In brief:

After months of researching my chapter contribution to an upcoming book on marketing to Digital Natives, it’s increasingly clear that mobile advertising companies – and their view of “consumers” needs — must evolve.

Mobile is a fiercely personal device and people – particularly empowered Digital Natives – want content and advertising on their terms. (I purposely mix content and advertising here because they are becoming one and the same thing.)

Another shift in the marketplace: our requirement to have a say in the content/advertising we are willing to receive. This came through loud and clear in the research/interviews I conducted for Mobile Advertising Research U.K. 2009 project, a research project endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA) to expertly document the state of the mobile advertising industry in the U.K.

Among the findings (based on 1,000+ consumer online responses and 20+ interviews with operators, enablers, agencies, and brands): only 32 percent of the 1,000+ consumers surveyed had a positive attitude toward receiving advertising messages on their mobile phone. However, that number rose to 64 percent, provided people were properly “incentivized,” and 70 percent if they were incentivized and “in control” of their mobile advertising experience.

Connect the dots, as an increasing number of mobile advertising companies and ecosystem companies have begun to do, and it’s clear that the capability to provide permission-based mobile advertising (with an easy opt-in/opt-out option) could become table stakes.

MOBILE PIONEERS

Companies such as BuzzCity’s myGamma and gofresh’s itsmy.com, mobile social networks turned mobile social ad networks, need little convincing. They made the strategic decision in 2007-08 to allow their verified members to choose the channel of advertising they would accept. Of course, this wasn’t just out of respect for the individual member. Opt-in also allows advertisers to better target their key demographic (example: sports enthusiasts with sports ads) and ensure members who receive a marketing message actually listen.

In my own mobile advertising road test/white paper (PDF) on behalf road test on behalf of Bango, a provider of mobile analytics solutions and MSG supporter, showed that this was indeed a plus for my own campaigns. In fact, I gave BuzzCity the highest marks overall because its opt-in allowed me to deliver effective mobile advertising. (Happy coincidence — I have an interview with BuzzCity CEO KF Lai next week and gofresh’s Vince Staybl has also just reached out to me from his NY trip to offer me a pre-briefing on some significant news, so watch this space.)

JUMPTAP CONSUMER INTELLIGENCE

Jumptap, a provider of mobile advertising solutions that also operates a major mobile ad network, aims to tackle these shortcomings. The company announced this week that is will implement a new feature in mid-year (translated: by end-June) that “enables mobile consumers to manage their own profiles for a more personalized brand experience.”

The focus is on permission-based advertising and on putting the consumer (individual) at the center of their advertising experience. In a nutshell, the feature will enable visitors to participating websites in Jumptap’s ad network to chose the mobile advertising content that interest them – and the choice to opt-out of the process altogether. (Specifically, all publishers in the network will be able to participate. Participating publishers will need to include a link to Jumptap’s profile manager.)

What’s the user experience?

People can choose from a variety of some 29 advertising content categories, including automotive, careers, chat & email, entertainment, finance, fitness, food & drink and games, as the slide below illustrates.

What’s at work (and how) in the background? And how does Jumptap avoid potentially presenting the same people with the same ads?

JumpTap operates a premium mobile advertising network with a penetration of approx. 50 million unique visits a month in the U.S. alone.

Predictably, Jumptap’s IP, which includes patented technology, mobile search algorithms and proprietary know-how around targeting and relevancy (which I have analyzed in this post), plays a huge role in delivering people mobile advertising they will likely find relevant and useful. The company counts unique visitors based on “distinct IDs we get from carriers, cookies, request headers and device IDs.” This can vary across network. “In instances where we don’t have a unique ID, we estimate the number of unique visitors based on page views/unique user that we see elsewhere in the network.”

INTERVIEW WITH PARAN JOHAR

Armed with this background I caught up with Jumptap CMO to learn still more about the nuts & bolts of this ambitious solution and what is says about the company’s wider mobile advertising strategy.

Q: Jumptap is one of a growing group of companies sharply focused on putting the consumer at the center of the mobile advertising ecosystem? Why is this important and what do you offer people?

A: What we’re now seeing is a new wave of mobile advertising right, with the focus on customer intelligence and really putting the customer at the forefront of the mobile advertising ecosystem. Many companies got lost and focused on other constituents: operators, publishers and advertisers. They are all important people, but we are putting the customer at the forefront of the mobile advertising ecosystem, and the way we’re doing that is allowing them to manage their own profiles in a really simple format. This also drives the relevancy of ads.

The concept of is revolutionary but because everyone else has been trying to satisfy other constituents. By driving customer intelligence you’re going to see a higher engagement rate. If you see a higher engagement rate, you’re going to see advertisers who are getting better ROI. If they’re getting a better ROI, you’re going to be able to charge them more. If you can charge them more, by default, you get a better publishing yield so you’re really taking care of all these other constituents by focusing on your core audience, which is the customer, and driving the customer intelligence.

Q: Other companies have a similar approach. And just last week Alcatel-Lucent broke on the scene with a mobile advertising solution that is the subject of a larger report I am currently writing. In it I argue that permission-based advertising is a good fit with messaging because you build a conversation that – in turn – can improve the customer data. But your focus is display….

A: Yes, it’s only about display and it’s not about behavioural targeting. What this is about is empowering consumers to choose their category of interest. That’s one component of the data that will drive the delivery of relevant advertising. It goes into the user profile. And then there might be a component related to context, a component related to carrier data, a component related to publishers’ data – or a keyword from a search. All these are components and the ultimate goal is to drive consumer relevancy through this focus on consumer intelligence– and the better we can understand our mobile ad network, the better we can serve relevant ads to consumers.

Throughout this process three things are critical. One is full-transparency. Two is respecting their privacy and making sure all this data is completely anonymous. And third is preference. We’re allowing them to tell advertisers ‘these are my categories of preference.’

Q: What’s the roll out and what are plans beyond the iPhone?

A: That’s a great question. We’re rolling this out at the end of Q2, and you’re going to get a link to a Beta site where you can go in on your iPhone – or any device – and just scroll through and change categories of interest to suit you. It’s incredibly simple. The idea was to keep it as simple as possible.

Q: It it’s for all handsets from the get-go?

A: It is for all handsets and all advertisers. It’s on iPhone and on mobile Internet, so it’s going to be limited at first. But, as it rolls out, it’s going to obviously develop [momentum]. The goal is ultimately to drive more relevant advertising to everyone on all handsets.

Q: I mentioned that other companies have placed some form of permission-based advertising at the core of what they do. Take BuzzCity. BuzzCity even surveys its members and shares this anonymized information with advertisers to help them target their audience. From an initial look at Jumptap is different because it offers the data to third-party publishers. This would perhaps be the differentiating factor. At the other end of the spectrum there is Alcatel-Lucent’s Optism solution, [a solution that harnesses permission-based advertising – specifically, text messaging – to improve targeting.] So, there are other flavors out there…

A: No one else is doing this the way we are. It is absolutely one of our key differentiators. We also have 80 percent of the carrier business in the U.S. AT&T works with two sales partners, right? One is Jumptap and the other is Yahoo. Needless to say, we’re in good company.

We also have the broadest IP portfolio of any mobile ad network. And we have our pay-per-lick performance marketplace that allows users to bid at a keyword level, category, handset or carrier. We’re the only ones who have all of that.

You bring up the mobile social networks such as BuzzCity. I think it’s a little bit different within a social media construct. That is one component that can be added to the user profile, certainly. But remember we are not taking a siloed approach. It’s not just contextual, not just consumer category information, not just behavioural, not just carrier information. It is all of these components aggregated across multiple forms of data to drive relevancy. That’s our consumer intelligence.

Q: Another part of this might be that you are a neutral network. You belong to a group of ad networks – including the likes of Millennial Media and inMobi – that is not in the Google or Apple camp…

A: I think that’s a great way to break out the marketplace now and there are three groups, so to speak. There’s a lot coming from Apple that I agree with — and there’s a lot that I don’t. On the one hand, Steve Jobs came out publicly and said that mobile advertising sucks and that he has this goal of driving relevancy right to his network. That’s something we applaud. It’s very much in line with our strategy of customer intelligence, so that I think is dead-on.

The piece I don’t think is dead-on is his approach. He’s almost creating a walled garden for himself, almost an AOL of the mobile Internet. Advertisers really don’t care where their ad runs. They care about reaching their audience, not the device. iPhone happens to be the sexy thing right now, but Android will be the next sexy thing – and it [Android] is already is starting to catch a lot of that limelight.

Imagine you were a TV buyer and you had to buy a 30 second TV spot and you had to be cognisant of whether your audience is watching television on a Samsung, Sony or Pioneer TV set. And then you had to worry about whether they were watching it over cable, satellite or a dish network. And then you had to customize your creative accordingly. And so on. It doesn’t make for an efficient marketplace and that’s where I think Apple is missing the boat a little bit. They’re becoming a walled garden in advertising, which I think is not good for the mobile advertising ecosystem in the long term.

Q: Finally, where is the excitement?

A: We’re doing a lot in rich media. Our Unified Rich Media Platform [which I detail further down] delivers the industry’s broadest set of rich media units – for both mobile Web and in apps – all from one network. And our rich media platform is completely open. So, if you’re a rich media buyer for you plug right into our system. We work with iPhone, Android, Palm, and Blackberry. We’re an open system and we help advertisers reach their target audience.

