By 2016 local online, interactive and digital advertising revenue will reach $38.1 billion, according to BIA/Kelsey's Annual U.S. Local Media Forecast, 2011-2016 report released Monday. The analyst firm expects 12.4% compound annual growth rate (CAGR) between 2011 and 2016, compared with 0.4% CAGR for traditional advertising revenue. The report analyzes market segmentations such as ad revenues for search, display, and SMS. The sluggish 2012 U.S. economy led BIA/Kelsey to lower projections. Initially, the analyst firm estimated the local media market to total $136.2 billion in 2012, but now expects it to deliver $134.6 billion. Even with an increase in significant political advertising spend this year, BIA/Kelsey estimates a little more than a 1.5% increase from $132.7 billion in 2011. The firm expects the economy to improve somewhat in 2013, but that lack of political advertising will lead to lower growth estimates in 2013 of slightly more than 0.7%. U.S. mobile ad spend will reach $9.92 billion in 2016 -- up from $1.62 billion in 2011, according to the report. Local mobile advertising, a subset, will reach $5.8 billion in 2016 -- up from $664 million in 2011, representing a 54.2% CAGR. The local mobile market represents a 0.6% share of local media ad revenue in 2011, growing to a 3.1% share in 2016. It points to smartphone penetration, mobile Web use and increases in ad inventory as growth drivers. The report suggests that while mobile ad inventory outpaces advertising demand today, analysts believe it will begin to accelerate increasing overall ad spend and ad rates, such as CPMs and cost per clicks (CPCs). Today, they are lower than desktop ads as a result of an abundance of inventory. The analyst firm also forecasts that new forms of mobile and social advertising will drive demand, pointing to mobile advertising from Facebook, such as sponsored stories, ZIP code level targeting, and offers-based campaigns. And self-service tools will spur adoption. Google has begun to bundle mobile ad placement with AdWords search marketing, for example.
Instagram is following the example of another mobile app -- Foursquare -- in building out its Web presence in contrast to the broader shift underway of Web properties extending to mobile. The popular photo-sharing app today announced the launch of profile pages for the Web, rolling out in the next few days. The profiles are photocentric and position Instagram to take on Pinterest more directly as an image-based social network appealing to brands. "Your Web profile features a selection of your recently shared photographs just above your profile photo and bio, giving others a snapshot of the photos you share on Instagram. In addition, you can follow users, comment & like photos and edit your profile easily and directly from the Web," the company stated in a blog post. Previously, only individual photos could be seen on Instagram.com. Now people and brands can link to their Instagram accounts, but users still cannot upload photos or search Instagram from the Web. An account set to public will allow anyone to see the profile by visiting Instagram.com/username, for example: instagram.com/nike. Photos set to private will only be seen by logged-in Instagram followers of that account. Instagram has more than 100 million registered users worldwide.
Underscoring the ways in which the smartphone app economy has supplanted the carrier-consumer relationship of old, Verizon announced to its users this week that it was closing Verizon Apps. The carrier’s own attempt to get into the app ecosystem on smartphones dominated by Google Play and Apple App Store began more than two years ago as Verizon Vcast Apps over two years ago. This separate section, often found on the deck of many Verizon Android and BlackBerry models, usually hosted a small collection of apps from both Verizon itself and third-party partners. But in a blog post, Verizon acknowledges the obvious -- that “There’s now a whole new tech landscape in which both consumers and developers can interact like never before. We’re evolving our strategy to further simplify today’s experience and meet the needs of tomorrow.” As Verizon itself recognizes in the post, most of the apps in its store replicated widely available apps in the more popular app markets like Google Play, Amazon and BlackBerry stores. Starting in January, Verizon will begin the process of removing the Verizon Apps section from smartphone interfaces. The company says it will continue to support its developer partners via a new “AppLuvr” app that will help app makers distribute their wares to Verizon customers via Android markets. AppLuvr is an Android app that leverages recommendations from your social network to surface new app suggestions. The arrival of smartphones and the app economy effectively disintermediated network operators from the mobile content market as consumers embraced the Google and Apple app markets as well as a host of third parties. Carriers, which once had total control of and a commercial stake in all the content their customers could see and select on their decks, suddenly found themselves out of the loop. Operators such as Verizon fought back by installing their own app stores on some of the smartphones they sold. But as Verizon itself appears to admit here, the generally small collection of apps tended to duplicate apps that were already available in the more familiar markets.
