People may be using their smartphones as a shopping tool in the stores, but that doesn’t mean they’re buying less from the retailers. In fact, the influence these mobile devices will have on annual in-store sales is expected to increase more than threefold over the next four years. According to a new study from Deloitte, the “mobile influence factor” (or effect of smartphones on in-store sales) on retail purchases will increase to $689 billion (or 19% of total store sales) by 2016, up from the current influence factor of $159 billion (or 5.1% of sales). (Mobile sales, meanwhile, are only expected to be $30 billion at that time.) Further evidence suggests smartphone shoppers are 14% more likely to make a purchase in the store than non-smartphone users. “That might go against conventional wisdom,” Kasey Lobaugh, principal and director of multichannel marketing for Deloitte, tells Marketing Daily. “[Retailers] need to provide the right information and functionality consumers are looking for. It’s really a great opportunity to aid in purchasing.” The spike in mobile influence will likely come as smartphones become even more prevalent among consumers, along with people’s comfort level with the devices. According to the survey, 40% use the device for store-related shopping after they have owned the phone for six months. After using it, however, they consistently use their phones on more than half of their shopping trips. According to the survey, nearly half (48%) of U.S. consumers said their phones have influenced their decision to purchase an item in-store, with usage highest at or near the point-of-purchase in a retailer. More than 60% of them use their smartphones in the store, and more than half have used them on their way to the retailer. Regardless of where they use their phones, people who use their smartphones as a shopping aid are more likely to make a purchase than those who do not. Nearly three-quarters of smartphone users (72%) said they made a purchase on their most recent shopping trip, compared with 63% who didn’t use a phone. The way people are using their phones is of particular importance to retailers. According to the study, 37% of smartphone owners used a third-party shopping application, while only 37% used a retailer’s mobile application. Lobaugh suggests people may not be getting what they’re looking for from the current incarnations of retailer apps. “Most retailers are serving up their Web site on a mobile device. I would argue the Web site isn’t what they’re looking for in the conversion process,” he says. “You have consumers who are trying to make complex decisions. The more information they have at their fingertips the more likely they are to make [a purchase] decision.”
Mobile advertising platform Smaato Thursday released its Global Price Index for the first quarter, showing a decline in mobile ad pricing from the fourth quarter. The company said ad volume increased 26% in the quarter, but pricing on average was 30% higher in the fourth quarter because of higher advertiser demand during the holiday shopping season. The Smaato index represents a percentage of the effective cost-per-click (eCPC) average per country across 80 mobile ad networks and uses the U.S. as a baseline of 100 for the overall index. The index serves as a global ”rate card,” helping advertisers better plan and roll out campaigns across different markets. App developers benefit by pinpointing countries or regions where they can drive the highest average revenue per user. The new index for the first quarter shows wide differences among regions worldwide. Western Europe has a score of 117, while the Middle East comes in at 36, underscoring the difference between mobile advertising in advanced and emerging areas. Central America represents an even bigger discount, with eCPCs indexing 70% less than in the U.S. “The Smaato Index indicates that app developers can now make more money in Western Europe than in the U.S. While for advertisers, the U.S. is now an incredible bargain, as they can reach 30% of the U.S. market through smartphones at 30% lower cost than in Western Europe,” stated Smaato CEO Ragner Kruse in a release Thursday. The company noted that users in Italy, with a score of 150, have a high affinity for mobile advertising in both apps and the mobile Web. At the same time, Scandinavia’s high smartphone penetration and low index score (96) make it an attractive but lower-cost option for advertisers. The report also highlighted the huge mobile markets represented by China and India, with index scores of 38 and 29, respectively. It pointed out that the two countries combined now have as many smartphones, as users in China especially have become savvy mobile shoppers searching for products and deals. Smaato says more than 50,000 app developers and publishers use its optimization platform to monetize content in more than 230 countries using rich media ad formats and real-time bidding technology for impression-level buying.