***

MY TAKE: Permission-based advertising sits at the core of a variety of approaches and solutions I analyze in my upcoming report for GigaOM PRO, a project that has evolved from a SWOT analysis of mobile advertising solutions (including Alcatel-Lucent’s Optism and JumpTap’s solution powered by “consumer intelligence”) into a wider discussion of the business value of permission-based (opt-in).

We have ample evidence that permission-based messaging delivers positive results and response rates. A messaging approach also allows brands and other companies in the ecosystem to build on this personal profiling data (with the individual’s permission) by adding questions to refine the profile. This way, an individual who has signed up for car ads (a broad topic) might divulge that they are more into Audi than BMW and even say why they prefer one over the other. All voluntary information an advertiser would no doubt value.

Display is a different. It’s more one-way than two-way, and there is a danger of “spamming” people with repeat advertising because there aren’t enough ads in a category – or because the ad networks can’t identify unique users (and therefore gauge whether an individual user has seen the same ad already, or not). Jumptap claims to have addressed the latter with its IP, technology and techniques that allow the ad network to identify 50 million uniques per month in the U.S. alone.

This week’s announcement builds on that foundation. The focus is to increase the value and relevancy of mobile display ads. (Thus, Jumptap does not compete with companies that focus on mobile messaging and direct marketing.) To achieve this Jumptap inputs the advertising categories chosen by the individual into a much larger, more sophisticated equation that includes data from carriers, searches and some context. This covers the bases to provide people a better user experience (provided there is a good supply of ads in each category), and that should certainly lead to high advertiser ROI and publisher yields. Of course, the proof is in the numbers. We’ll have to wait a while for those. In the meantime, Jumptap’s move can be read as an important confirmation that all advertising – not just messaging – is correctly evolving to provide people more of a say in what they get.

Disclaimer: Bango is an MSG supporter with a branded thought leadership presence on this website; Jumptap has been an MSG supporter and sponsored a series of podcasts.

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.

I outline the key data points and takeaways further down in this post.

But the real story is the insights the report gives us into winning players and strategies (that is, who will be selling the most and how).

APP DISTRIBUTION AND APP STORE PROLIFERATION

Chetan documents a real and gradual shift from on-deck stores (translated: mobile operator offerings) to off-deck plays that are primarily DD2C (Developer Direct 2 Consumer) – potentially the toughest kind of sales pitch for developers more adept in tech than marketing.

Indeed, developers are going to need some help with that. Little wonder that Patrick Mork, GetJar VP Marketing, singles out app payment and in-app advertising and reveals these are the next features/functionality in the GetJar pipeline. (Smart! It’s all about making it easier for developers to make money from their apps).

And then there are the regional differences that Chetan has expertly uncovered.

Particularly in emerging markets, the mobile apps- mobile advertising business ecosystem has become robust enough to provide developers added revenue. It’s a big business if we consider that Asia, with the lowest pre-paid subscriber rates, also accounted for 37 percent of global downloads.

Overall, Chetan estimates advertising based revenue accounted for about 12 percent of the overall revenue, but that figure is projected to rise to 28 percent by 2012.

Finally, the report confirms two observations that run through my own research and writing like a leit motif: the business imperative to improve content discovery and the potential for a Long Tail of app stores (not just an “app for that” – but an app store for that!).

Farmers Markets and Supermarkets? I’ll have more on that scenario later this week when I catch up with Mike Lurye, Director, Product Marketing, Amdocs Interactive, to explore the characteristics (choice, convenience, payment, personalization) that can potentially separate the leaders from the also-rans.

GETJAR PODCAST

But first the highlights from my podcast with GetJar’s Patrick Mork, who was instrumental in guiding the research project from the start. We discussed the report numbers that really stand out and the business model strategies they support.

HYPERLOCAL: Developers will need to adapt their business models to the regions. Direct sale of apps in developing markets versus ad-supported schemes in emerging markets. This divide spells fantastic opportunities in mobile advertising for companies that can tap them. (One reason why GetJar is gearing up to launch a partnership with a major advertising company to enable this scenario everywhere.)

THERE CAN BE ONLY A FEW?: GetJar CEO Ilja Laurs is bullish about the outlook for a fortunate few stores that have the right capabilities mix (GetJar among them. Of course). In his view: “There is no way that this many app stores will survive in the long term and while the value of the global app economy is set to be astoundingly high by 2012, we think only a few app stores will share this revenue.” Why? Patrick puts it down to the virtual nature of commerce in an app store. “In a virtual economy such as the app economy retail is different and you don’t need that many players.” The selling point is relevant content and app stores that have this – and consumer traffic – are in the winners’ circle. Another reason why only a few may survive: “Developers have finite resources…. They are resource-starved and will therefore only work with a few app stores because they won’t have the time or energy to work with many of them.” (After all, he adds, it can be a pain and drain to open accounts with multiple stores, connect to the back-end systems and upload the content. “Our value proposition continues to be that GetJar is a one-stop to upload it in one place.)

APP SHORTCUTS PAY-OFF: Patrick and I finally got the chance to discuss the runaway success of app shortcuts, literally shortcuts to mobile websites. Put simply, brands and content companies can promote their mobile website as if it was an app(!) Before you dismiss it, consider this: Facebook counts a whopping 45 million downloads of site shortcuts via GetJar. That number beats their iPhone app downloads by a mile!

Listen to the podcast here. [15:32]

My take: The app economy has officially arrived. In 2009, app downloads worldwide were approx. 7 billion with Asia accounting for a whopping 37 percent of the total. Total downloads are forecast to skyrocket to almost 50 billion in 2012 – a year on year growth rate of 92 percent. This would mean that the value of apps sold would be greater than the value of CDs sold in 2012 ($13.83 billion). But we shouldn’t break out the champagne just yet. The business models are unclear, the market is fragmented and real success is linked inextricably to local and regional market conditions. The hard truth: It’s not a single market and one-size-fits all app schemes won’t deliver. Will app stores be on-deck (operator managed) or off-deck (direct-2-consumer)? Or will there be hybrids? Will the prevailing model be paid apps or ad-supported apps? Or will it be a mix? I’m not avoiding the question when I say ‘all of the above’ and everything in-between. Chetan’s report paints a buoyant picture of a young market (“the proliferation of apps in many directions”) and hints at the key capabilities that will clinch the deal for app stores and there developers.

The bottom line: We need more engaging and creative approaches to mobile advertising in those markets where this model will rule (emerging markets). And we need the various channels of mobile advertising (messaging, Web, search and coupons/barcodes) to work together more tightly. Finally, content discovery is an issue the industry must recognize and solve.

In closing a positive – and possible –scenario (from Chetan) if we get this right: “Connectivity breeds apps. It is a given that as consumer electronic devices become wirelessly connected, consumers are looking to download apps on those platforms. Apps download on the iPod have been every bit of a success as they have been on the iPhone. Similarly, we will see a significant uptick in the apps for devices such as the iPad, telematics platforms in vehicles, digital cameras, navigation devices, picture frames, weight scales, and the list goes on and on. These apps will entertain and amuse consumers, analyze data on the devices, connect users with content and friends, and will interconnect various end-points in the pervasive mobile ecosystem in a much more profound manner.” It’s shaping up to be a great space indeed!

Overall, Smaato’s metrics show that the average worldwide ad network fill rates remain constant at 29 percent in February 2010. The fill rate is measured as the percentage of ads delivered per ad request and varies by different factors, like country, device, content type.

Smaato’s Index also provides a breakdown of CTR data, segmented according to operating system, showing that Symbian continues to lead the pack, with Android a distant second. However, there are some significant shifts that indicate the gap between operating system CTRs could be closing fast. For example, BlackBerry comes in at 51, up from 30 in December 2009, while Symbian – still the dominant operating system – has dropped slightly. It comes in at 147, compared with 173 in December 2009.

However, the biggest surprise is the lead Windows Mobile has over Apple. Specifically, the iPhone and iPod Touch show a declining CTR, coming in with a rate of 89. This is the first time Apple devices have dipped below the average Index of 100, and the first time that Windows Mobile has edged ahead of its rival. In December 2009 the iPhone posted a CTR Index of 119, sliding to 104 in January 2010.

PERFORMANCE

Overall, the best performing mobile ad network in the Smaato Worldwide Index had a fill rate of 72 percent February 2010, down 17 from January. Despite this decrease, the average for worldwide ad network fill rate performance remained steady at 29 percent. What’s more, Smaato found that six of the top ten ad networks performed above this average. This re-enforces the pivotal importance and potential advantages of the network aggregation business model. Smaato embraces the model (aggregating 35 ad networks worldwide) to deliver partners a high fill rate.

By way of background, the first metrics report, which Smaato released in January, identified the mobile networks in the U.S. that delivered the best performance by name. This month’s metrics don’t divulge the identities of the best-performing ad networks in the U.S. – but I can imagine Millennial Media is in the winner’s circle (again).

Speaking of the U.S., the average fill rate of mobile ad networks in the U.S. hovers at 35 percent, a decrease compared to January 2010 (fill rate – 47 percent) and December 2009 (fill rate – 55 percent). However, closer examination shows that the U.S. fill rate is still significantly higher than the worldwide average fill rate of only 29 percent.

Smaato metrics further show that the two top-performing ad networks in the U.S. also improved their fill rate. One network came in at 78 percent (up from 68 percent in January) and the other reached 64 percent (up from 61 percent in January).

SPOTLIGHT SOUTH-EAST-ASIA:

For the first time Smaato metrics examine fill rates in South-East Asia (Singapore, Malaysia, Indonesia and Philippines), markets where mobile marketing and advertising are buoyant. Overall, the fill rates reveal that two ad networks are performing head and shoulders above the others, coming in with 90 percent and 87 percent fill rates in this region. Overall, the fill rates show a similar spread to those recorded in the U.S.

