Mobile Groove — the monthly podcast I produce with Inma Martinez, leading digital media strategist, “free radical” and advisor to venture capitalists — zeroes in on Google, dissecting its mobile strategy and asking some uncomfortable questions.

ANDROID SHIPMENTS

There’s no denying the phenomenal popularity of Android apps. But how many Android devices have shipped and how big is the Android market – really? Great questions and we wish we had the answers. For some reason, it’s radio silence at Dell and across the 10+ manufacturers in the Open Handset Alliance. Inma will continue to dig for facts and figures, but right now your guess is as good as ours. Listen in and let us know.

GOOGLE’S GAIN

Google snaps up AdMob for $750 million in stock. Is Google banking on a boom in mobile advertising? Or does this latest spree (AdMob and Gizmo5) lay the groundwork for a much larger (and much smarter) scheme to dominate mobile? Inma’s take: Google is doing more than acquiring capabilities to take on rivals (Gizmo5 allows Google to take on Skye, for example). “The Web giant is buying up distribution relationships with mobile publishers – even if it has to buy it at a loss.” (By way of background, AdMob served ads for more than 15,000 mobile Web sites and applications worldwide with a sharp focus on iPhone apps.)

RIVAL AD NETWORKS

AdMob’s price tag sends a clear message to the market: no one (!) can offer a cheaper price for a mobile ad network that has created similar value. What does this mean for Millennial Media, JumpTap and other ad networks making their mark? And while we’re at it: what is the impact on mobile valuations – period? Inma is looking forward to huge deals that show mobile is a serious and solid industry.

GOBLET OF ROCK

This time we salute Europe’s media superstars for harnessing mobile to produce fantastic results. From great apps to sharp monetization strategies European publishers are showing they “get” mobile. Inma’s pick: The Daily Telegraph and an awesome iPhone app she encourages us all to take out for a spin. Since I’m still reeling from an excellent presentation I recall from the last Mobile Marketing Forum in Berlin, I raise mine to The BBC – specifically, BBC World and Tom Bowman, VP Strategy and Operations, BBC Advertising Sales. In addition to developing a cross-platform strategy that has placed mobile in the middle from the get-go – it has also monetized it through mobile advertising with fantastic results. This approach has allowed the BBC to become a Broadcaster 2.0. (More details on the BBC World mobile advertising strategy and the results it has delivered to date in my bi-monthly column for my favorite trade publication, EContent magazine. You can read all the columns here.)

On the occasion of so much excitement in the mobile space Inma also raises a second goblet of Rock to ACCEL Partners, for taking the dive and staying dedicated to mobile. By way of background, ACCEL recently sold two of its portfolio start-ups for a total of $1.5 billion. (AdMob went to Google for $750 million in stock and Playfish went to games publisher Electronic Arts for about $300 million.)

Until next time – keep it fun!

Listen to the podcast here, [17:27]

Mobile advertising continues to be a good news/bad news story. And your view seems to depend on the news you want to hear.

November was a stellar month for mobile advertising. Google paid an eye- watering $750 million to acquire 3-year old AdMob, a Silicon Valley-based leader in display and iPhone ad formats. Google is not one to waste money, so you can imagine what a huge opportunity mobile advertising really is (even if the rest of the industry is blinded to it) if a Web giant is willing to pay almost $1 billion for a company with mobile expertise. I wonder if we won’t look back in two years and say it was steal…

At the end spectrum, there are always industry pessimists who ask when mobile advertising will finally be big business. However, I must also note (with a grin) that many of these nay-sayers are large publishers (can’t name names) who are 1) amazed by the tremendous traffic to their mobile Web destinations and 2) clueless about how they might harness mobile advertising and monetise these eyeballs.

And let’s not forget the mood among traditional media players. Doom and gloom everywhere you look: newspapers, direct mail, TV, radio, yellow pages, outdoor, magazines and PC Internet.

In fact, the BIA Financial Network (BIA), parent of the Kelsey Group, forecast spend on these media to decline to $144.4 billion by 2013 from $155 billion last year.  But there are winners among the losers. With budgets under pressure and advertisers beginning to demand far more tangible results, traditional media – such as print – is likely to be hit far harder.

Marketers have long realised this trend and increasingly turn their attention to online and new media channels. Against this backdrop, online commands an ever-increasing share of spend. BIA has forecast the new media share globally to grow from around 9 percent today to over 22 percent by 2013. Moreover, a recent study from Pricewaterhouse Coopers (PwC) predicts by 2013 the new media share of advertising in the U.K. will be around 34 percent.

Clearly, the advertising market is going to shrink and see a substitution of spend. It’s a trend that squeezes traditional media and spells opportunity for companies that either play in new media or migrate value to their online assets. Thus, your chances of survival are a measure of your willingness to rethink your media business models and refocus your operating principles.

MOBILE MATTERS

The media futurist Jeffrey Cole points out that the biggest challenge companies face is their own reliance on traditional advertising models. “The problem [is] people often believe there is enough life left in the ‘old advertising model.’” While many companies are still waiting for traditional advertising techniques to deliver, Jeffrey is convinced that the “big breakthroughs will be digital advertising developed by those who grew up their entire life with digital media.”

If Jeffrey is correct, and I believe he is, then mobile – a personal medium digital natives regard as an extension of themselves – is where we will see the meaningful innovation and positive business results.

Indeed, mobile continues to be the bright spot in a raft of recent industry reports. Then market outlook is even more buoyant when it comes to advertising approaches that successfully combine location and promotion.

The Kelsey Group, a research firm specialised in location-based services, expects mobile local advertising revenue alone to reach more than $3.1 billion by 2013, up from just $160 million in 2008. Meanwhile, Gartner forecasts total spending on mobile advertising to grow to $7.5 billion in 2012, up from $530.2 million in 2008.

Connect the dots in these reports, and mobile advertising revenues could outstrip anything that has gone before, making mobile one of the fastest growing advertising channels of all time. A remarkable feat when you consider that the overall advertising industry (traditional and online) will continue its decline. No wonder Google was so keen to snap up AdMob and stake its turf.

WHY WILL MOBILE GROW

In a word, mobile is different. While other media may be limited to a time or context in our daily routines (print in the morning when we read the newspaper on the train and TV when we get home in the evening), mobile is a 24/7 channel directly to us.

Look at it this way and mobile ticks so many marketing boxes that you ignore it at your peril.

• Mobile is a life-line for the 18 to 30- year old demographic, a very attractive demographic to marketers and notoriously difficult to reach.
• Mobile is a personal device and rarely shared, making one-to-one marketing a real possibility.
• Mobile is present at the point of purchase, providing marketers a channel to influence people’s brand choice and encourage the all-important impulse buy.
• Mobile is measurable, allowing marketers insights into campaign performance and their ROI.

However, for most brands and media owners, mobile remains one of the great untapped channels.

WHO WILL “GET” IT?

Not everyone is blind to the tremendous opportunities at the intersection of local information and advertising approaches. In fact, there is a staggering number of players across the ecosystem jockeying for a lead position. At one end of the spectrum you have the search engines and platforms: Taptu, MCN, Google, Yahoo, and Microsoft, just to name a few. At the other end, you have dozens of directory publishers (Yell, Pagine Gialle, Pages Jaunes, etc.). And let’s not forget the social networks, media owners, verticals, handset manufacturers and mobile operators all lining up for a slice of the action.

The market is crowded. But, if companies continue with their current approaches, then a shake-out is imminent.

To be clear, only a handful of mobile players have what it takes to be highly successful. The barriers to entry, the complexities of the mobile channel and challenges of distribution and discovery make this a game for deep-pocketed players. But other companies have an equal chance (even if they don’t have equal budgets) if they use mobile in a smart and meaningful way to deliver real value to the consumer.

WHAT WILL MAKE A WINNER?

The winners will be the companies that have much more than content (such as local listings, for example). It will be those players that have the capabilities mix to deliver mobile consumers a contextual, relevant and tailored offering. This presupposes the know-how to deliver to the device capabilities, provide consumers the features they expect, enhance location information, support social and viral distribution and add value through marketing and advertising.

It may sound simple, but why are so many companies still getting it wrong?

In my view, they lack focus and an understanding of the mobile channel.

In contrast, companies succeeding in mobile are those players that have recognised the gaps in their knowledge of new media and brought in professionals that do. (Even better if these professionals are themselves digital natives with an instinctive grasp of mobile and its impact on every aspect of our daily lives.)

Leading digital agencies such as AKQA and Ogilvy, and progressive media owners including the BBC and Sky have long had dedicated mobile teams in place. Now other companies are following their lead, dedicating more resources to mobile or buying in skills as they need them (either because they believe in the true potential of mobile or because they have been pushed into mobile by brands who understand how important it is to engage with consumers on their personal device).

If you doubt that mobile demands experts with a different skills set, then consider the real reason Google acquired AdMob: it’s easier (and cheaper) to buy skilled people than make the investments and risk missing the mobile advertising opportunity altogether.

While many agencies and media companies have a long way to go (and a lot to lose), it is encouraging to see so many brands moving full-steam into mobile and reaping real benefits. The list of successful campaigns is impressive: Guinness with its ‘Passport to greatness’ campaign, British Airways with its ‘Mobile check-in’, HSBC with its ‘Business banking’, Sky with its ‘Remote record’, the BBC with ‘BBC mobile’ and the New York Times with their NY Times iPhone app. It is interesting to note that all these companies have dedicated teams or experienced agencies that understand usability and what makes mobile different. Even if these brands appear to experiment or treat mobile as a separate business, they are serious about mobile’s position as part of the digital marketing mix.

WHERE ARE THE LOCAL CONTENT OWNERS?

Brands are leading (not all – but we have more solid case studies than last year), agencies are learning and everyone else is at least talking.
So, where are the director publishers? They are the only players with content and vast experience in traditional advertising who have yet to make the most out of their digital assets. They should have a natural edge over their competitors, but, as I pointed out in my last column for MSG, they are leaving money on the table.

Indeed, directory publishers are best placed to deliver compelling local mobile services and – importantly – commercialise them through advertising. After all, they have existing customers and a powerful sales force to sell advertising products.

It appears that directory publishers are so focused on the business challenge that they can’t see the opportunity mobile represents. This, unfortunately, leave the  door wide open to Google & Co, companies that “get” mobile and understand the value of listings.

WHAT DO THEY NEED?

To close this gap directory publishers must stop thinking of mobile as a technology and understand it is a utility. The mobile device has evolved into a multifunctional tool. It is our social organiser, our information resource, our boredom filler. Basically, it supports our lives. Directory publishers have content that is a perfect fit provided they also plug it into the equation to simply or enhance our daily routine.

Directory publishers must also acknowledge that mobile comes with a whole set of new rules. Granted, the industry has yet to figure out these rules, but borrowing ideas and approaches from traditional media will not work. A good starting point is to answer three core questions: how are you going to approach mobile?; why is your offer relevant?; and what do you expect a consumer to do?

My takeaway: As a marketing medium mobile is only set to grow in value. Providers that get the basics right and forge partnerships that allow them to unlock the potential of mobile, monetise their digital assets and deliver features that add value to our lives will be well-equipped to compete against rivals and win.

Editor’s note: Martin’s next column will focus on what companies (specifically, local media and directory publishers) should to deliver contextually relevant mobile advertising based on location.

Martin Wilson has been involved in digital media for over 14 years, during which time he gained a wealth of experience in the fixed line and mobile Internet. In January 2008, Martin established Indigo 102, an independent consultancy, to assist organisations (including leading advertising agencies, directory publishers, media owners and online service providers) take their brands – and value propositions – mobile. In this role Martin has supported the development and launch of six mass market mobile services across three continents. You can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102).

Naturally, the news that Web giant Google was getting in on the action in mobile by acquiring AdMob created an atmosphere of excitement and optimism at the Global Mobile Marketing Forum last week in L.A. But it was more than a mood; it was a quantifiable trend. Mike Wehrs, President & Chief Executive Officer, Mobile Marketing Association (MMA), reported that mobile marketing shows an increase of 40 percent over last year.

What’s more, mobile is a line item in more budgets. Mike gave us the example of German carmaker Volkswagen, which is “doing things exclusively with iPhone Apps independent of other media channels”.

Another sure sign that mobile marketing has arrived full-force was the announcement by Microsoft (just prior to the event) that it had decided to join the MMA. In fact, Microsoft became the organization’s inaugural Premier Member, reflecting Microsoft’s commitment to both the association and the mobile marketing industry. As Charles Johnson, General Manager, Microsoft Mobile Advertising, put it in a press statement: “As mobile advertising has grown in significance, the time is now for carriers, OEMs, publishers and advertisers to join forces to capitalize on that growth.”

