In brief:

It’s encouraging to see a much sharper focus on mobile search and a growing realization among mobile operators, content providers and publishers/developers that there is a lot more to mobile search than the universal model we know from the online Internet. Mobile phone form factors push companies to develop new mobile search services that deliver us relevant results in tune with our intent and context. All the better if these services make use of features and functions such as voice recognition, image recognition, location-awareness and Augmented Reality.

Another development that makes search essential is the avalanche of apps and app stores, and the drive by all the players in the ecosystem to make these content and services storefronts a commercial success. Case in point: Apple’s decision to snap up Siri, a voice-activated digital personal assist that takes the concept of search to a new level (allowing us to find not search!)

OPEN CALL FOR MOBILE SEARCH FIRMS

Regular readers will recall that I have tracked mobile search from the start (hence, the name MSearchGroove, following on the popularity of my industry-first report on the mobile search and content discovery space).

My background and passion also allow me to connect with cool companies in the space such as Taptu, the first mobile search company to index the Mobile Touch Web; Expertmaker, a mobile search company in stealth mode that allows us to refine our search parameters in real-time; GetFugu, a company that combines search and image recognition to help people find local businesses and navigate to their website; and Aisle 411, a company at the sweet spot between mobile search and inventory management. (Check out the bnetTV video interviews I conducted with Carl Freer, GetFugu founder, and Nathan Pettyjohn, Aisle 411 Chairman & CEO.)

I look forward to including these and more cool companies in my keynote presentation to the European Commission. The Institute for Prospective Technological Studies, which is part of the Joint Research Centre of the European Commission, has organized an exploratory expert workshop titled “Exploring the Future of Mobile Search” to discuss the innovation potential in mobile search. The workshop will take place in Ghent, Belgium (June 9), during the 9th Conference of Telecommunication, Media and Internet Techno-Economics.

Timed to this event I will also kick off a new series on MSG profiling mobile search newcomers and innovators. If you are a mobile search company and want to be included in my ongoing work and upcoming series, then please contact me directly (peggy@msearchgroove.com).

DATA POINTS

With search at the top of the business agenda, the timing is excellent to recount the key takeaways of several recent mobile search reports.

MOBILE COMMERCE & MOBILE SEARCH: Mobile Commerce (MC) – which handles over 25 percent of the searches coming from U.K. mobile operator portals and other sources – recently released a report summarizing the trends it observes based on the search queries it “sees” per year.

Among the findings:

• The volume of searches has more than doubled over the last 12 months. MC reports an increase in mobile search usage from 125 million queries to 250 million, in part due to the jump in the number of people signing up for flat-rate data bundles to surf the mobile Web. The number of searches per unique user also shows an increase. The total has grown from 8 per month to 13. (Granted this is not the frequency of use we know from the online Internet, but it is an indication that users are gravitating to the search box on portals as they become more familiar with the mobile Web.)
• The position of the search box is critical. MC’s data confirms that the higher the search box is placed on the portal, the more people use it. It’s not rocket science, but it does show that there are very simple ways to significantly increase the use of search. Even stating that search is free of charge (as Orange has done on its Orange World Portal) can boost usage.
• Tag clouds are useful shortcuts. Many use search instead of bookmarks to reach sites and destinations quickly (which is why Facebook was the single most searched term of 2009). MC tells us that displaying tag clouds containing the most popular search terms is another way to increase searches and drive results.
• Date, time and current events drive searches. No surprise here – but you can follow Steve Page, MC founder, who shares the top search terms and trends via his Twitter feed (@sjspage).
• Internet destinations and giants (Google, Facebook, YouTube) are top search terms. In addition to this information and analysis (summarized in this earlier post on MSG) MC shares how subjects are searched, reminding advertisers that they must bid on many related terms and tag their mobile pages correctly to ensure their results are high up in the natural search results for the terms.
• Are local terms also local searches? Google may have recently claimed that 33 percent of all searches on mobile have a local context, but MC is less convinced. It shows that searches such as “Manchester” are more about local soccer teams (Manchester United) than the city. Of all location searches, 55 percent include either a city or area name, 17 percent have a point-of-interest, 15 percent use a full zip code and 13 percent have a partial zip code.
• Search shortcomings can be avoided. Transcoding is not the only way to mobilize sites. Advertisers should build versions optimized for device types. (Taptu indexes sites that are touch-friendly and built from the ground up for access via touchscreen devices, for example.) The intelligence behind the search boxes could also be better. MC’s road test of search on Nokia Ovi reveals that it delivers games results for pac man – but not for pacman. Android Market suffers the “same shortcoming.” (BTW: This could be solved with a simple “Did You Mean” response to clarify the search term and the searcher’s intent.)

Source

The bottom line: MC has brought together a lot of insights about what people search for and how they search for it. Mobile search isn’t perfect, but volumes are increasing, and so is the pressure on providers to deliver a better experience. And it’s not just about mobile operators any more. The rise of the app stores means publishers and the 75 app stores are well-advised to develop mobile search strategies to deliver people the apps they want – or at least relevant results.

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ARE APPS BEATING SEARCH?: This insightful post from GigaOM draws from a Broadpoint AmTech note and asks if apps are poised to disrupt the standard online search model. The Broadpoint report says search engines derive significant revenues from commerce-related queries (searching for “Amazon” or “eBay”) and suggests that warns that the growth in the usage of mobile apps that take people directly to destinations could be bad news for Google & Co. “If users get in the habit of simply using the Amazon app to search for products or a Fandango app for movies, then Google would be seriously impacted,” the report concludes.

Source

The bottom line: Mobile apps cover the bases to bypass search engines when the purpose of the search is navigational (using the search box as a shortcut) and commercial (looking for a product on Amazon by searching for Amazon first, for example). Sebastian Rupley, who wrote the post, reminds us that Google can likely read the writing on the wall, which is why the search giant is so interested in the “spread of Android-based phones, many of which emphasize its tools and applications, and steer users into its search/ad ecosystem.” It will be interesting to see how all search engines react to the onslaught of mobile apps that make finding and buying stuff with our phones a no-brainer.

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FACEBOOK DOMINATES: We all know that social networking is the number one activity on mobile. A recent ComScore report reveals that search queries on the social networking site (online) grew by a whopping 48 percent between February and March 2010. In its study, which is based on 15.4 billion core searches in the U.S., ComScore also found Google leads with 65.1 percent of the market, down 0.4 percent from February. It was followed by Yahoo, Microsoft, Ask and AOL. Microsoft showed a 7 percent increase after adding mapping and other features.

Source

The bottom line: Read between the lines and this bodes well for social sites and social search via mobile. Facebook, which has more than 400 million active users, is exploding when it comes to search (up 48 percent) on the Internet. Only a matter of time before this trend spreads to mobile, our preferred way to connect with our social networks and information about people who matter most to us on the fly. Meantime, Tech Crunch points out that search growth is slowing. The post concludes: the slowdown “may also be an indication that the search industry is maturing, and the next leg of growth may not kick in until people start searching on their mobile phones in a significant way or something else gives people a reason to search even more than they already do.”

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TAPTU TOUCH WEB REPORTS: This week Taptu releases the fourth in its series of reports analyzing the Mobile Touch Web. To make sure we are all on the same page and to set the stage for the next report findings, here’s a summary of the key takeaways.

• The January Report defined the Touch Web (and the ecosystem emerging around it) and concluded that the Mobile Touch Web had arrived full force. According to the company, which indexes touch-friendly sites and destinations, there were around 326,000 touch-friendly sites in January compared with a total of 180,000 apps across all app stores.
• The February Report takes this a step further, offering a breakdown of the sites that make up the Mobile Touch Web. The report emphasized shopping and services, a major subset of this new Web. In total Taptu counts approx. 83,000 Mobile Touch websites devoted to shopping and services. Why is this significant? Shopping and services accounts for about 26 percent of all sites. The same category accounts for less than 4 percent of apps in app stores. Taptu concludes that commerce is a chief focus on the Mobile Touch Web and will play an important role in its evolution.
• The March Report takes an in-depth look at the Government and Non-Profit sector and its growing presence on the Touch Web. The report highlights some of the leading services from Education institutions such as MIT, the Haiti disaster relief effort from the Charity sector and various local and federal government agencies that are using the Touch Web to reach a mass audience. A surprise: a large number of religious organizations embracing the Mobile Touch Web (a whopping 72 percent of all sites in the Government & Non-Profit segment are faith-based services).

Source: You can download all Taptu reports here: http://taptu.com/metrics/

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AUSTRALIA STATS: This post draws from new Nielsen research to provide numbers on mobile search usage in Australia.

• 73 percent of mobile Internet users conduct searches, compared to 38 percent accessing email and 14 percent checking social media sites
• The figure (73 percent) of people using mobile search was just 30 percent a year ago
• 43 percent of total Australian mobile phone owners have Internet-enabled handsets, though just 29 percent use their mobiles to access the Internet
• Search came out on top of activities conducted on mobile Internet; checking the news and weather, emails, maps and directories, and social networking were also cited as common mobile activities

The report also includes some insights into mobile social networking and the top handsets.

Source

The bottom line: Great to have country-specific stats. Although mobile Internet usage has a way to go, there is a tendency among users to use mobile search to explore all the exciting content at their finger tips. Makes sense that we start off by transferring our online experience to mobile.

Disclaimer: Taptu is an MSG supporter and client.

Who is making the money (and how) with barcodes? No easy answers there.

But the raft of recent announcements makes it clear that barcodes, like online/mobile search, cover the bases to become the interface to information everywhere. They allow us to access information (about products, places, people – the works!). Like search, barcodes also trigger the delivery of advertising in tune with the information we request.

With so much in common between these platforms (barcodes and search) it’s not surprising that search/OS giants Apple, Google and Microsoft have all unveiled ambitious barcode strategies. (Even Facebook has joined the party.) But even these giants will need to develop the IP and business ecosystems to make this work.