Extending its Project Devil initiative to mobile devices, AOL Wednesday unveiled premium display ad formats for smartphones and tablets similar to those it rolled out for the desktop 18 months ago. The Devil ads, which can be customized with more than 20 different content elements, were designed to bring TV-like visual and emotional impact to online advertising. Now AOL wants to bring the same dynamic ad elements to mobile screens. At launch, AOL is offering five types of applications for the mobile ads, powered by its Pictela content management technology. These include the photo gallery, which can show up to nine images in a carousel; a video gallery; a brand’s own content feed; and separate feeds for Facebook and Twitter. More apps will be introduced in the coming weeks. AOL is debuting the new ad units for the two dominant mobile platforms -- Apple’s iOS and Google’s Android -- and will sell the ads to run across its own mobile sites and apps, which had an audience of 28 million as of March, according to comScore. That makes AOL the eighth-ranked mobile property behind sites such as Google, Facebook and Yahoo. Adjustments have been made for smaller screen sizes. Devil ads in mobile initially displayed as standard rectangles across the top or bottom of the screen rather than commanding a good chunk of real estate, as on the desktop. That means they’re not immediately as eye-catching. But each unit shows up to three icons related to different types of applications, mirroring the characteristic three-panel display of the traditional Devil unit. A demo ad on the Daily Finance site for Moviefone, for instance, contains separate apps for viewing images, video or a Facebook feed. Clicking on any of the icons expands the ad full-screen and allows users to swipe across or tap the screen to interact with content. While the extension of Devil ads to mobile is a logical move for AOL, it won’t necessarily galvanize its emerging mobile ad business if the desktop is any guide. The units have not consistently bolstered the company’s online premium ad sales, which declined in the first quarter from a year ago. Last year, Macquarie analyst Ben Schachter noted that the Devil units weren’t having “the expected traction” with the company’s brand advertisers.
Microsoft may be coming to market with its upcoming "Surface" line of tablets after ignoring the hard lessons Google has learned about breaking Apple’s hold on the market. Although the low-end "Surface" running Windows RT and the higher-end Windows 8 model both should be available in the last quarter of this year, ABI Research is projecting the devices will account for only 1.3% of shipments this year. "The company is introducing a fragmented OS strategy with Windows RT and Windows 8," the analysts said in a news brief. This is precisely the problem with Google’s languid tablet efforts. While Apple offers developers a more unified iOS base, Android tablets from many manufacturers like Asus and Samsung have worked on various versions of the OS. The moving target has made it difficult for developers to get behind any single platform with compelling designs. ABI suggests Microsoft had forked its own market by offering Surface tablets that may not accommodate all apps. The enterprise is the most likely target of Microsoft marketing, since Windows 8 compatibility across devices should be an attraction to business IT. But ABI is doubtful. "Is Microsoft suggesting that organizations will make the 'post-PC era' move toward a mobile computing device and ditch traditional desktop and clamshell form-factors, or is the company hoping that employees will gain access to multiple devices?" the brief argues. "So far, businesses have been opposed to buying incremental computing assets for users due to the support costs."
Marketers continue to allocate budgets to U.S. paid-search advertising campaigns, but growth slowed to 15.5% in the second quarter of 2012, compared with the prior two quarters. In Q4 2011, paid-search ad spend grew 22.4%; and in Q1 2012, 30.3%, according to a quarterly report that IgnitionOne will release Thursday. Clicks also slowed to 13.2% in Q2 2012, compared with 29.1% in the prior quarter. Click-through rates came in flat year-on-year, ending an upward trend. Impressions, however, grew faster than last quarter with a 13.7% increase year-on-year, compared with 7.2% sequentially. The cost-per-click (CPC) rose 2.1% year-on-year, but clicks on Google fell slightly to 3.1%. The IgnitionOne report points to an increasing reliance on mobile paid-search ads that support less expensive clicks, as well as new ad formats that are generally lower in price. Yahoo and Bing experienced a 24.3% jump in CPCs, which the report suggests continues a sequential shift toward the two companies touting best practices. It has led to greater competition in auctions through the rise of broad-match keywords used as stepping stones to highlight other match types. The report points to a shift in market share during Q2. Google holds 79% of share compared with the Yahoo and Bing alliance at 21%, representing a 1% point year-on-year uptick for the quarter. Marketers increased the ad spend with Yahoo and Bing by nearly 33% year-on-year, which tops Google's 11% growth. Google's push toward mobile devices, as well as search and display advertising, will clearly pay off. Mobile search ad spending rose 333% year-on-year. Mobile search ads also had greater growth in engagement as clicks grew 325%, while impressions grew 130%. On Wednesday, Google announced the Nexus 7 tablet built by and co-branded with Taiwan's Asus. It will begin shipping in mid-July starting at $199. The device, available on Google Play, will feature Google Android 4.1, Jelly Bean, along with a Nvidia Tegra 3 processor. For Google, the Nexus 7 tablet will not only support advertisers through its search engine and affiliate networks, but also social signals from Google+, and games and books available through Google Play.