South-East Asia’s average fill rate of 32 percent is considerably higher compared to that of India’s, which came in at a mere 8 percent in the January Smaato metrics report. As Smaato CEO & Founder Ragnar Kruse sees it: This demonstrates the large differences across the Asian market and the need for developers to search for different partners or a mobile aggregation and optimization service.

The breakdown of the CTRs by operating system in this region provides an interesting and insightful picture of what devices users have and how they interact with mobile advertising.

Interestingly, the iPhone and iPodTouch dominate the region with a CTR Index of 164 followed by Symbian (127) and Android (124), while Windows Mobile comes in at the bottom of the table with 56.

PODCAST SERIES BACK BY DEMAND

In addition to providing us the inside track on what Smaato sees across its network of partner ad networks, the company is also sharply focused on cultivating a robust mobile advertising business ecosystem in which in can play a leadership role. To this end Smaato also dedicates significant resources to identify and encourage mobile advertising pioneers and innovators.

A prime example of this is the Smaato Mobile Advertising Award, which recognizes excellence in the mobile advertising and developers harnessing mobile apps and the mobile Web that can also be tapped to deliver compelling messages and campaigns to consumers worldwide.

Among the top three winners – chosen by a world-class jury of leading influencers of the mobile community including MSearchGroove – were: Aloqa, a U.S.-based mobile service that proactively notifies people of interesting places, events, music, movies and other activities nearby; Waze, an Israeli startup that taps the wisdom of crowds to provide real-time maps, traffic information and turn-by-turn directions; and Yoose, a provider of mobile coupon and loyalty programs based in Germany.

To showcase these high-flyer companies and their views on industry hot topics including engagement, location services, mobile couponing and crowd-sourcing Smaato has collaborated with MSearchGroove to produce a special podcast series showcasing the three company CEOs. In the interviews, which originally aired in time for the Mobile World Congress in February, the executives also comment on the meetings with eight top-notch VCs – high-level introductions that are part of the Smaato Award.

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Listen to the Waze podcast with CEO Noam Bardin here. [4:38]

Listen to Yoose podcast with CEO Christian Geissendoerfer here. [4:44]

Listen to the Aloqa podcast with CEO Sangeev Agrawal here. [4:43]

My take on the winners and the trends: Mobile advertising is content, and its value to us is inextricably linked with its ability to entertain us, inform us or simplify our lives. Waze harnesses our personal mobility and our position as nodes in a larger network to tap the wisdom of invisible crowds to deliver tangible benefits combined with a super-cool user experience.

Location isn’t the killer app we thought. But an app that combines location awareness with technology that can read the clues we leave behind – to passively personalize our experiences and present us with precisely what we are likely to appreciate based on our likes and dislikes — AND offer brands and nearby establishments a chance to monetize that fit – covers all the bases to be a crowd-pleaser.

Another trend that impacts mobile advertising is the avalanche of software applications (apps) that have transformed what we do with our devices. As our focus shifts from novelty to utility we will vote with our feet, visiting those websites that allow us to do what we want, quickly, easily and intuitively. Therefore, Aloqa, which ties together location, social media and a push-approach to local search, is well-positioned to benefit from our increasing focus on finding what’s important to us nearby. The clever decision to open APIs to third-party publishers ensures that Aloqa will cover the long tail, which is where the money really is in local in the first place.

And finally, a comment on Yoose. We know from looking at Japan and Korea that mobile coupons and mobile commerce can be part of our daily mobile experiences – provided the experience is seamless and simple. Yoose has developed more than a website; it has perfected a work flow that could move couponing out of the chasm and into the bowling alley.

Moving forward, Smaato will join MSearchGroove’s growing roster of contributors and collaborators.

Disclaimer: Smaato is not an MSG friend – but not a partner/supporter.

The bottom line: For quite some time, there’s been a lot of hype about operators being able to aggregate and utilize subscriber information to allow for better personalization of services – but also to generate better targeted advertisements and offers. Perhaps it’s now actually on the horizon, though tying it to IMS seems odd when some solutions (such as from ad tech provider MADS, or any number of recommendation vendors) already exist.

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THIS MOBILE INTERNET THING IS GOING TO BE BIG, says the latest piece of research from famed internet stock analyst Mary Meeker at Morgan Stanley. She and her team have released a 424-page report along with a 659-slide deck, coming to the conclusion that the mobile internet will be twice as big as the desktop internet. Perhaps a bit more interesting is the prediction that smartphones will outship notebook and netbook computers in 2010, and will outship the entire PC market in 2012. Source

The bottom line: Welcome to the party, Mary.

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THE ANDROID MARKET NOW FEATURES 20,000 APPLICATIONS, according to AndroLib.com, with about two thirds of them free for users to download. Keep in mind that the iPhone App Store offers about 100,000 applications, but the Android Market’s growth is impressive, having doubled in size since June. November was its biggest month for new apps, with over 3500 added. Source

The bottom line: Another reminder that all the app action isn’t on the iPhone.

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FIVE BILLION MOBILE APPS WILL BE DOWNLOADED IN 2014, says ABI, up from 2.3 billion in 2009. But it’s not all good news: the firm says that app sales revenue will decline by 2013, as competition pushes prices down. It also says that the iPhone App Store’s market share will peak in 2010 as more competitors enter the scene, with the Android Market in particular expected to grow its market share from the current 11 percent to 23 percent in 2014. Source

The bottom line: That’s nearly one app per every human being on the planet. Or, in other words, a lot.

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MOBILE DATA REVENUES WILL DOUBLE OVER THE NEXT FOUR YEARS TO 100 BILLION EUROS, according to Screen Digest. Revenues from rich media content like mobile TV, video, games and music will generate 8.6 billion euros of this, with the balance coming from operator data fees. The company also says that the iPhone will generate more than 7 billion downloads in 2013, a much more optimistic prediction than the one from ABI above. Source

The bottom line: Full speed ahead for the mobile data business.

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THE NUMBER OF TEXTS SENT IN THE US MORE THAN DOUBLED BETWEEN 2007 AND 2008, according to figures from the US Census Bureau, jumping from 48 billion to 110 billion. At the end of 2008, the US had over 270 million mobile subscribers, spending an average of $50 per month on their mobile bill. Source

The bottom line: US subscribers aren’t all thumbs when it comes to texting.

I suspect his thought-provoking blog will do more than set the tone for my book; it will impact the app store debate that will likely dominate 2010. Just look at the recent raft of app announcements: Analyst firm IDC predicts there will be more than 300,000 iPhone apps by the end of next year, compared to 75,000 Android apps; Samsung takes the wraps off its Bada app platform; and (just today) Orange officially opens its app store to users in the U.K. and France, offering more than 5,000 apps for Java, Android, BlackBerry, Symbian and Windows Mobile.

Connect the dots, and the avalanche of apps turns up the pressure on providers and mobile operators to be good retailers and put stuff we’re likely to appreciate where we can find and buy it. Common sense really.

Or is it? Not is we consider the statement from Nenad Marovac, Managing Partner, DN Capital, who was speaking at Heroes of the Mobile Screen earlier this week, In his view, “Operators should be pipes and shut up.” Hmmm… not much room in that model for mobile operators to wield the stockpile of analytics they collect (such as our browsing patterns and past purchases) to present us with a selection of apps we’re likely to appreciate.

In preparation for my own industry report on personalization and recommendation I have spent the last weeks interviewing a who’s who of industry players and their customers (mobile operators/service providers) who are convinced  the company with the most (and best) data wins. It’s a battle between operators (really smart pipes) and aggregators (Google & Co.) – and personalization and recommendation could just be the capabilities that distinguishes the leaders from the also-rans.

With that in mind, we continue MSG’s special podcast series on the top players in personalization, and conclude with Part 2 of my interview with Stephen Oman, Amdocs ChangingWorlds Worldwide Director Sales Engineering. Changing Worlds is an Irish provider of personalization technology that was recently acquired by Amdocs and is now part of Amdocs Interactive.

In Part 1 we dissected the content discovery dilemma, looked at on-portal challenges and examined the results of the company’s recent study that underlined the importance of personalization in determining and delivering mobile advertising.

In part 2 we explore personalization off-portal and across app stores.

ROLE OF THE MOBILE OPERATOR: As Stephen sees it: the operator has a spot at the “center of the Internet.” Their job: “helping the subscriber to go on to the Internet, helping them find the right content, helping them with additional suggestions which they might be interested in, and so on.  In doing that, they’re becoming if you like a partner to the subscriber when they are browsing the internet.” So, there’s an opportunity here for the operator to “set themselves up in essence as the home page for the mobile Internet for their subscribers.”

APP STORES: In many ways, it’s a repeat of the content discovery problems we know from on-portal. But it’s also an issue that independent developers will also face as they try to engage people and compete with similar, rival apps across the store. As Stephen puts it: Making an effort to personalize the content will “help people find more niche types of applications that may exist, and that would never appear in the what’s hot today or what’s in the top 10 for today.”

LONG-TAIL VERTICAL APP SCHEMES: Reports show that many apps downloaded are actually productivity apps. Additionally, apps are being downloaded by professionals in line with their professions. So, will we see a plethora of app stores split across lines such as task (apps to do “x”) or jobs (apps for doctors, for example)? Stephen was intrigued by the idea and agrees that we will likely see the launch of vertical app stores (similar to the vertical content portals that offered only ringtones or wallpapers). “It’s pretty much the same as you see in retail, you do have retail stores that sell pretty much everything, but you also have niche retail stores that cater for particular audiences.”