Will they “make” or “buy” the pieces they need (perhaps snapping up a provider of end-to-end barcode services that include the handset app and the overarching platform)? It’s a tough one to call. But one thing for certain: barcodes are in the bowling alley and making a solution from scratch (down to the clearing house or other barcode management scheme to help advertisers and brands achieve reach and interoperability among operators, agencies and enablers) may cost time even these giants don’t have.

MORE THAN MARKETING

While we wait to see how this could play out over the next months, barcode providers are signing deals that lay the groundwork for a myriad of applications beyond mobile marketing and couponing, bring the day closer when barcode scanning could well replace search as a means to access information about everything everywhere. (And without making us scroll through reams of results on our mobile devices, I might add.)

This exciting scenario is at the core of the recent tie-up between Renu Mobile – a company that provides marketing and advertising services including mobile Web (WAP), SMS, social media and now barcodes – and NeoMedia, a provider of barcode scanning, management and publishing solutions whose platform includes barcode reading software (NeoReader) and a barcode management system (NeoSphere).

Earlier this week the companies announced an agreement to include NeoMedia’s products as part of Renu Mobile’s end-to-end mobile campaign management services. This paves the way for Renu Mobile to build out its cross-media mobile marketing mix and deliver barcode capabilities to agencies and brands. I caught up with Carol Glennon, Renu Mobile CEO, to ask her about the tie-up with NeoMedia and her strategy to target a wide range of industry sectors including pharmaceuticals, enterprise and homeland security.

INTERVIEW HIGHLIGHTS

First, what does the tie-up mean?

According to Carol, it’s the only fit that allows her company to get reach without allying itself with a potential competitor. Put simply, NeoMedia NeoReader barcode reader software comes pre-installed on key devices and platforms. (NeoMedia recently announced its reader software was released for the iPhone 3G and 3GS. Its reader software also comes pre-installed on Sony Ericsson devices – and more handset deals are imminent, I’m told.)

More importantly, NeoMedia doesn’t compete with Renu in managing/executing mobile marketing campaigns. If anything, NeoMedia, through its involvement with Neustar, a company spearheading the creation of a barcode clearing house to drive adoption and enable interoperability, is doing its part to ensure mobile marketing delivers. To date barcode companies NeoMedia, 3GVision, Mobile Data Systems and Mobile Discovery are using the Neustar clearing house (more in this press release from Mobile World congress).

Connect the dots, and it’s about delivering barcode campaigns that are open, interoperable and global.

However, it’s also about powering enterprise apps everywhere.

Carol aims to be on top of the game with a slew of clients and services that focus sharply on public sector, security and pharmaceuticals. It’s easy to imagine how scanning a barcode on a bottle of medicine could allow people to access valuable information such as the proper dose, potential side-effects and/or a mobile website with advice or the location of nearby pharmacies and physicians.

Likewise barcodes could ensure that authorities (such as police and fire) resolve an emergency situation with fewer casualties. Among the scenarios high on Carol’s radar: barcodes built into the firefighter’s badge that allow doctors access to details about the individual (profile, health record, allergies etc) when that person is unconscious or injured. “It’s about enabling services – and rapid deployment – without authorities having to invest in new equipment or learn a new skillset.” Little wonder the next stop for Carol is MILCOM 2010, a military trade conference focused on the “Next Decade of Military Communications.”

Keeping with the security scenario, barcodes could also allow authorities to define and oversee a security area. Barcodes on vehicles, equipment, even people would potentially streamline security checks and wring more value out of limited manpower and resources.

WHAT’S NEXT?

Carol tells me Renu will expand its mobile marketing activities through the partnership with NeoMedia. But Renu will also move full-steam ahead on its first test of a pharmaceutical application later in the summer.

After I interviewed Carol I saw a tweet from my esteemed colleague and Forrester anaylst Thomas Husson about his latest blog post, a must-read treatise aptly titled Liberty, equality and mobility. Having studied barcode reports and white papers in preparation for the posts I was writing, I struck by some interesting possibilities and parallels.

Thomas’ post is an excellent examination of the societal impact of mobile phones and the pivotal role of governments in moving effective communications and media tools a giant step forward. He argued that governments should balance investments and “make the most of mature mobile ecosystems” such as NFC (near-field communications). Thomas provides some examples and reminds us that “innovative research and development clusters that focus on mobile innovation, optimized transport systems, and a tech-savvy image are key to appearing innovative and attractive to firms looking for new locations. This is why the French government and the city of Nice are heavily backing the large-scale live Near Field Communication (NFC) trials that will take place in Q2 2010 in the South of France.”

While NFC is quite different from barcodes – there is some exciting overlap because they are both interfaces to the digital world of information, content and utilities.

In fact, Neustar joined with Visa at Mobile World Congress to showcase the potential of barcodes. In this pilot it was about scanning the barcode on the back of the Visa card to check your balance. But it’s easy to imagine more applications involving financial institutions.

Likewise, it would also be possible to scan a barcode (as it is to swipe an NFC-enabled device over an NFC tag) to manage workflow. (I am reminded here of a white paper I wrote for Nokia years back that argued workers – in this case technicians – could swipe their phones over an NFC tag on a particular piece of equipment to access repair records and streamline trouble-shooting.)

Hmm – sounds like an application that would fit with barcodes – particularly since these technicians could do this now with ordinary mobile phones. (NFC success is somewhat stalled until we have a critical mass of NFC-enabled devices.)

And, if we need any help figuring out additional scenarios, I’m sure Carol could think of a few…

The takeaway: Barcode business models and use cases are falling into place – and companies that miss this wave (and the opportunity to add a barcode component to their service offer) risk falling behind.

UPDATE: Carol just informed me via Skype that Renu Mobile has signed its first hospital customer. Looks like barcodes with be everywhere this year. Look for more analysis of this exciting space on MSG.

Last week, we outlined the opportunities and challenges created by the proliferation of app stores. The takeaway: app stores may have turned people on to applications and whet their appetite for new content types, but they also turn up the pressure on companies across the ecosystem (operators, OS providers and handset-makers-turned-content-providers) to make finding and buying applications/content a no-brainer.

Indeed, personalization is the new business mantra, and it goes for content/apps as well as advertising. Guest columns from Barry Smyth, Chief Scientist of Changing Worlds, an Amdocs company and recognized pioneer in personalization technologies, and Jim Levey, a former Director of Product Marketing for Search and Digital Advertising at Amdocs who has joined MSG’s roster of authors and influencers, will examine the models and mindsets required to turn personalization into competitive advantage.

In the meantime, it’s productive for us all to be on the same page, starting off with an understanding of the offers and an overview of the competitive landscape.

This week the focus is Bytemobile, a company that sits between the operator and the individual, collecting the data (such as browsing behavior on- and off-portal) that – in theory – allows its operator customers to deliver individuals personalized content (and advertising) they are bound to appreciate.

What are the practical benefits of personalization? Where does Widget Bar (software that enables operators to insert a personalized toolbar on the screen of any mobile device) fit in to the scheme of things? And what’s in it for brands? I caught up with Adrian Hall, Bytemobile CMO, to get the inside track.

Listen to the podcast here. [15:30]

WHY PERSONALIZATION?: The advance of the iPhone has impacted the space on two levels: it has highlighted the continued need for content adaptation solutions (to display Flash properly, for example) and it has increased the desire of people to experience rich-media content across all devices (not just smartphones). “So, there’s still a very strong market for the content adaptation as a class of product, but clearly as devices increase in functionality and in capability, there’s a need still to influence the way the end user interacts with data, even on a device as sophisticated as the iPhone.” To allow operators to personalize data (and brand the overall value-added services experience) Bytemobile has introduced Widget Bar. (You can view the demo here.)

As Adrian puts it: The idea is to have a personalized toolbar on the screen of any mobile device (smartphone on down to mass market device), “which offers efficient user access to services like local news and weather, enhanced search, email and social networking.”

By way of background, the Widget Bar got a bit of a boost in July when Bytemobile launched a – well – starter pack for mobile operators that includes:

• The operator-configurable Inline Portal application that intelligently brings portal content to the top of every web page.
• The Search Bar application, that provides an always-present search query box (piggy-backing the search engine preferred by the mobile operator), thus facilitating content discovery and enhancing mobile browsing.
• The Share application that simplifies the sharing of mobile web content with other users directly or through popular social networking services such as Facebook and Twitter.
• The Notifications pop-up application that gives operators a way to inform subscribers of relevant updates such as promotions and operational messages on roaming and data limits.

Connect the dots, and for Bytemobile it’s all about enabling operators to own and brand the all-important interaction between people, their phones and their peers.

APP COMPARISON: “Widget Bar is basically a clientless application window, if you like, so it helps mobile users to gain access to useful applications and personalized content of their choice.  As I said, it does this using a consistent presentation format. So, what it basically offers is a series of ‘mini-apps,’ if you like, that sit across the top of the screen of your device.” What does the use case look like? Imagine people that get access (through the carrier data plan) to apps as part of a larger offer. “Hypothetically, $10 a month would get you access to the choice of 10 applications that you could populate across the top of your device….So, you can then choose little mini-apps that are basically zero-click apps of your choice that are somewhat personalized by the operator.” The result: a populated Widget Bar across the screen of any class of mobile phone that is “updated in real time, basically in the background whenever we happen to refresh a Web page that we’re searching on as part of a session on our mobile phone.”

OPERATOR PERSONALIZATION: It all starts with Bytemobile’s Unison platform, a mobile Internet platform that enables operators to deploy fully integrated, multi-service solutions from a single node in the core data path of the network. As Adrian puts it: “We actually sit in the data path and so we get access to see how users search the Web, what advertisements they click on, [and] their browsing behavior.” This insight allows Bytemobile to build up a real time user profile of that particular user.

DRIVERS: Adrian tells me the main reason operators are interested in (and currently trialling) Widget Bar is to fight back the competition coming from Web giants and handset makers. “Operators captured a lot of their data revenue through their portals.  Now, as the walls of the walled gardens break down and portal traffic and portal revenue is reducing, we’re all going to the open Internet.” As a result, carriers are looking for ways to capture “the mindshare of their consumers rather than the consumers going off to the app store and some of the other products from Google and Apple that immediately take the consumer away from the carrier, from the carrier’s brand and the carrier’s applications.”