REAL RESEARCH

Peter Johnson, VP Research, Mobile Marketing Association, provided us the latest findings from the Research and Metrics Committee.  A highlight: leveraging coupons and loyalty programs are winning customers. It is found to be the most successful of all the mobile marketing approaches (!).

Another surprise is spending. To date the average media spend by agencies on mobile is still only 1.8 percent of the total spend.  However, those agencies that have experienced successful mobile marketing have already moved mobile up to account for 2~3 percent of their overall spend.

In 2009 spending on mobile marketing was $1.7 billion in total. But there was a potential for $2.5 billion, if we think back to the boost in spending shown by companies successful in mobile marketing.

Success breeds success – and encourages more spending. To get there from here the industry needs more education and a sharing of best practices. To this end the MMA is working to encourage knowledge sharing worldwide and making sure best practices are better evangelized.

BRAND SUCCESS

But the real proof that mobile is at the top of the agenda comes from the major players pushing the envelope.

COCA-COLA COMPANY: Tom Daly, Group Manager, Strategy and Planning, Coca-Cola Company, revealed what it looks for in mobile agencies. It may not be easy to get into Coca-Cola, but it’s worth it. According to Tom, Coca-Cola is “working with over 400 brands in 200 countries with a minimum of $8K per brand per country, and it is growing and we are looking for new partners.” His checklist for agencies: The company looks for three things.

1) Talent and environment
2) Thought leadership
3) Account management process.

As he summed it up: “We look for best in class to take Coca-Cola to the world leaders in creative mobile marketing and transparency is key.”

AT&T INTERACTIVE: Matt Crowley, CMO, AT&T Interactive, argued local and search are the real drivers for mobile advertising. As he put it: Today the total of mobile ad spend is about 70 percent (display and SMS) compared to 30 percent search. But he expects this will change to 25 percent (display and SMS) and 70 percent search in 2013. In fact, local search is the driver.  “We have seen over 250% YOY mobile search network growth and our goal is to pre-load the YP mobile app with local search on every device.” Matt added that AT&T counts 79 million subs and 22 million on Medianet, AT&T’s mobile portal. “There is over 22 percent access of Medianet daily.”

CNN: Louis Gump, VP of Mobile, CNN, talked about the future of news on mobile. He asked the audience how many look at news on their mobile before they get out of bed in the morning and about 30 percent answered they did. No wonder mobile is at the center of their strategy. CNN has a freemium model (offering the mobile website free and a paid CNN app).

The company debated the pricing for this, but decided on the $1.99 price as a way to keep mobile moving forward as a profit center to propel initiatives across all the mobile strategies of CNN. As Louis put it: “We wanted a dual revenue stream, and at $1.99, yes, there was debate over prices from $0.99~9.99. But we chose that price as we doing this for marketing. We want mobile as a sustainable business platform.  He continued: “We need not only the one-way free route, but a way to sustainability 3.5 and 10 years down the road.” To date 34 percent of users access CNN news only on their mobile phones. This means over one-third of users are only getting their news from CNN and only via mobile. Connect the dots, and “mobile is now the channel for CNN to reach a different demographic of people.”

Interesting to note: CNN doesn’t limit its focus to the iPhone. Instead the mobile strategy is holistic and covers four platforms:

1)    Mobile website (with 11~12 million users  per month – free and ad-supported)
2)    Text messaging (breaking news alerts)
3)    Video- on-demand and streaming (to distribute clips much more widely)
4)    Apps (and here the news is the September 27th  release that has changed the way news is consumed on the iPhone)

FUTURE OF MOBILE

Charles Johnson, Head of Mobile Advertising for Microsoft led an engaging panel on the future of mobile advertising. Ken Wilner, CEO,  Zumobi, stated that that key to mobile is “engagement”. Yes, acquisition is important, but once you obtain a consumer, the on-going engagement is second to none as mobile is with the consumer all the time, everywhere. Frank Babieri, CEO,  Transpera, was particularly bullish about the outlook for video. In his view, of the users that access online video that also access mobile video, “more then 62 percent of the time they will access it from mobile.” Another data point to keep in mind (from Charles): We replace our phones every 12~18months and we’re due to make those purchases soon. Smartphones will likely be the ones we chose, attracted by all their cool features and the great mobile Internet experience. Thus, 2010 will be the year of mass-device transition, and that will accelerate our industry even further.

BANKING: Bruce Withers, Head of Mobile, Wells Fargo, shared his mobile banking vision. He should know. Wells Fargo has been nominated as one of the top mobile banking solutions in North America and part of that success is linked to their sharp focus on youth (Gen Y and Millennials) that are part of the larger group of mobile professionals that need banking services on the go. Some key stats illustrate the success of a multi-approach mobile strategy.

•    Text messaging alerts: the user averages about 19 requests per month
•    Mobile website and iPhone application: users engage in about six sessions per month.
•    Location: Wells Fargo has added unique features in their iPhone App, including an ATM finder and direct links to wellsfargo.com.

CROSS-MEDIA: Mike Carter, CEO, MyThum and Tiffany Gerhard, Sr. Manager, Marketing- Emerging Capabilities, BestBuy, had a great session on the success of cross-media marketing for a retail brand.  For me it was one of the highlights of the day – particularly if we consider that BestBuy was doing NOTHING in mobile two years ago. Now, they have holistic strategy and results that speak volumes (literally). The strategy includes mobile as part of the marketing mix, but it is also core strategy to the company’s CRM strategy. Tiffany pointed out that mobile is a key link in clinching the sale – and everything that follows. “The use case quite good for us is when many of our customers come into the store that find when a product is out of stock. They can just go to their BestBuy application and click-to-buy in one action and then have the product delivered right to their home” But it doesn’t stop there. Mobile allows the company to support the buying process with information and interaction with customers. “Everyday now is a learning process for us to get better with mobile.”

FOOD FOR THOUGHT

Throughout the event execs and speakers raised a variety of interesting points and challenges.

•    Zaw Thet, CEO, 4Info, brought our attention to the need for an industry-wide initiative to establish a mobile cookie.  Today the next best thing is the user’s telephone number or UID on the iPhone.  By using this we can recognize and build cross-media campaigns for targeting users from platform to platform.
•     Chetan Sharma, Chetan Sharma Consulting, stated we are finally seeing the growth of the networks. Now, mobile has surpassed the data card (!).
•    Michael Shim, Head of Mobile Sales, Yahoo, reported that Yahoo’s growth of 54.8 percent is greater then the average for the industry of 45.4 percent with the mobile Internet.  Yahoo is doing unique ad solutions for apps and working on a slew of cross-media campaigns (with clients such as Subway) that link the Web to mobile.

INSIDE INNOVATION

The MMF event also recognized companies and campaigns pushing the envelope and spearheading mobile adoption. The MMA received hundreds of submissions in 12 categories from companies across the globe and winners for the Fifth Annual Global Mobile Marketing Awards were selected by the MMA Awards Selection Committee, a body comprised of global industry leaders from wireless carriers, technology and content providers, agencies and industry publications.

I had the honor of sitting on the panel of judges, a privilege that gave me a first-hand look at the campaigns. The campaigns that were real eye-openers for me in terms of real ROI and creative excellence came from agencies such as: Mobile Dreams Factory (Mini Mobile Dealer), AKQA (Gap Style Mixer), F.biz (Trident Fresh) MyThum (Rogers/Live Nation live ticketing solution) and the Pizza Hut iPhone App from Pizza Hut.

My takeaway: We kicked off the MMF event asking ourselves if 2009 was the “year of mobile” – again. Maybe not. But 2010 is going to be an adventure.  With budgets coming back, mobile showing up on marketing budgets and the advance of smartphones, the stars are aligned for 2010 to (finally) be the year of mobile is 2010. With the stars aligned it’s up to the industry to deliver – with solutions that scale and turnkey cross-media strategies with mobile at their core.

Editor’s note: Matthew Snyder is CEO and Founder of ADObjects-Inc, a cross-media strategic consultancy focused on revenue-generating, customer acquisition, brand building and business development solutions for clients determined to make the most out of mobile. Clients/Partners include: Bing, CBS Radio, Canadian Music Week, Nokia and Mobility Ventures, as well as a variety of media companies and major brands. During his career at Nokia, where he held a number of positions including Device Program Manager and Global Director of Strategy in the Multimedia Group, he architected Nokia location-based services strategy and mobile search application. MSearchGroove is proud to be an associate of ADObjects, joining a vibrant team of professionals including Chetan Sharma, Founder and President of Chetan Sharma Consulting, a management consulting and strategic advisory firm, and Roman Kikta, a renowned venture capitalist, wireless pioneer, seasoned entrepreneur and author. Feel free to contact Matthew directly (matt@adostrategies.com) or follow him on Twitter (matsnyder2001).

Perhaps Patrick Moorhead, Director of Emerging Media at Razorfish, put it best. He was quoted saying: “(T)his is a wake-up call to clients who say mobile is not a real opportunity, because it is. Google doesn’t get involved in anything it doesn’t think has scale.”

But mobile advertising is more than big business. The fact that Google had to buy AdMob is a clear confirmation that mobile is also different.

MOBILE IS MOBILE

Mobile is a new medium (the 7^th Mass Media, actually) and squeezing online ads onto a small screen – even if that screen is a smartphone/touchscreen device – short changes advertisers and the people they hope to reach with their marketing message. SMS and display banners have their place in the marketing mix. But my own research and a recent mobile marketing survey conducted by Netsize underline the growing interest in richer advertising formats, as well as in-application advertising (in-app ads).

Connect the dots, and brands/advertisers are exploring and executing strategies that make the most of the mobile device and the range of exciting formats available.

Paul Palmieri, Millennial Media CEO, picked up on this key aspect. His take (from an email statement): “Google validated what many companies including Millennial Media has known for years – that mobile is a different market with a huge potential for advertising, possibly a bigger opportunity than online media.”

Google, which introduced AdSense for Mobile in June, has also had to acknowledge that online and mobile are different. The program, a way to land display ads (from online advertisers) on mobile phones, ended up dumping ads on mobile devices, a modus operandi that doesn’t work if the ad landing pages are not optimized for mobile.

But don’t assume content adaptation alone solves the problem. As Rachel Pasqua, Director, Mobile Marketing, iCrossing, pointed out during a panel I moderated on SEO and mobile search: It’s not enough to optimize ads; advertisers also have to think through what people do after the click. In her view, mobile campaigns that drive results have mobile at their core.

ADMOB’S ADVANTAGE

AdMob, a company that has focused on innovative made-for-mobile advertising formats (and analytics) from the start, “gets it.”

From early 2007 (the company was founded in 2006) executives including founder Omar Hamoui caught up regularly with me to brief me on cool new ad formats and innovation coming out of the “Ad Lab” it had with Apple. This sharp focus on richer advertising formats plus the technology platform to monetize mobile inventory and the analytics capabilities to optimize the delivery, tracking and reporting of mobile ad campaigns (which I personally road tested in my mobile advertising how-to white paper) has clearly paid off.

A few other aces in AdMob’s hand:

A huge footprint in CPC (cost-per-click) performance marketing. We read in the September AdMob Mobile Metrics Report that AdMob serves ads for more than 15,000 Web sites and applications around the world. The number of monthly ad requests in the AdMob network hit 10.2 billion in September 2009 (up from 1.6 billion in 2007).  BTW: The premium space is wide open to players such as Millennial Media, the next company I profile in MSG’s Meet The Mobile Ad Networks series.

A deep understanding of the in-app advertising space. AdMob is the largest ad network for in-app ad inventory on the iPhone. AdMob kicked off 2009 with the launch of Download Tracking for iPhone applications (allowing advertisers to accurately monitor App Store conversion rates and measure their return from advertising on AdMob’s network). If quickly followed with an iPhone Advertising Exchange, a concept similar to the banner and link exchange services we know from the Internet. As Russell Buckley, AdMob VP Global Alliances, put in this MSG interview at the time: “The new-launch iPhone Download Exchange is about allowing developers with apps and ad space to serve ads that promote other apps within the Download exchange, and get traction for their own apps in the process by placing ads for free on other applications.” An excellent way to build relationships and good will in the developer community in my book.

A drive to innovate new ad formats. It’s beyond the scope of my analysis to list all the new interactive ad formats AdMob quietly and cleverly brought online in 2009. The highlights: the capability to blend graphical display (banners) with iPhone-specific actions, including maps, calls (initiating a voice call from an ad), iTunes (opening the iTunes store to purchase music or video content from the store), audio (listening to recorded or streaming audio content) and – most important – integration with the App Store to download apps. And let’s not forget the cool new iPhone ad units that went live in July.

