The launch of the iPhone 5 on Wednesday will shake up the smartphone industry and have broader implications for a host of companies from Google to the U.S. major wireless to Intel, according to JP Morgan analysts. Apple is expected to raise the bar for other phone makers with features including a larger screen but thinner body, 4G LTE wireless capability and longer battery life. Many 4G phones have been criticized for being “pocket hogs” or “battery hogs,” but the new iPhone will avoid those labels. The device, however, is not expected to incorporate Near Field Communication technology to power mobile transactions or other uses. “The gap widens in Apple's favor with tomorrow's launch of the iPhone 5,” said JP Morgan analyst Mark Moskowitz, who hosted the conference call and covers the U.S. IT hardware sector. He expects the better battery performance, a new internally developed Maps app and an upgraded Siri voice assistant to attract new customers. The firm anticipates the global rollout of the latest iPhone to be faster and wider than in the past and projects Apple to ship at least 45 million of the devices in the fourth quarter, with about 25 million of those being iPhone 5 handsets. The pricing should stay the same as the iPhone 4S -- starting at $199 for the subsidized 16 GB model. The arrival of the iPhone 5 will ripple across the tech landscape. For PC makers like HD and Dell, it signals trouble. Sales of the device will further curb demand for laptops and desktop computers, as consumers increasingly switch to smartphones and tablets. When it comes to software, JP Morgan Internet analyst Doug Anmuth highlighted the effect on three companies in particular: Google, Facebook and eBay. Google — With Apple replacing Google Maps as the default maps app for iOS 6, Google is expected to lose some usage-related advertising revenue. While YouTube will no longer be a default app, the new downloadable version of the app for iOS allows Google to begin running advertising in music videos and offer expanded content and a better experience. “Google may sacrifice some usage, but overall it will be free of some of those restrictions imposed by Apple and will be able to monetize better,” said Anmuth. Despite rumors that Apple would also ditch Google search, he expects Google to remain the default search option for the iPhone 5. Facebook — Deeper integration with iOS 6 will drive greater engagement by streamlining status updates and social sharing. It won't directly drive revenue for Facebook, but will improve user experience on the device. eBay — The launch of Passbook, Apple's mobile wallet solution announced in June, will not initially drive transactions but could move the company into the mobile payments business over time. If Apple were to connect Passbook with its 400 million active iTunes accounts, that could pose a challenge to PayPal, eBay's digital payments unit. As for the wireless carriers, the new iPhone is expected to bring a spike in sales. Phil Cusick, who covers the U.S. telecom market for JP Morgan, has increased his estimate of iPhone shipments for Sprint to 1.75 million from 1.35 million units in the third quarter, and for AT&T, to 4 million from 3 million units. He also upped the forecast for Verizon Wireless, assuming a Sept. 21 release date for the iPhone 5. “Depending on carrier availability, we could see some pretty big impacts on carrier numbers this quarter,” said Cusick. He added that the price of the iPhone 4S would likely be lowered, while U.S. carriers will offer the subsidized iPhone 4 free. The older 3GS will be phased out. Cusick doesn't expect the new 4G LTE capability itself to drive consumer upgrades as much as the iPhone 5's other new features. People are still confused about exactly what the difference is between 4G and 3G mobile service. But to the extent that iPhone users upgrade to the latest handset, carriers will operate 4G networks more efficiently. The new iPhone also affects various Apple suppliers. Intel and Advance Micro Devices may suffer from the ongoing erosion of PC sales because of wireless devices, but certain semiconductor makers will gain, such as Analog Devices, Fairchild and Broadcom.
