Facebook's initial public offering cast a harsh light on its failure so far to monetize its immense mobile audience of 500 million worldwide. But it’s hardly the only company struggling to figure out how to make money off a rapidly growing mobile user base as more people adopt smartphones and tablets. In her annual Internet trends report presented Wednesday at the AllThingsD D10 conference, Mary Meeker underscored the upside for mobile monetization based on the history of ad growth on the desktop Web. Indeed, the Kleiner Perkins Caufield & Byers partner argues mobile is more promising than the mid-'90s era Internet in terms of rapid user growth, a large number of innovative developers and a broad base of sophisticated advertisers and marketers. With her trademark series of data-filled slides, Meeker also points to factoids showing that mobile monetization has grown from 153% annually from $700 million in 2008 to $12 billion last year. The bulk of that revenue (71%) has come from app sales and only 29% from mobile advertising. As with the desktop Internet, the report emphasizes that “dollars will follow eyeballs.” Mobile traffic makes up 10% of all Internet traffic, with ample room for further growth. At the same time, mobile is commanding 10% of users’ media time but only 1% of U.S. ad spend last year. It took time, but online ad spending -- equal to 22% of overall ad dollars -- has come more in line with the Internet’s share of time spent of 29%. Meeker suggests that the same rough balance between time and ad dollars spent will eventually come to mobile as well. Less encouraging: eCPMs on the desktop are still five times higher on average ($3.50 versus 75 cents) than those in mobile because of the lower value assigned to mobile advertising. As companies’ business models lag consumers’ shift from the PC to mobile, average revenue per user (ARPU) is 1.7 to 5 times lower on mobile than the traditional Web. Examples include Internet radio service Pandora, with a mobile ARPU of $3.87 compared to $6.62 online, and Zynga, where the difference was much more pronounced at $5 versus $25. Despite increasing its mobile audience by more than 50% in the last year, Facebook’s ad ARPU has remained stuck at about $4. The social network acknowledged that user growth has outpaced the increase in ads on the site because of its lack of significant mobile advertising to date. In addition to its $1 billion purchase of Instagram, the company is rumored to be considering acquiring the Opera mobile Web browser to help build its mobile business. Still, Meeker projects that mobile monetization levels in the U.S. could surpass the desktop Web in one to three years. That seems a bit aggressive considering that the Interactive Advertising Bureau estimated mobile advertising last year at $1.6 billion, compared to $31.7 billion in overall online ad revenue. To back up her optimistic outlook, Meeker points to the Japanese market, where companies like Gree and CyberAgent have seen mobile revenue ramp up quickly in recent years. The former, for instance, has seen its mobile ARPU quadruple from $6 in the third quarter of 2009 to $24 in the first quarter of 2012.
Adobe has developed a method through HTML5 that allows brands to build advertising content that Google can index in search results. The Edge tools, an alternative to Flash, allows companies to build animation into their Web site or online ads. Mark Anders, Adobe Fellow, calls the content "a presentation on the Web site or something that could resemble an ad" built in Edge as a special version of HTML5 file. The format enables Google's and Bing's bots to recognize the file as text and serve up the content in search results. Aside from l owering development costs for ad agencies, the technology provides multiplatform support. With the ability to turn ads into searchable content, the next question is whether the search engines will block or ask agencies to prevent the content from serving up. Earlier this month, Adobe released Edge preview 6, adding productivity and publishing tools. Content made with Edge runs on mobile devices or desktops. Adobe transitioned from Flash to HTML5 for several reasons. Among them, Apple would not allow anything Flash-related to run on the iPad. Search engines such as Google or Bing could not read Flash well enough to index the content, but Anders said the engines can have problems reading HTML if the content is not structured properly. Usually Edge saves files in HTML and dynamically injects the code into the pages at runtime through JavaScript. It works similar to Gmail. Since Google can't index it, Adobe engineers created a publishing option. Publishing content as static HTML allows companies to create and optimize content search engines can read.