THE GROWTH OPPORTUNITY: In a word: convergence. “Increasingly the mobile operators’ customers are expecting and demanding that if you like connected lifestyle….Crucially, they’re looking to be able to access services across many different devices: their mobile phone, online, through their TV, through digital TV, and that convergence of access is essentially going to improve and drive growth in the mobile digital economy.”

Editor’s note: This special focus on personalization and recommendation continues in the New Year with a look at a cool new recommendation company coming out of stealth mode and an analysis of Novarra. I had to reschedule this one a few times, but this time it is timed to some important news. Not one to miss!

Disclaimer: ChangingWorlds is not an MSG supporter.  However, MSG has published a by-lined thought leadership column authored by a ChangingWorlds senior executive. MSG has also participated in an invitation-only  thought leadership event organized by Amdocs.

Listen to the podcast here. [15:12]

Related posts:

PODCAST: ChangingWorlds Reveals Real Impact Of Personalization On Mobile Advertising CTRs; Google Shows Mobile Advertising Is Hot (Again), But Will Personalization Make The Market Sizzle?

SPECIAL REPORT: GETTING PERSONAL Openwave Adds Mobile Analytics; Are Gateway Providers The Ones To Watch? PLUS New Report/Project With GigaOM Pro

PODCAST: Bytemobile CMO Adrian Hall: Operators’ Can Win On Personalization; Does A Widget Bar Do One Better Than An App Store?

MSG DEBUT VIDEO: Xiam Talks Targeting & Filtering; Make Way For The Personalized Web!

GUEST COLUMN:Using Personalization To Pump Up The Volume & Increase The Value Of The Mobile Internet

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

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

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

REAL RESEARCH

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

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

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

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

BRAND SUCCESS

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

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

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

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

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

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

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

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

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

FUTURE OF MOBILE

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

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

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

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

FOOD FOR THOUGHT

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

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

INSIDE INNOVATION

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

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

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

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

While the iPhone OS was the leading smartphone platform on Millenial’s network, with 33 percent of smartphone share (ahead of BlackBerry’s 31 percent), Samsung was the top device maker, thanks to the predominance of featurephones. The company also said the US mobile web audience grew to 64.8 million users, and that its ad network reached nearly 80 percent of them.

The report also features a section on mobile app analytics, provided by Mobclix, which says that the iPhone App Store is the biggest on the block, with 115,000 apps, and also leads in downloads, with 100 million per month. Android Market is a distant second, with 20 million per month, and BlackBerry App World even further back in third, delivering 300,000 downloads per month.

Millienial adds that traffic to advertisers’ sites represented almost half of the mobile campaign destinations on its network in October, while app downloads accounted for about 30 percent. Source

The bottom line: Mobile web use – and the market for mobile ads – continues to grow. But don’t overlook smartphones, which still account for a huge chunk of the mobile web market.

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THE MOTOROLA DROID SOLD 250,000 UNITS IN ITS FIRST WEEK, according to GigaOM and based on a report from mobile analytics company Flurry. The new Android device, available only on Verizon Wireless in the US, has been well received by commentators, and now, apparently, by the market as well. Flurry says that the sales are more than four times those of T-Mobile’s MyTouch 3G in its first week of sales in August, but of course pale in comparison to the 1.6 million iPhone 3GS devices sold in its first week. Source

The bottom line: Is Motorola clawing its way back from the precipice? Could be – since software has long been its Achilles heel, turning to Android could turn out to be a smart choice, and one that saves the company.

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MORE THAN 3 MILLION PEOPLE IN THE UK HAVE REDEEMED A MOBILE COUPON, says Juniper Research in a new report. The analyst firm says that mobile coupons enjoy a redemption rate six times higher than traditional paper coupons, again highlighting the viability of mobile marketing to deliver results for advertisers and brands. Source

The bottom line: Mobile coupons seem like a no-brainer, if only because people are less likely to forget to bring their phone to a shop than a paper coupon! But combined with opt-in campaigns and any number of targeting techniques, they represent a valuable resource for retailers.

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THE NUMBER OF MOBILE SOCIAL NETWORKING USERS IN LATIN AMERICA AND AFRICA WILL INCREASE TENFOLD BY 2015, says a new report from analyst firm Frost & Sullivan and mobile social networking provider Colibria. F&S says the market will amount to 527 million users and be worth $2.4 billion in six years, reflecting the increased popularity of the services, but also the prevalence of mobile as an Internet channel in emerging markets. Source

The bottom line: It’s easy to predict the growth of mobile social networks, but anybody eyeing the space has to keep in mind how people in emerging markets use their mobiles and access the internet primarily through them.

Comscore says that the iPhone represents a third of those touchscreen devices, while the top ten list is filled with a number of touchscreen featurephones. Source

The bottom line: These numbers shouldn’t be too surprising, as smartphones continue to grow in popularity, and touchscreens make their way into the featurephone segment. Peggy adds: The touch web is here and will likely require content, experiences and mobile search tools to make the most out of it. Watch MSG for more on the touch paradigm and the potential business opportunities for companies that get it right.

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THE NUMBER OF NEW APPLICATIONS STARTED FOR THE ANDROID PLATFORM NEARLY DOUBLED IN OCTOBER, according to mobile analytics firm Flurry. The company, which tracks application and developer activity in app stores and across multiple platforms, says it’s seeing a lot of iPhone developers beginning to work on Android apps.

Android is gaining a lot of momentum as more devices hit the market – particularly in the US, where Verizon Wireless has made quite a splash with its marketing campaign for the Motorola Droid, and is also introducing the HTC Droid Eris. Meanwhile, T-Mobile USA recently announced it would introduce carrier billing and some other measures to try and increase its Android customers’ downloads. Source

The bottom line: Mobile developers will go to where the users are – if the developer and distribution experience is easy and rewarding. Apple and Android are leading the way, while others (notably Nokia’s Ovi and Symbian) still trail behind.

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THE VALUE OF COUPONS REDEEMED VIA MOBILE WILL HIT $6 BILLION WORLDWIDE BY 2014, says Juniper Research. In a new report about mobile coupons and NFC-enabled “smart posters”, the firm says that ARPU from offers from NFC coupons and smart posters will exceed ARPU generated by NFC payments in 5 years.

Juniper says, though, there are some potential stumbling blocks: consumer apathy, lack of willingness to change and consumers having to learn a new payment method. Source

The bottom line: Another confirmation that the mobile device is destined to be a payment device we use at the point of impulse – once we overcome the hurdles, of course. Peggy adds: Look for an in-depth look at this topic and more in the Netsize Guide 2010, a must-read mobile industry almanac available for free download beginning February 2010.

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

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

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

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

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

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

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

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

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

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

Following on from the phenomenally popular future-focused chapter that wrapped up last year’s Netsize guide (a chapter I was proud to co-create with Stan Chesnais, Netsize CEO), this year’s publication will continue to explore the personal experiences and business opportunities emerging as our virtual and physical worlds converge. Another highlight: 25+ interviews with C-Level executives and influencers.

I’m particularly interested in connecting with companies and pioneers taking mobility to a new level with the help of technology that links digital information with real-world places as we pass by.

The buzzword here is augmented reality, and I am pleased to report I already have an interview scheduled with John Ellenby, GeoVector CEO. GeoVector, a developer of mobile technology that recently launched its directional search and pointing application for mobile phones and released World Surfer for download from the Apple iTunes App Store and Android Market.

I’m also looking forward to a Q&A with Ogilvy’s mobile advertising mastermind Scott Seaborn, who is quite bullish about augmented reality and the central role it is likely to play in a wide variety of mobile marketing and promotion campaigns moving forward.

However, the Netsize Guide isn’t just about cool stuff on the horizon.

It also looks at the impact of app stores on the mobile business ecosystem that (at least traditionally) has the mobile operator at its center; the evolution of social media and the excitement over the social address book (more specifically, who owns it?); the trends that matter in mobile communitainment (games, music, social networking); and pivotal importance of personal engagement in mobile marketing and advertising.

I’m pleased to report that key players including Google, Sony Ericsson, Nokia Interactive Advertising, the Mobile Marketing Association, the Interactive Advertising Bureau, are already on board – a line-up sure to make the Netsize Guide 2010 a runaway success. (Another boost: Netsize’s decision to promote the guide via a destination within the new Thought Leadership section of MSearchGroove. This commercial offer, one of MSearchGroove’s growing portfolio of media solutions, allows a select group of companies to launch a branded microsite on MSearchGroove, thus presenting their commentary, case studies and subject matter expertise to a wide audience of executives and influencers.

This year’s guide also has a strong emphasis on mobile CRM, mobile commerce and case studies that illustrate how industry verticals (Education, Finance, Healthcare, Retail, Enterprise) are using mobile to fundamentally change/improve how they do business.

The bottom line: It’s not about mobile; it’s about mobilizing. We fully understand that mobile is personal, portable and part of our daily routine. Now the mobile industry has to stop talking to the mobile industry and reach out to verticals just beginning to explore what mobility means for them.

Against this backdrop, I am particularly open to hear how you (or your customer) has implemented (or is planning to implement) mobile. From mobile education case studies in emerging markets to cool new ways companies use mobile to super-charge customer service and CRM – I want to hear your story. All the better if the service harnesses a unique characteristic of mobile (context, location data, personal preferences and browsing patterns) to get the job done.

Ironically, this was also the topic of my recent article for EContent aptly titled the Immersive Enterprise.