Facebook CEO Mark Zuckerberg acknowledged disappointment with the company's stock performance since going public in May, but voiced optimism about its nascent mobile business as a long-term growth engine. Speaking publicly on Tuesday for the first time since Facebook's botched IPO, Zuckerberg addressed a wide range of topics about the company before a packed hall at the TechCrunch: Disrupt 2012 conference in San Francisco. The most immediate issue is the social network's plummeting stock price, which has been nearly halved from its $38-a-share offering price. Some analysts have suggested that Zuckerberg is overly focused on building products with little regard for Wall Street's focus on quarterly profits and growth. But the CEO suggested the company mission to “make the world more open and connected” doesn't conflict with achieving financial success. "Building a mission and building a business go hand-in-hand,” he said. “We need to do both.” Asked about the impact of the depressed stock price on employee morale and retention, Zuckerberg admitted the steep decline “doesn't help.” But he said the company is not a stranger to controversy and outside criticism and will be able to weather the current difficulties it faces as a newly public company. What's more, he argued that the drop in Facebook's stock price makes it a great time for new employees to join the company and existing ones to “double-down” and benefit from an eventual upswing in the value of their shares. One of the biggest questions feeding investor uncertainty is about Facebook's ability to monetize its mobile audience of more than 500 million and growing. The company only began running mobile ads in March, but Zuckerberg emphasized the huge potential that mobile offers for revenue growth. "Over the next three to five years, I think the biggest question on everyone's mind, that will determine our performance over that period, is really how well we do with mobile,” he said. One of the key steps Facebook has taken in recent months was to ditch HTML5 in favor of building native apps for iOS and Android devices. Zuckerberg called the company's bet on HTML5 its biggest mistake to date, acknowledging that the programming technology in the near future wouldn't be able to deliver the same capabilities as native apps. Facebook's recently updated iOS app has been well received and Zuckerberg said a new Android app is coming soon, without being more specific. The CEO also reiterated that Sponsored Story ads running in the mobile news feed are performing better than the standard display ads that run on the right side of Facebook pages and generate the bulk of its revenue. Early results from outside ad firms this summer indicated that mobile ads were earning 2.5 times more than traditional ads. "We're going to make more money [in mobile] than on the desktop," said Zuckerberg on Tuesday. A forecast released by eMarketer last week projected that Facebook will make just 72.7 million in U.S. mobile advertising, but ramp up to $629 million by 2014. A far more bullish outlook from Doug Anmuth, an analyst at JP Morgan, one of Facebook's IPO underwriters, predicts the company will earn 200 million from mobile ads this year, and 900 million in 2013. One mobile project Facebook won't pursue is a branded mobile phone. Zuckerberg denied repeated suggestions from interlocutor Michael Arrington that Facebook is building its own phone to compete directly with the iPhone and Android. Rather, he said it makes more sense for Facebook to work across multiple platforms to reach the widest mobile audience possible. However, Zuckerberg didn't rule out competing more directly with Google at some point in search. “That's one obvious thing we could do in the future if we were excited about it,” he said, noting that Facebook already generates 1 billion queries a day. The company last month did introduce search advertising, allowing marketers to run Sponsored Results that direct users to a specific Facebook app, group, event, or brand page. Did Zuck's talk do anything to reassure investors? In after-hours trading, Facebook shares were up 3.3% to $19.43. Not a strong vote of confidence, but better than hitting a new low.
Net neutrality rules will "advance broadband investment" and "ensure that wireless licensees act in the public interest," the Federal Communications Commission argues in new court papers. The FCC is defending its neutrality rules from a court challenge by Verizon and MetroPCS. The telecoms are asking the federal Court of Appeals for the D.C. Circuit to rule the FCC lacks authority to regulate broadband service. The neutrality rules, passed by the FCC in 2010, prohibit all broadband providers -- wireline as well as wireless -- from blocking sites or competing applications. The regulations, which took effect last year, also ban wireline providers from engaging in unreasonable discrimination. Verizon -- and MetroPCS, which joined in Verizon's brief -- argue that the Court of Appeals already ruled in a case involving Comcast that the FCC lacks authority to regulate broadband -- mainly because the FCC classified broadband as an "information" service and not a telecommunications service. But the FCC counters in its 121-page brief that Congress granted the agency authority to protect the openness of the Web. "The Internet developed and flourished in an environment of openness,"the FCC writes. "Congress assigned the FCC -- in which it vested policy-making authority over all communication by wire and radio -- a central role in protecting Internet openness and the resulting investment in broadband facilities." The FCC says the rules are necessary to prevent Internet service providers from blocking sites or applications. "The record before the Commission showed multiple incidents of broadband providers interfering with their customers’ ability to use Internet services, from file sharing services to Internet-based telephony," the FCC argues. The commission adds that broadband providers have incentives to prevent customers from accessing sites. "The law does not demand the Commission to wait until harm has already occurred," the government argues. The FCC also contends it's empowered to issue neutrality rules on the grounds that it can craft regulations to prohibit cable companies from engaging in unfair competition. The agency argues that the neutrality rules will prevent cable companies (which also provide broadband service) from unfairly stifling online video startups. "Internet-based distribution is becoming essential to the success of video distributors," the FCC says. "Cable companies have both the incentive and ability to interfere with competition from these new rivals."
