While it lives only on one phone running on only one carrier, the mobile payment system using near-field communication (NFC), Google Wallet, is expected to launch today. The Washington Post reports that documentation sent to partners in the effort tagged Sept. 19 as the rollout day. Google Wallet is the search provider's major play into the mobile payment competition. Using its own Google branded Nexus S 4G phone running only on the Sprint network, Google Wallet employs NFC technology to make tap-to-pay payments at select retail vendors. MasterCard is the only credit-card payment partner declared so far for the service, which requires in-store hardware. The WaPo reports that the documentation it has seen suggests that Citi MasterCard PayPass terminals will be the main provider used in the system. Google will be tying mobile payments in with its own localized deals service, Google Offers, so that customers using the offer at the designated merchant will automatically receive the discount when paying. Google has named more than a dozen retial partners, including Subway, Foot Locker, Bloomingdale's, Macy's Walgreen's and Radio Shack. Google Wallet payment partner MasterCard is also one of the members of a larger "ISIS" coalition of carriers, credit-card companies and technology providers that will likely be formidable competition for Google. PayPal also just announce last week it planned to introduce mobile payment solutions. Google rolled out a video recently promoting the Wallet, using Seinfeld character George Costanza as "Our First Google Wallet Customer." Using footage form the famous sit-com episode in which George's overstuffed wallet explodes on a New York City street. "Goodbye, wallet," the video promises. "The phone will take it from here."
A global deal between Kenshoo, a search engine marketing platform provider, and Omnicom Media Group's digital data and analytics division Annalect Group puts the focus on co-developing mobile products and services. Kenshoo and Annalect will support the mobile services through a variety of metrics driven by search, not just clicks and sales. Omnicom formed Annalect Group in late 2010 to build out analytics tools that gain better consumer insights. Scott Hagedorn, CEO at Annalect, stepped in from PHD Media to run the group. Under Hagedorn's watch, the most recent concept being tested combines mobile marketing and local consumer purchases. The idea to pull in search data with social and mobile marketing will enable advertisers to track the impact of local online and offline ads by consumers. Kenshoo has already begun to integrate check-in data into its platform. The data will appear alongside search and social to measure the impact of online marketing activity driving consumers to physical locations. The two companies have tapped APIs to track check-ins and other location-based activity. It will allow marketers to supporting both offline and online ad campaigns through mobile devices, which can drive in-store purchases. The plan to build out a series of mobile services will highlight technologies supported by search, according to Kenshoo CMO Aaron Goldman, although he declined to disclose additional features. The Annalect team has used Kenshoo's Universal Platform for about two years to support clients such as HBO, Hewlett-Packard, Lowe's, Starbucks and State Farm. Omnicom's Annalect Group appears to have become the first to infuse mobile data into a search marketing platform to support the growing expectation of mobile marketing. It's too early, however, to know if the partnership will return positive results. IDC expects the number of mobile Internet users to grow 16.6% between 2010 and 2015, faster than the number of users adopting wired- or wireless-connected devices. That means within a little more than three years, more users will access the Internet wirelessly through a mobile device than from a wired Ethernet connection. While the research firm didn't specially state the number of mobile users accessing the Internet through mobile, the total number of worldwide Internet user will grow from 2 billion in 2010 to 2.7 billion in 2015. About 40% of the world's population will have access. Worldwide online advertising will rise from $70 billion in 2010 to $138 billion in 2015, with its share of total advertising across all media growing from 11.9% to 17.8%, according to IDC.
After over a decade of delivering those red DVD-sized envelopes, Netflix -- the brand -- is going all digital. As part of a larger strategy to separate its streaming and DVD-by-mail businesses, Netflix will soon rename its DVD-by-mail service "Qwikster." "We realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently," Reed Hastings, Netflix co-founder and CEO, explained in a blog post Sunday. The move follows a recent decision by Netflix to raise prices on mail subscribers and a Facebook-grade user revolt. As a result, Netflix cutting third-quarter U.S. subscriber projections by 4% from 25 million to 24 million. Specifically, Netflix said expected 9.8 million streaming-only customers for the quarter is down from the 10 million previously estimated. Plus, it now forecasts 2.2 million DVD-only customers, down from 3 million expected previously. Qwikster, which will be run by company veteran Andy Rendich, will also include videogame rentals. Qwikster and Netflix will be run as two separate businesses with two different Web sites. For Netflix, the move is be interpreted as a pre-emptive response to its failing DVD-by-mail business. "We see little reason to create a new brand unless Netflix was intending to ultimately spin-out the Qwikster business," Morgan Keegan analyst Justin Patterson wrote in a research note on Monday. "The inclusion of video games seems to create a 'kicker' to get subscribers excited as this was a commonly requested feature." While Netflix said its financial outlook hadn't changed as a result of the lower subscriber growth projections, the company's stock has still taken a severe beating. In response, Netflix stated last week: "We know our decision to split our services has upset many of our subscribers, which we don't take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come." Hastings admitted on Sunday that he could have better communicated the change to subscribers and investors. "I messed up," he wrote in his blog post. "I owe everyone an explanation," he added, explaining: "...many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes." How will Netflix fare as an all digital brand? Well, it's ample competition. Given that fact, Barton Crockett, entertainment analyst at Lazard Capital Markets, suggested that the fates of Netflix and Hulu are now intertwined. "The Hulu sale could prove a catalyst," Crockett suggested in a research note Monday. If Netflix doesn't take Hulu off the market itself, a key competitor will, and will be that much stronger because of it.