I enjoyed connecting with companies including EMC, Liquid Machines, SecondLife and ThinkBalm, a super-cool company offering independent IT industry analysis and strategic advisory services to technology marketers and immersive Internet advocates. I was extremely impressed by Erica Driver, co-founder and principal at ThinkBalm, who invited me to join her ThinkBalm Innovation Community, a collaborative community in SecondLife dedicated to propelling the enterprise use of the Internet forward.

In addition to some surprising observations (which I recount in my article) Erica also shared the findings of a recent ThinkBalm survey of 66 immersive Internet practitioners. More than 40 percent of those surveyed saw a positive economic benefit from investments in immersive technologies in 2008 and 1Q2009, and more than half expect to obtain a positive total economic benefit in 2009. Looking to the future, over one third (36 percent) said their organizations will definitely expand their investments in 2009 an 2010, and another 38 percent indicated they might even expand their investment.

In my article I interpret this as proof that the next round of innovation will have to enable us to work in multiple locations, multiple dimensions (!) and across multiple devices.

But it was Martin Frid-Nielsen, CEO of Soonr, a company offering mobile cloud services, that put it best.

As Martin sees it: it’s not about enterprises embracing mobility, it’s about them absorbing mobility into every aspect of what they do. “The concept of mobility will be a given going forward for every company everywhere.”

If you have similar opinions/insights or if you want to be considered for inclusion in the Netsize Guide 2010, contact me directly (peggy@msearchgroove.com)

Deadline: October 30.

Disclaimer: Netsize is an MSG supporter.

The bottom line: Mobile data revenues continue to grow, and are a bright spot for mobile operators among sinking voice spending. It’s also notable that given the U.S. recession, mobile data spending grew so strongly.

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NOKIA’S OVI STORE IS SEEING STRONG GROWTH, the company says, citing a 50 percent increase in downloads in August over July, with user registrations up 250 percent in the month. Nokia says it’s approving about 500 pieces of content per week for the store, including apps, games and content like ringtones. 27 operators in 8 countries currently support direct billing for the Ovi store, but Nokia says that the feature will be available in more than 20 countries by the end of Q1. Source

The bottom line: It’s nice to see the download figures rise, but without a breakdown of what kind of content users are grabbing – or how much they’re paying for it – it’s difficult to assess this market from an operator or content provider perspective. What are users downloading? And who’s making money in the Ovi Store?

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PRINT PUBLISHERS SEE MOBILE PLAYING AN INCREASINGLY IMPORTANT ROLE IN THEIR ONLINE PLANS, says a new survey from the Audit Bureau of Circulation, the group that audits U.S. publishers’ subscriber figures. A third of those surveyed see mobile having a significant impact on their revenues within three years, and 70 percent say they’re paying more attention to mobile this year than last. 33 percent think they’ve got a good plan in place for the mobile market as well.

Also, 17 percent of those surveyed said they already had a smartphone app for their publication, and a further 56 percent plan to develop one in the next 24 months. Source

The bottom line: Print publishers are struggling, and it certainly looks like they are approaching mobile with much more determination than they initially did the web. They’re looking for new sources of revenue, and have big hopes for new platforms. But mobile in and of itself is not a business model for them, they’ve still got to figure out how to create value and generate revenues from it.

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NEWS AND REFERENCE APPS GET THE MOST WEEKLY USE AND STAY ON IPHONE USERS’ DEVICES THE LONGEST, says a report from mobile apps analytics provider Flurry. The company looked at the weekly usage rates and retention rates for several different types of apps, in an attempt to assess the level of user loyalty. It explains that the news and reference apps feature the most regularly updated content, hence their high usage and continued attraction.

It also found that “entertainment” apps, which it also calls gimmick apps (think iFart, the Zippo lighter app), have the lowest retention rate, highlighting how users download them, use them a few times, then delete them. It also broke out a couple of other sectors of usage patterns: one including apps like e-books, which get used intensely over a short period of time, and another holding navigation and productivity apps, which don’t get used as often, but are retained on devices for a long time. Source

The bottom line: These are some interesting figures that deliver some insight into how users – subconsciously, perhaps – view and utilize apps.

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THE NUMBER OF U.S. SMARTPHONE USERS ON SOCIAL NETWORKING SITES HAS TRIPLED in the past year, says new research from Nielsen. The company says there were 18.3 million unique users of mobile social networking sites on smartphones in July, up from 6.4 million in 2008. Facebook was the most popular site, getting twice as many users as the nearest rival, MySpace. Source

The bottom line: This follows last week’s data points that told a similar story and predicted even more growth for mobile social networking in the coming years. The mobile is an inherently social device, so expect to see ever-higher numbers.

The firm adds that the mobile Internet audience in the U.S. is now a third of the size of the wired Internet market, with the gap narrowing by the early part of the next decade. Source

The bottom line: No big surprises here, but some good insight into US mobile usage – in particular, the mobile internet audience is already a big target market for content providers and advertisers.
***
DON’T FORGET BLACKBERRY WEB USERS, says mobile web firm Bango. The company says BlackBerrys now account for 14 percent of all mobile web traffic, pulling ahead of the iPhone. Given the length of time BlackBerry has been in the market, plus the fact that essentially every such device comes with an unlimited data plan, it’s perhaps a little more surprising that the iPhone was ever ahead of the entire BlackBerry range. Source

The bottom line: Once again, we’re reminded that the mobile web is a lot more than just the iPhone, and that users of other devices generate significant traffic for publishers and content providers. It’s also another reminder that fragmentation among devices and the multitude of mobile web browsers on the market isn’t going away anytime soon!

***
TWO-THIRDS OF TWITTER USERS ARE UNDER 25, says eMarketer – or at least they were in May – while a tiny group of the service’s users account for most of its activity. Just 1.1 percent of Twitter users update more than 10 times per day, while 85 percent do so less than once per day; consequently, 5 percent of Twitter users account for 75 percent of its activity.

There’s also a small class of the most popular users: just 0.68 percent have more than 1,000 folllowers, while nearly 94 percent have less than 100 followers. Going the other way, the same trends hold true. 92 percent of users follow less than 100 others, while 0.77 follow more than 1,000. Source

The bottom line: The usage figures throw a little bit of cold water on the idea that Twitter is a huge runaway hit among the wider web public, since apparently it’s really only heavily used by a small percentage of users. The 85 percent that don’t update daily also points to the service having a lot of dropouts or inactive users.

***
SMARTPHONE USERS WANT TO TALK TO THEIR DEVICES, says a new survey sponsored by speech-recognition vendor TellMe Networks. The survey says that three-fourths of people would choose a smartphone with speech-recognition and control features, while a similar majority wouldn’t be uncomfortable speaking commands into their phone in a restaurant.  Source

The bottom line: A survey sponsored by a speech-recognition vendor could hardly be expected to find anything other than interest in the technology, but as the features become more pervasive, awareness and usage would be expected to increase. There certainly are situations when speech commands make sense – in a car, for instance.

***

MORE THAN HALF OF SOCIAL NETWORK USERS HAVE BEFRIENDED A BRAND, says a recent report from eMarketer. Almost as many have said something positive about a brand on a social-networking site, while almost a quarter have said something negative.

The report casts some doubt on the widely held view that people don’t have a lot of interest in conversing with or “friending” companies, brands and products online. Source

The bottom line: While there’s a certain amount of apparent interest among social-networking users – or really, web users in general, in interacting with brands online, these figures shouldn’t be used by marketers as a justification to jump into social networking without a careful plan and strategy. This interest shouldn’t translate into free reign for companies to invade users’ personal online spaces, especially when there’s still a lot of room for them to damage their brands by doing so.

***

INDIA WILL BE A LEADING MOBILE CONTENT MARKET BY 2013, says analyst firm mobileSQUARED, generating $2.37 billion in mobile content revenues then, compared to $835.8 million this year. Additionally, the firm reports that the number of Indian subscribers will grow from 400 million now to 700 million by the end of 2010.

Leading the way in mobile content will be ringback tones, the firm says, with ringtones, graphics and wallpapers making big contributions. One major threat, though: Indian operators’ cut of content revenues, which the company says is normally more than 70% for on-portal content, or content billed through premium SMS. Source

The bottom line: The opportunity on the subcontinent is huge – but will the market move more quickly past the types of content listed above, and on to apps and ad-supported content?

Mobile advertising is the topic of the week at MSearchGroove. I’m attending the Mobile Marketing Forum Europe in Berlin; MSearchGroove has joined forces with research firm ÆNEAS Strategy to partner with the Mobile Marketing Association and undertake the organization’s first pan-European research project examining the attitudes of mobile buyers; and Smaato, a pioneering mobile advertising company that operates a leading mobile ad optimization platform, has launched Mobile Advertising Award 2009, thus kicking of the  search among the world’s developers and publishes for outstanding innovation.

After the success of competition last year, Smaato is back with a bigger and better Mobile Advertising Award 2009. As Harald Neidhardt, Smaato CMO & Co-Founder put it: “With more than 100 entrants in its first year we could not ask for more positive feedback. We think this is a clear indictor that there is a lot of creativity and positive energy in the ecosystem. The best is yet to come!”

This year, the competition is divided into three categories of ad-enabled mobile solutions: iPhone, mobile website and applications, and games running on all other platforms. Participation is free and you can learn more about the application procedure here.

Deadline for submissions is October 9th.  The winner will be announced at the Mobile 2.0 Conference in San Francisco on October 15th.

