Western Europeans are embracing the mobile phone as a platform for buying -- so much so that by 2017, 6.8% of online sales will be coming from devices, according to Forrester. In its first European Mobile Commerce forecast, the company projects that the €1.7 billion in mobile spending seen last year will grow elevenfold to €19.2 billion in 2017. According to analyst and author of the report Martin Gill, this massive growth will be seen most for "easy to merchandise" categories such as DVDs, books, music and event ticketing that can take advantage of immediate inspiration to purchase or location awareness. In his blog post peeking at the report, Gill says the most significant growth will be in southern Europe and that the practice of mobile purchasing will remain a niche e-commerce activity for some time. The figures do not include sales via tablet devices. The estimate includes goods such as magazine subscriptions, gift cards and purchases for in-store pick-up but does not include mobile-based content such as ringtones and apps or m-payments made at physical checkouts. The number of people using phones to make e-commerce buys will expand from only 7.6 million in 2011 to 79 million by the end of the forecast period, constituting about 45% of mobile phone owners. Despite the broadening of the base for m-commerce, Forrester is not expecting a sharp increase in revenue realized per user. The average m-buyer will spend €227 annually with the platform in 2017, up from €201 in 2011. The UK will be the leading region for m-commerce for the foreseeable future. But mobile shopping in the southern European regions will benefit from less widespread broadband coverage on the desktop, leaving countries like Spain and Italy to rely more on their smartphones for e-commerce than some other countries. Gill notes that many European retailers have been slow to adopt mobile commerce and create more fluid user experiences. “It’s time that eBusiness executives stopped talking about mobile as something to do in the future and started enabling great, multi-touchpoint shopping experiences with mobile at the heart,” he argues.
Taking a play out of his old Interactive Advertising Bureau playbook, Mobile Marketing Association CEO Greg Stuart this morning announced an ambitious initiative to research the role that mobile media plays in the marketing mix. The initiative, dubbed SMoX.me, stands for Smart Mobile Cross Marketing Effectiveness, and is modeled after XMOS, or Cross Media Optimization Studies that were funded by the IAB’s members. The initiative, which is being unveiled by Stuart today at the MMA’s Mobile CEO & CMO Summit in the Dominican Republic, has secured more than $1 million in initial funding to conduct research that will prove the “ROI” of mobile in marketing mixes. The MMA said an RFP, or request-for-proposal, has been sent to research organizations interested in conducting the studies and that a consortium of companies would be involved in the selection process, which is expected to be completed by the third quarter of 2012. The selection process will also determine which brand marketers’ campaigns would be used as the basis of the research. The IAB’s XMOS studies were conducted exclusively by Marketing Evolution, whose founder Rex Briggs co-authored a book -- “What Sticks” -- with Stuart based on the culmination of the research, which was funded by IAB members.
Compared to a year ago, mobile app store users are considerably less certain about privacy safeguards on their downloads. According to a new survey of over 500 smartphone owners by privacy services provider Truste and Harris Interactive, only 14% of respondents feel that their apps stores only make downloads available that safeguard their privacy. That level of confidence is down from 25% just a year ago. In fact. now 37% of say they don’t think these download stores vet the apps for privacy -- up from 25% last year. The 2012 U.S. Online and Mobile Privacy Perception Report finds that 85% of smartphone users will not download an app if they don’t trust it. In order to determine their level of confidence in an app, 38% say they research it online and 34% check for a privacy policy. Truste Board chair Fran Maier tells Mobile Marketing Daily that a year of press and legislative scrutiny on privacy protection in Apple and Google/Android’s respective apps stores has taken its toll on confidence. “We believe press has driven concern on overall smartphone privacy and security, an overall increase in Android usage which generally is a more open environment than Apple IOS and increasing consumer concern regarding privacy overall,” she says. Across platforms, consumers were 60% more concerned about these issues than last year. But since last year’s report, consumers were surprised to discover that some apps pulled data from their social media contact lists in order to expand their own user base. And many apps are unclear about how and what user data they collect and track. Despite an overall wariness about behavioral targeting via mobile apps (only 1% say they “like it”), there is now widespread awareness of the practice. Truste and Harris find that 62% of smartphone owners are aware that publishers track mobile actions in order to target ads. There is a more nuanced approach to the perceived exchange of value between apps and users, however. Almost half (49%) of respondents said they would be willing to share their gender with an app developer, while 36% are willing to share age and 35% will share email. Eagerness to exchange data for service on mobile devices plummets as the detail becomes more personal, however. While a quarter in the survey would share their full name, only 12% said they