Consumer magazines’ print readership declined over the last year, but the losses were partly offset by growth in digital readership, according to GfK MRI, which recently released the second wave of its revised Survey of The American Consumer, amended to include more questions about digital reading. In the period from September 2011-April 2012, the total average print audience of 190 major titles tracked by GfK MRI came to just over 1.2 billion, down 2.7% from 1.24 billion for the same period in 2011. When print and digital editions are considered together, the figure sank 2.6% from just under 1.25 billion to just under 1.22 billion. (The GfK MRI figures offer unduplicated estimates of audiences for print and digital editions, but do not include traffic to magazine Web sites.) Judging by these figures, digital readership is making a small but growing contribution to the total magazine audience. The most recent wave included some 34.7 million unduplicated digital readers, up from 31.8 million unduplicated digital readers in the previous wave. That's still a small proportion of total readership, at about 2.8% of the combined print and digital audience, up from 2.5% a year before. GfK MRI introduced the new questions in its Survey of The American Consumer in response to growing demand from publishers and advertisers for more information about digital readership, spurred by the widespread adoption of tablet-style computers and e-readers. In February GfK MRI also launched Starch Digital, a syndicated service to measure the readership and effectiveness of digital advertising in consumer magazines. Starch Digital will measure every ad in every issue of 40 top magazines on tablets, e-readers and in various digital reproductions, including Zinio and Coverleaf, with title-specific data that is due to become available sometime in the second quarter. This will include monthly ROI metrics for 25 magazine genres and 625 advertised product categories. These metrics include: the percentage of readers who noted a digital ad, how much of an ad was read (the “read any” and “read most” ratings), and actions taken as a result of reading a digital ad, including making an actual purchase, intent to buy, visiting a Web site, and recommending a product. The Starch Digital survey also includes customized questions to address unique features of digital ads -- for example, whether readers looked at associated video or photo galleries.
For all the hoopla about people streaming video content on their smartphones, tablets, PCs and gaming consoles, gaming is still the preferred activity for all these devices. According to new research from PwC U.S., people (regardless of whether they’re heavy, medium or light gamers) spend more time playing games on the various devices than they do watching TV or movies on them. The disparity was particularly wide when it came to gaming consoles, which were used an average of 3.7 hours a week for gaming vs. 2.3 for video watching, among all gamer categories. “Gaming has become increasingly integrated into our daily lifestyles in recent years,” Michael Yatsko, director in PwC’s Entertainment, Media and Communications Advisory practice, tells Marketing Daily. “Some respondents said gaming served as a way to break up free time and to decompress from the stress of their day while others look at it as a way to keep in touch and stay social.” At the same time, the research suggests that console makers ought to look at marketing the devices as more than just a gaming device. Particularly as consumers become more sensitive to games pricing (44% of consumers said they spent $5 or less a month on gaming, due in large part to the lower game prices on the mobile platform), positioning the console as a media hub for the home may offset concerns about the higher cost of investment. “By extending gaming experiences across multiple platforms, consumers can become engaged in ways that better integrate into their daily lifestyles and work-styles,” Yatsko says. “Doing so provides businesses with more opportunities to monetize their services and enhance brand intimacy.” People also expressed a strong desire to play and save games across a variety of different platforms, according to the research. When it comes to these different platforms, however, gamers have different mindsets and expectations. While a majority of those who play games on a mobile platform does so in 5-15-minute bursts, most console gamers will play for an average of 60-90 minutes, with PC gamers coming in at an average 30-60 minutes. The ability to play and save games across a variety of platforms may also make people more willing to adopt subscription-based models, though many of the more casual gamers may have to be convinced that they’re getting a decent value over purchasing games. People are also intrigued by the idea of streaming games, though they have questions about how the technology would work (such as lag-time) and how it might hurt a device’s resale value. “Most respondents were intrigued by this particular idea and were quick to identify inherent benefits such as no clutter of CD’s, great social gaming interaction and portability and flexibility,” Yatsko says.