The winning companies in each category will be invited to attend Mobile World Congress, the leading mobile industry event, in Barcelona (February 15-18). In addition, Smaato will introduce these innovative publishers and developers to VC’s at the partner level. Other prizes include a booth at the hugely successful mobile industry event M-Days in Munich (January 28-29, 2010) and free event tickets.

MSearchGroove is proud to be a media partner and – on a personal note – I am honored to be named to the panel of judges.

This high-caliber group of industry influencers includes (in alphabetical order) Tomi Ahonen (Author), James Cameron (Camerjam), Jim Cook (MobiAdNews), Lubna Dajani (Mobile Monday, NYC), Bambi Francisco (vator.tv), Tim Green (Mobile Entertainment), Trey Harvin (mobiThinking), Matthäus Krzykowski (Venturebeat), Ragnar Kruse (Smaato Inc.), Caroline Lewko (WIP), Bena Roberts (GoMoNews), Kei Shimada (Infinita), Michelle Sklar (bnetTV), Matthew Snyder (IAB), Giselle Tsirulnik (Mobile Marketer), Mark Wächter (Mobile Monday, Germany & BVDW) and Rudy De Waele (dotOpen/mTrends).

By way of background, last year’s Mobile Advertising Award finalists included: aka-aki, buzzd, funkysexycool, Fish Labs, Fring, Peperoni, Queep, Skout, Tourspot and Vayyoo. The winner was DialPlus with a smartphone interface for showing visual information from the Web for a phone number before, during and after a call.

With all attention focused on mobile advertising the timing is perfect to draw your attention to Higher Revenues With Mobile Ad Optimization & Global Ad Network Aggregation. This white paper, developed by Smaato to explain the nuts and bolts of ad revenue optimization, describes the opportunities available to mobile publishers and developers seeking to monetize their inventory worldwide.  Specifically, it explores how/why different mobile ad networks deliver different mobile fill rates and outlines the pricing tiers for mobile inventory.

Harald asked me to contribute a quote to the press release back in June, which stands firm as my assessment of the white paper and the company that created it.

“The buzz in the mobile advertising space is around delivering the right ad to the right person- even better if this occurs in the right context. But the real issue publishers face is how to identify – in real-time – the right ad network to deliver the right results. Smaato, a global company whose own evolution shows its grasp of the key issues impacting the mobile advertising business ecosystem at all levels, has gained significant traction through its ability to dynamically identify the ad networks that monetize publishers’ inventory best. This innovation is core to Smaato’s competitive advantage and pivotal in moving the mobile advertising industry to the next level.”

You can download the white paper here – and I hope you will circle back with your thoughts/opinion/feedback.

Disclaimer: Smaato has been an MSG supporter.

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

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

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

***

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

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

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

***

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

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

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

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

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

***

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

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

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

***

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

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

In brief: MSearchGroove proudly steps up to the plate and hosts the Carnival of the Mobilists for the first time.

The last weekend in August and I spent much of it at a two-day summer festival in Siegburg, Germany, where I’m based. I’ve been on a natural high with good friends, great food and a wonderful line-up of home-grown entertainment. But not all the excitement was at the local fairgrounds. The Mobilists have also come up with a mix of thought leadership and must-read posts that give us new perspectives on mobile and start our adrenalin flowing.

Andy Favell and the team at mobiThinking.com do us all a great service and compile a comprehensive list of mobile industry facts and figures. The first in this series focuses on the size of the mobile Web and the implications for marketers. What do the numbers tell us? Should investors/companies take advantage of the economic slowdown and move ahead while others are standing still? Read on, find out and tell us what you think.

Another round of important mobile stats comes from Jose Colucci at Mobile Strategy, who continues the countdown of the 12 Reasons Why Canadian Banks Should Really Offer Mobile Services. Jose expertly brings together figures that show significant growth and penetration (despite strict government regulation, a lack of competition and a sky-high mobile data plans and pricing).  The bottom line: over 70 percent of Canadians have wireless access. Is Canada an untapped market for banking services? Is there a first-mover advantage for financial institutions that get involved? Read on, find out and tell us what you think.

With all the buzz around app stores and the proliferation of mobile devices (beyond just phones), the timing couldn’t be better for this post from Antoine RJ Wright. In it he recounts Nokia’s size, scope and industry influence, and wonders if the Finnish giant has the resources and marketing muscle to sustain three brands/strategies: Ovi, Symbian and Maemo. Could Maemo be the “wild card” in Nokia’s hand? Read on, find out and tell us what you think.

Tsahi Levent-Levi at VoIP Survivor, a blog in RADVISION’s blogs network providing insights into the VoIP industry, connects the dots in recent analysis/commentary and examines the outlook for mobile VoIP. Will current interest among carriers create the conditions for a viable market? Or will it simply advance the shift to IMS (IP Multimedia Subsystem) – a technology that defines how to set up advanced services for 3G cellular networks – and put operators back in the driver’s seat? Hmmm…should Fring and Truphone watch their backs? Read on, find out and tell us what you think.

A refreshing new idea comes from Judy Breck at Golden Swamp. She uses the debut of  Half the Sky, a new book documenting the plight and progress of the world’s women, to start a long overdue discussion about the impact of mobile on women in the emerging markets. Must women such as Saima Muhammad, a Pakistani woman who routinely beaten by her husband until she started a successful embroidery business, continue to endure their terrible fates in silence? Or does personal mobility offer the promise of liberation and freedom from oppression? What is the outcome when the world’s women have access to the Internet in their pockets? Read on, find out and join in the conversation at Golden Swamp.

Meanwhile, Dennis Bournique at WAP Review uncovers disturbing inequities in the price of mobile data in the developed world. He successfully argues the case for a rethink based on his shocking observation that (currently) all prepaid data is “wildly overpriced.” So, what is fair price for mobile data on prepaid plans? Dennis does the math and provides us a reasonable model that makes money and sense for everyone. Read on, find out and give us your take.

Some eight operating systems are battling for market supremacy. Will there be only one? Digital evangelist Ian Wood (thankfully) moves us past the academic discussion and back to basics in a post that draws from his vast personal experience and road tests. His conclusion: look for consolidation that will see three OS providers emerge. Who will make the winner’s circle? Read on, find out and let us know what you think.

Kudos to C. Enrique Ortiz at About Mobility for asking the question: is Apple a control freak? He connects the dots in recent developments – such as the decision by Apple to reject both Google Voice and Riverturn’s VoiceCentral application – to communicate an uncomfortable truth. But it’s not about whether Apple is morphing into a monopolist; it’s about the larger impact on the ecosystem and the third-party developers that have made iPhone the success it is. What are the arguments (pro and com)? What’s at stake? Read on, find out and speak out!

Finally, MSearchGroove uses COM #189 to showcase Mobile Groove, its new, no-holds-barred podcast series. I join with series co-host Inma Martinez, a leading digital media strategist and advisor to venture capitalists who has been referred to as a “free radical” by Red Herring and Fast Company. Together we raise our goblet of rock and speak out on the rise and demise of Blyk, what went wrong at Spinvox and what we can expect from Microsoft moving forward. Read on, have fun and contact us with your ideas/input! (mobilegroove AT msearchgroove DOTcom)

Post of the week goes to Judy Breck at Golden Swamp for prompting us to see mobile as a tool (for change) rather than a technology. Access to the mobile Internet gives everyone – particularly women suffering in isolation – a voice, allowing them to connect with people and peers who can amplify their message and fight their cause. Thanks, Judy, for reminding us why mobile is amazing and why we must strive to bridge the digital divide.

***

If you’re like me, then use the last days of August to catch up on your reading and check out the Carnival posts we unfortunately missed on MSearchGroove.

COM #186 at allaboutiphone.net (Topics include: what brands want from targeting; U.S. wireless data stats from Chetan Sharma; and a look at whether Europe risks losing its competitive edge in mobile. A highlight: an answer to the question – does Steve Jobs hate the App Store?)

COM #187 hosted by Jamie Wells at mobilestance.com (Topics include: five iPhone apps that could make publishers money; a discussion around the future of paid content; an in-depth look at what a mobile Web OS experience could offer; and an exclusive interview with Blyk.)

COM #188 at Golden Swamp (Topics include: how location adds context to content; a look at the cool new Layar Reality Browser2.0; an analysis of Nokia; and a new take on mobile education.)

Thanks to COM contributors and readers.

Look for the Carnival next week at WIPJam - and be sure to catch up with Caroline Lewko and the great WIPJam team at the next Jam Session on the World Tour: WIPJam@OSiM (Open Source in Mobile), September 16, in Amsterdam.

When I first met Inma Martinez at Mobile 2.0 Europe I was struck by the depth of her knowledge and the strength of her determination to speak her mind. I made the decision to work with her at some level. A few in-person meetings in London (where she is based) and many Skype chats later we are proud to take the wraps off Mobile Groove, a monthly podcast series here at MSearchGroove that will provide short, digestible and insightful commentary on what’s hot in news, investments and developments impacting the mobile space at all levels.

Mobile Groove will air on the last Friday of every month and consist of three thought-provoking segments: The Big Picture, a wrap of the month’s news and views; Street Groove, an informed discussion of the companies and technologies sure to rock the mobile space; and The Radar, a roundup of talk on the street and what is highest on investors’ radars.

OUTRAGEOUS & INSIGHTFUL

The first in the series kicks of with a look at the the rise and fall of ad-funded MVNO Blyk, the controversy surrounding voice-to-text provider Spinvox and an in-depth look at the key platform players (Apple, Google and Microsoft) – specifically the news via Taiwan handset makers that Microsoft plans to adopt a dual platform strategy to promote its Windows Mobile OS (operating system) and, thus, take aim at both Android- and iPhone-based platforms.