I caught up with Thomas Schulz, Vice President & Managing Director, EMEA, at the time of the launch to talk through the nuts & bolts of these new formats, which include mobile social networking (as he put it: turning a brand message into a conversation by letting people click on the banner to access the advertiser’s content/updates on Twitter, Facebook etc…); mobile search (allowing people to search in a company’s mobile site by typing a keyword query directly into the banner); and a multi-panel banner (allowing people to answer multiple calls to action in a single rich media ad).

And the list goes on….

WAS THAT THE PRIZE?

As a loyal BlackBerry user, I am the first to side with executives such as Boris Fridman, Crisp Wireless CEO, who correctly remind us that iPhone is not the only game in town. (More in this post.)

So, did Google snap up AdMob for its impressive reach, its innovation, its grasp of iPhone/in-app ads or its mobile analytics?

Or was it — as Ian Schafer, CEO of Deep Focus, an interactive marketing agency suggests – AdMob’s stockpile of data that clinched the deal.

As he put it in this must-read post:

“With the acquisition of AdMob, Google now has access to usage data of many of the most popular mobile apps — especially the apps in the iTunes App Store. For iPhones. If Google is taking on Apple for mobile OS market share, they just scored a huge competitive advantage. Google will know more details than ever about how people are using iPhone apps, how they are engaging with advertising within those apps, and users loyalty to those apps.”

I am intrigued by Ian’s take – so much so that I have scheduled a straight-talk podcast with him next week to discuss this in more depth.

So, is it all about giving Google a leg up on understanding and segmenting app users based on how they interact with in-app ads?

Eric Schmidt, Google CEO, sure leaves that impression. As he put it in this interview with Bloomberg: “One the key success points for the iPhone was this enormous development of apps, and particularly free apps, which are advertising supported. Now that we have our Android platform coming out, and really with some serious partners behind it, it will also be important to have that be true for Android as well as the others.”

The takeaway: As I have pointed out in many posts on MSG and throughout my ongoing research into content discovery, mobile search and personalization: context matters. Contextual information (what mobile operators have, by the way) is what Google lacks. The AdMob purchase covers all the bases to close this gap, paving the way for the delivery of mobile advertising everywhere – particularly on the Android platform.

TOUCH WEB RULES (?)

But what we should be asking ourselves is how this new realization that mobile is indeed different will likely impact the wider mobile Web. The advance of touchscreen devices, app stores and new advertising approaches/formats are all coming together in a new kind of interactive mobile Internet, a brave new place where new content, new experiences and even new mobile search services will set the bar.

In a September blog post AdMob referred to this Internet (the one we experience on iPhones and other touchscreen devices) as the “Middle Web.” This “space that lies between the full Web experience you find on a PC and the ad-less Web experience you remember from the first Web-enabled mobile phones.”

This new Web throws up as many issues as it does opportunities.

• What does it do to usability?
• What does it mean for mobile advertising and how do we make it easy and inviting for people to interact with company sites and ads?
• And one AdMob didn’t ask: What is the impact on mobile search?

Tough questions, but Taptu, a mobile search provider, has some of the answers in its series of white papers. Like AdMob and Google, Taptu shares the view that the advance of touchscreen devices, app stores and new advertising approaches/formats changes all the rules.

In this new Web – which Taptu calls the Touch Web – people demand optimized sites (for touchscreen devices) and specialized mobile advertising that makes the most of device functionality and all the features that make the Touch Web more interactive and potentially more exciting than the mobile Web. During my last trip to London, I caught up with Taptu CEO Steve Ives and Bob Last, Taptu SVP Business Development, to talk about the impact of everything in the middle of the Web on the future of the Internet.

This is serious business.

Taptu has crawled, indexed and graded websites (assessing factors such as their suitability for touch devices and their page weights –key since it impacts the speed of browsing on mobile network and the end-user experience) to create an index of Touch Web-friendly sites.  (Taptu counts 120,000 to date.)

To make sure Touch Web-friendly sites also figure highly in mobile search results Taptu has also fine-tuned its algorithms to “decide whether to return results from the Touch Web, the mobile Web or the wider Web” depending on factors such as the searcher’s device and what thy would likely appreciate.

To round out the experience Taptu is exploring innovative new ad formats for touch devices. In an MSG exclusive with Andreas Bernstrom, Taptu COO, treated me to a glimpse of how people might interact with ads on a touch device, a fascinating briefing I captured in this detailed post.

A highlight: Search results are displayed in a card format optimized for presentation on a touch device. I watched as Andreas not only breezed through the card results (depicting images and information in an easy-to-browse format); he could actually flip the cards over to see more details (say, the discography of a particular band or the tour dates of a group). And if you like what you see, then share it (!)  – Twitter it, post it to your personal site or just send it via email to your friends.

The bottom line: if mobile is different, then the Touch Web is a brave new world. Google (with AdMob) is well-prepared for the challenges and opportunities this new Web brings. At the other end of the spectrum, Taptu will most certainly be out of the gates first with a mobile search service (and advertising approach) that makes the most out of the Touch Web. Now the pressure is on companies across the ecosystem to do more than develop a strategy for mobile; they should also brainstorm on tactics to address/harness the unique characteristics of the Touch Web.

Look for more news from Taptu soon- Steve and Bob assure me there are some amazing things in the pipeline.

Disclaimer: MSG has contributed comments to the Taptu Touch Web white paper.

The company also found that featurephones still drive 60 percent of its ad requests from the US. It accounts this to the pervasiveness of unlimited data plans there, in contrast to other regions around the world, where such plans aren’t in such wide use, or are mainly limited to smartphones. Source

The bottom line: First, some kudos to AdMob on the second anniversary of its useful analytics reports. When they launched in September 2007, the company had 1.6 billion ads served. Last month, it served 10.2 billion. That’s some hefty growth. Second, the high use of featurephones serves as a reminder to content providers and web developers that there’s still a market beyond iPhones, Pres and Android devices.

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THREE-FOURTHS OF EUROPEAN CONSUMERS WANT A SINGLE ADDRESS BOOK FOR ALL THEIR SOCIAL NETWORKS, according to a new survey from Critical Path, which has a single-address book solution for sale to operators. The company’s survey found that 75 percent of those surveyed “found the task of updating their contacts across their social networks frustrating”, and a slightly higher percentage wanted a solution that would sync them. Source

The bottom line: Address book fragmentation is a real issue for users who navigate multiple social networking services, and want them all to come together seamlessly on their mobile device. And operators like Vodafone, which recently took the wraps off its 360 service that does exactly this, realize this – and so too do device manufacturers (see Motorola’s BLUR service on its new Android devices).

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USERS’ SATISFACTION WITH THEIR SMARTPHONES IS VERY SEPARATE FROM THEIR SATISFACTION WITH THEIR SERVICE PROVIDER, according to a new survey of American mobile users from the CFI Group. The study found that the iPhone platform received the highest user satisfaction ratings (83 out of 100, 8 points higher than Android and Pre – presumably they meant WebOS), while AT&T had the lowest level of satisfaction among the top four US operators. AT&T scored a 73 among its non-iPhone users, but the score dropped to 69 among iPhone users. Source

The bottom line: Given the widespread complaints about AT&T from iPhone users, this report shouldn’t be too surprising. But it also shows how device exclusivity and operator branding can be a double-edged sword. While certainly the iPhone has driven users to AT&T, it may have not a lot of damage to its reputation by not being able to deliver a good experience to them. Consumers have become increasingly savvy to the multiple brands that live on their mobile device, and when they encounter a service issue, they point fingers at the operator, not the device maker.

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THE AUGMENTED REALITY MARKET WILL BE WORTH $350 MILLION IN 2014,  says ABI Research, up from just $6 million in 2008, thanks to the increasing capabilities of smartphone platforms. This $350 million will be divvied up among mobile apps ($190 million) and AR-based ad revenues ($160 million), the company says, as developers and marketers seek to capitalize on the technology. Source

The bottom line: AR still faces a lot of issues before it’s a huge commercial success – and many of them are the same as other location-based ad models which still haven’t come to fruition. There’s no doubt that there are some useful and cool potential applications of augmented reality, but as usual, there’s still a big leap to turning them into commercial revenues.

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ANDROID DEVICES WILL OUTSELL THE IPHONE BY 2012, according to recent predictions from Gartner. The firm says Android will be the second most-popular smartphone OS at that point, after Symbian, making up 18 percent of the market. Blackberry will come in third with about 14 percent, and iPhone in fourth at 13.6 million. Source

The bottom line: As long as Apple pursues what is, essentially, a single-device strategy, it won’t be the market leader when it’s up against other platforms found in a variety of form factors from multiple providers. At some point, if Apple wants to lead the market – at least in number of devices shipped – it will need to change course and increase the number of models in the marketplace.

The bottom line: If anything, these figures are conservative, since in some sense, all mobile users are part of a mobile social network: the one represented by their handset’s phonebook. This list of contacts is arguably users’ most important social network, and will increasingly meld with those of online social networking services, blurring the line between users and non-users.

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THE VALUE OF THE EUROPEAN CONNECTED VEHICLE MARKET WILL DOUBLE TO 6.2 BILLION EUROS BY 2013, says Telematics Update. The growth will be driven by the mandatory installation of eCall black-box devices in cars, as well as consumer interest in connected vehicle services. Additionally, the group expects insurance companies to take advantage of telematics in their consumer offerings. Source

The bottom line: Cars are increasingly getting connected to mobile data networks, generally for navigation and traffic services. Some content networks are emerging, particularly in the US, but the growth in telematics and connected cars could represent a significant opportunity for mobile developers and content providers.

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ANDROID IS GAINING MOBILE WEB MARKET SHARE,  say the latest metrics from the AdMob ad network, but iPhone remains on top, accounting for 40 percent of all the ad requests on its network worldwide. The company says Android is growing strongly in North America and Europe, and accounts for 13 percent of US ad requests from smartphones. The Palm Pre is also showing strong growth, accounting for 9 percent of US smartphone usage. Source

The bottom line: These stats show just how hungry the market is for devices that make browsing the web a breeze. The strong figures from the Pre, a device that’s not sustained its early buzz in the US, underlines this. Also, expect the Android share to keep growing as more and more devices running the platform hit the market.

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WORKING MOMS ARE A GOOD TARGET FOR MOBILE MARKETING, says a new report from Scarborough Research, based on their mobile usage and spending. It found that they spend $94 per month on average on their mobile bill each month, compared to the overall average of $78. In addition, the firm found that working moms are 42 percent more likely than the average mobile user to download content to their phone. It’s a decent market segment, too, accounting for 9 percent of the user adult population, or 11 percent of mobile users – 21.6 million. Source

The bottom line: Males aged 18-34 are often touted as one of the most desirable segments for marketers, but this research says they should take a look at working moms as well, particularly for mobile content. This makes some intuitive sense, as working moms generally have their hands full with work and their families, making the prime mobile users.

While MSG prepares to unveil a string of new projects and media solutions for our growing roster of clients, I am wrapping up my own presentations for two exciting industry events. First on the agenda: a half-day session on Tuesday (September 29th) with Deutsche Telekom executives to discuss the challenges and opportunities of converged services and the implications this has for the consumer portal experience.

My contribution to this exclusive thought leadership event, organized by Amdocs Interactive, will look at the trend to hyper-connectedness and our increasing requirements for personalized and relevant content experiences.

I will be joined by esteemed friend and colleague Andreas Constantinou, Research Director of VisionMobile, a market analysis and strategic advisory firm. Andreas’ thoughts on the new mobile services and applications value chain – and the impact of the likes of Google, Nokia and Apple – is beyond thought-provoking.

I look forward to capturing his ideas in the opening chapter of  the Netsize Guide 2010, the must-read mobile industry almanac I write (for the third consecutive year!) on behalf of Netsize, a mobile commerce and communications enabler. More details on the Guide in future posts. In the meantime, I encourage companies across the ecosystems to contact me directly with case studies and great ideas.

After that it’s off to Edinburgh to speak at the 2009 118tracker Information Innovation Conference & Awards aboard the Royal Yacht Britannia. Where is the value in location? My presentation — the outcome of a new collaboration with Matthew Snyder, Founder & CEO of ADObjects, a strategic cross-media consultancy – offers some surprising answers.