would be willing to share date of birth. Location -- a particularly important special data point for mobile advertisers -- triggered particularly sensitive responses, with only 9% willing to give up their current “precise” location for an app. In fact, sensitivity over location-based targeting was almost as high as sharing of phone number with a publisher, which only 8% said they would be willing to do. When it comes to on-device contact lists, which was a source of controversy in the last year as some apps were found to scrape phone contacts, only 1% said they wanted to share that information with an app. Maier says that legislation and regulation may force app makers to be more forthright about their data collection practices. “Right now you can't easily validate whether or not an app even has a privacy policy, includes good security, or has any certification or verification,” she says. “We believe that regulatory or legislative action may well push app developers and stores to validate app privacy and security. And once they start down that path they'll want to improve consumer trust by indicating through search or other means that the apps are trustworthy.” Concerns about mobile privacy seem to be rising within a context of increased awareness of the issue across digital platforms, the study finds. This year, 40% are saying that a targeted ad has made them feel uncomfortable. Half now say they will opt out of behavioral tracking when the option is available -- almost double the findings from last year. The Truste study indicates that 94% now say that online privacy is an important issue, and a sharply increasing number of consumers now trust themselves most when it comes to policing trust among online entities. More than three-quarters of users say they don’t allow companies to share information with third parties, 35% claim to have stopped interacting with a company because of privacy concerns, and 90% use various kinds of privacy controls and cookie cleaning on their browsers.
Microsoft’s latest round of layoffs, which were confirmed on Wednesday, are interesting in that the tech giant seems to be cutting back on online video and mobile advertising, which just happen to be two of the fastest-growing sectors in media today. Sources tell Adweek that the moves signal a shift toward automated ad selling rather than using a human sales force to sell ads to brands. The trade pub also reports that between 15 and 30 percent of Microsoft Advertising’s sales force will be eliminated. Wednesday’s layoff announcement wasn’t altogether surprising, given that earlier in the week the company took a massive $6.2 billion write-down tied to its 2007 purchase of aQuantive. On the way out now are Microsoft’s entire mobile advertising team, with the exception of Jeff Plaisted, director of sales and strategy, mobile & Skype advertising, as well as much of the Global Creative Solutions team, which includes its Branded Entertainment Experiences Team (BEET), the report says. BEET director Russ Axelrod is said to be among those taking severance packages. The sources said the remaining members of the Global Creative Solutions group would shift their focus on promoting Windows 8 to app developers, rather than on brand advertising. Atlas, Microsoft’s ad server that was part of aQuantive, and several regional sales offices are among the other divisions also hit by the cuts.
The mobile wallet has been a solution in search of a problem for a number of years now. The promise of integrating payment and marketing tools into a portable digital device (namely the cell phone) is as obvious as it has been elusive. If digital marketing can be tied more directly to actual point of sale, then marketers can close the loop on measuring ROI in ways never before possible. The payoffs for ad impressions, loyalty programs, offers-based programs, etc. all can be tied to purchase. The implications for media attribution, consumer behavioral data and just about everything else in the media value chain are enormous. While mobile wallets have been a dream of marketers, they have not been able to demonstrate the necessary value for two key constituencies, consumers and merchants. For the end user, mobile payments and wallets don’t solve much of anything, since pulling out a cell phone is not much better than pulling out a credit card or a loyalty card. And what is in it for the payment chain? As Alistair Goodman, CEO of geo-located mobile solutions provider Placecast explains it, “There has been a realization in the mobile wallet space that there is not a lot of new revenue to be generated by the transactions because that is a very efficient channel and all the players are quite optimized.” There is also not a lot of incentive for merchants to get with a program that merely shifts the method of payments consumers will be using anyway. As it has taken much longer for the mobile wallet idea to take hold than many had hoped, it is clearer now that the infrastructure has to add some value to a transaction method so that it benefits consumer and retailer. This may be where location-aware offers come in. Goodman’s Placecast has been developing over the years on a ShopAlerts product that uses geo-fencing to alert opted-in users of offers available at their favorite retailers. As the consumer approaches a geo-fenced area (close to the relevant mall or retail outlet), she can receive push messaging and offers from the chosen retailer. In my testing of the system, the model is not the geo-triggered nightmare many have presumed push geo-targeting would be. The user is not assaulted with unwelcome coffee shop promos as she walks down a street. Users select their favorite retailers, who