The rapid acceleration of mobile Internet use is not restricted to consumers. Media companies are responding just as quickly, if not comprehensively, according to new research from Company Data Trees that shows a near doubling in the share of publishers that have mobile-ready presence. In January, the researchers found 14.67% of publishers among the top 10,000 sites to have mobile-friendly sites, measured by Alexa. By early September, that share had escalated to 25.67%. According to Company Data Trees CEO David Engel, the company used its proprietary technology called Mobile+Positive. "It loads each Web site on five different mobile OSes and on 10 devices," he says. In this context, "publishers" were defined as any mobile site that sells ad impressions, and it netted about 66% of the total universe of top 10,000 sites as measured by Alexa. The jump in the number of publisher sites with mobile destinations rose 75% between January and September. The rate at which publishers are adopting mobile outpaced the full range of Web site providers, which rose 66% in the same period. According to Engel, once you move outside of Alexa's top 10,000, the rate of mobile adoption descends. Despite the rapid growth in sites that kick the mobile browser over to a handset-friendly experience, however, the rate of ad presence on these sites remains low: 38.6%. "My theory is they haven't gotten around to it yet, and that it requires an education about mobile," says Engel. "Or they may not have been approached by any mobile ad network yet." Clearly, there is room for tremendous growth in mobile advertising on these under-utilized media sites, both for banner and for pre-rolls. In Company Data Tree's analysis, nearly 14% % of all of the publishers in the top 10,000 were already running video at their sites, and about 10% of the publishers that had come on in the last nine months included video. For publishers and for brands, the trend is obvious. Consumers can bring to their mobile browsing an expectation of a mobile-optimized experience. Despite the incredible growth rates of mobile Wen adoption among publishers, too many media sites are popping into the mobile browsers in their full and relatively useless Web iteration. Ironically, it is that full Web experience that Steve Jobs initially touted as a leading feature of the iPhone Safari browser. The site Apple used to demo the original full Web experience, NYTimes.com, still comes up in its full version on the iPhone. Mobile.nytimes.com is what users need.
To date, rumors of the death of mobile text messaging have been greatly exaggerated. Despite competition from a growing field of rival services from instant messaging to chat to newer offerings like Apple's iMessage and Facebook Messenger, SMS text messaging does not seem to be losing its appeal for mobile users. New data from the Pew Research Center finds that nearly three-quarters (73%) of American cell phone owners are texting, and nearly a third (31%) prefer texting to talking. That roughly matches recent data from comScore showing that 70% of U.S. mobile subscribers use text message. Young people are the most avid practitioners, with those between 18 and 24 exchanging an average of 109.5 messages on a typical day. That works out to more than 3,200 texts per month -- and the typical or median cell owner in this age group sends or receives 50 messages per day (or 1,500 messages per month). To put that in perspective, the average of 109.5 texts per day among 18- to-24-year-olds is more than double the comparable figure for 25-to-34-year-olds, and 23 times that for those 65 or older. While texting remains the most pervasive non-voice mobile activity, the Pew study finds that among adults as a whole, usage is leveling off. Text messaging users trade an average of 41.5 messages on a typical day, with the median user sending or receiving 10 texts daily. Both figures are virtually unchanged from 2010. Similarly, cell owners make or receive an average of 12 calls on their cells per day, the same as last year. Calling and texting is not a zero sum game. The study found that people who text often also make a large number of calls and vice versa. So mobile users who exchanged zero to 10 messages a day made or received an average of 8.2 voice calls. At the other extreme, those who traded more than 50 texts on a normal day exchanged an average of 30.2 calls. In additio to teens and twentysomethings, ethnic minorities continue to demonstrate a pattern of greater mobile activity than other groups. African-Americans and Hispanics, for instance, exchange 70 and 49 text messages a day compared to about 31 for whites. Smartphone users and those at the lower end of the income and education scale also text more frequently. A key to the enduring popularity of text messaging, however, has been its standardization across devices, networks and operating systems. "Interoperability has a lot to do with it -- anyone with a phone can text anyone else without worrying whether or not the person they are trying to reach is on the same service -- as does the fact that you can text from pretty much any type of cell phone," noted Aaron Smith, a senior research specialist with Pew's Internet & American Life Project. "After all, fewer than half of cell owners have smartphones, but even people on more basic phones can text-even if they don't have access to some other tools you mentioned." Wireless operators are banking on the continuing addiction to texting to plump up mobile data revenues. Last month, AT&T ended a plan for new subscribers providing 1,000 text messages for $10. Instead, individual customers will have to choose between an unlimited text plan for $20 a month or pay the standard 20-cent per-message charge. The Pew study results come from a nationally representative phone survey of 2,277 adults ages 18 and older, conducted from April 26 to May 22, including 755 cell phone interviews.