We also draw from some exciting new services (such as AmbiSense’s innovative destination guide solutions for mobile phones, GeoVector’s new directional search and pointing app and Colibria’s Network Address Book, an offer that builds on our increasing interest in context-aware social address books – a requirement that sits at the core of Vodafone’s path-breaking  360 offer. A special highlight of the presentation: Mobile advertising innovation and vision from Russell Buckley, esteemed colleague and AdMob Vice President, Global Alliances.

If you can’t make the events, be sure to check back for in-depth analysis of the companies and services I mentioned. A special thanks to Anthony Stiso at DEUSA Enterprises LLC, who heads up communications  for GeoVector, and Cristina Whittington, Colibria Account Manager at Nelson Bostock Communications, for their prompt attention to my briefing requests.

Reminder: If you want to catch-up or meet-up, then contact me at peggy@msearchgroove or DM me @peggyanne.

Only a few weeks since I teamed up with Inma Martinez – a leading digital media strategist and advisor to venture capitalists who has been referred to as a “free radical” by Red Herring and Fast Company – to co-host Mobile Groove. The overwhelming positive response to our no-holds-barred monthly podcast (which speaks out on developments impacting the mobile industry/investment community at all levels) is encouraging and we are gearing up for our September podcast, a program sure to showcase the highlights of the events and exclusive interviews/briefings/chats Inma and I experience first-hand over the next weeks.

Inma has been invited to attend Mobilize in San Francisco (September 10), a conference that explores the industry vision for the future of wireless and also offers 10 cool startups a platform as part of the Launchpad. As review of these companies (which include: Pageonce, mataio, Waze, Toktumi Line2, Glympse, Ondeego, Square Connect, Locle, IQ Engines and Distimo) shows: the real innovation is in the mix-ups and mash-ups at the intersection of content and context. Inma and I will integrate her observations and first-hand encounters with entrepreneurs into the next in the Mobile Groove series, so be sure to connect with her during the show. To meet up or catch up, email her directly at imartinez AT stradbrokeadvisors DOTcom.

While I won’t make the trip, I have teamed up with the organizers to promote this and all GigaOM events going forward. All have assembled world class speakers and all will be prominently featured on MSearchGroove. (For example, this week’s conference features keynotes by Sanjay Jha, CEO of Motorola and Cole Brodman, CTO of T-Mobile, presentations that anchor a stellar line up of telecoms and web industry speakers including Andy Rubin, co-Founder of Android and Len Lauer, COO of Qualcomm.) Thanks to Surj Patel MSearchGroove readers can register for a special $100 discount on the ticket price. Please click here to take advantage of this offer (standard: $545), and be sure to enter the discount code: MPSALZ100.

While Inma makes her way to Mobilize, I am gearing up for the Mobile marketing Forum (MMF) Europe in Berlin (September 9-10) -  a Mobile Marketing Association (MMA) event that brings together a who’s who of mobile companies, operators.

In addition to my own one-on-ones and a lunch with Mike Wehrs, MMA President and Chief Executive Officer, I also look forward to conducting industry interviews with long-time MSearchGroove friend and partner bnetTV, the online destination for quality industry news and commentary. (Over the past two years I have worked with the bnetTV team to create some 40 video interviews, segments that I invite you to explore in the bnetTV video jukebox featured in the right-hand sidebar on the homepage.)

The filming schedule is hectic, but exciting (!), and features interviews with senior execs from companies including (in no special order) AdMob, GetJar, AKQA, We Love Mobile, Openwave and Out There Media. We have a super-busy schedule, but some slots are still available, so please contact me directly (peggy ATmsearchgroove DOTcom) to schedule a video interview.

I look forward to seeing you there!

In absolute terms, though, it’s an average of 1 paid app per month on Android, 2.6 paid apps on iPhone and 2.0 on iPod Touch. Broken down into those who “regularly” download paid apps, they tend to download 5 paid apps per month, spending $9.

Another interesting observation from the report is that iPod Touch users download an average total of 18 apps per month – whereas iPhone users grab 10 each month. Source

The bottom line: Apple’s App Store remains the gold standard, demonstrating that consumers will download – and pay for — apps when it’s easy to browse and simple to install. At this point, most of the other app stores out there are poor imitators that don’t pay enough attention to the usability aspects of their offerings and how they integrate into the installation process of compatible devices. Meanwhile, iPhone users are dropping some decent money on paid apps, and creating advertising opportunities with free ones.

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MOBILE NET ADSPEND TO QUADRUPLE TO $2 BILLION BY 2014, according to Juniper Research. The firm says that mobile internet ad spending worldwide will approach $500 million this year, and almost reach $2 billion by 2014.

This doesn’t even include SMS advertising, which Juniper says will be overtaken by mobile Internet ad spending this year. Overall, total mobile ad spending will hit $1.4 billion this year, and $6 billion in 2014. Source

The bottom line: Over the past several weeks, we’ve seen a lot of predictions like this, highlighting the expected growth in the mobile advertising market. Perhaps the most important thing to takeaway is that these predictions signal the high interest in mobile advertising – but to hit these lofty targets, the entire ecosystem will have to work to deliver the right solutions for brands and consumers.

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THE U.S. AD MARKET WILL FALL BY $1.6 BILLION THIS YEAR, says the Yankee Group in a new report. Spending on TV advertising will fall by $2 billion alone, the firm says, as budgets shrink and consumers shift to the I nternet on both PC and mobile. Another key factor the report cites is the booming amount of inventory available on these platforms, which it says put constant downward pressure on prices. Source

The bottom line: Like the previous point, there have been several of these reports lately, showing a significant drop in ad spending, but they typically show mobile as one bright spot. Again, the opportunity is there for mobile advertising to grow and take dollars away from other platforms – but only if the ecosystem can deliver the right opportunities.

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HARDLY ANYBODY’S WATCHING MOBILE TV, according to a new report from In-Stat (that shouldn’t really surprise anybody in mobile). Despite mobile TV’s failure to live up to the hype that’s surrounded it for several years, the firm says that 54 million people will watch analog free-to-air TV on their mobile this year, reaching 300 million in 2013. That’s an important distinction: in many developed markets, analog TV isn’t available on mobiles, or it’s somewhere in the process of being switched off in favor of digital terrestrial broadcasts. This means that growth will come largely in developing markets.

The report, it should be mentioned, was conducted on behalf of a mobile TV chip company and contains many of the type of stats that other reports about mobile TV have mentioned: those who use it tend to use it several times a week, and spend a decent amount of time watching. But the issue remains that there simply aren’t very many people at all using mobile TV. Source

The bottom line: The report’s author says that free-to-air programming supported by advertising would boost the mobile TV market. That might be true, but the lack of uptake seems to be largely built on a real lack of interest for mobile TV among consumers. Furthermore, if mobile TV accesses freely available signals, cutting the operators out of the picture, they’re unlikely to want to subsidize handsets that would support it.

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M-COMMERCE IS MOVING SLOWLY, at least in the U.S., says a new report from eMarketer. One survey it cites says retailers say budget constraints are the biggest factor keeping them from expanding their efforts, with consumer apathy apparently not even included in the survey. Another poll in the report says that more than half of U.S. consumers would be willing to buy pizza or movie/event tickets by mobile, with just 34 percent saying they’d buy games and just 24 percent saying they’d purchase mobile video/TV content.

The report talks about one more survey, which says that the most popular form of purchase via mobile among US m-commerce users is, as you’d expect, mobile content. Next, is consumer electronics, which it says has been bought by half the people who have used m-commerce. A small sample size (just 137) could help explain that figure. Source

The bottom line: Perhaps the biggest factor holding back m-commerce is a lack of real demand. For many types of goods, shopping on mobile isn’t a great experience. But for other kinds of products – in particular, services that are consumed on the go like events or travel – some market may emerge.

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OPERA MINI SEES 25 MILLION DOWNLOADS on GetJar alone, the site says. GetJar says Opera Mini is the most downloaded mobile app of all time, and that it alone has served up 7.5 million downloads of the latest version of the app since the beginning of the year. Source

The bottom line: Two main takeaways here: Opera Mini, as most readers probably already know, is a hugely popular app across multiple platforms and app stores. Second, the smartphone app stores aren’t the only places sending mobile users lots of downloads.

That said, the ranking of ad networks according to potential monthly visitors is:

1. Millennial Media: 45.6 million
2. Third Screen Media: 28.6 million
3. AdMob: 25.7 million
4. MSN Ad Network: 25.4 million
5. Jumptap: 23.4 million
6. Quattro Wireless: 23 million
Source

The bottom line: Nielsen’s warning makes it hard to put a lot of faith in these numbers, but as the company itself pointed out, overall, they illustrate the reach mobile ad networks can now offer, alongside all of their other benefits like effective targeting. So, in some way, having the biggest reach isn’t as important as having the right reach – that is, targeting the correct audience – for each advertiser.
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ADMOB TO SERVE UP ITS 100 BILLIONTH AD sometime over the weekend, the company said in an email. It’s certainly a big number, reached in three years or so, and the company says it’s now serving more than 8 billion impressions per month across its network. Source

The bottom line: Admob continues to grow its number of impressions, but as the above point indicates, it’s not all about quantity. Establishing significant inventory is important, but going forward, that won’t be an issue, as the previous point shows. Effective targeting and other enhancements will be key to unlock the real potential of mobile advertising.
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MARKETERS ARE STILL SKEPTICAL ABOUT TWITTER, with just 8 percent saying they think it’s a “very effective” promotional tool, while 50 percent say it’s “somewhat effective”. Consumers feel the same way, with half of them saying it’s “not that effective” or “not at all effective” for promotions. Source

The bottom line: These numbers are striking, given all the hype surrounding Twitter at the moment. But instead of undermining social media’s value to marketers, perhaps they reflect an understanding that social networks really don’t work as outlets for traditional advertising and promotional efforts, and that successful social media marketing requires a different approach. It seems clear that consumers don’t want their social networks polluted with impersonal advertising blasted at them from marketers, so a different, more conversational and personal – and less overtly promotional – approach is needed.
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MONTHLY DATA TRAFFIC WILL EXCEED 2008′S YEARLY TOTAL WITHIN 5 YEARS, according to a new report from ABI Research. The company says that in 2008, 1.3 exabytes of data went across mobile networks, but in 2014, 1.6 exabytes will be sent each month. The vast majority of this – 74 percent – will be from web and internet access, with more than half of all traffic coming from computers with embedded cellular modems.

ABI says that a quarter of the 2014 traffic will be from audio and video streaming, with less than 1 percent from VoIP and P2P file-sharing. Those last two segments seem a bit low, particularly if consumers shift in large numbers from fixed to mobile internet for their primary broadband connection. It’s unrealistic to think that consumers will give up their P2P and VoIP apps when they go mobile on a PC, regardless of the blocking operators may try to do. Source

The bottom line: Mobile data traffic will obviously continue to boom – but much of the growth will come from PC and laptop use. While mobile operators will welcome the revenue bump, the question remains if their networks can handle all the activity without sacrificing performance.
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WESTERN EUROPE’S MOBILE AD MARKET TO BE WORTH €950 MILLION BY 2013, according to new research from FirstPartner. The company says that the market will see a compound annual growth rate of 50 percent over the next five years, with the U.K. leading the way. It also adds that mobile search will be the most dominant revenue stream, and that if the mobile ad market is going to really take off, the ecosystem of operators, ad agencies and sales houses will have to work closely to sell the market on mobile advertising’s benefits. Source

The bottom line: Predicating a market growth report on operators playing ball with anyone could be a risky proposition – but that’s not to say the company’s incorrect in saying the ecosystem has to align itself and work together to move in the right direction.
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TURKEY TO HAVE 30 MILLION 3G USERS BY 2013, according to Wireless Intelligence. The country’s mobile operators flipped on their 3G networks last week, and the research firm expects them to see solid growth. While Turkey may be late to the 3G game, there’s high demand for high-speed mobile data, while the infrastructure and device market has also matured, allowing for heavy growth. Source

The bottom line: Not a lot to say about this one, really, apart from the idea that high-speed data and access to mobile content and data services is a global phenomenon at this point. That said, content providers and marketers still need to work to build their local intelligence, because while the generic global demand might be there, what works and what doesn’t will vary from area to area.

The Bottom Line: As the economy begins to recover, so too will advertising. But that doesn’t mean that things will go back to the same state they were in a year or two ago. The recession and subsequent drop off in ad spending may prove to be an inflection point where marketers shift their spending away from old-media outlets like newspapers, in favor of newer channels like mobile.

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MOBILE USABILITY IS AN OXYMORON, according to a study of mobile web sites from well-known usability consultants Nielsen Norman Group. The company says that the results remind them of their first study of desktop PC sites in 1994, and that user had much lower success rates at completing tasks than on desktop sites.