maintain restraint in using a system that could easily be overused. In a new effort, Placecast has turned its ShopAlert system into an HTML5-based white label wallet that carriers, credit card companies and retailers now can incorporate into their own solutions or brand for themselves. The idea here is that geo-located offers can be ties to a mobile wallet and payment system provided by these partners. In the demo I saw, the consumer can either do a pull-based search of a given area for offers or select from a series of product categories to have geo-fenced offers pushed to them when they enter relevant zones. “The way to think about it first and foremost is as an API framework to do geo-fencing,“ says Goodman. “It delivers offers to an in-box, allows searching for offers nearby and can track redemptions and expiring offers.” The system can be linked to loyalty programs, credit cards, and a range of payment systems. This doesn’t require the often overhyped NFC tap-to-pay infrastructure, but it can use that payment system when available. Placecast is not providing the payment or security piece of the equation (that is up to the first parties), but it is linking the offers to payments to add value to the transactional piece of m-payments. Goodman, whose Placecast platform has been in operation globally for several years, has been watching the mobile wallet space evolve and crafted a solution that seems to place its bets more directly on the carriers, credit card companies and retailers than on the operating system vendors like Apple and Google. Google, of course, has its NFC-powered Wallet, which has foundered since its launch. And Apple has announced a new Passbook app for iOS that will consolidate offers and loyalty cards in a single place but is not tied (yet) to a payment solution. Goodman is not convinced that Apple and Google will rule the space as much as the brands that have already established trusted financial relationships with consumers. “It is not at all clear yet who will win the mobile wallet wars,” he says. “It is our view that partners in the mobile operator and credit card space have a strong advantage because they have strong relationships. The consumer does not want 20 mobile wallets. It will be a matter of who will provide the most value and added services.” And it is a matter of how consumer habits evolve around these new payment and offers systems. Worldwide movement towards mobilized payments has been varied according to region. Even before smartphones, Asian markets were much quicker than most to embrace the idea of a mobilized payment system. In Europe, the carrier O2 has already rolled out m-payments in the U.. and is actively studying how consumers will respond to the opportunity. The U.S. market has been stymied somewhat by a preoccupation with NFC and too many in the market seeing to wait upon the seeming wizardry of waving a cell phone in front of a POS terminal to make a payment. The growing presence of alternatives like PayPal and others fueled by mobile startups seems to be convincing more companies that they don’t have to wait for NFC-equipped phones to make an m-payment ecosystem real. The technology and standards have been available for more than five years now. Even if NFC phones started appearing in great numbers, this minute it would take years before hardware upgrade cycles would allow a critical mass. Whether a great number of consumers will want geo-located offers, let along push messaging triggered by their location is still an open question. In its years of operation Placecast has amassed 10 million active users, and Goodman insists that now he is starting to see the carriers and credit card companies embrace the idea of location-based offering mechanisms. But the time is ripe for retailers and all of the mobile players to start experimenting in this space. If mobile media has proven anything it is that consumers are driving the trends and are using the technology in ways that many never anticipated. The industry is in a persistent catch-up mode trying to geo-locate where the mobile consumer wants and needs the infrastructure to be next.
Earlier this year, mobile apps Path and Hipster were caught uploading users' address books without telling them. Both companies apparently did so in order to suggest friends for users, but that explanation didn't do very much to stem criticism by watchdogs -- not to mention class-action lawyers, who promptly sued those companies. Now, researchers at the University of California, Berkeley have released a new study, "Mobile Phones and Privacy," confirming what should have been obvious to app developers: The vast majority of people don't want to be snooped on by their apps. Eighty-one percent of cell phone owners surveyed by UC Berkeley said they either "definitely" or "probably" wouldn't allow an app to collect a contact list in order to suggest more friends. An even greater proportion, 93%, said they definitely or probably wouldn't allow an app to collect friends' contact information in order to offer them coupons. The study also found that people aren't thrilled with the prospect of location-based ads. A staggering 92% of survey respondents said they either definitely or probably wouldn't allow a cell phone provider to use their location to tailor ads to them. The authors say those findings indicate that people likely don't see eye to eye with marketers and merchants when it comes to mobile phone data. "This suggests that the value proposition offered to consumers by service providers ... should be especially clear and compelling for desired uses of mobile phone data," the report states. The study was based on a survey of more than 1,000 cell phone users.