A federal appellate court has reversed a judge's groundbreaking decision setting aside a six-figure award for file-sharing. The 1st Circuit Court of Appeals ruled late last week that U.S. District Court Judge Nancy Gertner prematurely decided the $675,000 verdict against grad student Joel Tenenbaum was unconstitutionally high. The court ruled that Gertner should have instead considered whether to slash the verdict under the concept of "remittitur," which allows judges to propose an award lower than that returned by the jury. "It was not necessary for the district court to reach the constitutional question of whether the jury's award of $22,500 per infringement was so excessive as to violate due process," the 1st Circuit wrote. "If the district court had ordered remittitur, there would have been a number of possible outcomes that would have eliminated the constitutional due process issue altogether, or at the very least materially reshaped that issue." The appeals court also rejected Tenenbaum's argument that he should not have been found liable for violating copyright based on allegations of file-sharing. The ruling means that the case will return to Gertner for a decision about whether to allow the jury's verdict to stand or reduce it under the remittitur concept. If Gertner does slice the damage award, the record labels can reject the reduced award and demand a new trial on damages. Two years ago, a jury found Tenenbaum liable for copyright infringement for sharing 30 tracks on a peer-to-peer network and ordered him to pay $675,000. Gertner last July ruled that the award was unconstitutional because it was "grossly excessive" and reduced it to $67,500. The copyright statute provides for damages ranging from $750 to $150,000 per work infringed. At the time, she said that slashing the verdict under the remittitur concept would be futile, given that the record labels had indicated they would reject a reduction. The labels urged Gertner to order Tenenbaum to pay the six-figure award, while Tenenbaum argued that damages of more than $30 -- the cost of 30 tracks on iTunes -- were too high. It's not yet clear whether Gertner will now reduce the award under her remittitur power or, if she does, whether the new figure will meet with the RIAA's approval. Either way, should the case end up at the 1st Circuit again, Tenenbaum could face an uphill battle. Although the judges on the appellate panel reinstated the verdict on procedural grounds, they also expressed criticism of Tenenbaum. The appellate judges wrote that Tenenbaum was warned repeatedly that file-sharing could infringe on copyright. In addition, the court wrote, Tenenbaum appears to have lied during the course of the case. He "attempted to shift responsibility for his conduct to other individuals by claiming they could have used his computer in order to illegally download and distribute the copyrighted works," the appellate judges wrote. "These individuals included a foster child living in his family's home, burglars who had broken into the home, his family's house guest, and his own sisters." The judges also specifically rebuffed his argument that he shouldn't have to pay a high damage award because he was a noncommercial file-sharer. The law "does not make the distinctions he urges between 'consumer' and 'non-consumer' infringement," the judges wrote. The appeals court added that Tenenbaum "widely and repeatedly copied works belonging to Sony and then illegally distributed those works to others, who also did not pay Sony." Jennifer Pariser, senior vice president for litigation and legal affairs at the Recoding Industry Association of America, praised the appellate opinion. "We are pleased the court agreed with us that the finding of liability was correct and that the District Court erred in finding the verdict unconstitutional," she stated. Tenenbaum's representatives didn't respond to a request for comment. Tenenbaum was one of two defendants sued for file-sharing by the RIAA who took his case to a jury. Many of the other 18,000 people accused of file-sharing by the RIAA paid four-figure settlements. The other person to contest the charges at trial was Jammie Thomas-Rasset. She was found liable for copyright infringement and hit with a $1.5 million jury verdict for sharing 24 songs on Kazaa. U.S. District Court Judge Michael Davis later reduced that award to $54,000. The RIAA is appealing that move. The RIAA stopped filing new lawsuits against non-commercial users in December 2008.