MOBILE ADVERTISING: “The key to effective advertising and more effective click through rates clearly is the ability to analyze the browsing behavior of particular [individual] consumers.  Because we can analyse browsing behaviour in real time, it allows us to work with the carriers and their ad providers, be it the ad networks that they’ve chosen or in-house facilities that they’ve built, to much more effectively target ads to consumers.”

PROFILING: Bytemobile’s ability to personalize content goes back to the insights it gained offering products and solutions to monitor how people use services such as video in order to implement fair use policies. “Typically when we talk to carriers, they see that 2-3% of users are typically using 50-70% of bandwidth and clearly they’re not paying for that amount.” Sitting in that sweet spot between the carrier and the consumer (monitoring video use) has also allowed Bytemobile to focus on personalization. As Adrian puts it: “It’s personalisation that’s going to end up increasing either the click through of an advert…or staying with the carrier and the value-added services that particular carrier can offer versus just going straight out to a Google or an Apple [destination], and ultimately increasing the chances of making that carrier a dumb pipe.”

WHAT’S NEXT?: In a word, execution. It’s all about helping operators implement Bytemobile’s personalization solutions. Adrian tells me operator deals are in the pipeline, but no details yet. He also reports that large-scale user experience trials conducted in cooperation with operators show the vast majority of users accessed the Widget Bar application several times per week. (No numbers from Bytemobile, so it’s not possible to quantify this “vast majority.”)

Other observations from Adrian:

• Bytemobile users reported finding navigation tools such as the Search Bar application extremely useful
• The Inline Portal application effectively doubled users’ visits to the operators’ portals
• Instant user access to the latest portal services and content, the continuous presence of the operator’s brand on the web browser, and the accurate targeting of content delivered to users all resulted in increased click-through rates

My take: Hmmm – it wasn’t so long ago that mobile search was widely regarded as a silver-bullet solution that would allow content companies/developers to present their offers within an acceptable click-distance and clinch that all-important sale. However, the usability barriers outlined in this post from my last mobile search masterclass have shifted industry focus from mobile search to tools and technologies that allow content owners/developers to employ a more proactive approach. Against this backdrop, content discovery (and the solutions to present content/apps where users can see and buy them) is back in the spotlight, all the better if these solutions bubble up content/apps to the surface that are in tune with our individual preferences. (And it’s not just about content; personalization can also be harnessed to deliver people advertising that they are more likely to appreciate.) Bytemobile is one of a new breed of companies allowing operators to connect the dots in the clues people leave behind (browsing behavior, for example) to serve up content they are bound to like and – more importantly – brand it to reinforce their value-add. Will this allow operators to do battle with Google, Apple and all the other companies jumping on the content/app bandwagon? It’s too early to call that one – but solutions such as this certainly create a more level playing field and play up the importance of personalization data only the operators can access.

In brief: An analysis of what Blyk’s partnership with Vodafone Netherlands really means, an exclusive Q&A with

It’s been a bit quiet at MSG as I finalize the plans and partnerships that will transform MSG into a media company and lay the groundwork for an ambitious mobile marketing publishing project that has already earned the endorsement of several major industry organizations.  (More in a press release soon via RealWire, a global news release distribution service and MSG partner that, like the online media industry that is its focus, is always-on, always-connected and always professional, which is why I can recommend them so highly.)

But I couldn’t end the week without posting an analysis of the exciting (but not unexpected) news from Blyk, combination mobile engagement media company, mobile advertising startup and MVNO, that it had signed an deal with to roll out its branded service in partnership with Vodafone Netherlands and to share revenues with the operator.

Connect the dots, and Blyk has executed on the game-changing strategy that Antti Öhling, Blyk co-founder and CEO U.K., outlined in May in this exclusive Q&A. In it he provides solid logic for “making the switch” from MVNO (a model he called a “proof of concept”) to youth engagement media. The reasons range from scale and speed (both accelerated through partnership with operators) to the ones that matter most to advertisers: reach and engagement.

As Antti put it: “An MVNO means that you have to make up-front heavy investments. We needed to do it in the U.K. in order to get the whole machinery working. We needed to have access to all the tools that the operators have in their server rooms. Now that we understand how to use it [technology] we know how to help them. We know exactly how they can combine operator infrastructure with our ad engine and campaign management. We can make every campaign pixel perfect but what’s more important is that they [campaigns] are extremely relevant to the receiver. We saw the MVNO model as too slow for growth. If we partner with operators, we can triple or quadruple the speed, and reach the scalability that many advertisers are looking for.”

And while we’re reviewing the milestone statements from this Q&A (opinions that have new and significant meaning in view of the Vodafone Netherlands partnership), allow me to bring your attention to the one from Antti that speaks volumes (literally) about why operators would/should tie up with Blyk for a Blyk-branded service in the first place. In a word, brand.

As he put it: “Blyk is a simple end-to-end proposition that covers everything from ad platform, campaign management, user experience and audience management to technology.  Sometimes when I discuss this with operators, I say, ‘Think of Blyk as a Coke.’ as this example makes our role easier to understand. We have the recipe and we have the brand. People understand Blyk; young people understand what it means when we come to a country.  The recipe is how you make it work.  The operators have the factories for making all the refreshments they need, and they have their existing distribution channels. Basically, they have the works. But if they bring Coke in there, they can get so much more volume and so much more value. It’s a lot more interesting – and lucrative – to have Blyk as part of the operator offer. In other words, they can expand their reach to offering another well-known product.”

EXPERIENCE EXPERTS

Jonathan MacDonald – friend, esteemed colleague and, importantly, an architect of Blyk strategy – highlights another ace that plays in Blyk’s favor as it enters into this and other partnerships with mobile operators: breadth of offer.

Based on a background briefing with Antti Öhling, Blyk co-founder and CEO U.K., Jonathan pieces together what he calls the “Blyk partnership Blueprint” (which he shares in this post).

The model:

1)    Position yourself as an MVNO (as Blyk did) to perfect the process of linking brands with people. As Jonathan, an eyewitness to this stage of the company build-out observes: “Over time there was constant improvement of processes and tools which all connected to creating a true experience for Blyk members and creating the world’s first network as a media.”

2)    Productize this offer. Create a comprehensive capabilities mix whose components (in the case of Blyk) include: “Blyk brand, Blyk user experience, Blyk approach, Blyk audience management and of course, Blyk advertising sales.”)

3)    Partner with mobile operators. Use the existing infrastructure and capabilities of the mobile operator, experts at customer acquisition, billing and delivering great service.

Intrigued by this model, I caught up with Pekka Ala-Pietilä, Blyk co-founder and CEO, earlier this morning to deep-dive into Blyk’s real business objectives and the real value of brand in the scheme of mobile advertising. (My personal thanks to Irene Nyberg, Blyk Head of Analyst Relations and International Press, for arranging this briefing on short notice.)

AN EXCERPT OF THE Q&A WITH PEKKA ALA-PIETILÄ

Q: What have you achieved in the U.K. and how will you bring this to bear in your partnership with Vodafone Netherlands and others in the pipeline?

A: There are three elements. We have developed the capability to make ads relevant, that has allowed us to create an opt-in audience that want to receive this advertising. Beyond this, we have changed the whole context of advertising. Advertising ceases to exist because it is perceived as content. And that is one of the great aspirations of advertisers: to get to a level of relevance where what they send is perceived as valuable information, valuable content and important social currency. The fact that the audience responds positively to this response is reflected in the third element of this: our net advocacy scores. [By way of background, Net Advocacy is a measure of the volume of positive and negative word-of-mouth.] With over 40 percent, we’re at the same level as YouTube and Facebook. That is important for advertisers. Net advocacy is high and so are response rates. They have stayed at 25 percent for over 20 months now. [NOTE: Some 200 advertisers, including major brands such as Coca-Cola, L'Oreal and Sky, have run some 2,500 campaigns to date, reporting an average response rate of 25 percent.]

Q: You have achieved brand awareness without yourself spending on advertising and promotion. It worked in the U.K., but what will be the strategy for other countries? And how do you quantify your brand strength?

A: We believe the Blyk brand has several facets. The consumer-facing brand has the capability to spill over. Consumers are connected and can find out about our brand on the Internet or from other sources, so we believe that is how awareness will continue to grow. Our brand also has a great crossover effect when it comes to advertisers. We work with all six major advertising agencies and a large number of international and global brands. Finally, our brand is known to mobile operators who know what we achieved in the U.K. and what we plan to do in The Netherlands. Many forget that we have successfully recruited youth, the most difficult audience segment to reach because you have to get to them through the clutter of other media. We did this because youth is an extremely important segment for advertisers.

Q: The news is the partnership. But why not just go it alone?

A: Mobile advertising is not a technology game. Technologies can be bought. Of course, you need to have a good technology, and we have it. But it comes to the ability to deliver a seamless end-to-end media experience, which is why we are a media company. Operators are telecom companies and all the corporate DNA and KPIs [key performance indicators] are telco-driven. In the model [Vodafone Netherlands partnership] the operator brings the telco capability, the infrastructure, the billing and the ability to acquire customers and on a mass scale and feed that into an opt-in database that you need to make advertising work. We bring the audience management – the member experience – and we manage it for them. We bring the processes, how the media works between the members and the advertisers; and we bring the technology and the ad sales force. All this means we can get off to a flying start, and that’s a great benefit for operators.

Q: You have a kind of turnkey solution here; one that you say gets you off to a “flying start” when you move into a new country. What countries are on the roadmap?

A: We have a model that doesn’t only allow us to grow fast in a country. We can roll it out in number of countries in parallel.

Q: Such as?

A: We are moving in Europe and Asia. One of the guidelines we follow is the interest shown by advertisers, the markets they think are important. Asia is where broadband has not and never will take off to the same level that it has in Europe. There mobile will be THE digital media. There is no other digital advertising channel available.