When asked, most marketers are happy to explain why one social network is better for business than another. According to new data, however, different networks lend themselves to different strategic objectives. “Not all channels in the social space are created equal,” according to Diane Kegley, CMO of RichRelevance. Facebook, for instance, dominates as a source of traffic. Indeed, shoppers who click through from Facebook account for the overwhelming majority of shopping sessions at nearly 86%, per new findings from RichRelevance, a provider of personalized recommendations for ecommerce sites. Pinterest and Twitter trail far behind with an 11.3% and 2.9% share of the driven traffic, respectively, RichRelevance finds. Pinterest appears to drive larger orders -- nearly double that of other social channels. While shoppers who come to retail sites from Facebook and Twitter purchase more often, Pinterest users spend dramatically more than either: $168.83 on average compared to average order values of $94.70 for Facebook and $70.84 for Twitter. Also working in Facebook’s favor, RichRelevance reports that shoppers who started on the top social network ultimately browse more -- and buy more often. Shoppers who enter retail sites from Facebook tend to stay longer -- nearly seven pages per visit compared to nearly three for Twitter and just over four from Pinterest. They also purchase somewhat more frequently, with conversion rates of 2.63% -- compared to average conversion rates of .93% among Pinterest users and 1.09% among Twitter users. “Every social network promises a new way of connecting consumers with retailers and brands,” added Kegley. Yet what they actually deliver is often another story. RichRelevance based its Shopping Insights study on nearly 700 million shopping sessions across top U.S. retail sites between January and August of this year.
Lyris unveiled a digital marketing platform Tuesday that resembles an enterprise resource planning (ERP) system built to support online advertising, part of an effort to rebuild and rebrand the company. The transformation began two years ago after Wolfgang Maasberg stepped in as Lyris CEO. The company shuttered several products, reconfigured a global sales organization, and reduced the employee count from 292 employees to 165. Lyris ONE analyzes data gathered from structured and unstructured sources like social, email, mobile and hundreds of enterprise applications that power interactive marketing campaigns. Creating a segment once took days after the database batched and marketers ran reports; the platform now allows marketers to create the segment while reviewing the data. These days "the customer becomes the channel," said Alex Lustberg, VP of marketing at Lyris. It means consumers don't care what device they access information from, so marketers must connect all messages across screens to create a consistent experience. The data collected through JavaScript tagging and a partnership built with data integration company Talend doesn't require the platform to identify the screen, but rather the behavior on the device. As the marketing front office becomes the next frontier for enterprise software, building ERP platforms for multichannel digital advertising and making the data available to marketers is an alternative to silos. "Marketers are a little afraid of owning data projects, but they need the information to target," Lustberg said. A Corporate Executive Board study of nearly 800 marketers at Fortune 1000 companies found the majority of marketers still rely too much on intuition, with only 11% of customer-related decisions integrating data, cites Lyris. Today's campaigns are aided by integrating marketing analytics that help determine the most profitable market segments. Lyris One also automates email and social exchanges and SMS notifications for mobile and data feeds for display retargeting. It's unclear whether the company plans to build out campaign creation tools for display or take in data from an ad network.