MediaVest USA and mobile ad network Millennial Media have struck a partnership giving the agency access to Millennials' proprietary data set and the ability to beta-test new mobile ad technology with clients. Specifically, MediaVest will be able to use the ad network’s “Audience Insight” reports, which enable brand advertisers to see how their campaigns performed across more than 600 difference audience categories. That means they can obtain results even for segments that are not directly targeted in a given campaign, but overlap with the intended audience. For example, a campaign targeting “gadget geeks” might also include golf fans or business travelers. That information can be used to optimize mobile and digital ad efforts. MediaVest clients such as The Coca-Cola Company, Comcast, Mondelez International, Microsoft and Procter & Gamble will have access to the full data suite on Millennial’s ad platform under the deal. As the company releases new technology offerings, these and other clients will serve as alpha and beta partners during testing. Said Amanda Richman, president of digital at MediaVest: “By leveraging Millennial Media’s data sets, we can accelerate and validate the reach, engagement and ROI of mobile.” Millennial collects data about users and campaign effectiveness from more than 38,000 sites and apps that run ads powered by its platform. It delivers billions of ads each month across 7,000 different device types. The information gathered includes app usage, location data and previous interaction with ads. With this data, Millennial says it has developed more than 300 million user profiles on an anonymous basis.
Marketers have sometimes found it easier to reach consumers on devices running the Android operating system compared with Apple, given the open architecture. Android tablet shipments, led by Samsung and Amazon, rose at the expense of Apple in third-quarter 2012, which saw its share slip notably during the quarter, according to International Data Corp. Apple slipped from 65.5% market share in 2Q 2012 to 50.4% in 3Q 2012. The remaining top five tablet vendors all gained share during the quarter as a result. Apple shipped 14 million tablets. Most notably, Samsung shipped 5.1 million tablets worldwide in 3Q, up 115% sequentially and 325% compared with the year-ago quarter. Amazon followed with 2.5 million, Asus with 2.4 million, Lenovo with 0.4, and all others 3.3. Overall, worldwide tablet shipments reached 27.8 million units in Q3 2012, according to IDC. The tablet market grew 49.5% year-over-year in the quarter, and 6.7% during the second quarter of 2012. Ryan Reith, program manager, IDC's Mobile Device Trackers, believes Samsung's growth to 18.4% of worldwide market share during the quarter represents the first time an Apple competitor has attained this level of share since the original launch of the iPad. Apple may continue to lose market share to Google, but the company said Monday that it sold more than 3 million iPads in three days since the launch of the new iPad mini, which supports a 7.9-inch Multi-Touch display, FaceTime HD and iSight cameras. U.S. local mobile ads will account for $5.8 billion in 2016 -- up from $664 million in 2011, according to BIA/Kelsey. The analyst firm estimates marketers spent $2.7 billion for mobile ads this year. The rising cost of fiber and cable TV will also have an impact on market share, as more consumers opt in to Internet TV, running on Android's Google TV, and Windows' Xbox 360, while ditching Verizon FiOS and AT&T U-verse. Both consoles have access to the Internet and publishers' sites streaming TV show content. Both support apps allowing consumers to control their respective TV devices with tablets and smartphones.