Q: We hear that a lot – but why is advertising the major revenue source for every mass media except mobile? And where are the mobile operators? My own mobile advertising research (Mobile Advertising Research U.K.) revealed value chain confusion is to blame, along with a lack of awareness and education. What’s your take?

A: For one, the industry has tried to take the online experience – such as search and banner – and apply it to mobile. We have not yet come up with an adaptation that is right for the mobile context. It’s the same as in the 1990s, when we learned that you cannot force mobile on the Internet and saw that WAP didn’t work.

Second, operators have taken a purely technology approach. They have brought in multiple platforms, in some cases two, three, even four technology platforms, and none is generating revenues. So they have gone for piecemeal and not complete solutions and it’s only a recent revelation [among operators] that this isn’t going to work.

But awareness is changing and that will sharpen the focus on mobile advertising. Another development that has raised the stakes is the intention of the Internet companies – Google, Apple, Microsoft, Nokia and others – to make money and a business out of mobile advertising. So, there will be an interesting increase of efforts and tensions, and this will create an increased sense of urgency on the part of the operators to put more effort into mobile advertising. There will be a battle between players to decide who will be first to create the foundation and grow to become the game-changer in mobile advertising.

Q: My own research also revealed a growing concern that the number of mouths to feed in the value chain exceeds the revenues to share. How many mouths are in your value chain?

A: We have only three mouths to be fed: agencies, operator and us. So, there is more than enough to be shared and go around. If the value chain is a puzzle then, you are right, there are too many players that need to be taken care of, and you have more companies than revenues to go around. On the topic of costs, we can partner in way that the incremental cost for an operator to actually build this capability from the technical side is low. The production cost and what’s need to achieve economies of scale for producing [advertising] messages is also low. On top of that the incremental cost for us to connect [our media offering] with different operators is again low. So, when you look at the cost competitiveness of different alternative value chains or solutions – the one we have built is almost unbeatable. There are revenues to share and the partners involved [Blyk and the operator] already have an optimized cost structure.

Q: Lastly, a look back to your off-portal play. You have a partnership with Velti and a sharp focus on content portals and providers. What does this tell us about Blyk objectives? Some could argue this conflicts or that you could be spreading yourself too thin…

A: This is not a zero-sum game. That model only applies when the market is stagnant – but on the mobile side – content and consumption the market is on a growth curve. What happens off-portal – and promoting it – is a way of helping acquaint people with mobile and encouraging them to use services and content, and that is a benefit for everyone. A parallel is i-mode. There are open and closed spaces – and helping both to grow is a win-win for everyone.

Q: It’s about content and services. But what about apps? Companies tell me they are excited about apps and getting in now with advertising schemes and strategies. Is Blyk going to jump aboard the app bandwagon?

A: We will have an aspect in our business which will definitely, and in due course, be aligned with the elements you mentioned. Having said that, we don’t see the need to rush to the app stores – especially when our core business has so much potential. We have more then enough work and opportunities just focusing on what we do.

WHAT DOES THIS ALL MEAN?

My take: Connect the dots, and Blyk has its eye on the prize: developing the capabilities – in partnership with mobile operators – to be a game-changing engagement media in reach and response.

It’s also about leveling the playing field and helping mobile operators understand the terrible truth: mobile operators are no longer in the access business and focusing on growing subscriber numbers obliges them to overlook the very opportunities (such as mobile advertising) and value creation opportunities that Internet brands are rushing to embrace.

Indeed, let’s not forget how bullish Google CEO Eric Schmidt is on mobile advertising. In August 2008 during a guest spot on CNBC’s “Mad Money with Jim Cramer” he stated: “Over time, we will make more money from mobile advertising. The reason is because the mobile computer is more targeted. Think about it–you carry your phone everywhere; it knows all about you.”

But it’s more than a play to make sure the Internet – where network operators (who owned the networks) and media companies (that owned the content) lost out to Internet giants such as Google – doesn’t repeat itself.

Mobile has to be different, which is why the partners (Blyk and Vodafone Netherlands) have also agreed to maintain the Blyk brand to their mutual benefit. (Makes sense… Why start with a new brand when Blyk already has a high net advocacy rate and high profile with agencies and advertisers?) Against this backdrop, a Blyk brand in the arsenal is a great way to jumpstart a youth-focused mobile offer wrapped in a proven media model brands and agencies understand. Now it’s up to the partners to turn it on and turn up the volume (literally) to build the opt-in database of members that will attract the brands.

But does it have to stop with a youth brand? I doubt it. A look under the hood a the breadth of the Blyk offer tells us this is a turnkey solution that clever operators could brand and turn on for other customer segments that advertisers want to reach (other age groups or illusive prosumers, for example).

And why not?

After all, the solution is the same (Blyk built it); the value chain is manageable (always and only three mouths to feed); and a raft of recent research reports tell us people everywhere respond positively to mobile advertising that is relevant to their interests and respectful of their right to co-create their advertising experiences. (Or at least they have to have that option. No doubt the 90/10 rule that holds for the Internet – that 90 percent are lurkers and 10 percent are contributors who get involved – goes for the mobile Web, but it’s best to ask permission all the same, and it’s a great way to gather the demographic data that so far only the social networks can.)

And if this sounds far-fetched then consider a surprise finding that emerged from the interviews that fed into Mobile Advertising Research U.K.: a growth opportunity lies in building the capabilities mix to improve audience segmentation and deliver demographics brands and agencies know from other media.

From the report: “However, this opportunity also represents one of the greatest challenges to mobile operators. While they wield powerful data about their customers, many operators have not yet structured their organizations to deliver this in a form that brands and agencies appreciate. As one executive at an application provider put it: ‘Operators must be able to segment the audience into media segments that make sense. Till now they haven’t done a good job at that.’”

Maybe the Blyk Blueprint shows the way…

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RELATED READING

·       Blyk: Inventory Doesn’t Make Mobile Operators Media Companies; Why Mobile Advertising Must Be Relevant

·       Ad-funded MVNO Blyk: Alive & Kicking – AND Coming Exclusively To MSG

·       Mobile Advertising Success: Orchestrate Don’t Dominate

·       PODCAST: Blyk COO Leif Fågelstedt On Stats, Response & Competitive Landscape; Mobile; Does Blyk Break The Mould?

·       Podcast: Blyk COO Leif Fågelstedt On Mobile Advertising,

Meanwhile, GetJar, which runs an independent, multi-platform app download site, says it, too, has seen more than 1.5 billion downloads of the 50,000 apps it carries. It says the five most popular apps are Opera Mini; three mobile social networking apps, eBuddy, Nimbuzz and mig33; and Google Maps. Source

The Bottom Line: The attraction of app downloads rolls on, and not just for iPhone users. One question, though: how many of those 1.5 billion apps on iPhones get actively used? Still, in some sense, it’s not that important. The big download figures show what mobile users will do when the browsing, download and installation process is quick and simple – something that can’t be said about many previous attempts at app stores on other platforms.

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INSIGHTS ON MOBILE DATA USAGE. Peggy has passed over some stats from Comscore from the Open Mobile Summit, a top-notch conference and networking opportunity that MSearchGroove is proud to sponsor as a media partner. In fact, MSG will be a sponsor and speaker at the next Open Mobile Summit in November in San Francisco – but more about that later. The figures show some interesting points about mobile media usage, including that a higher percentage of US mobile users are mobile media users (meaning they use browsers or apps, or download media) than Europeans, at 35 percent to 28 percent.

Also, an interesting figure on UK mobile browsing habits: 74 percent of mobile browsers in the UK hit operator portals, but those portals only account for 12.4 percent of all pages viewed. This shows that users are comfortable going off-deck to find the content they want, like Facebook, which alone generates 23 percent of all the mobile page views. Facebook and the other top 20 destinations account for 67 percent of the pages viewed, though Comscore measured 167,000 sites.

Comscore also reports that mobile banner ads continue to be dominated by ads for mobile products. 65 percent of mobile banners in the US are for mobile products, while the figure jumps to 85 percent in the UK.

The Bottom Line: There has been plenty of evidence to document the growth in mobile web use, but these stats illustrate that it’s definitely coming from off-deck sites, at least in the UK. Facebook continually emerges as a top mobile web destination, revealing the desire for mobile users to stay connected to their social networks while they’re away from their PCs.

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ENTERTAINMENT COMPANIES TOP MOBILE ADVERTISERS LIST, according to mobile ad provider Millenial Media. The company has released a report of the top ten industries that are using mobile advertising – excluding mobile apps, ringtones and other downloads, which the previous data point suggests makes up the bulk of the market. Movie, TV, music and video game companies topped the list, followed by telecom companies, “portals”, dating services, retailers, consumer packaged goods companies, the automotive industry, the armed forces, education and travel companies. Source

The Bottom Line: These sorts of stats will likely vary widely based on the ad provider’s network of sites, and other factors, though they do illustrate the breadth of companies that are using mobile advertising. Still, taken in concert with the previous data point, it looks like ads for mobile services and downloads dominate.

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FACEBOOK, TWITTER TOPS AMONG YOUNG BRITISH MOBILE WEB USERS, says a new report from CCS Insight. A survey of more than 1,000 people between 16 and 35 in the UK revealed that more than a third of them regularly access Twitter and/or Facebook from their mobile device. It also found that men are twice as likely to access the mobile web as women, and that young people expect mobile content to be free. Source

The Bottom Line: Again, Facebook’s name pops up as one of the most popular mobile web destinations. That’s not surprising, but the difference in use between women and men is, at least in terms of the size of the gap. This highlights an area in which operators, content providers and handset vendors could do more.

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WHAT DO US CONSUMERS REALLY WANT IN THEIR MOBILE PHONES? A new study from online retailer Wirefly says that US consumers are most interested in basic factors when making a handset purchase, such as size and color, with almost two-thirds saying they were more concerned with these aspects than the high-tech features of a phone. Source

Meanwhile a separate survey from Data Development Worldwide found that 40 percent of US shoppers looking to make a mobile device purchase in the next three months wanted a single device that could handle a variety of tasks, such as a smartphone or netbook.