Google provided free recommendations and reviews from Zagat on Wednesday, serving up content on Google+ in a feature the tech company calls Local. After paying millions for the site and the content in September, the tech company will finally link social with maps and search features. The Local tab in Google+, available on both desktop and mobile, offers a list of nearby recommended places. The new service will also appear across Google's Search and Maps for desktop and mobile, combining content from one listing. Available today on devices running Android, the product will soon launch for Apple iOS. Reviewers can share opinions and upload photos on places to eat. User reviews determine the scores in Google+ Local based on a 0 to 3 point scale, from Excellent to Poor or Fair, using Zagat's 30-point scale. Google takes ratings, creates an average, and then multiplies them by 10 to arrive at averaged scores. Ratings given to Food, Decor, and Service accompany the average cost. When there are not enough user ratings, Google will show an overall score. A Google spokesperson said there was "no way for a company to buy their way to the top of the listing." Photos and videos appear to drive the vast majority of engagement between consumers and businesses on Google+, according to a SimplyMeasured study. Google+ continues to gain market share, and more brands have begun to adopt business pages, albeit slowly. The average weekly engagement rose 112% since February, and content engagement rose 65%, according to SimplyMeasured. Since its February update, two new brands on the Interbrand Top 100 list became active on Google+: Xerox and Nike. In that same time period, the circler counts of 22% of the brands rose 13% to more than 100,000. Local will not only offer restaurant recommendations, but also shopping, hotels, resorts, spas, golf courses and other categories in about 100 countries.
iPhone users are the data hogs of the smartphone world. On average, they account for 80% of the top 10% of heaviest data users, according to a new study by U.K.-based technology research firm Analysys Mason. Furthermore, iPhone owners are three times more likely to be in the top 30% of heaviest data users than the next-most “data-hungry” mobile consumers -- those with HTC phones running Android. The findings were based on tracking of more than 1,000 smartphone users for two months in the U.S., U.K., France, Germany and Spain using Arbitron Mobile’s on-device monitoring app. When it comes to apps, people used an average of 32.6 apps during the two-month study period -- of which nearly half (47%) were used only once during that time. Given that nearly 1 million apps are available globally, the small number of apps per user indicates underscores the imbalance between supply and demand. Almost two-thirds (64.3%) of apps tracked during the study had only one user over the two months. Ronan de Renesse, co-author of the Analysys Mason study, noted that some apps are seasonal or created only for a specific event, so have only a short shelf life. When comparing mobile operating systems, the report showed that Android and iPhone users used ‘long-tail’ apps (apps that are outside the top 25 by number of users) 10 times more than consumers with BlackBerry or Symbian devices. That could be the result of the App Store and Google Play offering a wider variety of apps and the ability to find less popular apps more easily. Both platforms offer more than 500,000 apps. In terms of messaging, email and SMS text were each used by virtually everyone in the 1,000-person sample. But the increased use of email relative to SMS raises questions about how viable the latter is as a separate fee-based service, according to the study. A separate, recent report by Strand Consulting asserted the rise of mobile messaging via Facebook is eating into carriers’ SMS revenue globally. Among other highlights from the Analysys Mason report: -75% of panelists used Wi-Fi on their smartphone. -45% of panelists used instant messaging or over-the-top messaging services, almost half of who used WhatsApp Messenger. -More than 99% of panelists used their mobile browser at least once, for an average of 7.5 minutes per day. -In the U.S., 30% of consumers used more than 500 megabytes (MB) of cellular data per month, compared with 13% in France and the U.K., and only 8% in Germany. -All mobile communications apps are used more by women than men, apart from mobile VoIP.