In September, mobile marketing firm Velti announced closing its largest-ever deal -- worth $27 million over two years -- with a company described only as a “major U.S. brand.” The major U.S. brand is T-Mobile USA, according to sources. Neither Velti or T-Mobile would confirm that the wireless carrier is the client in question. But last year, Velti handled a large mobile marketing campaign for T-Mobile aimed at promoting the carrier’s 4G service. The 4G PayDay campaign included a trivia contest and drew involvement from more than 1.3 million T-Mobile subscribers, according to Velti. In announcing the $27 million contract Sept. 18, Velti said the relationship would focus on mobile programs designed to drive engagement and the long-term loyalty of the brand’s existing customers. That’s in line with the type of work it has already done for T-Mobile. The dollar size of the deal is far larger than Velti’s typical six-figure engagement. News of the agreement helped push the company’s stock up 6% to $10.30 the day after it was announced. It has since fallen back below $7 a share as of Nov. 5. Velti reports third-quarter results on Nov. 14. Wall Street analysts expect the company to report earnings of three cents a share on revenue of $62 million. That compares to a loss of two cents a share on revenue of $38.2 million in the year-earlier period.
Even before Providence Equity Partners officially sold its stake in Hulu last month, there was wide speculation regarding the future of the video venture, and its ability to attract quality content. Somewhat easing such concerns, CBS Corporation just agreed to a non-exclusive, multi-year licensing agreement to stream programs on the Hulu Plus subscription service. Financial terms of the deal were not disclosed. “We remain ever-focused on building a differentiated and high-value service for our customers,” Andy Forssell, SVP of content at Hulu, said Monday. Effective January 2013, Hulu Plus subscribers will have access to more than 2,600 episodes from CBS library series such as “Medium,” “Numb3rs” and “CSI: Miami” to classic shows like “Star Trek,” “I Love Lucy” and “The Twilight Zone.” In addition to CBS, recent content deals with World Wrestling Entertainment -- and the expansion of its partnership with Viacom to include Nickelodeon content -- suggest Hulu is moving in the right direction. Earlier this year, Hulu Plus said it had more than 2 million paying subscribers, each of whom pays $7.99 a month for the service. Last month, comScore reported that Hulu saw its viewership number fall sharply in 2012, including a 58% drop to 65 million hours viewed in August. The research firm, however, attributed the decline to a “refinement of tag collection mechanisms,” as well as a broader enumeration change. Meanwhile, Nielsen reported that Hulu -- excluding Hulu Plus -- saw unique monthly visitors decline to 12 million in August from 19 million last December. Last year, Hulu said it made $420 million. A number of suitors -- including Yahoo, Amazon, Dish, and Google -- were also considering bids for Hulu for as much as $2 billion. Originally purchased in 2007 for $100 million, Providence Equity sold its 10% share back to co-owners News Corp., Comcast and Disney for $200 million last month. The deal valued Hulu at $2 billion. With the divestment, top Hulu executives whose shares have already vested should now have the option to cash out of the company. Sources told Variety over the summer that CEO Jason Kilar could cash out at close to $100 million, at which point he would likely leave the company.
Apple is asking California's highest court to rule that a state law limiting data collection by merchants who accept credit cards doesn't apply to online retailers.Imposing the Song-Beverly Act's requirements on Web retailers "threatens to produce unintended and absurd results," Apple argues in its legal papers. The 21-year-old privacy law bans retailers from requesting and storing the street addresses of consumers who pay by credit card.Apple argues that it doesn't make sense to apply the Song-Beverly law to online retailers, given that they can't verify identity by asking for a photo or comparing an in-store signature to the one on a card.California's Supreme Court is slated to hear arguments on Wednesday.The matter stems from a potential class-action lawsuit against Apple filed last year by David Krescent. He alleges that Apple violated California's law by requiring him to provide his address when he purchased media from the company.Krescent says the law should apply regardless of whether consumers make purchases in person or on the Web. "The purpose of the Act is to prevent merchants from overreaching in their personal information requests," he says in court papers.He argues that even though the law should be interpreted broadly, it was enacted before online commerce became common. "The Legislature could have limited the Act, and could have stated the Act does not apply to any transaction where the merchant does not actually physically obtain the credit card...yet the Legislature deliberately chose not to do so," he writes.But Apple says that online retailers need to be able to collect personal data from customers for security purposes. "Unfortunately, computer criminals can engage in online credit card fraud on a vast automated scale, requiring even greater vigilance and verification than in person-to-person transactions," the company writes. "Unlike brick-and-mortar transactions, the only effective means that an online e-retailer has to prevent fraud is to ask the customer for personal identification information that a fraudster would have difficulty obtaining, namely, the cardholder's billing address and telephone number," it adds.Apple isn't the only online company facing suit for allegedly violating the law. Cases also are pending against Ticketmaster and eHarmony. The California Supreme Court is holding off on a decision in those matters until it rules on the Apple case.