The Bottom Line: It’s hard to take much away from either one of these surveys, really, apart from a confirmation of the old adage, “different strokes for different folks.” Physical form factors obviously remain very important, but so too is functionality. Witness the reaction this week to the Nokia Surge, a social-networking-centric device that’s being launched on AT&T. Much of the online reaction was to call the device ugly, but its design stems from AT&T’s desire to sell more low-end QWERTY devices – a desire borne out of consumer demand for such devices that can make texting and emailing easier.

The recent report on trends in location-aware apps from Apple’s App Store, Google’s Android Marketplace, and Blackberry’s App World released by Skyhook Wireless, itself a provider of a patented hybrid system of location awareness, reveals a buoyant market for LBS apps. Indeed, the Apple App Store was found to have the greatest number of location-based applications, at over 2,300, and the highest percentage of paid for location apps, at over 75 percent. 67 percent of Blackberry apps are paid, and 80 percent of Android Marketplace apps are free.

Clearly, location apps are popular, as their increasing ubiquity and popularity across a variety of app stores demonstrates. But move past the hype and the excitement generated by the flurry of activity in the space, and it becomes clear that location services – by themselves – are not game-changing.

Location-aware data is not enough

Indeed, mobile location-based services and social networking companies such as Loopt, Pelago, and Sense Networks have invested a great deal to achieve their vision, which revolves around the provision of an array of consumer and community services supported by socially-tagged, location-aware data stores. The data they have is impressive and the expansion plans they pursue are ambitious. However, they also face formidable competition from Internet giants (Google, MySpace, Facebook, and Yelp) that have already aggregated their own large sets of useful social content, and are anxious to extend their reach to mobile.

Can companies compete on location data? Many players are positioning themselves to do just this. However, I submit that location services – and the structures and systems in place to deliver them – represent little more than an incremental innovation on top of the immense stockpiles of location data and content that are largely under the control of established Web companies and heavyweights. As a result, these Web giants are well-positioned to leverage location data to mobilize their offers and ultimately dominate the marketplace. There are, however, options and strategies mobile location services companies can employ to win the game – even though, as I argue in this is column, location services on their own are far from game-changing.

Admittedly, not everyone shares my view. Sam Altman, founder of Loopt, told me in a recent interview that he strongly believes in the value of innovation in location-based services and their central position in personal mobility experiences. A prime example is the company’s iPhone app. Loopt’s Mix feature enables users -without compromising their personal privacy – to connect with other users nearby. What’s more, users can find places nearby on Yelp and find what their friends on Loopt are saying about those places.

Beyond this interesting user experience, Loopt’s location-related content is thin, and therefore isn’t terribly useful – yet. However, it’s not so much the company’s progress with their service offering that interests me as much as its business priorities.

Specifically, Loopt has correctly honed in on two features/functionalities which are fundamental to all location-based services moving forward.

1. Connecting users to each other (using location in addition to other social filtering parameters).
2. Connecting users to information (using location as an additional input to search).

The intersection between location and search on a mobile is particularly promising, and has caught the attention of location services providers including Loopt, Sense Networks (CitySense), and Pelago (Where service), as well as mobile search services providers including ChaCha, a company that connects users to a human agents trained to provide answers to their SMS text search queries and, more recently, voice-activated queries.

However, these players are all pursuing business models built around a broad but rather general vision of what location-based services are – and can be.

In their view, location can be to mobile search and social networking what PageRank currently is to Internet search. Put in this perspective, location is potentially disruptive. What’s more, the companies that control the data stores (thus the capabilities to connect users to information they require, and to each other) are positioned to rock the industry.

Location information is power, both to the companies that deliver it and the consumers, who benefit from the tremendous amount of utility it provides.

Love the restaurant where you just ate? Review it, post it online, and alert everyone (or just your friends) nearby to try the place, all while you’re waiting for the check. Want to find a good barber shop in Mountain View, California? Ask a question, direct it only to users in downtown Mountain View, and be alerted when you receive an answer from someone there. The immediacy, intimacy, relevance, and quality of such services make them very exciting for consumers.

And let’s not forget the potential for the delivery of more relevant, location-aware mobile advertising, which is the main attraction for local stores, clubs, restaurants, businesses, and organizations hoping to attract consumers to their premises.

The location tools and technologies used here to record what we do and where we are (all the while paying careful attention to personal privacy concerns) as part of our day-to-day routine provide advertisers, agencies, and mobile operators a potentially much deeper understanding of consumer habits, insights that can greatly increase the value of mobile advertising linked to location-based services. Mobile contextual advertising is already de rigueur, but location has the potential to make mobile advertising more relevant, more personalized, and thus much more effective.

But it doesn’t stop there. Adding location on top of traditional information sources we know from the Internet provides online companies with further opportunity to personalize content for their users on the move. Location can also boost the quality and value of online recommendations (where the system delivers suggestions based on an implicit understanding of user content preferences and requirements) and search (where an explicit query triggers the delivery of additional related results).

Why location-based services are an incremental innovation

Clearly, location services which connect users to each other, or information, or both have the best chances for success. However, there are several major obstacles that make this a difficult space for companies – particularly startups – to gain traction.

1. Users can resist change: Connecting users to each other and introducing them to new social networking communities could be tough, particularly if they are loyal to the communities where they are already members. The social networking space is already nearing saturation point, at least in the U.S. and the U.K.
2. User-generated content matters: Without a large data store of geotagged content, there is little value to a location-based service. Yelp and CitySearch, companies that have large data stores of reviews, listings, phone numbers, and shop information indexed by location, have the advantage here.
3. Search needs location: Developing effective mobile search will likely require heavy-duty algorithms and design (that factor location and context into the equation), and a large infrastructure to deliver.
4. Google is on an expansion course: Companies – particularly startups – face strong competition from Google. Latitude, a service that allows users to share their location with their friends on GTalk, can be read as Google’s bid for market supremacy. Is Google over-reaching? Not if we consider the company’s ability, through Latitude, to leverage legions of clusters for search to deliver more relevant information culled from a wider data set than any startup could ever stockpile. Furthermore, Google’s dominance in contextual advertising, which it is trying to extend to the mobile space, allows it to reach out to a wide network of advertisers and businesses eager to attract traffic to their sites and tap in to the potentially lucrative Long Tail of search queries. While even Google will have difficulties as it sharpens its focus on selling paid search advertising to the hyperlocal market, its brand recognition and reach may allow it to make considerable inroads and thus pose a significant threat to a broad mix of location services providers and mobile ad networks.
5. Brands need trust: Users are generally not accustomed to sharing their location data with brands and merchants. To convince consumers they trust brands with their personal information, all communications (particularly brand messages delivered via mobile marketing campaigns) will need to be permission-based and comply with the Global Code of Conduct, guidelines introduced by the Mobile Marketing Association (MMA), a global non-profit trade organization established to lead the growth of mobile marketing and its associated technologies. Put another way, brands best positioned to achieve their business objectives, and reach mainstream users instead of just early adopters, are ones that respect our privacy and have our respect. That narrows the candidates down to established big-name brands, companies that we know and trust.
6. Content without consent is spam: The avalanche of new content linked to contextual data (what we do and where) opens the door wide open to the delivery of spam and the spread of fraud. All companies have to do their utmost to attack this problem at the root. However, many startups will likely find they lack the infrastructure to keep this issue in check.

Put another way, making a mark in the location services space requires more than the ability to pick up on a user’s location. Location services require the professional and reliable interplay of systems and services enabling search, content delivery and discovery, social networking and communication, and mobile marketing and advertising. What’s more, players in this space must connect and collaborate with a complex value chain that includes advertisers, enablers, operators, consumers, and companies we have yet to identify.

Given these factors, the players that emerge dominant in this market are likely to be the names we know from the Internet: Facebook, MySpace, Google, and Yelp. Why? Because, as I have pointed out: It’s not about location; it’s about the data and the networks that power location services. Internet giants have experience, communities, content, and search. Location is just another ingredient they can add to their already successful recipe for success. Put simply, location serves as an additional input, paving the way for these companies to provide interesting new applications – applications that fundamentally leverage the assets already out there on the Web.

Smart strategies for clever newcomers

It may be a bleak picture that I paint for mobile location companies and startups; I would like to point out that I am a believer in the vision behind location based services. However, given my experience and common sense, I cannot ignore the barriers that prevent newcomers from changing the game.

But there are actions startups can take to ensure they nonetheless secure a central spot in the merging location services value chain. It may require a rethink, but the potential rewards make it well worth the effort.

I would therefore suggest startups refocus their strategy to bring more value to users, boost their competitiveness in the process. I would advise executing one of the following options:

1. Mashup: tackle the “cold start” problem and build up your data store (and follow the lead of services such as Loopt and Where) by providing content from larger Web services such as Yelp, Evite, Eventbrite, and CitySearch. It’s a great way to connect your users to valuable information immediately. What’s more, there’s an opportunity for one or two location-based “data aggregators” – companies that use information from other services and present it via a unified interface on the mobile device. (However, there is only room for a few companies in this space since the barriers to entry are low and little prevents Internet giants from entering the mobile space (on their own) themselves. Yelp and Google lead the group of Internet companies staking out their mobile territory by releasing location-aware apps for the iPhone and Android devices. A successful play in this niche would therefore require companies to outmaneuver both the mashups offered by other competitors aiming to be data aggregators and the individual siloed applications offered by the Internet companies that have the data and determination to play in mobile.
2. Killer search: It may seem unlikely, but search can be decisive and disruptive, particularly as the integration of location information will likely cause a seismic shift in how users interact with the results they receive on their mobile phone. Keep in mind that, when Google began promoting their brand of search engine, observers joked that the race had already been run and won by the likes of Lycos, HotBot, Yahoo, and AltaVista. My message: If a company makes a fundamental improvement in search by using location data, it would represent a sea-change in contextual search and shift the balance of power away from the current market leaders.
3. Big money: Location can enhance the value and effectiveness of advertising and marketing, adding a new dimension to how companies communicate their brand message to consumers. It may even be possible to use location information to provide better advertising that will appeal to users. As this recent post on MSearchGroove points out: Advertising is indeed content. Location can enable the delivery of truly compelling content. At the other end of the spectrum, we might ask ourselves if it is not possible that location could even pave the way for a whole new paradigm around the effective monetization of content and services that does not involve ad-funding. The value of receiving the right information at the right time and in the right context may be so valuable that people will pay for it.