The group tested 36 web sites, asking users to attempt particular tasks on each one, such as trying to find information about wine on a wine site, or flight information on an airline’s mobile site. They also tested “web-wide tasks” where users could utilize any site they wanted. The average success rate on mobile was 59 percent, compared to 80 percent on PCs, while they also found that users of mobile-specific sites were successful 64 percent of the time, compared to 53 percent when trying to use a full desktop site on a mobile device. Source

The Bottom Line: The results of this study shouldn’t be particularly surprising to anybody who’s spent much time on the mobile web, but it’s also easy to quibble with the methodology and setup of the tests here, in particular how it ignores the use of search on mobile devices. Instead of getting bogged down in the details, save the $200 on the report and take this away: while the mobile web may be improving, it’s still far from perfect, even with ever more powerful browsers. Every web publisher needs to think about mobile users, and consider how best to serve them.

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MORE THAN HALF OF IPHONE/IPOD TOUCH USERS ARE IN NORTH AMERICA, according to Admob’s latest monthly metrics report. 58 percent of Apple mobile device users are in North America, the company says, with 26 percent in Western Europe, 7 percent in Asia and 9 percent in the rest of the world. Admob also says that over the past six months, the ratio of iPhones to iPod touches across its network has remained constant at about 2:1, suggesting the devices are selling in a similar ratio. Admob also says that requests from Android devices are growing by 25 percent monthly, giving it a greater growth rate than Windows Mobile devices for the first time. Source

The Bottom Line: That the majority of Apple’s mobile devices are in North America is a no-brainer, but perhaps the fact that that Europe holds half as many might be a little surprising, given the patchwork distribution of the iPhone there.

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FIFTY-SIX PERCENT OF AMERICANS HAVE ACCESSED THE INTERNET FROM A MOBILE DEVICE, say new stats from the Pew Internet and American Life Project – but two-thirds of those have been on a laptop. Still, the group says that 32 percent of Americans have used a mobile phone to send emails or look at the web, up from 24 percent in December 2007. Nearly a fifth of Americans access the mobile internet every day, up from a tenth in 2007. Source

The Bottom Line: There seems to be a wide range of numbers cited when it comes to mobile internet usage in the US, spanning different services and devices. However, all the reports agree on one thing: numbers of users are growing.

***

The bottom line: These results highlight the potential of compelling, relevant and properly targeted messages. In particular, they illustrate how much more likely are consumers are to respond to SMS and MMS ads than simple Internet banners.  Peggy adds: Mobile Advertising Research U.K. confirms this, but there’s also a lot of mileage left in banners. For more on what makes for a great mobile advertising experience and a balanced value chain check back tomorrow for my take on a new-launch Hardees campaign.

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TOP APPLICATIONS ON THE APPLE APP STORE HAVE MORE THAN 1 MILLION USERS, according to AdMob’s latest Mobile Metrics Report for May 2009. The report found that the most popular free applications in AdMob’s iPhone network generated the majority of usage, with the top 5 percent of applications garnering more than 100,000 users in May, and some apps showing more than 1 million active users.

A further 14 percent of applications had between 10,000 and 100,000 active users, while 54 percent of applications had less than 1,000. AdMob reached 15.1 million unique users through iPhone and iPod touch devices across 2,309 applications in May, with the average user accessing four applications.  44 percent of iPhone ad requests came from devices running the new version 3.0 of the iPhone OS, compared to just 1 percent of iPod touch requests.  Source

The bottom line: These numbers from AdMob underline the ongoing popularity of apps on the iPhone. But they also offer some insight into the potential value of in-app advertising for developers and content providers, since the apps in AdMob’s iPhone network are all free to download, and earn money solely from advertising.

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SUBSCRIPTION VIDEO AND MUSIC ACCOUNT FOR 40 PERCENT OF MOBILE DOWNLOADS IN THE UK, according to a study from GfK, as the model grows in popularity against pay-per-download sales. The research also states that casual and classic trivia and word games lead the mobile gaming market with 27 per cent of sales, while the budget sector (£3 or less) is also enjoying success through basic and retro games.  It also adds that nine per cent of the mobile tariffs signed up in the UK in Q1 have bundled-in flat-rate data.
Source

The bottom line: This study illustrates the growing popularity of the flat-rate model, both in mobile data access, but also in content subscriptions. Still, the content-subscription model contrasts with the booming pay-per-download app store model.  Will one triumph over the other?

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AD-FUNDED MMS REVENUES TO HIT $8.7 BILLION by 2014, says Juniper Research in a new Mobile Messaging report.  The report says that annual growth rates are reaching 94%, with SMS and mobile email continuing to dominate the person-to-person (p2p) mobile messaging market.

The report, entitled “Mobile Messaging & IP Evolution”, found that the Far East & China would lead the global ad-funded MMS market by a considerable margin, followed by North America and Western Europe.  The adoption of push MMS and SMS in mature and emerging markets has enabled network operators to support ad-funded voice and SMS tariffs, and combat falling ARPU, while providing brands with new advertising channels. Source

The bottom line: These are bold projections from Juniper.  P2P MMS messaging still has a way to go before it reaches the usage level of SMS, but these projections suggest that MMS advertising could prove to be a lucrative revenue stream in its own right.

***

MORE THAN 60 PERCENT OF MOBILE USERS STILL ONLY USE THEIR HANDSET FOR VOICE AND TEXT, according to a KPMG survey. The survey of 4,190 consumers in 19 countries also says that consumer satisfaction rates with mobile services have increased. Music satisfaction is up to 66 percent, video 52 percent (from just 14 percent), IM 44 percent and live TV 38 percent.

The factors influencing users’ next mobile content purchase, according to the survey are, in order: clarity of pricing, cost, ability to save content, download speed and the ability to try content before purchasing it.  36 percent of respondents said they would accept mobile advertising, while 49 percent said they would accept it in music and 28 percent in games.  Source

The bottom line: The level of acceptance of mobile advertising is encouraging.  However, the headline is arguably the most pertinent point: for over 60 percent of consumers, the mobile internet doesn’t exist and text messaging is the only data application of a mobile device.

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MOBILE ENTERTAINMENT REVENUES ARE EXPECTED TO GROW 28 PERCENT ON AVERAGE over the next year, according to the Mobile Entertainment Forum’s quarterly Business Confidence Index, up one percent from its last survey.

Content owners are much more optimistic about their revenues, with the anticipated average income up from $6.1 million to $17.1 million.Revenue in Western Europe is expected to be down 10 percent, North American revenues are predicted to be up 8

percent. 81 percent of respondents said they were as confident as last year about the future of their business. Source

The bottom line: This MEF study illustrates a bullish mobile entertainment market, unbowed by the economic climate.  It could be that, aside from the natural obligation towards market confidence, stakeholders believe the purchasing of relatively low cost content through microbilling will remain popular as consumers delay the big ticket items and seek alternative forms of entertainment.

***

APATHY AND PRICE RULE IN NOT SELECTING THE iPHONE, say the latest findings from The NPD Group.  The study showed that the primary reasons consumers do not want to purchase an iPhone are “lack of interest” (55 percent) and “high price” (42 percent).

One in five mobile phone owners say they want to purchase an iPhone, but have not yet done so, and NPD’s report indicates data plan pricing and exclusivity remain key obstacles.  18 percent of consumers who have not purchased an iPhone cited the expense of the data plan, while 21 percent said they didn’t want to switch carriers.  Source

The bottom line: Reasons why Apple’s iPhone isn’t persuading everyone to leave their current carrier and device seem quite simple: they aren’t actually that bothered.  Given the previous data point, which revealed that 60 percent of people only use voice and text, this shouldn’t come as much of a surprise.

***

iPHONE USERS TOP SMARTPHONE LOYALTY ratings, according to a new survey by Crowd Science.  It also says four out of ten BlackBerry and other smartphone users would switch to Apple’s iPhone as their next smartphone purchase.

On the other hand, only 14 percent of non-BlackBerry smartphone users would switch to a BlackBerry for their next purchase. Meanwhile, a huge 82 percent of iPhone users are loyal to the brand. Source

The bottom line: In contrast to the previous report, this one highlights the attitudes of smartphone users who, almost by definition of being smartphone users, care a little more.  The study is as much a study of consumer brand perception, and the iPhone steals the show as expected, but BlackBerry may take note of the small minority who would switch for their next purchase.

***

MORE THAN HALF HAVE MOBILE SECURITY FEARS, according to mobile security specialists, Cloudmark Inc.  The report says mobile spam now affects two in three consumers, more than 50 percent worry about mobile security, and only 7 percent believe the information they send over the phone is secure.

Cloudmark also says the concern about mobile security is detrimentally affecting the adoption of mobile services such as banking and e-commerce, with more than two thirds (69.3%) of consumers stating that they wouldn’t use value-added services such as mobile banking.

Two thirds of consumers (65.9%) have received unwanted or unsolicited messages (spam) on their mobile phone. While a majority of spam messages could simply be seen as a nuisance, 29% of respondents had received malicious spam such as phishing messages, fraud messages or messages containing inappropriate content.  Source

The bottom line: This report highlights the ongoing fears around the security of mobile devices, which will likely become more prevalent as smartphones become more pervasive, and spammers and malware authors pay more attention to mobile. However, we should also remember that the mobile security specialists who produced the report might have a small agenda of their own.

Among the overall findings:

• Devices don’t’ matter (much): Users with standard feature phones will use the Web as much or even more than a smartphone user if the mobile Internet experience is good
• There is a ‘long tail’ in the mobile Internet: The top website typically accounts for 5 percent of total mobile page views. The number two site accounts for less than 1 percent of traffic. And the top 500 sites account for only 25-30 percent of all page views
• Sessions vary: 40 percent of mobile internet sessions are under five minutes and 40 percent are over 15 minutes

The report further groups mobile users into ‘tribes’ based on their distinctive user profiles. These are:

• The Business Pro – Dependent on their mobile to be more productive and to handle all their communications
• The Mobile Millennial – Early adopters and young adults with disposable income
• The Connected Kid – Children and teenagers who have grown up with technology from a young age
• The Multitasking Parent – Use their mobile phone to stay in touch and manage family schedules
• The Frugal Fanatic – Cost conscious of spending, usually opting for a free handset

Based on these observations and segmentation the report concludes:

• Multitasking Parents and Mobile Millennials are the most active user populations, generating nearly 2/3 of mobile browsing sessions between them
• Business Pros even with their highly capable devices, generate less mobile browsing sessions than expected. They also use news, sports and information sites twice as much as nearly all other groups and are lowest for social networks
• Mobile Millennial and Connected Kids are by far the heaviest users of social networks
• Frugal Fanatics utilise handset customisation services more than twice as much as any other group
• Connected Kids have far more page views relative to sessions than any other group, indicating they tend to surf more for entertainment purposes
• Source

The bottom line: The Mobile Internet, and indeed many mobile services, would fail to survive and thrive without technical companies such as Novarra, largely unknown to the masses, but which provide critical back-end solutions. Peggy adds: Kudos to Novarra for an excellent report! Not a lot of rocket science here, but an important confirmation of the groups of people on the mobile Web and an overview of what they do. Read between the lines, and you’ll see there is a great deal of untapped value in developing (and branding) life-enabling/life-simplifying services for the Multitasking Parents and Mobile Millennials, who are the most active user populations and – potentially – most responsive to companies that make their lives easier. (I highly recommend you check out my fireside chat with Ogilvy’s Rory Sutherland, packed with some surprising business model suggestions, supported by the findings above.)

***

LOCAL MOBILE CONTENT ATTRACTS SIGNIFICANT AUDIENCE. Local content views are up 51 percent over the past year, according to comScore figures. Research also reveals that application downloads are leading the growth.  It observes an 83 percent increase in the number of subscribers to local content via applications since March 2008, with text messaging services also outpacing average growth.  The study shows a 72 per cent increase in SMS subscriptions in the 12 months to March 2009.

Meanwhile, browser based access continues to grow at a rate of 34 percent year on year over the same period and, despite the slower growth rate, remains the dominant method for retrieving local content.  It accounted for 63.7 percent of all downloads in March 2009. Earlier research by comScore found younger mobile users tend to retrieve more entertainment content, while older users across Europe usually prefer financial information. Source

The bottom line: These generally encouraging comScore statistics confirm our hunch that applications downloads and mobile Internet usage are on the rise. However, the surge in local mobile content may not reflect a universal trend. It’s likely that the popularity of local content is a product of context. In other words, local content thrives in a handful of large, dense, urban regions where high-speed network coverage and captive audiences are the norm. Peggy adds: These stats also question our assumption that the global giants we know rule the roost. Take Skyrock in France, which is bigger that Facebook can ever hope to be. The popularity and reach of local content – particularly on personal devices such as our mobile phones – is sure to climb.