Inma, who stands out as an über-connected advisor to venture capital firms, also gives us the inside track a new fund by entrepreneurs for entrepreneurs that may spell relief for European startups and smart people with brilliant ideas.

We joined forces to provide industry commentary and insights on the top market news in the mobile industry. But it doesn’t mean you can’t get involved. We welcome your ideas, suggestions and elevator pitches. DM us on Twitter(@mobilegroove)or email us at mobilegroove@msearchgroove.com.

Listen to the podcast here. [22:25]

A ROUND OF THANKS

And finally, thanks (again!) to Inma, for the energy and excellent ideas. Thanks to Annette Kramer, a Stradbroke Partner and presentation coach, for her kind offer to do the intro and outro to our podcast series; and to Alfred DeRose, Brian Avery and the team of professionals at Tego Interactive, a company helping to build businesses – including mine – through converged Web and mobile solutions. The company has been instrumental in creating some new features and functionality (including a mobile site) for MSearchGroove, with more soon to come, so please check back regularly.

And a special thanks to RealWire, an MSG partner and supporter whose global news release distribution service (specializing in the online media and mobile) consistently delivers reach, audience and exceptional analytics. MSG uses RealWire for all press releases, and I recommend you do the same.

For now our podcast will be accessible via the MSearchGroove web site home page. In September Mobile Groove will also be available for download via a dedicated iTunes channel.

It was great to have the last few days off and even better to map out an exciting line-up of MSearchGroove projects for the next few months. One that I am particularly honored to announce: my collaboration with GigaOM Pro, the new research arm of the highly respected tech blog GigaOM. By way of background, GigaOM Pro has brought together an impressive roster of industry authorities and analysts (including my esteemed colleague Chetan Sharma) to “address the gap that exists in real-time expert industry analysis on emerging technology markets.” The GigaOM Pro solution: Make timely, highly relevant analysis and insights accessible and practical.

I’m on board to write an in-depth examination of personalization and recommendation technologies and business models, a natural next step given my long track record analyzing mobile search and my deep involvement in the recommender space. (This includes work with Strands, a major provider of recommender systems, on recommender industry events including RecSys 09 – October 22-25, NYC.)

The report is an ambitious undertaking and I am naturally interested in connecting with personalization/recommendation companies –so please contact me directly if you wish to be considered for inclusion. peggy@msearchgroove.com

Why the buzz about personalization?

The advance of Internet-specific smartphones and the spread of app store schemes turns up the pressure on mobile operators (and their content providers) to decipher data transactions (on and off the network), combine it with location and demographic data and use the results to create a 360-degree view of the individual.

Where does this shift leave mobile operators?

They are hard pushed to turn analytics into competitive advantage. Sensing this business opportunity (that execs tell me they estimate hovers in the hundreds of millions of dollars), a slew of companies (such as Amdocs, Bytemobile, Novarra and Qualcomm) are among the first out the gates with revamped offers to arm operators for the ultimate battle with Web giants for the mobile customer. This special series profiles the players jockeying for position in the marketplace.

This week we look at Openwave, which has recently productized its existing analytics capabilities and business intelligence know-how, and packaged it up as Mobile Analytics.

The solution – designed to aggregate usage data and behavioral information across a variety of sources, including on-portal surfing and open Web browsing, to generate meaningful reports –dovetails with other Openwave offers (behavioral targeting, profiling, usage pattern analysis) to lay the groundwork for the delivery of relevant content and advertising.

I caught up with Mayur Pitamber, Openwave Product Management Strategist, to discuss the role of the mobile operator, debate the value of personalization and what we can expect next in the Openwave product roadmap.

AN EXCERPT OF OUR Q&A

Q: Let’s talk about the fit with mobile advertising. You have just launched the complement to your own mobile advertising solution, which is Mobile Analytics. What’s the level of interest in mobile advertising? I’m hearing some operators get it, but many more don’t…

A: There was some hype about it at first, but operators are starting to see the value of it now and they are also beginning to understand the real value of the data they have. The last months have been marked by a surge of activity and RFIs and RFPs specifically for mobile analytics solutions, which is new in this market. We didn’t see this last year.

A lot of what happened and the initial excitement around mobile advertising industry was quite premature. It’s not just about offering targeted advertising; it’s about offering relevant products and services based on the user’s behavior. The operators can use analytics to gain profiles of these users, the sites they frequent and what they do while online. It’s when this information can be aggregated and provided to media agencies and brands that it really becomes valuable.

It’s all about helping operators to provide the mobile audience metrics that the brands are looking for. Not necessarily going through the GSMA, because they have some of that [covered in their] initiative, but doing that directly. With the solution we’re offering the operators can provide those metrics directly to the brands, to the media agencies, to the publishers, and be a vital part of that mobile advertising ecosystem. And with our solution there’s no need for us to insert tracking or cookies or JavaScript, or anything like that. Every Web page goes through our gateway and we can basically track on that. So, that’s a key differentiator.

Q: There are, of course, other solutions in this space. A long list of gateway providers: Qualcomm, Amdocs, Ericsson, Nokia, Bytemobile, Novarra. And the space is getting crowded.

A: Obviously, there are competitors out there.  All gateway providers can provide parts of this sort of solution. However, I haven’t come across a solution [similar to ours] with this [breadth] out there in the market at this point in time. Being a gateway provider for the last 10 years, we’ve been providing this type of reporting to operators. But now we’ve added more features and made it more user-friendly. So, it’s a mature business intelligence product that we’re bringing to the market.

Q: In early August, Telstra announced it had implemented your Mobile Analytics solution. The press release says it’s all about providing Telstra a “dashboard view of intelligent analytics and rich reporting capabilities across its mobile device portfolio.” To start, how many of your operator customers have this solution or perhaps the analytics solutions that preceded this?

A: We have deployed previous versions of this analytic solution to some six tier-1 operators around the world.

Q: Let’s say I’m an operator and I don’t have a solution from Openwave, but I like the analytics.  Can I just have that, or is it a package deal?

A: Previously, the solution was just built around Openwave products. But obviously, we want a bigger market share, so we’ve designed the solution such that it will work with any other gateway, any other vendor of gateway products.

Q: You said before competing on analytics is the way for operators to be “a vital part of the ecosystem.” Can operators really play this central role?

A: That’s a really good question. I think it’s quite difficult to answer as well. The operators have traditionally been sluggish. Their bread and butter has been voice revenues and SMS revenues. To really get them incentivized to offer new services such as mobile advertising, you need a compelling business case. I’ve spoken to dozens of operators around the world. Some of them are in advanced stages of creating any-time mobile advertising organizations. Others have only one or two mobile advertising product managers. For these operators, the business case – for whatever reason – is just not compelling enough for the decision makers to say okay, let’s really invest in this.

Q: This jives with what people told me while I was conducting interviews for Mobile Advertising Research UK. As one executive at a mobile infrastructure company that counts over 300 network operator clients observed: Mobile advertising only becomes interesting for an operator when “the type of revenue they can envisage is around 2 percent of their overall revenue to 5 percent, and with an opportunity to grow to 10 percent of revenue. This is the revenue that will really make them sit up and make it work.” Another figure that stands out: GBP 28.6 million, which is what the IAB reckons was the mobile ad spend in 2008. What’s your take?

A: I can believe the ad spend for the U.K. I think the hold up is the thinking about the role of the mobile operator. We have to be clear about what they can do. In my view, the role of the mobile operator will be to provide incentives for people to use new services so that additional inventory and mediums become available to insert ads. And obviously, once those mediums become available, that becomes attractive to brands and advertisers. But, right now, it’s difficult for operators to manage their inventories. They have SMS inventory, MMS inventory, on-portal, off-portal. All of these are different systems and it’s difficult to provide brands and advertisers a consolidated view of what is available out there. So, it’s when there is a clear view of the different inventories out there and the tools to manage these inventories, and make these inventories available to third-parties such as the brands and media agencies, that I think mobile advertising will really take off.

Q: Are you convinced operators can start acting like media companies? Or are there going to be a lot of carriers that focus on access over audience?

A: The tier-1s I talk with have created organizations to manage mobile advertising. They’ve created sales forces to go out and sell inventory. So, they are already acting as media agencies and helping brands identify which inventory they want to use. But again, these are just the big tier-1 operators.

Q: Advertising is messaging – and loads of it. Or it could borrow from TV and be video-centric? We don’t know. In any case, we have more data usage – both from people surfing with their smartphones and brands that want to reach them. What is the potential impact on the network side of things? What are you seeing?

A: We’re seeing huge increase in data traffic volumes. A data tsunami is going to hit operators within the next 12-24 months. And some operators are quite oblivious to this. So, [with Mobile Analytics] we’re helping the operators to identify trends on the operational front as well. We’re saying ‘Hey, you need to do capacity planning and optimize your networks because this is going to be your traffic in 6 months or 12 months.’

Q: Let’s move to the report on North American mobile Internet trends you issued that may have got lost in the CTIA shuffle. It made some interesting points, and I understand you are about to release another one soon. What were some of the key observations and what were the surprises?

A: That report was basically based on data from one of our customers in North America. Many of the trends we saw confirmed what the market was thinking. For example, everyone is doing social networking on mobile. The top sites, as you could guess, were Facebook and MySpace.

In terms of search, we were able to also track some keywords. Something that was interesting: people – when they wanted to find Google — wouldn’t enter Google on their mobile phone and go to Google. They would actually enter ‘Google’ in a Yahoo search engine. This operator had Yahoo as a search partner. Anyway, that tells us that a lot of search use may be because of usability. It’s easier to type it [a destination] in a search box than to navigate to it on the Web.