In conclusion, a bright future awaits location services startups that think outside the box. Granted, it’s a tough market with ever tougher competition, but a strategy built on one (or all) of the options I present will help startups stand up to the Internet giants. I strongly believe location and location-based services are the future. I enjoy hearing about scrappy, ambitious startups, and their success should encourage all companies in this space to execute on the strategies I have outlined. The strategies may vary but the pay-off is clear: Companies that position themselves now to leverage the power of location will lead the way in delivering contextual relevance across mobile search, mobile advertising, and a potentially lucrative range of mobile services we cannot even imagine.

About the author:

Web: http://www.linkedin.com/in/njanewit
Nate Janewit is a search and mobile technologist and a Silicon Valley resident. His career thus far has spanned Microsoft, Google, Kosmix, Efficient Frontier, and research in Japan and at Stanford. He is an analyst of emerging technology and media and actively contributes to developments in the search and search advertising space.

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.

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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.

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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.

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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

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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.

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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.

Read between the lines, and GyPSii goes one huge step beyond the slew of location-aware, mobile social networking services we’ve see up to this point. Sure, it allows people to instantly capture and share what they are actually doing, building a multi-media virtual diary on their world – the places they have been and the things that they have done.  But it also allows people to search (and find) these places/people/experiences with their mobile phones.

I am immediately reminded of the key theme of the Netsize Guide 2009, a milestone mobile almanac that represents an exciting (and on-going) collaboration with Stan Chesnais, Netsize CEO, who steered me in the direction of the next mega-trend in mobile: The blurring of the barriers between the virtual and physical worlds.

But it’s more than an adrenalin-driven vision of the future. As we described in the book (which I urge you to download via the MSG sidebar), it’s happening now, and examples range from Ford’s super-cool use of augmented reality in a mobile marketing campaign, to visual search/advertising schemes supported by SnapNow, to GyPSii’s little known business model, which is all about indexing the world around us for the delivery of relevant advertising and services we can’t yet imagine. (I hadn’t had the pleasure of meeting with GyPSii at the time I wrote the book, but you can bet it has a top-notch spot in the 2010 Guide!)

Shortly before GyPSii launched its iPhone app, Vanessa Vigar, Head of Corporate Communications, invited me to company HQ in Amsterdam to connect with Dan Harple, GyPSii CEO. The interview was a meeting of the minds, which I have produced as a two-part podcast here on MSG. (Thanks again for reaching out, Vanessa!)

In Part 1, Dan gives me the high-level view of what GyPSii is (and isn’t), presents his no-holds-barred view of the real market for location services, and walks me through the value propositions (for people and GyPSii partners) that are intertwined with the company mission to make sure all of us are out on our bikes searching the planet, instead of on our PCs searching the Internet.

Listen to the podcast. [17:00]

For background on  GyPSii and a review of some of the recent announcements (deals with handset manufacturers, impressive traction in China, and the newly-released Open Experience API), check out my bnetTV interview with Shane Lennon, Senior Vice President, Marketing & Product Development at GyPSii, in the MSG video jukebox (located in the right-hand sidebar).

Audio interview excerpts:

MOBILITY: Despite the fact we have mobile services, we still tend to experience life and everything around us in a sit-down, do-nothing mode. “Everyone’s connected now, but our lives are developing a kind of virtual feel to them that I think is thin.” Dan and his team (mostly ex-Netscape) developed GyPSii to “record your life in a digital way, so wherever you are you can record what you’re doing and you can share that with communities, your friends, your family.” The newly-released module, called GyPSii Connect, automatically connects people with their other social networks, such as Facebook and Twitter.

LOCATION: Is LBS the next big thing? Maybe – but our definition of it is limiting our ability to break new ground. A problem is our outmoded paradigm. “To create innovation you don’t look in the rear view mirror.” GyPSii does location, “but it’s not all we do.”

SEARCH: A primary function of GyPSii is PlaceMe. From the website: “PlaceMe – allows you to create a point of interest (POI) and associate a current or previous image, video, audio and text, URL and reference the POI to your current or last geo-location, categorize, tag and describe the point of interest and submit to the server in real time to a personal or publicly designated folder in your MyPlaces (your record of points of interest).” Put simply, every time you do [perform] a PlaceMe, you create a searchable place on the Internet. GyPSii has put this function at the center of a new search paradigm. It’s all about “a much deeper level of relevancy which isn’t about a virtual world, it’s about a real world.  So, when I search, I don’t want to really search what other websites people clicked on, I want to search other places and experiences that people had.”

PEOPLE-POWERED SEARCH: Google search is about PageRank, an algorithm that, like a popularity contest, pushes what the mass market says is cool. But there’s more to life than following the crowd. GyPSii relies on people to make results relevant and potentially more valuable to us. It’s all about “building an alternative global Internet search index.” As Dan puts it: “I think the only way you build that index is if you empower millions of people to build it.  So, that’s natural, it’s organic, it came from real people, I just think that’s a cooler index to have.” After all, it’s people and their opinions that matter most. “When I search, I don’t really care how many people clicked on a restaurant’s website, it doesn’t matter to me.  What matters is did my friends go there, did people in my community go there, who goes there and what do they think of it.”

MOBILE ADVERTISING: Part 2 focuses on this topic – but we do get a view into the business models Dan imagines can emerge when you combine people-powered search and real world experience. “I think the future of advertising is about a much deeper level of relevance and context and location.”

iPHONE: It’s game-changing – but the barrier to entry for that coolness may not be so high after all. “As a developer, you can make much cooler apps on the iPhone right now, but I would suggest that other companies who build browsers, [such as] Opera and Microsoft, will create a much better mobile browser. But I think the barrier to [an] enhanced user experience is more at an operating system level. (Translated: Symbian is clunky and needs to get better, for example.) As far as advertising goes, Dan isn’t jumping on the iPhone bandwagon. “I’d say the amount of ads served in the mobile market right now isn’t yet quite material.  It’s material when it’s at scale, and, for all the love of Apple and the coolness of the iPhone, it’s not a product that’s had scale.”

GYPSII iPHONE APP: (Note: This interview was conducted prior to launch, so no deep details.) What could Dan say at the time: It does more and looks cooler (because it’s an iPhone, of course!). But look under the hood and the iconography of GyPSii (the visual vocabulary), which is core to what GyPSsii is, will stay the same. “Practically, what this means is when GyPSii rolls out on the iPhone, it will reflect the next-gen – and we don’t call it UI any more, we call it UX – user experience.  So, our next-gen UX will be on the iPhone and then that’s already in build processes on all of our other device families.

OPENEXPERIENCE API (OEx):  Just call it the “window into the management of your social fabric and your interaction with people, not just on GyPSii but on other social networks.  It’s the management of all your social media, how you record it, how you share it, and how you search for it.” What does it mean for partners? In a word: Speed. “If you think what Facebook Connect has done for Facebook, it’s a similar thing for GyPSii; it allows us to get integration with other partners fast.” As Dan puts it: “The way to think about this is if we had to go and do a custom build of GyPSii on every device, no company could afford to do that, there are too many devices coming and they’re coming too quickly….So, we essentially built a core platform and an API around that platform which drives all the experiences you see in GyPSii, so then all those key functions can be called out of that API.” The OEx is at the heart of a recent deal with Samsung. “They’re launching their own social media location-based portal, and essentially it’s GyPSii, it’s using the GyPSii back-end and using our open experience API to make all that happen.”

In Part 2 – Dan and I take a look at mobile advertising, which is live in countries such as China. We also deep dive into the details of the Gypsii business model, one Dan calls the waterfall model, and we dissect the GyPSii mobile search paradigm, one based on a new concept Dan calls PlaceRank.

Special thanks to GyPSii for hosting my podcast until I can work out the details to upload my content to the cloud and make it avaiable to MSG readers via iTunes. It’s work in progress and coming soon!

This has been widely heralded as Vodafone’s venture into the app store market.  Only after the APIs are released to developers will it be any easier to tell if Vodafone has a good chance of emulating the success of Apple’s original. (Source)

The bottom line: Betavine, Vodafone’s open source developer community will also need to play a key role in feeding out information and supporting developers.

***

VODAFONE MOBILE AD RESULTS: Vodafone announced on Wednesday that it had fulfilled its ambition to open up mobile advertising services to 18 operating company markets in the last 18 months. It reports strong revenue growth from mobile advertising services was experienced during 2008/9, and plans to continue the roll out, expanding the type of mobile advertising services and their reach.

Over the last year, Vodafone Marketing Solutions has run over 2000 campaigns across its global footprint for hundreds of global brands. According to Vodafone, these brands are enjoying considerable success with mobile banner campaigns and newer mobile advertising formats such as branded content, sponsored alerts, opt-in push messaging and advertising on service based text messages.

Vodafone says it will continue to invest in its advertising offering over the coming year by adding to its global reach through affiliates and partners- “including operators such as mobilkom, Proximus, Vodacom, and China Mobile” – and by seeking to extend the number, type and effectiveness of its advertising service portfolio. (Source)

The bottom line: These developments in mobile advertising can only be good for a still nascent, yet evidently burgeoning market with many new technologies to explore. As the technologies and partnerships develop, together with mobile Internet usage and penetration of sophisticated handsets, so will the numbers exposed to mobile advertising.