***

MOBILE ADVERTISING FOR MOVIES AND ALCOHOL SET BENCHMARK for industry, according to a study by Amethon Mobile Internet Insight.  The study also states that despite high CTRs, brands should focus on the quality of engagement.

Analysis of traffic to more than 100 mobile advertising sites found that consumers view just over 3 pages per visit for best-in-class campaigns, while the average across all campaigns analyzed was only 1.53 pages. Only 33 percent of consumers venture beyond the first page of mobile campaign sites, which the research says suggests mobile advertising campaigns need more compelling content within the microsite to engage consumers more effectively.

The report found that movie related campaign sites achieve the highest engagement levels, visitors viewing an average of 1.65 pages per visit, a figure that also accounted for a 21 percent share of overall audience. Alcohol campaigns achieved a similar share of audience but suffered from poor engagement, with users often not navigating beyond the age verification page.

Portal and directory service campaigns were the most common (22 percent of all campaigns), but had a relatively low audience share and below-average engagement.  Meanwhile, content downloads such as branded wallpapers or videos in the microsite did not significantly improve engagement. Source

The bottom line: This detailed study of mobile advertising offers insightful statistics to support what many have been saying all along: Advertising must be relevant and engaging.  While it probably comes as no surprise that interest in advertising around films takes the top shot, a lot of work has to be done in the way of creative thought to the landing page and what people do after they click through. This is particularly pertinent in view of the drop off in popularity of wallpapers and video.  The other issue of poor engagement in popular alcohol campaigns, possibly due to age verification process is disappointing but not surprising or uncommon.  I explore age verification issues in more detail in a recent post here.

***

40 PERCENT OF USERS ACCESS INTERNET MORE OFTEN ON iPHONE / iPOD TOUCH THAN ON PC, according to a new demographic study from comScore and Admob.  The research also reveals that 69 percent of iPod Touch users are between 13-24 years of age, while the same age segment represents just 26 percent of iPhone users. In total, 74 percent of iPhone users are over the age of 25, compared to 31 percent of iPod touch users. Over 70 percent of users on both the iPhone and iPod touch are male.

Over the next six months, iPhone users are said to be planning to buy clothing (57 percent), entertainment (47 percent), and travel (45 percent), while iPod touch users plan to purchase clothing (61 percent), entertainment (53 percent), and mobile devices (36 percent).

By way of background, the methodology used in this primary research into the demographics and behavioral characteristics of iPhone and iPod touch users in the first half of 2009 is as follows: Participants were visitors to domains within the AdMob iPhone network who were shown survey invitation banners rather than banner ads. Those who clicked through the survey banner were presented with the mobile survey. The total sample size of iPod touch participants is 3,848, while the total number of

participants in the iPhone sample is 3,454. All results were tested for statistically significant differences at the 95 percent confidence level.  Source

The bottom line: As well as the headline that 40 percent of users access the Internet via their mobile device more often than their computer, the other key finding is the age differentiation.  You could surmise from this that teenagers can convince their parents to buy them an iPod touch, but not an iPhone and all its recurring bills. Other findings such as average salary were largely in-line with the age difference.  The ongoing generation of such data is key in the production of applications and the execution of mobile advertising strategies.

***

LG EXPECTS NINE PERCENT RISE in mobile sales.  The Korean handset manufacturer has said it will sell 110 million devices this year, despite a flat global market. The company has also said this figure will rise to more than 200 million by 2012. Source

The bottom line: Handset manufacturers marginalized, at least in publicity terms, by the “bigger” names now have an uphill task to continue producing new quality devices which will gain mass market penetration and to effectively promote their core differentiators.  These bullish projections are encouraging signs of a still highly competitive marketplace.

Regular readers will recall that MSG was commissioned to conduct Mobile Advertising UK, a research project research endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA), to expertly document the state of the mobile advertising industry in the U.K. and identify growth opportunities in the emerging mobile advertising marketplace. The report – which combines valuable consumer insights gathered by ÆNEAS Strategy Consulting and Management (coordinated by my esteemed colleagues Tarik Fawzi and Atva van Zanten) and qualitative research based on 20+ interviews with operators, enablers, agencies, and brands contributed by MSG – will be formally released in July.

In the meantime, allow me to share some of the key findings and data points based on an online survey of 1,000+ UK mobile users. (And please follow along in the complete presentation below via SlideShare, and listen in to this audio interview via The Really Mobile Project, where I put some of the stats into perspective.)

At a glance:

• Today the mobile advertising market in the U.K. totals nearly GBP 30 million ($48 million).
• Mobile advertising accounts for only 0.16 percent of the total advertising market – which is where Internet advertising was in 1998.
• ÆNEAS Strategy forecasts that mobile advertising will see accelerated growth in four years and so account for a significant portion of advertising spending. Drivers include: A calculated growth rate of 99 percent in 2008 vs. 2007; the overall shift towards digital advertising; and increased demand for targeting, reach, and a medium that -like no other – allows advertisers to identify and track unique visitors. (For more on this unique capability and the benefits I encourage you to read my own road test of mobile analytics solutions.)
• Only 32 percent of those surveyed have a positive attitude about receiving advertising on their mobile phone. However, 64 percent said they would accept advertising is they are properly incentivized, and 70 percent said they would accept mobile advertising if they are incentivized AND in control.
• The majority of those surveyed felt 5 advertising messages per day was the limit of what they would accept.

Unsurprisingly, youth are most familiar with mobile advertising channels (specifically rich media such as MMS and in-game advertising (approaches we know from the likes of Unkasoft). What’s more a whopping 84 percent of youth surveyed has a positive attitude toward mobile advertising if incentivized. The bottom line: Acceptance of mobile advertising is right up there with TV and other more traditional media IF we can get our head around what incentives to offer and develop the mechanisms that put people in control.

No clue on the right incentives, but it’s not a given that companies need to offer cash to capture people’s attention. In the fireside chat I recorded with Rory Sutherland, Ogilvy UK Vice Chairman, we discuss the value of branded utilities and life-simplifying services. Will people accept advertising if the pay-off is less stress/more convenience? It sure looks that way!

Rory Sutherland audio interview

A highlight for both me and the audience was the entertaining and educational fireside chat with Rory, whose interest in -well – us and the finer points of behavioral psychology brought much-needed balance and big-picture vision to the discussion. As he points out in this recent opinion column in New Media Age: The job at hand is to use ideas to turn human understanding into business advantage. During our interview he made it clear that mobile is a medium perfectly suited to achieve just this goal. (Listen to the audio interview here. It’s 28:40 – but time flies when you’re having fun – and this sheer genius!

A few excerpts that made us think:

YES WE CAN!: Mobile can change people’s behavior – primarily because it takes the heavy-lifting out of doing things we might not do otherwise. Case in point: Charity. A moment of “epiphany” for Rory was the huge response to SMS campaigns asking for donations, although we have assumed that youth is not a demographic to give so generously. As he put it: “If this technology can change behavior that significantly, then who cares how good it is at advertising. Advertising is about changing opinions as a half-way house to changing their behavior.” The bottom line: If you can change people’s behavior from the get-go with mobile, then it deserves a top-notch spot in our campaigns.

LIFE-SIMPLYING: Rory’s message: Don’t dismiss branded utility because it’s unglamorous. Being brandedly useful is key. (And here is an example from Rory’s Twitter feed that illustrates this approach. The IBM Scout is a branded app that helps people get the most out of the Wimbledon 2009 Championships, providing live coverage of just about everything.

COUCH POTATOES: Let’s face it – many of us are. Rory figured this out when he was watching a line of cars at a drive-in ordering fast-food. Not one got out of the car to order at the counter – even though it was empty. Connect the dots, and it’s clear we are all a bit lazy. Apply this observation on basic human behavior to mobile and you have a powerful combination indeed! We will likely reach to the medium at hand (the personal device we have with us at all times) because it’s more convenient. “Channel preference almost trumps brand preference.” Some people may prefer Pizza Hut, but if they can order from Dominos by text, then they will likely switch for this reason. The bottom line: “Modality and modal preferences seem in a weird way to trump other things.”

WHAT’S THE POINT?: We have lost sight of what mobile can do. (A point that also came out in the research I conducted.) We’re hung up on old models and enamored of new technology, and we are missing some big opportunities. Imagine using text campaigns to encourage impulse savings instead of impulse buying. Or how about a brand that simply harnesses mobile to improve listening? As Rory pointed out: “Advertising is talking and listening. That’s a perfectly reasonable form of marketing, and mobile brilliant and you can do it in real-time.”

METRICS: We have become prisoners of our own metrics. To show us how ridiculous our obsession has become, Rory compares media buyers to alcoholics. “Alcoholics buy booze on a single metric: How much alcohol do I get per pound (GBP), and this is how media buyers buy media.”

MOBILE MATTERS:  “Mobile has been the medium of first resort and dangerous to neglect it which is probably why Google has been scared. Search has been the first place you go on the Web and mobile preempts this in some respects.”

By way of background, Rory’s bio:

Born in Usk, Monmouthshire in 1965, Rory read Classics at Christ’s College, Cambridge, before joining Ogilvy as a Graduate Trainee in 1988. After 18 months spent as the world’s worst account handler (as a desperate remedial measure he was once booked onto a time management course, but got the date wrong) Rory became a copywriter in June 1990. He has worked on Amex, BT, Compaq, Microsoft, IBM, BUPA, easyJet, Unilever, winning a few awards along the way. He was appointed Creative Director of OgilvyOne in 1997 and ECD in 1998. In 2005 he was appointed Vice Chairman on the Ogilvy Group in the UK in recognition of his improved timekeeping.

By an amazing stroke of luck (his brother is an academic) Rory first used the Internet in 1987. Hence he had the advantage in 1994 of knowing what it was and what it might do a few years ahead of many colleagues. Most people would have combined this knowledge of marketing and technology to make a fortune; not Rory. Instead he became the first Briton to have his credit card details stolen online, thereby losing £22.45.

In his spare time, Rory collects self-aggrandizing job titles. He was President of the Direct Jury at Cannes in 2007, and was elected President of the Institute of Practitioners in Advertising in 2009. He is also the Technology Correspondent of the Spectator, the world’s oldest English language magazine. At quiet moments in the proceedings over the next few days you may like to pay a furtive visit to his blog at http://snipr.com/da9bq

Rory is married with twin daughters of 7 (Hetty and Millie) and lives in the former home of Napoleon III in Brasted in Kent. Unfortunately in the attic.

Listen to the podcast here.

The bottom line: As illustrated numerous times within this section, the data dominance and superior browsing experience allowed by smartphones is undeniable.  Making mobile Web user experience smooth, easy, and compelling – as these handsets often do – is shown to consistently drive mobile data traffic.  That many consumers probably can’t tell and don’t care about the difference between mobile websites and HTML sites is also testament to technical developments.

***

GARTNER SAYS THE NUMBER OF MOBILE PAYMENT users will increase by 70 percent this year.  Its report claims that 73.4 million users of mpayment in 2009 would represent a leap of 70.4 percent from 2008.  By 2012, it says mobile payment will reach more than 190 million, more than 3 percent of total mobile users worldwide, attaining a level at which it will be considered “mainstream.”

Gartner defines a mobile payment as paying for a product or service using mobile technology such as a short message service (SMS), Wireless Application Protocol (WAP), Unstructured Supplementary Service Data (USSD), and Near Field Communication (NFC). It includes transactions that use cash, bank accounts or debit and credit cards, as well as non-carrier stored value accounts, such as travel cards, gift cards or PayPal. It does not include transactions that use mobile operators’ billing systems, such as purchase of mobile content or telebanking by mobile to the service center via an interactive voice response (IVR) system. Source

The bottom line: Although the definition of mobile payment is ambiguous here, these figures demonstrate that the mass market is slowly growing confident in using their mobile to pay for and transfer money.  Much effort has been made to foster consumer confidence in the micropayment mobile payment space, and the adoption of mobile banking technologies still varies drastically from region to region.  There are regulatory and security challenges to overcome, particularly with the emergence of NFC technologies, but these figures give strong reason for hope.