Lcoal deals pioneer Groupon announced at its blog this week that it has acquired Breadcrumb, which makes point-of-sale systems for hospitality and restaurant merchants. The POS system uses tablet apps to manage things such as restaurant seating, order tracking and submission and hotel room booking. “Breadcrumb will continue to serve new and existing clients and we look forward to offering their product to our existing merchant partners,” the company said. “Also, for Groupon merchant partners that use Breadcrumb’s point of sale system, we’ll be able to significantly improve the process of redeeming a Groupon.” The acquisition fuels speculation about Groupon’s ultimate ambitions in leveraging mobile technology to weave its way into local business and even mobile payments. The company has been testing an m-payment solution that appears to undercut rivals such as Square and PayPal with lower merchant costs. VentureBeat reports that the test program charges a shop owner only 1.8% of a transaction compared to around 2.7% by others. The company was offering an iPod Touch and a card reader to enable the POS system. With Breadcrumb, Groupon gets technology that not only takes payments but can weave its way into the basic functionality of a merchant’s workflow. During its most recent earning call, CEO Andrew Mason claimed that the next stage of Groupon’s development would involve an “operating system for mobile commerce.” Mobile devices are already processing 30% of Groupon daily deal transactions. The m-payment space has become very cluttered very quickly. In addition to the seemingly never-ending trails of the ISIS consortium of credit card companies, hardware OEMs and carriers, there is the Google Wallet, PayPal Here, Intuit GoPayment and a host of smaller startups like Square, Boku, and Gopago.
So-called TV Everywhere services -- which were supposed to be the coordinated response of pay TV operators like Comcast, Time Warner Cable and DirecTV to threatening over-the-top TV/video services like Netflix and Hulu -- are suffering from a lack of visibility, according to Parks Associates’ Brett Sappington. In a column for Fierce Online Video, Sappington reveals that only one-fourth or fewer subscribers to most of the big pay TV operators are even aware of the TV Everywhere services that are available to them. “This lack of subscriber awareness negates the efficacy of TV Everywhere as a tool to combat OTT services and underscores the marketing challenges for providers going forward,” Sappington writes. “TV Everywhere” services refer to the delivery of TV content, including live and on-demand programming, from a pay-TV provider to any Web-connected device. These services are often authenticated, meaning that subscribers must log in using their pay TV account information to gain access to the TV content these services offer. Sappington also reveals that while cord-cutting was the main focus of pay TV operators in 2011, the threat of so-called “cord shaving” is “potentially a greater danger.” “Cord shavers” are pay TV customers who downgrade their service to basic packages, realizing they can get much of the premium TV content they desire through online video sources. Like cord cutters, cord shavers want to save money -- but according to Sappington, they consume more content than cord cutters, who tend to be light video users. Cord shavers tend to be heavy users of Netflix, for instance, consuming nearly eight hours of video per week on a computer. He adds that 12 percent of U.S. broadband households that were pay TV subscribers have downgraded their pay TV service in the last year, while another 8 percent are likely to do so next year.