***

ORANGE TRAFFIC: Orange revealed record mobile Internet traffic levels. As a study by the Internet Advertising Bureau (IAB) showed, the U.K. mobile ad market was worth GBP28.6 million in 2008.

The Orange World portal counted 3.25 million unique users between December and February 2009, a 26 percent increase on its previous Orange Digital Media Index (ODMI) study for the three months from July 2008.

Social networking continued to gain popularity, averaging more than 940,000 monthly unique visitors to sites such as Bebo and Facebook, each viewing an average of 397 pages a month. (Source)

The bottom line: This goes to show that mobile Internet traffic is strong outside the top two operators, with mobile Internet consumers increasingly happy to mimic their PC-browsing habits on the smaller screen. The statistics do seem generally skewed to a younger demographic.  It would be interesting to see increased demographic granularity on these browsing statistics, and discover where older age groups head to for their mobile internet content.

***

IN-APP ADVERTISING:  In-application up-selling is set to exceed $14billion by 2014, according to the latest Juniper Research report. Juniper says the “fremium” business model, in which free-to-download applications are monetized through subsequent micropayments from within the application, will become increasingly prevalent.

The iPhone is set to support in-app billing later this year as part of its operating system v3.0 upgrade, and Juniper expects other app stores to follow suit. (Source)

The bottom line: It should be interesting to observe the support in-app billing receives and how it is adopted.  We are currently asked to pay to upgrade an application to the full advertising-free version, but this will ask us to pay to unlock new content such as the next level of a mobile game, or the most up-to-date video highlights of a match. Will it be an interruptive nuisance and create a negative user experience; or provide a compelling value added benefit to already appreciated applications?  Watch this space, and check out this post for more commentary.

***

U.K. MOBILE AD SPEND:  The U.K. mobile advertising spend rose to GBP28.6 million ($44 million) in 2008, higher than expected, according to a study from the digital marketing trade body Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

• Spending doubled in size on a like for like basis in 2008, jumping 99.2 percent year on year
• Mobile ad spend was divided evenly between mobile display advertising (49.8 percent) and paid-for-search advertising on the mobile web 50.2 percent.
• Mobile display, including banners, text links, tenancies pre/post roll and in game ads, accounted for £14.2 million ($22 million) in 2008
• Paid-for search reached an estimated GBP14.4 million ($22 million).

The larger than anticipated spend was put down to several factors: A bigger audience, a better mobile user experience, increased mobile Internet usage – especially in social networking, better handsets, and growing mobile departments in U.K. media agencies. (Source)

Following a similar theme, comScore’s M:Metrics reported last Friday that 45 percent more U.K. advertisers ran mobile Internet banner campaigns in the six-month period ending March 2009, compared to the six months prior.

The bottom line: These statistics illustrate that far from being a neglected medium, U.K. brands are committing budget to targeted mobile advertising, which is reaching an ever-increasing audience. If many of these are only still trials and the total spends remain modest, then the figures produced when brands properly begin campaigns should make for compelling reading.

Just two weeks after release and my new white paper (Mobile Advertising For The Masses) counts 500+ downloads. (Again, I am honored that Bango (white paper sponsor) refers to me as a “mobile guru.”) I always endeavor to communicate complex ideas in a way that everyone will understand, and am told people enjoy my accessible and entertaining writing style. But the real reason behind the popularity of this hands-on analysis of campaigns across three mobile social networks (BuzzCity, itsmy.com, and Peperonity) is timing. Mobile social networks are on the rise (a recent Informa report counted 200+ of them) and open for business.

Where is the money?

I was fortunate to speak at Mobile Advertising & the Rise of Social Networking: What does it mean for Brands, Agencies and Service Providers?, a Knowledge & Networking Seminar organized by AIME (the Association for Interactive Media and Entertainment) last week in London. I enjoyed the opportunity to network with mobile professionals in a casual atmosphere and will most definitely participate in future AIME events. Andrew Darling, AIME Director of Communications, tells me upcoming events/topics include: WAP publishing, mobile payments, mobile coupons, and mobile widgets.

My session looked at the nuts and bolts of mobile advertising in social networks, and the real results, revenues,  and strategies first-mover companies such as pioneer mobile flirting service Flirtomatic and brave consumer brands (via full-service mobile marketing agency Inside Mobile), have to share.

As I am currently conducting my own mobile advertising research, I was particularly interested to learn from Eric Mugnier, Inside Mobile Product and Innovation Director, that the agency has also done its homework in the form of an in-depth survey of 80 key decision makers in the global mobile advertising value chain. The report won’t be released for a few weeks/months but Eric, who is also interested in my input and ideas, has promised MSG will have it first. (Thanks Eric!)

In his presentation, which included video interview excerpts from a selection of interviews, Eric outlined a few clear trends/requirements for effective mobile advertising in a social network. Mobile advertising must be targeted and relevant; the industry has no shortage of good ideas, but it must address issues around scale; and finally, brands and agencies have built the proper foundations, and  now the priority must be to create a toolkit approach that will allow more companies to execute on the lessons they have learned.

“Killer app”

Where are the brands?

Further along than I thought if we consider the example of a major sporting goods and sports apparel company, an Inside Mobile client gearing up to release an iPhone app that combines creativity, communication, and community to deliver a compelling advertising experience that users can make their own.

In a nutshell, the app allows people to customize their shoe and share it with their friends. In the next phase, people will be able to buy what they created with their phones, share what they created with the community (and this is where it gets really interesting), geotag their creation to add another dimension to the discussion (this is what I created and where), and have the ability to post their creation as part of their Facebook profile. (More next week when MSG has the exclusive on this innovative campaign.)

As Eric put it: Allowing people to customize, share, and – most importantly – make the end-result a part of their own digital persona paves the way for effective and enthusiastic viral marketing. He’s right!

It was refreshing to hear Eric describe the campaign elements in these terms. I read it as proof the advertising ecosystem has moved a giant step forward in understanding that: 1) The emergence of empowered individuals, the advance of so-called digital natives (individuals who have grown up with the Internet), and the abundance of applications designed to give consumers more of a say in how they create, access and enjoy content have transformed communication and, more specifically, the business of advertising; 2) Advertising has become content, and brands and agencies must find ways to turn their one-way pitch to “consumers” into invigorating and effective two-way conversations; and 3) Advertising in a social network is all about active participation in the community and developing ways to interact with members and enable them to interact with each other.

My take: The principles I have discussed and debated with Jonathan MacDonald, mobile advertising activist and close friend/colleague for almost a year now, are no longer just ideas; they are the building blocks of ideal business models. Well done (!) – I’m sure Jonathan’s many presentations, trips, and workshops play a role somewhere in this transformation.

Mobile metrics

Speaking of progress, Henry Stevens, Director of Media and Entertainment, GSMA, updated us on the Mobile Media Metrics (MMM) initiative to use independently aggregated and audited metrics from operator network data to develop a common methodology (what to measure) and common process (how to measure). Agreement on these key points would enable media owners to measure performance of their media properties across mobile networks, and help media planners better understand audience trends and behavior.

Where are we now?

As we know, all five U.K. mobile operators are on board. Now the GSMA is well on its way to a commercial launch in the U.K. (the feasibility study is complete) and working with operators in other European markets to duplicate this across other regions. A technical solution for the anonymization and aggregation of operator data (allowing a persistent and unique ID), as well as integration with other relevant databases and third-party demographics, top the agenda.

But the real news is how all this can be integrated into existing reporting tools. The GSMA is currently seeking the input of brands, agencies, and media owners to ensure the process meets the long-term objective of the organization to drive the growth of mobile as a multimedia platform.

Another presentation that underlined the pivotal importance of analytics in the scheme of things came from Nandi Gurprasad, VP of Alliances, Bango.

In a case study of Tapatap, a Bango customer that was recently acquired by women’s social network LimeLife, Nandi showed how the social gaming community used analytics to measure the success of its mobile Web ad campaigns and refine advertising pitches and presentations to target countries, networks and handsets which it determined (through analytics) yield the best conversion rates. Accurate tracking of response rates across different ad networks also allowed Tapatap to better plan campaigns and, more importantly, determine customer acquisition cost.

As Nandi put it: The example shows how and why companies should leverage tools that “give them an edge” – specifically, tools that provide real-time and reliable information on users – and which provide answers to the all-important questions: Who (are my customers)? What (did they look at)? Where (did they come from)?

Vendor spin aside, mobile social networks are here to stay and grow. They offer opportunity for advertisers and drive demand for analytics solutions. (As I point out in my white paper: When the end-game is all about getting a big(ger) picture view of what you achieved and where you missed the mark, then a more comprehensive analytics solution is a must. In practical terms, the two (offered by mobile social network ad networks and independent vendors) are complementary – not competitive.)

Flirtomatic’s phenomenal numbers

Saving the best for last, a real highpoint was the inside track on Flirtomatic, a combination mobile social network and mobile flirting service with the ability to monetize mobile users through conversation with content such as virtual flowers, chocolate, and kisses.

Matt Dicks, Flirtomatic Commercial Director, reported the community counts over 1 million U.K. users and outlined how Flirtomatic turns people with a passing interest in flirting to spending customers.

The trick is retail 101 all over again: Delight the customer.

In a nutshell, Flirtomatic “makes newcomers feel welcome when they come in.” Some 55 percent of daily new users go active and send a Flirtogram (signaling they want to flirt); some 20 percent of users go on to spend with Flirtomatic on items such as virtual gifts or features to enhance their own profiles. Flirtomatic chalks up revenues of $10 per month per spending customer.

At the other end of the spectrum, Flirtomatic counts “over 100 million WAP impressions per month.” Where does mobile advertising pay dividends?

A whopping 84 percent of page impressions are generated on-portal (where Flirtomatic essentially plasters operator portals with banner ads). Next are ad networks with 12 percent, followed by paid search with 3 percent (a category Matt said shows significant growth as more users go off portal and explore mobile search services to get where they want to go).