Two years ago, technology performance firm Compuware issued study results showing that mobile users were frustrated by slow load times and other problems accessing mobile sites. Little has changed since then, according to findings from an updated version of the survey. For example, 57% of mobile users globally in 2011 reported having a problem loading a mobile site, nearly the same as the 60% rate two years ago. Nearly half (47%) had trouble opening mobile apps. At the same time, people have higher expectations for the speed of the mobile Web. Seven in 10 (71%) believe a Web site should appear as quickly on their phone as on their desktop, up from 58% in 2009. Nearly 60% of Web users say they expect a mobile site to load in three seconds or less, and 74% are willing to wait five seconds before leaving the site. Half are only willing to wait five seconds or less for an app to load before giving up. China has the most demanding users -- with 73% expecting pages to appear in three seconds or less, compared to 58% in the U.S. The problem is that 77% of top companies across different industries have mobile page load times of more than five seconds. And people don't have much patience for retrying a site that isn't launching instantly. The majority of mobile Web users are only willing to retry a Web site (78%) or application (80%) two times or less if it does not work initially. A third will head to a competitor's site instead. Compuware says that non-optimized mobile sites are part of the difficulty accessing mobile. About 90% of the top 30 U.S. banks and top 30 retailers have mobile-specific sites and/or applications. But further down these lists and in other verticals, the number of companies with a proper mobile presence decreases, leading to performance issues. Certainly other factors, such as varying user experience across different mobile browsers and devices, as well as network speeds, can also have a significant impact. But even in testing sites on the same devices and networks, the difference in response time between the fasted and slowest mobile site can be as high as 12 seconds. What can companies do to speed up their mobile sites? By measuring performance from an end-user perspective, a site can figure whether it's something inside the firewall, a third-party service, a slow ISP or CDN, or a mobile browser, according to Lorenz Jakober, product marketing manager of mobile for Compuware's application performance management (APM) business. "If your mobile site is generally slower than your competitors, you need to focus on tweaking your entire delivery chain -- from the data center to how the mobile browser interacts with your site," he said. The risk for Web publishers and marketers is that mobile users who have a bad experience are much less likely to return to that site. Nearly half of mobile Web users are unlikely to return to a site they had trouble accessing, and 57% are unlikely to recommend the site, according to the Compuware. The results were drawn from survey conducted earlier this year among 4,014 cell owners (1,001 from the U.S., and about 500 each from the U.K. Germany, France, China, India, and Australia).
Brand messages and incentives make consumers pay attention to ads, according to a recent study. In fact, combining the two strategies increases interaction by 91% and brand perception by 38%, as well as improved recall and purchase intent, according to findings from KN Dimestore and SocialVibe released Monday. While 48% of survey participants reported they may initially opt-in to engage with a brand for the incentive, they stay and pay attention to the brand message. SocialVibe calls the strategy "value-exchange brand advertising" and defines it as ads that ask for a consumer's attention in exchange for something they want, such as virtual currency for social games or making a donation to charity. It differs from offer-based, cost-per-action (CPA) advertising, which requires a sign-up or purchase of something. The study, which gathers data from more than 30,000 survey respondents, set out to determine if and why incentives prompt people to engage with the advertisements, how they affect consumer perception of the brands, and whether they influence people to visit the company's Web site or tell a friend about the offer. Participants interacted with ads from U.S. brands across financial services, CPG, entertainment, e-commerce and technology categories between June and July of 2011. Engaging with the ad increased the odds that the consumer would purchase the product. For instance, when survey participants were asked about their intent to purchase a brand, another CPG product in the study showed an increase of 32 points, or a 110 percent increase. A similar increase was seen in the entertainment category, where the intent to view a specific television program rose 32 points. The study demonstrates that incentives through ads drive Web site and in-store traffic, as well as purchases and conversions. Consumers who gain a satisfied view through incentives tend to visit the brand's Web site more often and 36% are more likely to shop for brand-related items at physical store after interacting with the ad. As part of the study, KN Dimestore, a subsidiary of Knowledge Networks, demonstrated how consumers took the opportunity to earn virtual currency to Zynga game players in exchange for interacting with a movie studio's ad. Consumers who had interacted -- as well as not interacted -- with the ad, were asked if they had gone to see the movie in theaters. The study revealed 32 out of every 100 people who interacted with the ad bought tickets and saw the movie.
MEDIA magazine is finalizing its annual "Future Of Media" issue (yes, we come back to it every year), and this one will take an unusual twist: Instead of focusing on how media is evolving because of people, Guest Editor Brian Monahan, head of Interpublic's Magna Global unit, suggested we focus on how people are evolving because of media. What do you think? Actually, we'd love to hear it, and share it, via a special blog and newsletter we'll be publishing leading up to our "Future of Media Forum" Oct. 5th in NYC. If you'd like to post some thoughts about the evolution or de-evolution of people because of media, please send them to carrie@mediapost.com.