The widely anticipated launch of the iPhone 5 on Wednesday could help turn millions more Americans into smartphone owners. Already, 45% of U.S. adults have made the switch to smartphones, according to the latest data from Pew Research Center's Internet & American Life project. That's up from 35% in May 2011. Some 34% own feature phones, 15% have no cell phone at all, and 5% say they're not sure if they have a smartphone or not. The report comes on the heels of an estimate yesterday from Nielsen indicating that more than half (55.5%) of U.S. mobile users own smartphones. The Pew study shows that smartphone users tend to be younger and more affluent than the general population. For example, two-thirds of those ages 18-29 have high-end phones, as do 68% of those living in households earning $75,000 or more. In terms of gender, about the same proportion of men and women have smartphones, at 46% and 45%, respectively. Blacks and Hispanics are more likely to own smartphones than whites -- at 47% and 49%, respectively, compared to 42% of whites. People who use smartphones may not be smarter, but they are more likely to be better educated: 61% with college or higher degrees and urban or suburban dwellers, 48% and 49%, respectively, compared to 29% who describe themselves as rural residents. The results come from a Pew survey of 3,014 adults conducted from Aug. 7-Sept. 6. The survey has a margin of error of plus or minus two percentage points. A separate study released by the research organization last week suggested that smartphone users have also become more sophisticated about protecting their privacy on devices. Half have erased their phones' search or browsing history, while 30% have turned off location tracking. More than half (57%) of mobile app users overall have removed particular apps or decided not to install because of privacy concerns.
In the world of digital media, marketers turn to company and product Web sites first when communicating with multicultural customers. That’s according to new research just completed by the Association of National Advertisers to help understand how marketers are and ought to be using newer media platforms to reach multicultural consumers. In a blog entry posted today on the ANA site, Bill Duggan, group executive vice president at the association, declared that the research is important “since multicultural customers have been the earliest adopters of digital technology. The growth rate for multicultural audiences has outpaced the general market.” The research will be presented in detail at the ANA’s Multicultural Marketing & Diversity Conference next month. The research analyzed 18 newer media platforms and company Web sites ranked as the top platform to engage multicultural customers. Duggan didn't specify in his blog the other media platforms that were analyzed and couldn't be immediately reached for follow-up questions. Marketers indicated that among newer media platforms for targeting multicultural audiences, Web sites will get the most spending in 2012, noted Duggan. In large part, that’s due to the fact that sites are deemed most effective by marketers for reaching multicultural customers. A majority of marketers -- 63% -- said they used in-language sites to reach their U.S.-based multicultural customers, with 59% indicating they deploy a Spanish-language Web site for that purpose. Twenty-two percent of the marketers polled indicated their companies have an Asian-language Web site. When it comes to reaching multicultural consumers, concluded Duggan, for marketers, “Web sites are front and center.”
If I’m being perfectly honest, I could just write about Nike every week. I expect you’d get more than your fill of innovation goodness. Personally, I think Nike is the marketer/brand of the decade, if not the millennium. (Although, I suspect some folks in Cupertino might take issue. And they could very well have a point.)With Fuelband, it has taken yet another effortless stride from being all about professional runners and running into a multipurpose, versatile brand that is all about active lifestyles and living. They even seemingly bypassed amateur running and other sports in order to get there.My fellow Westport neighbor (or ex-neighbor) was a delightful lady named Martha. She wore an ankle bracelet for a while to indicate that she was betrothed to the Department of Corrections. I am likewise “tagged,” except that in my case, I am submissive to Nike and have been since March in Austin, Texas, at SxSW, when I first purchased and started wearing my bracelet.For those of you who are living blissfully on a remote island somewhere, the Nike Fuelband is a sort of a pedometer that measures daily steps taken, calories burnt and “Fuel” earned. Fuel is Nike’s proprietary and algorithmically determined measure of activity or what I called “Universal Currency” in my book, “Flip the Funnel.”The Fuelband deploys slick design, obvious social peacocking (bragging and talking smack between Facebook friends) and gaming (badging, milestones) to create a water resistant masterpiece. Perhaps another time, I’ll go into more reasons why I think it’s the bomb!In this piece, however, I want to talk about Nike’s “Find your Greatness” activation platform, which has been used pretty powerfully with “reality” stars, such as morbidly obese 12-year old Nathan Sorrell from London, Ohio, in a bizarro twist on Dove’s Campaign for Real Beauty. It uses real, flawed, plus- or minus-sized humans as