Q: Finally – what about app stores? They’re hot. What is the value-add, if any, from analytics?

A: One of the operators we’re working with is in the process of opening an app store. They know that not all users are going to go through the apps. If you figure the iPhone app store has tens of thousands of apps and growing, users would lose patience sifting through all that. This operator wants to analytics specifically on this [operator] app store to identify the top ten apps. But it goes beyond this to include how many times have the apps been downloaded; who has consumed them; and whether the users have shared apps with other people. More importantly, the operator is providing this app store data to the application developers, so they also have insight into how their apps are being used and how many people have downloaded their apps. So, Mobile Analytics can be used to identify the audiences going to these app stores – and that can be used to build the business.

WHAT’S NEXT?

Generally speaking, the value of data is not in the data itself, but in the mashups we create when we combine it with other data stores. Put another way, the way to wring the value out of analytics is to combine it with location and demographics data, which is why Openwave is keen to feature both in its Mobile Analytics solution. Mayur tells me we can expect location in the next months. (Openwave is also gearing up to announce another customer win for its analytics offer in South East Asia.)

Likewise recommendation capabilities are moving up the list to take a center spot in Openwave strategy. As Mayur put it: The next version of Mobile Analytics will come with recommenders “bolted on.” No word yet on what the recommender will allow (delivery of content or advertising – or both?), how it will achieve this (based on item-to-item or user-to user – or both?), or how it will integrate with Openwave’s underlying Integra platform. But read between the lines, and the sharpened focus on recommendation is at least a welcome testament to the timing and importance of my upcoming GigaOM report on the same topic.

Openwave, unlike some of the gateway providers I’ve examined/profiled in this series, is also bullish about mobile search. The company demo points out that Mobile Analytics potentially improves mobile search, allowing operators to deliver relevant results individuals will find useful.

I am reminded at this juncture of a related post I wrote about the potential for operator-centric, operator-powered, operator-controlled mobile search. With the right tools and technology mobile operators can follow our virtual breadcrumb trail to optimize our mobile search (and advertising) experiences, using our actual usage patterns to give us the answers/results we will most likely appreciate.

My take: Personalization is a hot topic but personalized recommendation and search are even hotter. The space is crowding with gateway providers that are using their position in the network to give their operator customers insights into what people are doing on the network (on- and off-portal). The end-game is about helping operators make business decisions based on new subscriber behaviors and trends. Openwave is one of a number of companies in this space – but it has its eye on the prize: drilling down in the data to help operators manage bandwidth allocation, deliver targeted mobile advertising AND fine-tune recommendation and mobile search. What better way for operators to compete against Internet and search engine giants, and potentially win?

Next in the series: We discuss personalization with Novarra.

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.

The bottom line: While flat-rate data plans have become more pervasive, and mobile data use has increased, cost still remains a very sticky subject, particularly for content not covered under unlimited data plans. This is a huge issue for operators and content providers looking to increase uptake of mobile content, but the implication is pretty clear: consumers don’t have good pricing information, and they’re hesitant to shell out without it.

***

THERE’S A MIDDLE CLASS OF IPHONE APP DEVELOPERS, says mobile apps analytics company Flurry, with them bigger than independent developers, but much smaller than the traditional mobile powerhouses. The company studied the distribution of the most popular games on US carrier decks and in the Apple App Store, and found that the iPhone environment wasn’t dominated by the same big names (EA, Gameloft, Namco, etc.), but rather by smaller, newer developers.

Flurry says the cost of content is a big issue: it notes that in the App Store, EA’s games mostly run from $5 to $10, compared to the $1 to $2 of other more popular games. It also notes that just before it conducted its analysis, Gameloft sliced the cost of its iPhone games to 99 cents; consequently 3 of its games leapt into the top 25 list. Source

The bottom line: Once again, these figures show how price-sensitive consumers are when it comes to mobile content. The question for the likes of EA, though, falls back to that wonderful economic concept of price elasticity: by cutting the price of a $5 game to $1, will they get 5 times as many buyers? It’s hard to get a read on that from Flurry’s data, but anecdotally, it seems that users have a much easier time paying the mental transaction cost of a 99-cent app, and the lower price tempts a lot more curious buyers.

***

SIXTY-TWO PERCENT OF MOBILE VIDEO USERS SPEND MORE TIME ON THE MOBILE INTERNET than they do surfing the internet on their PCs, according to a survey from mobile video delivery company Transpera, compared to just 9 percent of people who don’t watch mobile video. There’s a wide gap in other usage stats between users and non-users of mobile video, making it clear that those who do use it are heavy mobile users in general.

There’s also some good info for potential mobile video advertisers: the company found that mobile video users eat out more, travel more and tend to earn more money than non-users. Of course, if these users are out of their home or traveling more often, and cost isn’t a concern, they might be expected to use mobile services more heavily. Source

The bottom line: Clearly people using mobile video are early adopters and heavy users of mobile data services. This is great and makes them a good target for advertisers, on one hand, but on the other, expresses that use of mobile video is still far from mainstream.

***

THE MOBILE WEB ISN’T JUST LIMITED TO SMARTPHONES, browser behemoth Opera says. In its latest State of the Mobile Web report, the company says served over 10.4 billion pages to the 26.5 million users of its Opera Mini browser in June, up 8 percent over May. It reports the top ten countries for Opera Mini use in the month were Russia, Indonesia, India, China, Ukraine, South Africa, U.S., U.K., Poland and Nigeria, with India overtaking China last month. Source

The bottom line: Opera Mini remains a popular way for feature phone users to get online, and coupled with the use of operator-provided transcoding services, as well as good old carrier decks, remind us that browsing the mobile web isn’t limited to the likes of the iPhone and other high-end devices. Users of simpler devices remain a huge and viable audience for mobile content providers and advertisers.

***

MOBILE DATA PLANS ARE ONE OF THE FIRST THINGS CONSUMERS LOOK TO CUT when they hit budget problems, says research from Strategy Analytics. It found that almost half of Americans surveyed said they’d drop mobile data completely if they needed to cut household costs, a far greater percentage than mobile voice, fixed voice, digital TV or broadband internet.

The bottom line: While mobile data use grows, it’s still viewed largely as a luxury item, rather than a necessity. Just 10 percent of people said they’d drop their fixed broadband completely, showing just how important it has become to people – meaning mobile data has a long way to go.

***

TEXT, VOICE, THEN MOBILE WEB are the most common features used daily by UK mobile subscribers, says Lightspeed Research. But the gap between text and voice, and mobile web remains pretty huge: About half of those surveyed send a text every day, while a little more than a third make a call each day; but just 9 percent use the mobile web every day. Source

The bottom line: While mobile web use continues to grow, as we’ve seen from multiple data points today, there’s still a lot of room for growth and several obstacles remain. For advertisers, a bigger audience would be beneficial, so what can be done to help to grow that audience? There’s the Blyk model (documented in Peggy’s in-depth analysis), which looks to offer free service to users in exchange for ads, but perhaps other sponsorship opportunities exist. Vodafone’s “free internet days” have generated a lot of interest and usage, and these sorts of offers could represent a sponsorship opportunity.

No matter how you look at it (or who you ask) mobile search, the model that has effectively retrofitted Internet search for mobile devices, is riddled with shortcomings This was the message that came across in the interviews I conducted for Mobile Advertising Research UK, the presentations I and other search authorities made during the recent Mobile Search Masterclass in London, and, more recently, in the mobile search assessment white paper (Pump Up The Volume: An Assessment of Voice-Enabled Web Search on the iPhone) I co-authored with Peggy Albright. (DOWNLOAD)

Is mobile search broken? More importantly, how can we fix it? These are the questions I put to a variety of executives representing companies from across the mobile search and advertising business ecosystem. Read between the lines, and their answers – along with my own conclusions – point to areas of improvement and opportunity in mobile search.

MOBILE ADVERTISING RESEARCH UK

Primary research and C-Level interviews with agencies, brands, operators and third parties reveal mobile search is missing the mark. Their gripe: the poor quality of mobile search (specifically universal search powered by keyword queries and PageRank algorithms) is to blame for a lack of interest and investment in paid search advertising.

As a leading executive at a global brand put it: “Just between the two of us, our spend for search is by far not in the [single] digits yet – and it won’t be….We do a lot in mobile, but the basics of search are not yet at the level of sophistication consumers would expect from us.”

At the other end of the spectrum, agencies are far from upbeat about the short-term outlook for mobile search. As one managing director at a mobile marketing agency put it: “Just the way the content is indexed prevents advertisers from creating a cohesive plan to integrate search in their [mobile] advertising strategies. There is just not the volume to get in and really do some targeted search [advertising], and that’s what brands want: to make advertising personal and relevant to every search the consumer makes.”

Against this backdrop, many sources questioned whether the U.K. adspend figures for 2008 released by the Internet Advertising Bureau (IAB) – the trade body for digital marketing – and PricewaterhouseCoopers (PwC) didn’t overplay the importance of paid search advertising.

The study – a U.K. first – shows that mobile adspend bucked all market trends, increasing by 99.2 percent year on year to reach GBP28.6 million. Mobile display advertising – which includes banners, text links, tenancies pre/post roll and in-game – accounted for GBP14.2 million in 2008, 49.8 percent of all mobile advertising spend, while paid-for search advertising was estimated to account for GBP14.4 million, 50.2 percent of all mobile advertising spend.

As Harry Dewhirst, Co-Founder & