said Perrette. Overall, about 15% of Discovery's digital content is now consumed through a mobile device, with mobile page views tripling in 2011. Perrette promises that more is on the way. “We’re only scratching the surface of fully mobile-enabling all of our brands,” he said. The company is still creating the technical and sales infrastructure to monetize its mobile usage. “We’ll have more ability to offer rich media across our mobile sites by this summer,” said Perrette. Digital still makes up about only 2% of Discovery Communications' total ad sales. The company is quick to note, however, that digital is the fastest-growing segment of sales, increasing 40% last year. New data from the Interactive Advertising Bureau showed that online ad spending overall grew 22% to $31.7 billion last year, with mobile and online video among the fastest-growing areas -- at 149% and 29%, respectively. Together, they accounted for almost 11% of overall online ad dollars in 2011. The $31.7 billion total edged out IAB's estimate of $31 billion in cable TV ad spending last year.
A full quarter of consumers intend to purchase (or have already purchased) a smartphone during the first half of this year, once again proving the popularity of the mobile device. According to ABI research, the 25% of consumers who showed a purchase intent for a smartphone is equal to the number of people who intend to buy HDTVs, and far exceeds the number of people who intend to buy tablets (18%). (Indeed, more people intend to buy Blu-ray players (16%) and video game consoles (17%) than tablets, according to the firm.) The main factor in the continued popularity of HDTVs (as well as Blu-ray players and video game consoles) is the increasing presence of built-in Internet connectivity. The television is still the dominant entertainment center for the American family and Internet connectivity opens up the flexibility of the Internet to the television screen. “Consumer electronics devices like TVs, Blu-ray players, and game consoles remain at the heart of the digital living room,” said ABI senior analyst Michael Inouye, in a statement. “Respondents, for instance, continue to favor connected CE devices for viewing Internet video content on the main screen over alternatives like smartphones or tablets. While connecting a mobile device to the TV screen or wirelessly mirroring the screen may be foreign to many consumers, this practice will occur more frequently as the market and consumer behavior evolves, but given the portable nature of these devices and social nature of TV viewing, fixed devices will continue to have a strong role to play in the digital living room.”
A pair of Wall Street firms predict strong results for Netflix, which streams TV shows and movies, when the company reports results for the January-March period Monday. Credit Suisse said it expects Netflix to post an addition of 1.8 million net domestic subscribers for its online service, close to the high end of Netflix guidance. J.P. Morgan said the company would report it has 23.4 million streaming domestic subscribers. Credit Suisse believes Netflix is making strides in putting behind it the damage suffered after a pricing change last year, writing that “the brand continues to recover.” The firm estimates revenue for the quarter will come in at $824 million, up 17% from the same period the year before, as subscribers are paying more on average. Netflix is predicted to take an operating loss as it expands into the U.K. and Latin America. Netflix shares were trading in the $106 range midday Friday and Credit Suisse projects a rise to $140. J.P. Morgan, however, was less than bullish, with a price target of $95. J.P. Morgan warned that Netflix’s streaming rights with Starz have expired and that could impact the company moving forward. Other headwinds include Amazon’s expansion in the online streaming business, RedBox and Verizon moving in and Comcast’s TV Everywhere efforts.
With the backing of some prominent media venture capital firms, NimbleTV is looking to start as a subscription TV service. It intends to bring all cable, satellite, and telco-delivered networks to any device. Greycroft Partners and Tribeca Venture Partners are investors, as well as media firm Tribune Co., which Nimble contends is not a competitor and working within the law. NimbleTV is based on a simple idea: "Customers should be able to access the TV they pay for wherever they happen to be," said Anand Subramanian, CEO of NimbleTV. Nimble, a cloud-based service, is looking to speed up the slow-moving process of making all TV networks available digitally. Company executives are pushing cable TV and other operators efforts for "TV Everywhere" -- allowing their consumers to access all their traditional TV channels from a digital video device. Under its plan, consumers still pay their cable, satellite or telco subscribers. There is is a fee to Nimble, according to The New York Times, of around $20 for set-up and management services. Nimble says it merely acts as a "payment service." Subramanian says his Nimble complies with all laws about the distribution of TV networks, stating: “Today, the groundbreaking technology behind our service makes ‘TV everywhere’ a reality -- with more options, high-quality viewing on any device, watchable from anywhere.” NimbleTV will begin by running a test run in New York City, limited to 26 networks. Nimble says no box or equipment is needed for its service.
Android and Apple’s iOS platform both gained share of the North American smartphone market at the expense of BlackBerry, according to the latest data from mobile ad network InMobi. iOS maintained its narrow lead over Android in the first quarter, with as 36.8% share, up from 33.1% in the fourth quarter of 2011. Android came in at 34.1%, up from 32.5% in the prior quarter. By contrast, Research in Motion’s BlackBerry OS dropped from a nearly 12% share in the fourth quarter to 7.3% in the first three months of 2012. The quarterly drop-off signals the troubled handset maker’s continuing decline as a result of Apple and Google’s growing dominance of smartphone operating systems. RIM last month reported sales plummeted 25% in the fourth quarter. Globally, Android was the top smartphone platform in Q1, however, with 22.2% of impressions compared to 18.2% for iOS. The iPhone, iPad and iPod alone accounted for 37% of impressions on InMobi’s network in North America, with the BlackBerry 8520 a distant third among individual devices, generating almost 2% of impressions. Among phone manufacturers, Nokia was second behind Apple, with 14% share of impressions, followed by Samsung and HTC (both 9%), RIM (7%), LG (6%) and Motorola (5%). "Apple maintained its lead over Android and further increased its share of impressions and handset dominance; the new iPad certainly helped its overall position,” said Ann Frisbie, vice president and managing director, North America, at InMobi “However, we know that fierce competition is created across the operating systems when new devices enter the market and this time last year Android surpassed iOS globally.” Apple should provide figures for iPad and iPhone sales in the quarter when it reports its latest financial results April 24. But sales of the Apple tablet won’t reflect the full impact of the new iPad model, which was only launched last month. Frisbie suggested Apple could see heightened challenges in the U.S. market later this year with a rumored launch of an Android-based smartphone from Amazon and a 7-inch Google-branded tablet. Microsoft is also expected to introduce a much-anticipated Windows 8 during the latter half of 2012. InMobi’s North American network grew impressions 18% in the first quarter to 52.6 million, the vast majority of which (84%) came from smartphones.
Signaling the increased seriousness with which it is entering the enterprise market, Apple launched late last week a section of its site that outlines how the iPhone is a business tool. Titling its pitch as “Not just another day at the office,” Apple walks users through key business scenarios for using its device, from organizing schedules to managing projects and arranging travel. Each area of work life highlights three apps -- some by Apple itself, but most from third parties like Kayak, BillMinder, Cisco and Tripit. Videos also accompany each task. A much less detailed site outlining the iPad’s business uses is also at Apple.com. Since its release in 2007, the iPhone has always been challenged by some enterprises and IT managers as more of a consumer than a business device. Concerns about security and the ability to integrate the phone and iOS with internal business systems persisted even as Apple attempted to add and enhance these features with every version of iOS. In this site supporting the iPhone in the enterprise, Apple underscores its ability to integrate with Microsoft Exchange, VPNs and office networks. Cases from companies like Dow are included. Despite clear gains in the enterprise markets, the most recent impartial survey of enterprise readiness still gives the nod to the struggling BlackBerry. Trend Micro, a leading provider of cloud security services, did a comprehensive study of built-in security, application security, authentication functions, device wipe capabilities, firewalls, and virtualization among the major mobile platforms. BlackBerry 7.0 scored highest across the board, the company reports. Apple iOS was second, followed by Windows Phone 7.5 and Android 2.3. Research in Motion’s BlackBerry OS still excels at security and ease of enterprise integration, the research found. The study, which was carried out by The Altimeter Group and Bloor Research along with Trend Micro, praised both Apple and Microsoft for providing good security and integration. Android appeared to be singled out for its fragmentation, which makes it difficult to issue operating system updates consistently and reliably across a fleet of diverse phones. Arguably, Microsoft issued the first self-titled smartphone years before the iPhone -- which was aimed mainly at the enterprise, since it was assumed that few consumers would afford or want a computer in their pocket. RIM enjoyed business market dominance mainly on the strength of its messaging, as the company failed repeatedly to make Web and app functionality appealing on its devices. Apple helped reinvent the category with the iPhone aimed at a consumer audience, which then became the market thrust of the second smartphone wave. But this consumer focus has delayed the proliferation of smartphones as enterprise tools -- and so perhaps the emergence of a massive market in b2b apps, marketing and services for these devices. Company IT managers have been slow to migrate employees to this generation of touchscreen and devices, but are being pressed by their employees to integrate the phones the staff prefers to use. As Nigel Stanley, practice leader at Bloor Research, says in this report, "security people I work with are scared witless by consumerization and the rapid adoption of these devices.”