So, operators have the volume now, but will this continue? Matt expects operators will rule the roost for another 2-3 years. After all, operators are the gatekeeper and the billing agent. An envious position between the content company and the customer indeed!

Flirtomatic has also made the move from virtual gifting to the real thing (overcoming a logistics nightmare to let members give the objects of their affection chocolate and sexy underwear). The results: 500 gave chocolates and 300 gave underwear. More important than the numbers, the experiment proves members are willing to give and receive real gifts using their mobile phone.

Read between the lines, and this behavior bodes well for brands and advertisers.

As Matt pointed out: It’s a golden opportunity for brands to get involved. Think of the sponsorship and sampling opportunities. Encourage members to send flowers (and plug Interflora in the process, for example.) Cross-sell and up-sell chocolates (you just sent your loved one Cadbury Creme Eggs, have you thought of trying a milk chocolate bar?).

The possibilities are endless – and the conversions can peg the needle. Matt walked us through the example of an early experiment Flirtomatic conducted with a popular brand of cider. Members could “shout a pint” to their buddies using their mobile phones. The recipients got a voucher on their mobile phone for a free pint of cider and the location of the nearest pub that would redeem it. The results: 348,000 members sent a pint to their friends over a two week period; CTR peaked at an impressive 10 percent.

Should mobile advertising stop at delivering a message? Or should it seek to unite the virtual and physical worlds (a topic I also examine in detail in the Netsize Guide 2009 on offer in the MSG sidebar)? The jury is out on this one, but the discussion will continue at MSG.

What do YOU think?

BTW: Matt kindly invited me to visit Flirtomatic during my next trip to London, an offer I will gladly take him up on. I have long admired the company and Mark Curtis, Flirtomatic founder and author of this  well-known book on disruption culture, whose views I also hope to capture in a thought-provoking podcast. If there was ever a mobile social community success story worth telling, then Flirtomatic is it!

Disclaimer:  Bango is an MSG supporter.

I caught up with Steve Ives, Taptu CEO, in an exclusive interview where he revealed the recent deal with itsmy.com is just the start. Look for three more deals with mobile social networks before February. Also expect Taptu to sharpen its focus on mobile search monetization, particularly in the U.S. where Steve tells me most of his traffic is. (And there’s an even better reason to concentrate on mobile search sponsored links; sources tell me CPMs around key word search terms are in the $3-$10 range.)

Listen to the podcast here. [20:22]

I should add it’s longer than others in the series, but that is because we deep-dive into a variety of key topics, including mobile search trends, Taptu’s ambitions to deliver mobile search verticals (and allow users to personalize them), the impact of the iPhone, the emergence (and pivotal importance) of a new segment Steve calls “unwired socials” (accounting for over half of Taptu’s users today), and a few details of a strategy Steve would rather keep under wraps to develop a “user interface for discovery” inspired by touch devices.

But for me, the real news is the keen focus on mobile social networks. In November Taptu quietly and cleverly sealed a deal with itsmy.com, an ad-funded mobile-only social network with two million users, to provide core search functionality (allowing them to search for mobile content such as videos, entertainment, music, and images from within the community as well as directly from their personal homepage). The deal also lets itsmy.com monetize those searches through mobile search sponsored links. (By way of background, Taptu replaces Google, and I’ll go into the reasons in my podcast with Vince Staybl, Gofresh CEO, which is coming up in this series. As Vince put it: Google failed to “get” mobile – a serious shortcoming that convinced him to switch to Taptu.) Gofresh isn’t the first mobile social network to ally with Taptu for search and advertising. Moblr quietly replaced Yahoo with Taptu in February 2008 to do much the same thing. (More evidence of a trend: The decision by BuzzCity to partner with MCN for mobile search for its mobile-only social network myGamma in Thailand.)

Another deal from Taptu you may have missed in the holiday hectic: A partnership with ZooVision, a U.S.-based free streaming mobile video portal, to provide mobile search and no doubt increase its entertainment-related inventory. (By way of background, Taptu replaced Google – yet again.)

Other highlights from the podcast:

FUNDING: In December, Taptu secured GBP6.45m in series B funding from its existing investors (3i and Sofinnova) and appointed Andreas Bernstrom to the position of Chief Operating Officer (COO). The money will allow Taptu to focus on monetization. As Steve put it: “We’ve only just started putting ads on our site. So, for 09, the big focus is optimizing the monetization, so for every thousand searches that get made on our site, we optimize the revenue.” (The business model is a rev share.)

AD NETWORKS: Taptu works with Yahoo, Google and AdMob. “We’re focusing on search ads and search ad platforms, so we’ve been working with Yahoo in the U.K. for a couple of months now just to explore what happens when we put those search ads up on our site….For us, a big priority next year is the U.S., because actually the majority of our audience is in the U.S., and looking at how we best monetize that. But it is going to be search ads, in other words ads that are tied into search keywords, because we found from our ad experiments that they have the best revenue per thousand.” (I asked around in the industry and the word is keywords can fetch $3-$10 CPMs.)

RELEVANCY & ENAGEMENT: The industry needs to work on both. Online we have annoying display ads, and users are anything but engaged. Mobile could go the same way – so wake up! “In the mobile world, users can develop banner blindness very quickly. They’re not terribly engaging, and we’re training users to ignore them because most ads are not very relevant to the needs of the user. So we’ve got to increase relevancy on the one hand, and we’ve got to make them more engaging and kind of entertaining on the other hand.”

SEGMENTATION: Most of the audience is Unwired Socials whose first screen in is the PC, but this is changing. Make way for the Pioneer Youth, propelled into a strong second position by the iPhone and other touch screen devices delivering a rich mobile Web experience. (Keeping in mind they still don’t do a great job transcoding sites with flash, for example.)

SEARCH BEHAVIOR: Unwired Socials search for entertainment and some adult; Pioneer Youth gravitates to career and lifestyle. Sensing an opportunity in other verticals such as mobile job search in emerging markets, Taptu is determined to evolve “from a sort of beachhead in entertainment search, which is where we started, to add more and more sources to become a universal search engine.”

FEDERATED SEARCH: Figures prominently in Taptu’s roadmap. “Our strategy is to extend that to allow for hundreds or even thousands of sources and to allow users to create their own vertical channels with Taptu. It’s going to take a while to translate that vision into reality, but it’s the way forward which offers the best scope for improving the relevancy of results because you can have custom scoring systems for each channel which are optimized to that channel.” As Steve sees it, it’s all about “allowing the user and having a discovery into user interface which allows the user to explore these different channels easily and look for related results.”

UI IMPROVEMENTS: Look for them! Steve preferred not to disclose details, but he’s bullish on touch screen devices. As he puts it: “Touch devices give you the opportunity for a much more interesting user interface for discovery than normal phones, so you’ll see some innovation from us in that area.”

2009 TRENDS: A slowdown in the market and fewer people replacing their handsets. The bright spot: The continued enthusiasm for the iPhone and the N97. Another interesting development to watch for: Local search on mobile will develop into a different market – with different dynamics. “The user interface for local search is going to be in a mapping application; it’s not going to be the search engine search box. So, local search will gravitate – it will almost fork into being somewhat of a different market, accessed from a different point on the handset user interface.”

On a personal note, I’m pleased to report Charles Knight, at MSG partner site AltSearchEngines, is back in full-force and looking forward to a fantastic 2009 with more staff, more content and more traffic. And it’s a similar success story at MSG. He is cross-posting this podcast and all MSG mobile search coverage. I’m excited about the cross-pollination because many super-cool online search engines are gearing up to go mobile – giving both our sites loads to track and analyze. Another trait that brings us closer together: Our determination to offer Alts (alternative search engines) a platform. To this end, we are planning yet another event, much like our search engine dinner in Berlin last fall. This time it’s MARCH 30 in San Francisco (timed to the SF Expo) – so please mark that date.

Disclaimer: MSG collaborated with Taptu on a white paper in 2008; MCN has been an MSG supporter.

I am proud that EContent named me to its panel of 14 judges to evaluate the 100+ candidates across the categories: classification & taxonomy; collaboration; content commerce; content creation, production, & digital publishing; content delivery; content management; content security; fee-based info services; intranets & portals; mobile content; search engines & technologies; and social media. (We spent one month in our judging wiki, reviewing previous list members and considering a slew of worthy new contenders. In addition to casting votes, we were involved in lively discussion and debate – a process that was daunting at times, but always incredibly rewarding.)

More importantly, my participation in the judging team allowed me to introduce my peers to mobile industry innovators high on my radar and emphasize the role of mobile-only search and personalization companies in the scheme of things.

Content may not be convergent yet, but the all-pervasive nature of digital content reinforces how important it is for organizations of all kinds to maximize this essential resource and, as my dear friend and mentor Tomi Ahonen would say, Think mobile.

Congratulations are in order for the four new (mobile) additions to the EContent100: ChangingWorlds, CrispWireless JumpTap, MCN and SurfKitchen. They join other movers and shakers that made the list including Apple, Facebook, Google, Microsoft, Nokia and Twitter. As today’s press releases show, SurfKitchen was recognized for its innovation and influence in mobile content and service delivery; MCN was commended for its position as a leader in federated mobile search and search merchandising; and JumpTap was honored for its advances in mobile search and advertising. (Click here for the full EContent list.)

A special thanks to Julie Ginches at JumpTap for not only issuing a press release, but also recognizing my involvement in the judging team. I would also like to extend my personal thanks to the dozens of mobile content and search companies that reached out to me directly and encourage you to keep the conversation going. I will be a member of the judging team for years to come – and will work with EContent in every way I can to ensure that those companies hard at work to make digital content work are recognized for their accomplishments.

On a personal note: I invite you to peruse my EContent columns (aptly titled Agile Minds) here. EContent has also promoted me to the position of contributing editor, so please reach out to me directly with your pitches. I am always open to good ideas! As I have said many times, my mission, and the purpose of MSG, is to identify and amplify voices the industry should hear.

Disclaimer: JumpTap has sponsored an MSG podcast series; MCN is an MSG supporter