***

SPEECH APPLICATIONS ARE TO TRIPLE by 2014 according to a new Datamonitor report. The report claims that as we get used to using mobile computing devices in ‘hands-busy’, ‘eyes-busy’ environments, speech recognition technologies are expected to gain considerable traction. The global market for advanced speech recognition (ASR) in mobile handsets will increase from $32.7 million in 2009 to $99.6 million in 2014. Meanwhile ASR in-vehicle telematics is expected to grow from $64.3 million in 2009 to 208.2 million by 2014. Source

The bottom line: An exciting array of new voice applications has been promised for some time now, without seeming to gain mass market adoption.  This Datamonitor report suggests the market is still full of potential, and with technologies emerging to intuitively allow users to control device functionality with their voice, these projections may herald the beginning of significant penetration.

Peggy adds: A space to watch is voice-activated mobile search, where “Just say what you want,” the guiding principle of voice search to avoid complex and confusing navigation, and to provide a shortcut to information (in the network) and services (on the mobile device) the user wants, is particularly compelling.

***

OPERA’S MINI BROWSER RECORDED MORE THAN 23.4 million users worldwide in April, a jump of 140 percent from the same period one year ago. Page views in America grew 129 percent over the last year; unique users grew 11.8 percent; and there was an average of 198 page views per user in April. U.S. carrier subscribers are said to be viewing more data-intensive pages than those in any other country. Opera said the average page viewed is about 32KB compressed (almost 320KB uncompressed).

Top 10 sites accessed via Opera Mini in the U.S., by number of unique users:

1. Google.com
2. Facebook.com
3. MySpace.com
4. Wikipedia.org
5. YouTube.com (up from 7)
6. Yahoo.com
7. NYTimes.com (down from 5)
8. AccuWeather.com
9. My.Opera.com
10. ESPN.com

Source

The bottom line: The mobile Internet is continuing to see heavy usage and mass adoption, although we should remember these figures are largely coming from BlackBerry handsets operating Opera. The handsets do have massive appeal, as clearly does mobile Internet content.  However, we might also remember that, as a corporate device of choice, their users may not always be paying the bills

***

AN AENEAS STRATEGY STUDY OF U.K. ATTITUDE TOWARDS mobile advertising found that 64 percent of consumers would grant permission to receive mobile advertising if they were incentivized.  The majority of the 1,002 consumers surveyed had a more negative initial attitude, but this changed if advertising was made relevant (65 percent positive), permission was asked (67 percent positive), or if the consumer was in control (69 percent positive). It placed mobile amongst the most popular traditional media (print, outdoor, and television) and above the Internet and radio. 

The research also revealed that 52 percent claim engagement with the brands they love is important, five advertisements per day is most accepted by consumers, 52 percent of consumers doesn’t mind listening to a brand message while waiting for someone to pick up the phone, and 54 percent would send an interesting offer they have received to  friends and family

Tarik Fawzi, of Aeneas Strategy Consulting and Management, commented: ”The consumer research shows some unexpected results regarding consumer attitude towards mobile advertising. Also mobile is compared with other media. This shows consumers know what they want and are open towards mobile advertising, if it is offered on their terms.” Source

The bottom line: This study shows once again that relevancy and control of mobile advertising are critical to its consumer acceptance and success.  The challenge mobile advertising faces is in making campaigns relevant, and offering control, but still maintaining a strong enough number of eyeballs to keep brands spending.

Peggy adds: This consumer research will also be discussed during Mobile Advertising U.K. (June 15 in London), when MSG, which was commissioned to research and write the report in collaboration with Aeneas, will present key findings from interviews with 15+ industry executives and influencers.

***

41 PERCENT OF U.S. CONSUMERS ARE LIKELY TO PURCHASE a multimedia handset with a data plan as their next phone, says a new study by the Yankee Group. BlackBerry and Apple are the top two brands, considered by 44 percent and 30 percent of prospective buyers, respectively.

Meanwhile, in enterprise, the same analyst claims that 75 percent of small to medium businesses anticipate some reduction in their business technology investments due to the economy. End-user software and hardware are the two areas that will experience the biggest budget cuts. Source

The bottom line: These two nuggets from Yankee illustrate the ongoing consumer affair with smartphones, and the rich data consumption experience they allow, in the face of predictable technology cutbacks which the environment has imposed on smaller businesses. It’s tough out there, but consumers remain enthused about compelling mobile data experiences, if the data plan is right.

On the heels of JumpTap’s announcement of tapMatch, its pay-per-click (PPC) performance mobile ad marketplace, I can finally post this exclusive Q&A with Paran Johar, JumpTap CMO. During the pre-briefing, we went through the nuts and bolts of the offer (unlike Google, which offers keyword bidding  and MCN – a provider of mobile search management, search merchandising, and PPC content promotion solutions offering category bidding- Jumptap offers both), and took a closer look at how the search technology potentially maximizes performance by delivering contextually relevant advertising.

By way of background, tapMatch builds audience profiles from multiple sources including search queries, context, and click thru history to match the most relevant ad messages to each mobile consumer. Advertisers can target their marketing message according to keywords, categories, location, demographics, mobile carrier, publisher, and mobile handsets including Blackberry and iPhone. Ads run across a comprehensive set of categories including automotive, careers, finance, fitness, and health, enhanced by keyword search parameters. They are priced and served by auction, and advertisers only pay when consumers click on their messages.

JumpTap tells me it can decipher the keywords from mobile Web pages and use that information to create categories of users. For instance, in this chocolate example above, if the user has gone to a site about mobile phones and then another site comparing different mobile technologies, the system knows that a search for “chocolate” has a higher probability of meaning the mobile phone “chocolate” instead of something you eat. JumpTap can then place the correct advertiser ads in front of the user that relate to chocolate phones and not candy.

Q&A EXCERPT:

Q: Let’s start with the landscape. When I read the draft press release I thought it competes with Google at one level and MCN at another. What is the differentiation?

A: Well, that’s really the point. It’s not just a pay-per-click marketplace. It is a pay-per-click marketplace that allows advertisers to bid all the way to the keyword level. Smart advertisers understand that keyword level buying is the best way to target users. So this allows you to target context, and [target] carrier handset, all the way to the keyword level.

Q: How does your technology do it?

A: Our technology crawls the page, extracts the relevant keywords, builds a taxonomy based on those keywords, and then builds a preference set to develop an audience profile to serve a relevant ad.

Q: How does this fit in with the other products and announcements I’ve tracked on MSG? I’m thinking here of your white label search, your premium ad network – the works.

A: You mention the premium mobile ad network. Now this has been an evolution to our business model. We started with tapSearch, which is our white label search product. We evolved into the premium mobile ad network, which still exists and is really toward let’s say the upper funnel of mobile advertising to drive brand awareness, consideration, purchase intent. We’ve got our platform, tapLink, to extract data from carriers. This [tapMatch] is the last piece of the puzzle, utilizing our search technology to develop audience profiles in a pay-per-click marketplace. It [tapLink] addresses the ROI sensitive advertiser. So, if the premium mobile ad network is really focused on the upper funnel, tapMatch is really on the lower funnel -  driving ROI, whether that is click-through, click-to-action, click-to-SMS, or click-to-call.

Q: What about publishers?

It provides publishers with access to multiple resources for their inventory monetization. First, they can allocate a percentage of that [inventory] toward brand advertising – actually as much as possible to get those high effective CPMs. Second, they can take any remnant inventory and run it through tapMatch with full transparency and full control to make sure that they’re not running let’s say, punch the monkey ads. The advertiser also could control on the other side, what types of publishers they run on.

Q: Relevancy is a big part of your messaging here. Is this because you sense a change in what advertisers require? It used to be about showing an ad and now it’s about making sure the ad matches context somewhere along the way.

A: Yes. Our goal is not to run billions and billions of impressions. Our goal is to make an impression – with both the consumer and the advertiser – with relevancy. The mobile phone is a very personal channel. We think the appetite for a user to accept what I call ’spam advertising’ has really diminished, and that’s why we really focus on driving relevancy from all sources.

Q: What is the fit with iPhone?

A: Well certainly iPhone apps are part of both networks. An iPhone application developer is really like a publisher with much more dynamic abilities for creative insertion in terms of integration into maps, integration into address books, whatever. So absolutely, a publisher has the opportunity to participate in either or both [ad networks]. And they can allocate their inventory based on their choice.

Q: Of course there are a lot of ad networks out there. How are you going to continue to differentiate?

A: If you can name me another ad network with 17 carrier relationships and search as part of its technology, then we have competition. The only one I know that’s even close is obviously Google. Google and Yahoo we compete with. But the AdMobs and the Quattros of the world are in another space. If you just look at the ad network component of our business, then, yes, we compete, but they don’t have that white label search technology and they don’t have any of the carrier information either.

Q: That may be – but the space is crowding fast…

A: We organized a mobile advertising conference in Florida a couple of weeks ago on a Saturday night through Sunday. And we had almost 200 brands and agencies show up. I organized that and I reached out to our friends at AdMob and our friends at Quattro, and they participated as part of this mobile advertising conference. They are ad networks, and there is differentiation. We all know Quattro – they take a different approach which is ‘I’ll build your WAP site in exchange for the ad revenue’. AdMob takes the long-tail approach.

Ours is completely different. We have those carrier relationships. We’ve got the white label mobile search technology that builds relevancy, we’ve got the premium mobile ad network for the top funnel, and then we’ve got tapMatch, a performance marketplace that builds relevancy; that takes it all the way to the keyword level, utilizing hyper-targeting.

You can’t just go out and get 17 carrier relationships. You can’t just go out and build a white label search engine and utilize that technology for hyper-targeting. That kind of stuff takes years and years of development.

Q: What about the mobile analytics? What can I track and target?

A: It’s fully self-service. The app has tracking mechanisms so you can set up click-to-SMS, click-to-call, click through, and track all of that at the individual campaign level.

Q: And the difference with AdSense here?

A: Certainly AdSense is similar. However, they don’t do carrier targeting or handset targeting or context. So it takes AdSense specifically made for mobile to the next level.

Q: You have 17 carrier relationships. These include:  AT&T, Alltel, Boost, Virgin, US Cellular, Orange Spain, TeliaSonera Group (in seven countries), 3 Sweden and Bell Mobility. It’s a good mix, but I miss more operators in Europe and Asia.

A: We’re looking at the rest of Europe, and we’re obviously looking at parts of Asia. But we’re doing so very carefully. Given the economic times, excessive capital expenditure right now does not make sense. We have to look at those opportunistically to make sure it’s the right time. And you’re going to hear a big announcement for us in Spain in the coming weeks.

Q: Let’s talk about some hard numbers. In your press release you state: “Reaching qualified mobile audiences with highly targeted, relevant ads elicits strong consumer engagement, increased click thru rates and higher conversions according to early testers of the tool.” What is the range of CPCs you see?

A: It really depends on the category and the keyword. The more granular you get in terms of your keywords, the more expensive the bid price. And it’s dynamic and all in real-time. What are the keywords on Google or Yahoo? It depends on the keyword and it depends on the category, and it depends on the day and time. It could range from $0.10 to $0.25 in some cases to several dollars.

Q: Not a ball-park figure?

A: Peggy, it just depends on the keyword and the time of day. It’s almost like saying how much does a TV spot cost. It depends if you’re in prime-time; daytime; late news. And it’s similar here.

Q: Many will read today’s announcement as  throwing down the gauntlet, challenging Google and Yahoo. Is that how you see it?

A: Yes, definitely it’s a David verses Goliath story and we don’t mind being David. The fact that people reference Google and Yahoo in an on-going basis with JumpTap is a good thing for us.

Q: So let’s wrap up with some nuts and bolts. When are you live and in which countries?

A: We can give you a demo log-in – it goes live on the 15^th. It’s only the U.S. right now.

My take: Competition is heating up, but JumpTap’s connection with mobile operators (and access to valuable customer data that Google and Yahoo will never see) is the source of competitive advantage. JumpTap’s marketplace (category and keyword) and spread of networks (Premium Ad Network and now tapMatch) position it to offer a powerful combination of premium and performance advertising, going a long way toward ensuring the best ads will appear on a site. The technology is in place, now JumpTap has to focus on execution and slow but steady expansion of its operator footprint.

But there’s a twist. This exchange is built from the ground up to maximize the effectiveness of exchange ads by ensuring they only run on devices that do not already have the same application installed. What’s more, it allows targeting according to Operating System (OS) version, geography, and device (iPhone vs. iPod touch).

Shortly after the announcement, I caught up with Russell Buckley, AdMob VP Global Alliances, to learn how the new service enables the ecosystem (advertisers and developers) to get consumers’ attention, promote apps, and drive results.

By way of background, advertisers already use Download Tracking, a service AdMob launched in January (and discussed in this podcast interview) that allows advertisers to monitor App Store conversion rates and cost-per-download. Specifically, advertisers can use Download Tracking to view and track multiple applications and drill down to look at conversion rates by specific ad and for specific dates.