The iPad may soon join the remote control and DVR in the pantheon of transformative TV devices, if it hasn’t already. Thanks to that prospect, its influence has stretched deeply into media research. Never-ending wonder about how iPads will impact the TV ecosystem seems to be generating an amount of research worthy of a national health crisis. Nielsen, networks and academics are on the case, stat. Steve Jobs not only leaves a legacy of energizing the music, smartphone and tablet businesses, but media research as well. If Apple had sat out the tablet revolution and left the space to Kindles, Nooks and maybe some entrants from HP and Sony, would there be this speedy pursuit of consumer insight? Pre-iPad, was there anywhere near this much research on how the Kindle could alter the publishing industry? Perhaps it would save time and money if media researchers widely agreed that certain truths are now self-evident. It would seemingly benefit all parties if they agreed that enough research has been done on iPad behavior. Yes, research -– particularly with a technology as novel and fast-growing as iPads– should be ongoing. But, at least for now, the work being done appears to be largely duplicative and yielding results that are intuitive. Agency and network executives who normally have an insatiable thirst for insight might actually be saying, “Another iPad study? Really?” Isn’t there another topic worth evaluating with such vigor? Certain hypotheses no longer are worthy of three-month studies with large online panels or focus groups in 25 cities. Research is coming out at such a rapid clip that it is losing punch. A study might come out on Monday showing 66% of iPad users do X, followed by one on Tuesday showing the number is more like 77%. Then Wednesday, data would flow showing the figure will be 88% by 2017. Shockingly, the research community isn’t likely to agree by affirmation on various conclusions, but there are obvious trends, where the actual percentages are pretty irrelevant. Here’s a primer: -Consumers are increasingly using iPads to engage in dual-screen behavior. They enjoy watching TV, while using the devices. Many are using them to check out content related to the TV show they’re watching simultaneously. -Consumers appreciate the iPad screen’s HDTV-like display, which makes viewing full-length episodes a thoroughly satisfying experience. They also like the opportunity to catch up on missed shows. -Consumers would welcome more apps, such as WatchESPN, allowing them to view live content on their iPads anywhere, anytime. Consumers also appreciate opportunities to view content via HBO Go and Netflix platforms. -Consumers mostly use tablets alone. They don’t enjoy sitting down on the couch with a loved one and watching a show on an iPad together when a large-screen TV is in front of them. -Consumers who are more technologically inclined use iPads more than consumers who are not as technologically inclined. -Consumers appreciate the opportunity to view content on iPads, but also engage in social media activities at the same time. Networks can capitalize on this. -Consumers are more likely to watch video on an iPad if they are in a room without a TV. -Consumers turn to iPads to watch TV shows when someone else is using the TV, and watching something they are not interested in. -Consumers like their iPads, but still plan on keeping their smartphones and laptops. Forced to make a decision on keeping only one device, they may opt for the iPad. -Consumers continue to discover more apps to use on their iPads, particularly when a trusted friend viewed as a virtual clone promotes one. Even with their aversions, researchers should also agree that releasing data showing consumers welcome ads during iPad content can make them look embarrassingly self-serving. Only, if their work shows the opposite, should they be able to go public.