Perhaps it was pent-up shopping energy in the aftermath of Sandy in the mid-Atlantic region, but someone threw a switch this weekend when it came to mall traffic. Starting Friday evening, I found crowds just about everywhere, with noticeable clots around tablet demo tables at Apple, Best Buy, Microsoft and Barnes & Noble. Unwittingly, I ended up doing a tour this weekend of the major tablet sales channels, and my highly subjective takeaway is that all boats likely will rise. This could be a very strong tablet holiday, and Apple is not going to own the market anymore. My own hands-on experience with the major new tablet offerings for this season suggests to me at least that the special iPad magnetism may have been diminished by compelling hardware counterarguments by rivals and Apple’s own design/pricing decision. My ten or fifteen minutes with the Microsoft Surface left me impressed with the platform’s nod to productivity and very engaging interface. Navigation across the walls of windowpanes can be disorienting, to be sure. This is an interface with a learning curve. Still, Microsoft rewards mastery with some slick multi-panel functionality and a convincing connection to one’s desktop experience. That all demo units included one of the detachable keyboards helped make the case that this is not an iPad clone. And by the way, the Microsoft store was almost as full as the Apple store when I visited both within minutes of one another. The Surface table had a crowd. Apple was full as usual, and the newly launched iPad Mini was sold out. Both my wife and I got to spend time with them. She got sucked into Temple Run, while still insisting she had no use for a tablet. The thinness and lightness of the Mini are impressive, and certainly make the rivals feel bulky and that much less portable. My impression of the much-debated screen technology and its relatively low pixel density is that it is not a big issue for the average user. I have been on a Retina Display for months, and the difference between the Mini and full-sized iPad is less apparent than I was expecting. The smaller screen using the same pixel density as pre-Retina iPads combined to make text and images rich and sharp to my eye. And after using the Nexus 7 from Google, Kindle Fire, Nooks and a range of knock-off Android tablets in the 7-inch form factor, I definitely found the iPad Mini roomier and less of a downgrade from an iPad. The width made a difference in making this model feel less like an e-book reader with benefits and more like a tablet. All that said, I think Apple must have made a conscious decision not to own the smaller tablet market in the way it owns the full-size market. The $329 pricing keeps the brand’s marquee value, surely. But if they had priced this thing at $249, I think it likely would have been game over for the rest. This may have been cagey on their part. Perhaps they presumed that the rest of the market would be fragmented across Kindle, Nook and so many Android flavors that it wasn't worth killing their margins on the Mini to win. Traditionally, Apple seems to prefer dominating the conversation around a platform to owning the market. I think for a lot of Americans in that next tier of tablet owners, the price differential is especially important for a device they aren’t sure will be a part of their everyday lives. The amount of consumer interest at Barnes & Noble and Microsoft suggests to me that a good number of people are interested in the tablet platform and seriously interested in models other than iPads. But they need a content story. I think that Barnes & Noble might have a sleeper on its hands with the new 9-inch Nook HD+. After using a Nook Tablet for the past year, I was struck by how much more fluid the performance and interface has become in the new iteration. In reading digital magazines, for instance, toggling between the full-page view and a text-focused article view was very easy. Zooming was smooth. But most of all, the screen really dazzled me. Sharpness and color richness were exceptional, and the image seemed to be floating above the glass in much the way images appear on the iPhone 5. And the 9-inch form factor, while odd in the current environment, offered an excellent weight and portability. And these things start at $269. With the same pixel density as the Retina Display, slightly smaller dimensions and a very aggressive price, the Nook HD+ should not be counted out by any means. My gut tells me that the tablet market is about to open up considerably.