BlackBerry maker Research in Motion, which reported Tuesday that it may experience an unexpected loss for the first quarter and saw its shares plunge nearly 8% yesterday, is in a “make-or-break blitz to roll out its next smartphone and operating system” analysts and industry observers tell the Wall Street Journal’s Will Connors. That’s after influential tech columnist Shelly Palmer declared it all but embalmed in a column last Friday. That said, denial is a potent force, and there seems to be plenty of we-refuse-to-see-it-that-way operating at both the corporate and consumer levels. "There are a bunch of people [within RIM] that still don't understand how dire the situation is," a person close to the company tells Connors. Officially, says a spokesman, RIM employees ‘understand the vital importance of launching BlackBerry 10 on time at a quality that exceeds the expectations of our users.’” The difficulty with that, however, is the increasingly high level of competing products. And don’t discount products that don’t even use cellular networks, even if they are not at all ready for the primetime business market. Yet. The New York Times’ tech columnist, David Pogue, has a gushing review of Samsung’s new challenge to Apple’s $200 iPod Touch, which uses wi-fi to connect to the Internet and allowing his teenage son virtually free phone usage since wi-fi is becoming ubiquitous. The Galaxy Player 4.2 “should hold special appeal for a significant customer niche: rebels,” Pogue writes. Included among them is “anyone with a dominant anti-Apple gene,” suggesting that the rebel-rousers have become the Establishment. Back to BlackBerry. Palmer’s “BlackBerry Is Truly Over” piece is based on calls he made -– first to Verizon and then to RIM itself –- trying to resolve a problem an employee was having in getting her BlackBerry 9650 to see Gmail and other Google apps critical to the enterprise. Any skilled tech could have solved the problem in 10 seconds, Palmer writes, but he never found that person during a long-and-frustrating journey through RIM’s customer service tree. Bottom line: Palmer’s head of client services now uses an iPhone rather than a BlackBerry. “With the Samsung Galaxy S III about to break all Android sales records and a new iPhone around the corner -- I’m sorry to inform you that, we did all we could … but RIM’s self-inflicted injuries were too severe,” writes Palmer, an avowed lover of every BlackBerry device he’s ever owned. “Despite all our efforts … well, you know how this ends.” RIM announced that it might lose money in the quarter even before the reporting period officially ends Saturday, which is an unusual move in itself. “While many analysts had said they expected that RIM…might start to lose money this fiscal year, none had predicted it would do so in the first quarter,” blogs the New York Times’ Ian Austen, who points out that National Bank Financial analyst Kris Thompson compares buying shares in the company to “going to the casino. If you’re feeling lucky, this stock might be worth a dice-roll under $10.” Bloomberg News reported on April 19 that RIM would pick an investment-banking adviser, Bloomberg News’ Hugo Miller reminds us, speculating that it would be JP Morgan. Tuesday it did just that, retaining both Morgan RBC Capital to "review" its strategic options -– “generally corporate jargon for putting a company on the block,” write Julianne Pepitone and David Goldman in CNNMoney. It also looks good. “Bringing in a blue-chip bank at least gives you the seal of approval that you’re doing the correct due diligence and taking shareholder interest into account here,” Avian Securities analyst Matt Thornton tells Miller. It’s most valuable assets may be its secure network – which is particularly attractive to its 20 million business and government users worldwide -- and its patents, according to CBS MoneyWatch. Another asset are those folks who, unlike Shelly Palmer, remain in denial that once customer service unravels, it’s very difficult to get the ball rolling again. After reading his piece, I sent it to a colleague who I knew had debated the relative merits of the iPhone and a BlackBerry recently for his primary use -- sending email. “I love my BlackBerry Bold and it does not have a touchscreen,” he emailed me back in reply. But, he added, “I am not enthralled with the Playbook (BlackBerry’s Tablet). I’ve spent enough time with it that we should work well together, however that is not the case yet. I will try both on-line tutorial and the tech rep before condemning it.” Do you, like me, hear Palmer’s conclusion resonating in your head? That would be: “Well, you know how this ends.”,