spokespeople, versus the celebrity-laden, retouched incumbent approach.So what happens when you put 1 (technology) and 1 (creativity) together? You get 12, August 12, 2012 to be specific. #findyourgreatness Day. On August 12, all Fuelband users had an opportunity to set a “world” record of Fuel earned in a single day. A global challenge uniting every single customer. In addition, individuals had the opportunity to set their own personal best and break their records.Clearly, I wasn’t backing down. I started my day with an eight-mile run. Followed it up with baseball and soccer in the back yard with my son, and went for a two-mile stroll with my daughter. This is what I had to do in order to eclipse my long 4 ½ hour walk spoiled playing golf from a month back. I broke my record. Tweeted it. Facebooked it. Checked in. Checked out. Rested. Iced. Compressed. Elevated and at the end of the day, proudly stroked my two “collectors” badges to prove to my adoring fan base of tens that I had found my individual greatness and played my part in this virtual activityfest.Looking back, I see yet another way that Nike has been able to connect the dots and live large in a world where technology-led innovation is a blessing and not so secret weapon in terms of walking the talk of consumer engagement, communal activity, advocacy and passion-led conversation -- while earning plenty of consumer credits in form of Fuel in the process.So what’s your equivalent of Fuelband?Where’s your (brand) greatness?Does it exist? If so, how are you bringing it to life and if not, isn’t it time to explore your own intersection of Madison Avenue and Mountain View. I’ll even give you a complimentary hashtag to get you motivated.On your marks. Get set. Go!
The very first online advertisers -- the pioneers of interactive advertising -- did a lot to advance the industry, from providing tracking, targeting and metrics to bringing a new sense of reach and scale to the digital advertising world. But when it comes to ad execution and how consumers learned to react to banner advertising, they messed up. Flashy, intrusive banner ads -- several of them to a page -- interrupted the user experience. Landing pages with complicated calls to action confused people and pushed them into sales funnels. It ruined the way that consumers think about advertising on the Internet. Why would you click on an ad on your favorite blog or Web site when you know it’s just going to take you away from your current experience? With mobile, we have a chance to start fresh. We have an opportunity to reinvent the ad experience and essentially "retrain" how people think about brands and their messages as they use apps and the mobile Web. Rather than being an interruption, an advertisement on a mobile device should be something that the user can engage with and then return to what they were doing previously, whether it is reading medical news or playing a challenging game of Words with Friends. This is particularly important because mobile devices by their very nature are more personal than PCs: from traffic patterns we can see that consumers use their smartphones and tablets in the mornings, evenings and weekends to check email, listen to music, pay bills and plan family trips. These are highly personal digital experiences that users do not want to have interrupted. But how can mobile advertising provide engaging experiences with branded content without landing pages? The answer is already out there. When Steve Jobs launched the iAd platform in April 2010, he noted that clicking on a mobile ad “yanks you out of your app” and as a result, people learn not to click on them. By placing the interactive and video content within an expandable ad unit, however, and allowing users to close the experience and go right back to where they were, they are offering a level of freedom and politeness that mobile users require. No landing pages, no navigation away from content. So hats off to Apple for creating such a large stage for that kind of user experience: advertising as an invitation, not an interruption. Now, as smartphone and tablet use reaches that of PCs -- and is on track to surpass it -- advertisers are getting hungry. And rightly so, because mobile users haven’t tuned them out yet, as they’ve done online. As of the end of July, the majority (61%) of smartphone users prefer free, ad-supported apps, and 43% said they were open to receiving in-app promotional messages from their favorite brands once a week. Particularly among the 18-24 and 25- to-34-year-old segments, the mobile equivalent of “banner blindness” hasn’t come into effect yet. Mobile users are increasing in number, and they have fresh eyes, ready to engage with brands on their devices. With ads that click away, or rather, “tap” away, to another destination, we’re getting frighteningly close to messing up...again. Let’s do this right this time. Expandable ad units are really the only solution that is good for all three constituents: Advertisers, Publishers, and Users. Advertisers will get better results; in fact, with A/B testing we’ve seen post-tap response and engagement rates up to 10X higher on ads that expand versus those that launch a new page. Publishers will see higher engagement rates as users return to their content immediately after engaging with an advertisement. And users will get the polite, non-intrusive experience that they deserve on their devices, like shopping for a new car on a quiet Saturday morning…with their iPad.