Marin Software has formed a partnership with RevTrax to connect online paid-search ad clicks and analytics to in-store purchases. This should give marketers running campaigns across channels the tools to closely match budgets to media. The agreement supports data analysis on margin and redemption that aims to support brands. Paid-search promotions link to printable or mobile landing pages that display a coupon with a unique barcode or promo code. The brand can track back the unique code to the coupon and paid-search ad driving engagement. The RevTrax technology triggers a code that sends conversion data to Marin, which attributes the keywords to the specific campaigns, search engine and network. Seth Sarelson, COO of RevTrax, said the offline data reports on things like margin analysis. Are consumers more likely to buy products with higher margins based on specific search ads? Do they come in the store and redeem the coupons quicker? A disconnect kept marketers from attributing paid-search campaigns to in-store purchases, although most sales still take place in brick-and-mortar stores. For every $1 of ecommerce revenue generated from paid search, marketers can expect to see approximately another $6 of in-store revenue, according to a RevTrax study. The finding shows that if marketers undervalue the search channel by not factoring in-store sales into the paid-search ROI calculation, they may undervalue the channel by as much as 85%. A handful of companies have begun to link paid search to in-store sales and revenue. In 2011, Merrell Wreden, vice president of marketing for AMF Bowling, told MediaPost SearchBlog about plans to launch a mobile campaign and tie in coupons. Now, the company takes the strategy a step further to link in paid-search ads. Through support from marketing company MediaWhiz, AMF tied offline conversion data from RevTrax with campaign data from the search engines to analyze return on advertising spend. It took six months, but monthly revenue attributed to search marketing rose more than 10 times than revenue in the first month of the program. Over nine months, AMF Bowling's conversion rate jumped 74% and cost per conversion dropped nearly 70%. Matt Lawson, vice president of marketing and partnerships at Marin Software, said revenue rose tenfold by optimizing offline conversions.
With the 40-day quiet period after Facebook’s IPO ended, the first wave of Wall Street analyst reports arrived Wednesday, weighing in on the company’s prospects following its rocky market debut in May. As reported in The Wall Street Journal today, many analysts are taking a wait-and-see approach to Facebook, initiating coverage with neutral ratings over concerns about monetization. Facebook’s stratospheric valuation at launch also dampened enthusiasm for the stock, with even the most bullish analysts projecting it will take another year before the company gets back to its IPO price of $38 a share. Much of Facebook’s future growth will hinge on its ad business, which accounted for 80% of its revenue in 2011. The initial research report from Citigroup analyst Mark Mahaney, who rated Facebook as a “hold,” highlighted some of the challenges the company faces in maximizing its potential as an advertising platform. On the plus side, the report noted that 85% of marketers use Facebook as a marketing tool, based on a survey of some 800 advertisers it conducted with Ad Age. Furthermore, more than half (56%) expect their Facebook budgets to increase over the next year, with 39% saying spending will be about the same. But while Facebook is now an “experimental buy” for major brand advertisers, they have yet to make full budget commitments to the social network. Why? “Limited creative options, less-than-robust tracking and data analytics tools, and a somewhat uncooperative attitude were cited as negative factors by the advertisers we spoke with,” stated the Citigroup report. Mahaney also noted it was somewhat surprising that big endemic advertisers like Amazon, eBay, Priceline and Expedia aren’t spending much on Facebook, either. “The fact that these highly sophisticated Online Advertisers aren’t committed to the Facebook platform should give potential investors in FB pause,” he wrote. Their reluctance stemmed, in part, from uncertainty about return on investment of Facebook advertising, with 38% describing it as inferior to that of platforms such as Yahoo and Google. In the months leading up to its IPO in particular, Facebook has been more aggressive in rolling out new ad offerings to attract spending and bolster revenue growth. The majority of marketers (58%) said they were happy with the company’s array of products and services, but a significant minority—42%--were not. Along with introducing more ad options, Mahaney suggested Facebook should also beef up its national sales force and advertising teams. The most publicized shortcoming of Facebook’s ad strategy to date has been its lack of mobile monetization until recently. Early data from Facebook ad partners suggests sponsored stories in mobile are delivering higher click-through rates than on the desktop at lower rates. The lower eCPMs in mobile may be welcome to advertisers but not necessarily Facebook’s bottom line. Even so, some analysts see significant upside to Facebook’s mobile ad efforts. Doug Anmuth, an analyst at JP Morgan, one of the lead underwriter’s of Facebook’s IPO, projects mobile could bring in $300 million to $500 million in the next two to four quarters “as higher pricing and visit frequency offset fewer overall impressions.” Anmuth has a “buy” rating on Facebook. Citigroup’s Mahaney, by contrast, projects mobile advertising won’t even be material until 2014.