Russell tells me AdMob’s advertisers are already using this information (gleaned from using Download Tracking) to write better ads, calculate their return on ad spend, tune their App Info pages, and develop better pricing strategies. The new-launch iPhone Download Exchange is about allowing developers with apps and ad space to serve ads that promote other apps within the Download exchange, and get traction for their own apps in the process by placing ads for free on other applications.

Put simply, it’s a what-goes-around-comes-around concept that helps applications increase downloads by advertising within other iPhone applications – AdMob already has over 1,000 apps in its network. It’s a good starting point, particularly since “the top 33 of the top 100 iPhone applications” also figure in this group. How will this build AdMob’s business? What is the volume really? And how does AdMob maintain relevancy across sessions? These are just a few of the topics Russell and I explored in the following Q&A.

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Q: You’ve had your eye on the prize since the start, building a mobile ad network for the iPhone and now launching this ad exchange. What are the numbers?

A: It (ads on the iPhone) is pumping through quite a lot of volume at the moment in terms of helping us grow our business. We don’t actually break down the page use between applications and the web browsing through the iPhone. But what I could tell you is that we’re serving ads in about 1 in 3 iPhones every month. That means that we’re serving on 7.2 million iPhones and 3.9 million iPod Touch’s worldwide. So it’s about 1 in 3 total.

Q: Why launch an ad exchange?

A: We’re very close to the mobile development community and one of the things that they keep telling us is that they want more creative ways, better ways, to tell people about the applications and get them to download them. With something like 25,000 applications in the app store, it’s quite difficult to stand out now. But at the same time, not everyone wants to spend money. And so, listening to what developers wanted, we came up with the idea of an exchange. This way, publishers who sign up to the AdMob network, who we’re serving ads to already, can donate a portion of traffic to other people to serve free ads in their applications, and in return they get similar amounts of advertising on other peoples traffic.

Q: So it’s basically bartering?

Exactly- It’s helping our publishers or the application developers grow their businesses. And obviously, indirectly, we benefit because the more inventory, the more people have downloaded it, the bigger our network gets. But the primary reason is because we were asked to come up with a way of being able to promote ads. And we’ve got quite sophisticated targeting, so that if you’ve already got an application downloaded on your iPhone, we won’t serve you an ad for that application again. So there’s no wastage and it’s an efficient way of doing it.

Q: Apple is the one to watch now. What about Android?

A: The iPhone is a hugely significant device. That’s certainly obvious. But in the future more phones will be like the iPhone; and one coming up is Android. We already serve ads on the Android and they [Android] already have an application store, so we’ve already got an ad unit focused on that. From what we’ve seen, the iPhone type of experience – and I’ve included Android in there – does tend to drive a lot more traffic for publishers than normal phones. The iPhone has always had very high metrics in terms of consumption of Web pages, and now it’s got high metrics in terms of consumption of applications, and, therefore, ads within applications.

Q: The numbers are significant for iPhone, but it’s not the only game in town. What about the other devices and the other app store schemes coming online?

A: Obviously our business is serving everybody and serving ads to the less common denominator. So we’re going to continue to be in that business without question. The iPhone has allowed us to create some new ad units, which are more interesting than perhaps what you can achieve on today’s smartphones. And, because of the explosive growth in advertising consumption and the great volumes we’re seeing in terms of browsing and application downloads, we’ll continue our efforts in the iPhone.

Q: It’s not just about advertising; it’s about relevancy. How does AdMob enable content discovery through relevant advertising?

A: In practice, when you download an application, we already know something about you: We know that you download applications on an iPhone and we also know what [apps] you don’t have on your phone. For example, if you’ve got the Facebook application already installed on your iPhone, we won’t promote Facebook to you. We’ll promote something else you haven’t got, which makes you more likely to buy it.

Q: You keep that relevancy going across sessions…?

A: No, it’s not about a session. We can tell from the phone itself, from what’s installed on it.

Q: That’s quite sophisticated.  I would imagine with some tweaks to the algorithms AdMob could figure out what content is similar to other content and recommend it.

A: Yes. That’s in there and we might be exploring more. However, at the moment it’s pretty basic. Right now, if we serve an ad through the exchange, we check first to see what applications the user has on the iPhone to be sure we serve an ad for a different, but related app.

Q:  I see from checking out the self-service at the backend that developers can do quite a lot themselves. Take the ads. AdMob automatically creates exchange ads for the developer’s app based on the description in the Apple App Store.  However, there is a mechanism that allows developers to edit the ads or create their own.  Targeting is based on the app description in the Apple App Store, and the developer can also apply ad filters.  Can you explain some of the nuts and bolts?

A: It’s a self-serve platform. You simply go there, check the box that says ‘yes, I want to participate in the exchange,’ and then we start serving a few ads in your apps and your ads get served elsewhere. If you want to stop, you just uncheck the box. It’s something you can switch on and off at will really.

Q: No money changes hands here. But what about moving forward?

This is more about enabling discovery of our own products. So it’s barter more than anything else. Obviously, the more eyeballs they get, the more money they make through serving ads. So yes, it’s in their interest to get more and more in-store apps because they make more and more money from the paid-for ads. Let’s just be clear on this. When you sign up at the application exchange, it’s not about saying ‘I want only to serve free ads in there’. It’s about ‘I want to give a small portion of my traffic at my site while continuing to make money through serving normal ads.’ So you don’t give all of your pages away. You just give a portion of them to promote other people who will then in turn promote you. But all of that time, your traffic’s growing and we’re all making more money from the paid-for ads which we’re serving.

Q: You just launched and I see you are organizing events for iPhone developers. I’m think here of the Developer Meetup in San Mateo, where developers talk about their strategies. What is the feedback on the exchange?

A: As I said, we work with about 33 of the top 100 already. So we’ll be reaching out to more people in the next few weeks to tell them about the exchange. The idea is going to be popular because, at the end of the day, it’s a way of growing your business for free – which we’re enabling our publishers to benefit from. I think it’s going to have good up-take actually. I think we’ll certainly see within a couple of weeks, hundreds of developers giving it a try.

Disclaimer: AdMob has been an MSG supporter.

This could be the week that Apple chalks up its one-billionth iPhone application download, according to this post at MoCoNews. Principal Correspondent Tricia Duryee does the math and figures “about 100 apps are being downloaded every second-that’s 6,000 every minute, 360,000 every hour and 8.6 million a day.”

It’s a flood of apps that pegs the needle, and no doubt plays in favor of companies that recognized the potential of the Apple App Store early on. I’m thinking here of mobile ad marketplace AdMob, which just launched Download Tracking for iPhone applications, allowing advertisers to accurately monitor App Store conversion rates, (detailed in a separate post based on an exclusive briefing with Russell Buckley, AdMob VP Global Alliances); and Taptu, a mobile search company gearing up to solve the search/discovery problem in the “Touch Web” and become a leading App Store mobile ad network in the process (an ambitious plan I discuss tomorrow’s exclusive Q&A with Andreas Bernstrom, Taptu COO).

The iPhone has helped to unleash a new interest among consumers in the mobile Web, but it nonetheless represents a tiny subset of the total mobile market. To date Apple has sold 17 million iPhones worldwide (a total Nokia generally tops in a fortnight). Garter puts it in perspective: It concludes that smartphones account for a small percentage of handsets (11-12 percent of all handsets sold globally), and iPhones account for an even smaller percentage of total smartphones (8.2 percent of handsets sold globally).

Another keys data point comes from comScore. It reports that more than half (54 percent) of app users are in households making at least $75,000 per year. If your end-goal is about reaching a mass-market audience with apps, ads or marketing campaigns, you’re well-advised to think beyond the iPhone.

Before jumping on the iPhone bandwagon, we should also take a closer look at new stats from AdMob and Bango, numbers that both confirm and deny iPhone’s leading position.

First, the monthly AdMob Mobile Metrics Report.

It lists the top smartphones in its network (market share AdMob calculates “based on the percentage of requests received by a particular handset” for the ads its serves), and found that smartphones generated a whopping 33 percent of worldwide traffic in February 2009, up 26 percent from six months ago. The real surprise: iPhone generated 33 percent of all smartphone traffic worldwide and half (!) of all traffic in the U.S.

Wow (!), iPhone is where the action is – or so it seems…

New data from Bango, a provider of mobile analytics solutions, tells a different story. The Bango Top 20 handset list (likewise based on February stats) puts the Nokia 3110c in the number one spot; iPhone comes in at number 24 (!). By way of background,Bango data looks at the activities of major brands and businesses as their consumers browse to mobile websites (measured by Bango Analytics) and buy mobile content and services (as measured by Bango Payment).

How can iPhone be both a leader and a laggard?

As this well-written/researched post from mobiThinking points out: It depends on where you sit. AdMob counts the number of mobile adverts it serves to different types of handsets, not unique handsets. “So, if iPhone users surf more (aren’t the majority of iPhone users on unlimited data plans?), then iPhones go to the top. So, from AdMob’s perspective iPhone is indeed the only game in town.

Bango, because it can identify and track unique visitors to its customers’ sites, has correctly identified a diverse range of handsets browsing the mobile Web. It’s a more representative sample of the devices surfing the mobile Web, with smartphones accounting for 30 percent of handsets in the top 20.

My take: The existence of two conflicting views of the handsets that matter most (to advertisers/publishers) underlines the importance of employing analytics tools that provide a more holistic view of what customers do and the devices they use. Focusing only on the iPhone or only mass-market handsets is a sure-fire way to short change yourself and your customers. It takes two, baby!

But it’s not just about big-picture anayltics; it’s about how brands and publishers approach the mobile Web.

As Boris Fridman, Crisp Wireless CEO, points out (via the company newsletter): ” For everyone thinking about investing in an iPhone app, I say, kudos – but don’t do it at the expense of a mobile website.  Our recent Crisp Wireless Index shows that iPhone usage for mobile browsing across our network has grown significantly from 9.1 percent to 22.98 percent.  However, Blackberry browsing still holds a significant share at 23.98%. Furthermore, recent studies from Pinch Media show that as novelty wears off, iPhone app usage drops significantly after 90 days. Mobile has become a crucial channel that requires a multi-pronged approach.  Our own Tom Limongello recently stated it best in his blog post pointing out how maintaining a mobile or iPhone-optimized website to complement iPhone apps is key to maintaining discoverability and addressing a broader market.” (More from Crisp Wireless  in an exclusive interview next week.)

I’m reminded here of an interesting debate during a recent industry conference, a discussion I would like to open up to MSG readers. Does the popularity of the iPhone among this demographic and the continued hype around the iPhone (one that sees many companies invest in the iPhone as their only mobile play) combine at some level to create a new kind of iPhone-only affluent mobile Internet (as opposed to a mass-market mobile Internet for the rest of us)? What do YOU think? What’s more, is there a danger this will increase fragmentation and move us one giant step away from the One Web vision Steve Bratt, Chief Executive Officer, World Wide Web Consortium, outlines in this excellent presentation?

Disclaimer: AdMob has been an MSG supporter; Bango is an MSG supporter.

I’m also pleased to report that the interest in my series of mobile advertising white papers is going strong. While I’ve just wrapped up Vol 2, my earlier white paper (Mobile Advertising For Newbies) will soon be making the rounds as part of a package of audio-visual presentations on mobile advertising produced by Henry Stewart Talks, a company committed to providing access to world class seminars by leading thinkers and authorities from around the globe in one online resource. The company commissioned me to summarize the findings of my first white paper and so educate the market about the pivotal role of mobile analytics in all we do. The more digital we become, the more the data matters…

Location is another topic high on my agenda, so I am looking forward to a F2F meeting/podcast with Dan Harple, who is responsible for leadership, and strategic and operational growth at GyPSii, a super-cool company leading the race to deliver us mobile experiences that combine information, entertainment, social networks, and location/navigation. A passion for multimedia, real-time interactive communications, collaboration, and social media runs through Dan’s bio like a leitmotif.

Prior to joining GyPSii he was Founder, Chairman, and CEO of Context Media, Inc., an enterprise software firm that was acquired by Oracle. Before that, his efforts centered on media research in Context Labs, a company he co-founded with Artist and Producer Todd Rundgren. Cool!

If you want to know more about the company and its future roadmap, then click on the screen in the MSG video player and watch the interview I did with Shane Lennon, Vice President, Marketing & Product Development, during Mobile World Congress. It’s the video interview I chose to showcase this week, and you can read more in my column for bnetTV’s weekly newsletter here.