Countless studies have shown growth for mobile video, both in tablets and smartphones. For instance, eMarketer forecasts double-digit growth for video consumption among smartphone users through 2015. And a recent study from Keynote Competitive Research showed that 76% of tablet users watch video on their devices. But while user consumption is seeing rapid growth, it’s still unclear what role brands and advertisers will play in mobile video. While many marketers, including myself, are promoting dynamic design that allows for device-agnostic display, consumer usage and expectations vary depending on device. Right now, 63% of tablet users use their device mainly for entertainment purposes. Because these users understand that ads are part of the experience and reduced cost of content, there is a lot of opportunity for brand marketing video on tablets. If a tablet user sees a video ad in the middle of consuming leisure content, it’s not as disruptive as it is for the person who’s using the smartphone to find directions. That’s why we’re going to focus below on the smartphone, a more difficult area to tackle. Smartphone Video Usage Let’s break mobile usage down into three behavioral pieces: Multitasking, Saving Time, and Killing Time. Multitasking is, for my purposes here, the use of mobile content as supplemental or even disassociated activity while doing something else as a primary activity. It could be dinner, attendance at a sporting event, watching TV (the second-screen experience), attending a lecture, and so forth. The issue is that with many of these activities, the multitasking occurs in an environment with other people -- and unfortunately, that can minimize the effectiveness of video. While there’s plenty of ways for brands to reach multitaskers on mobile, the self-defined reduced attention provides limited opportunities for them to do it through video. Saving Time is the use that revolves around making your life easier and more immediately convenient, such as looking up directions, finding the nearest pizza parlor, comparing prices, and more. To that end, unless we can think of a way for advertising video to deliver information in a quick and convenient manner (as compared to text or stills or data), then I think we should eliminate video as a best use for this behavior. Put simply, you won’t find a lot of people who are receptive to video ads when they’re just trying to locate the nearest gas station. To be clear, and to highlight the reason that branded video cannot be device-agnostic, this is slightly different than the role video can play in making your life easy and convenient on other devices, such as how-to DIY or cooking videos. Killing Time periods can include everything from waiting for a flight, commuting on public transportation or avoiding a long conference call. This seems to be the most fertile ground for marketing video distribution, and is why we see more references to “snackable” mobile content, a term previously reserved for Web video but no longer universally applicable, due to increased long-form consumption. Smartphone users are always “snacking”; they don’t tolerate dull moments. They proactively look for content to distract them. This is the behavior that mobile video advertisers should home in on. It’s not the same as tablet users who likes to relax with their device before going to bed, but it follows a similar drive: the need for entertainment. Native Digital Video in Pop Culture, News and Gaming Mobile users’ need for entertainment is why I believe that the biggest opportunity for video on smartphones lies in pop culture, news, and gaming. These three areas are part of the content backbone, if you will, of smartphone mobile use particularly when you’re just looking to kill time. Some of the best examples of content for this use case are Angry Birds and other kill-time mobile games like it, Twitter (which is itself a snackable content delivery system based on in-the-moment information streams), and Buzzfeed, which is “viral” news packaged in snackwrap nuggets. These companies and their content, to varying degrees, are both creating and surfing waves of cultural interests in a moment. And they are doing it at scale and with a consistent audience. Put differently: Given the recent cancellation of Anderson Cooper’s TV series (due to lack of audience), and the companion ruminations on the difficulty of achieving scaled audience for talk/news content on television, I’m beginning to look at mobile and tablet as the future drivers of news and pop culture information. They are more responsive, more immediately relevant, and with you all the time. So what does that mean for brands and marketers? Our industry needs to use this kind of information -- usage habits, success stories -- as a filtering system, as we consider how to connect in new ways with the ready audience on smartphones.