Mobile is both its own beast and an increasingly important venue for video. You’ve seen all the reports on mobile video viewing increasing. Much of that increase comes from a growth in complementary TV viewing -- either in looking up videos related to TV content, or tuning into TV shows or clips. But the mobile viewing experience isn’t always pleasant for consumers. In fact, a recent Interactive Advertising Bureau study found that about 61% of consumers say media-related mobile apps aren’t worth downloading, and 54% say media Web sites don’t work very well on phones. But consumers still use mobile devices to access those sites, so what can brands and media sites do to improve the experience for consumers? The key points that advertisers should remember in creating small-screen experiences should include making them fun and useful, and then learning how to cross-promote between venues, the IAB said. To do that, looks for ways to bring viewers more information. The IAB said that talent resource site IMDB sees traffic rise during commercial breaks, so follow its lead and create the type of content viewers will want to look up during a show. “When trying to encourage multiscreen behavior, let viewers know that there’s something waiting for them, right now, that they can’t get elsewhere -- a separate ending, interviews with the cast, clues to an upcoming episode,” the IAB said. Interaction is also a vital behavior to keep in mind, so look for ways to tie in a call to action. “That action might be commercial (a registration or even purchase), but it might also be simply brand-related. Take a virtual test drive of the hero’s car or enter to win a sponsored trip to the set.” Viewers want to get involved, so brands may want to look for voting options, user-generated story lines and mechanisms to submit and share content. It’s also smart to find ways to weave product discovery into a second-screen experience. Mobile phones are becoming powerful shopping tools, so try to link shopping to your show content. The IAB also suggests looking for how-to, educational or self-improvement content to augment what’s on TV. Viewers often discover new things they want to learn or do from TV and then look to mobile phones to carry out those solutions.
Let me start by copping to a total lack of impartiality on this topic. I have been completely in the tank for podcasting for six years or more. I don’t understand why it isn’t bigger than it is. Time-shifted radio? Isn’t that as simple and compelling as it gets? And yet podcasting, which Apple named and proliferated in its mid-generation of iPods, never seemed to jump out of its niche -- nuts like me. In fact, Apple itself seemed to turn its back on its own genius innovation last year with iOS 5 when they made the podcast element in iTunes on devices impossibly hard to find. Why I couldn’t easily subscribe to my NPR, MSNBC, KCRW, Ted Talk, and G4 shows on the devices themselves has always been a total mystery to me, but now they were hard to find as well. Apple is trying to make amends with yesterday’s release of its first party Podcasts app now available for iOS. Finally the podcast catalog is more accessible. You can subscribe to podcasts and listen to them via streaming or download for offline use. There are handy tools here like a sleep timer for those of us who might fall asleep to the podcasts. As much as I am happy to have a dedicated app for podcasting I am surprised at how poor the design is here. the apps bounce back a decent iTunes catalog and a ham-handed Library interface that has crappy discovery and feels like a separate experience. I don’t get this bifurcated structure, especially coming from the company that worships simplicity. I get that it mimics the look of the iBookstore, but I think it feels fragmented and disorienting. There is a Top Stories section that lets you browse with a horizontal tuner slidebar that is terrible to manipulate on the iPhone, and actually positions your finger so it blocks the content tags that pop up as you scroll. The experience is only nominally better on the iPad. Which is all too bad because my initial frustrations with the ell-intentioned app force me to pivot radically into a rant about the incredibly underrated (even by consumers) podcast media format. When the user gets a handle on the discovery and subscription process, podcasting should be the distribution mechanism of the post-PC device age. It lets you load your device with multimedia experiences that download automatically as updated and are ever-ready. The process has been kludgy all along, and despite proselytizing podcasts to friends and family for years, most people just don’t want to be bothered. But this is a platform that comes closer to post-mass, personalized media than any I can imagine. This is where I look forward to my dose of Chris Matthews, my hit of NPR middlebrow-ism (Yeah, I am looking at you, Terry Gross) an occasional show about comic reprint by some guy with a mic somewhere in the Midwest, vintage radio from Warner Bros., the "60 Minutes" I keep managing to miss on TV, and more. This is what the post-PC should resemble. For years already I have had video podcasts that accompany me to my stairmaster each morning, audio shows that plug into my car and still others that I listen to when lifting weights at the gym. This is nano-niche media that has been shaped and chosen for mobile moments in my day. Hell, I even have video podcasts on my TV and can spend an hour with them at a time before I even turn the live TV feed on. This is what happens when the user can control the media and map content to device and to time of day, even mode and mood. And not coincidentally, I know that Audible and Bing sponsor the Slate Culture Gabfest. I discovered new sources for discount comics because my vintage comics podcast was brought to me by vendors who were laser targeted to my tastes. I can even recall that years ago ChiChi’s sponsored every daily Onion spoof radio news show with a five second end-piece. When pull-based media becomes that personal, that ritualized, that well integrated with patterns in a person’s day -- the benefit for the aligned sponsor is as powerful as any I have experienced as a consumer. This is what the post-mass media world could and should be. Podcasting may be a backwater for enthusiasts like me who don’t mind making the effort for personalized media. But in it is the kernel of a future where media consumption maps against moments the user defines. In this media environment, advertising is not dead. It lives because it is part of something the consumer actually cares about.