Conventional wisdom suggests that putting a mobile ad as close to the point of sale as possible is, for all the obvious reasons, the smartest local mobile targeting method. Geo-fencing and location profiling are, after all, one of the hottest areas of mobile ad tech right now. We presume that proximity aligns best with either intent or opportunity. And so when Danny Huynh, senior partner, managing director of Mindshare in Chicago and Greg Hallinan, CMO of Verve Wireless were walking me through results from a recent Radio Shack campaign the other day, one metric they recited had me asking them to repeat it slowly to make sure I got it. The highly geotargeted campaign of banner ads and mobile circulars actually enjoyed higher click-through rates when the user was farthest from a Radio Shack. The campaign, which ran across Verve’s 3500 local news outlets during holiday 2011 and then again in early 2012, was focused on driving store traffic -- especially around its line of wireless products. Eighty-nine percent of the impressions hit users within a 5-mile radius of the nearest store. But the CTRs actually went up as the radius expanded. So consumers targeted within 2 miles of a store had a .67% click rate, people 2 to 5 miles out had a .7% CTR, and those from 5 to 10 miles out clicked through at a substantially higher .8% rate. That seems counterintuitive until you get beyond your own intuition. “The ad is a guide for that consumer to find the store,” says Huynh. “The farther they are away from the store the more help they need to find it.” Arguably, people closer to a Radio Shack were already more aware of its location. In fact, much of the creative for the campaign was not only location-aware but location-specific. Once a mobile site in the Verve network like APNews.com asked permission to use your location, the banner itself could tell you that a Radio Shack is “1.9 miles away,” for instance. Verve employed a combination of GPS, WiFi, content and cell tower triangulation to establish place. But the campaign also targeted by device to determine the audience most likely to need a new phone and contract. The campaign looked for devices that were registered at least 18 months ago. What is interesting here is how the creative and the geotargeting turned a banner ad into a user tool. There was the expectation among those who clicked through, I suppose, that they would get directions -- that the ad would act as a guide. Hallinan says that this phenomenon is not unique to the Radio Shack campaign. As counterintuitive as it seems at first, it makes a lot of sense, and they are seeing it across many geotargeted campaigns. But the issues this raises for creative -- and simply the ways in which marketers think about mobile media -- should be profound. It underscores how much mobile content and advertising really becomes utility. It demands that we pivot away from some of the thinking that dominated banners on the Web. As Huynh reflected on the data: “We have to think about the role of mobile as a utility device, not just as an ad vehicle.” If users already understand that their smartphones are tools -- not just browsers -- then the marketing messages need to align with user expectations. In future efforts, Huynh is looking for ways of leveraging location more dynamically into the ad creative. About half of the units served in this campaign were e-circulars that expanded out into mini-catalogs featuring just a few items. He and Hallinan said they could look at which SKUs were selling well in certain markets to customize the mobile catalog for those viewers. While click-throughs were the primary KPI for this stage, obviously m-commerce could be another goal. But the idea that mobile users are bringing even to the banner ads they see a somewhat different expectation, or that advertisers can do things creatively to trigger that expectation, seems to me compelling. Tying the creative to the broader functionality of the device -- leaving behind the limitations of the Web -- seems to be the challenge for the imagination here. Web advertising and e-commerce, search, etc. took shape only as we came to understand the very task-driven sensibility behind desktop Internet use. Mobile is not just the Web made portable. There is a different sensibility we as users bring to the device. Ultimately, all channels of communication on this platform need to decipher this medium that has its own message.
What is mobile doing to email? Millions of emails a minute are being received, but many of the senders are still creating traditional emails without consideration for the millions of them being read on a mobile device. With billions of people on mobile phones increasingly using them for messaging, many of the messages coming over the airwaves are still packaged as traditional email. I guess this is logical and to be expected, since many of the Web sites being sought out also are still just traditional Web sites, not mobile-optimized. Even with the rapid-fire, multi info-swapping capabilities of mobile, email is hardly vanishing. Here are some email stats and estimates compiled by Pingdom.
The addition of display ads and social media features to mobile video can boost the effectiveness and engagement of a mobile marketing buy. That’s the finding of an analysis of mobile video advertising conducted by Rhythm New Media, a premium mobile ad network. Display ads are integrated into 88 percent of mobile video campaigns, and that’s because the combo can lift engagement, Rhythm concluded from the data it culled from more than 140 campaigns it ran for top brands in the first quarter. Full-page mobile display ads combined with video spots raise engagement by 15 percent, with engagement being any sort of interaction with the ad. Combining video with tablet banner ads lifts engagement by 41 percent, Rhythm said. Tablet full-page ads have a 20 percent engagement rate already. Also, the addition of social media buttons to streaming video ads can raise interaction by 64 percent. Rhythm also found that while smartphones are the dominant mobile device, the use of tablets for watching video and ads is quickly growing. Smartphones account for 79 percent of total minutes viewed, but on a per-user basis, tablet owners watch more videos.