The devastation reeked by Super Storm Sandy — and our struggle responding to it — provide brutal reminders of the importance of planning. While it is impossible to manage the unpredictable impact of a natural disaster, improving infrastructure and internal systems at every level and using technology to monitor and provide services can mitigate some of the physical, economic and personal toll. For instance, replacing our outdated airline system with digital satellite technology would result in critical operational and cost efficiencies, some of which would have mattered in the wake of nearly 20,000 flight cancellations, according to Marion Blakey, of the Aerospace Industries Assoc. Similar assertions have been echoed across the spectrum of this latest disaster experience -- from century-old transit systems and inadequate power grids to insufficient water and gasoline management — all complicated by what has become an extreme weather norm. Ironically, just days before the super storm made landfall, these concerns were mentioned against the backdrop of America's fiscal and economic problems, in a presentation by Mary Meeker, a former Morgan Stanley Internet analyst turned venture capitalist at Kleiner Perkins Caufield & Byers. In an update to her annual assessment of USA Inc., evaluating the country's prospects as if it was a failing, flagellating corporation, Meeker argues that trends, events and data points underscore an urgent need to “reorganize” USA Inc. Mobile connectivity and digital technology can be catalysts for improving infrastructure and systems, while creating jobs and generating new wealth. It is a clarion call that no longer can be ignored. The enormous wealth destruction caused by Super Storm Sandy exacerbates the national fiscal crisis created by high unemployment, exorbitant debt, dangerous cutbacks and failure to upgrade aging internal systems. In the storm's aftermath, Meeker was quick to shift her focus from the stunning changes leisure-time, entertainment and commerce noted in her 2012 Internet Trends report to more critical innovation and advancements required in the country's most fundamental public services and safety systems. Every company, organization and government agency should be focused on ways to use technology to “reimagine” what we must and can do better in America to protect and improve the quality of life. It will take a village of private-public collaboration. "Innovation is alive and well in Silicon Valley. Young entrepreneurs are reimagining the things we have known for many years reconstructed and rebuilt using the Internet, using mobile phones and using applications,” Meeker said in a CNBC interview Nov. 1. The rigorous public use of social media and mobile connectivity throughout the storm-related chaos points to a vital tech system ready to be mined for new, better ideas. The pledge by companies such as Google and Facebook to rewire the way people access, share and use information should be pushed beyond the profit motive to support the public interest. That mandate should be embraced by every company, regardless of size and scope —broadcasters, cable operators and Internet service providers — familiar with and invested in local public service as well as commerce. “Mobile connectivity is growing very rapidly. There are 5 billion mobile phone users in the world, only 1 billion of which are smartphones users, so the growth there will be strong for a long time," Meeker said. While Meeker’s latest iteration of USA Inc. drills down on the need for USA's financial turnaround, she returns to the key point: There is almost nothing wrong with the U.S. economy and well being that can’t be fixed by a more enterprising application of technology. Advances in technology—particularly in areas such as public services and safety-- will drive demand and costs, Meeker says. Investments in technology, infrastructure and education boost productivity which, like employment growth, accounts for half of long-term real GDP growth. Although technology, infrastructure and education investments drove 90% of labor productivity growth from 1977 to 2000, USA Inc. has increasingly allocated resources away from productive technology, infrastructure and education investment in favor of less productive entitlement program spending through 2009, Meeker reports. USA Inc. also has steadily scaled back investment in technology R&D since the 1960s, relying on private industry has picked up much of the slack. Although 2% of companies accounted for nearly 100% of net wealth creation of the 1,720 tech IPOs in the USA, 1980 to 2002, a poor economy is now straining businesses, while the country's fiscal and infrastructure state grow more dire. Within 15 years, the government will be helpless to respond to those needs when its entitlement spending and interest expenses exceed its revenues, according to the Congressional Budget Office. The bottom line, Meeker says, is that newer technology and improved infrastructure will translate into increased efficiency and lowercosts over time. In the shadow of Sandy's lingering distress, this should be a no-brainer.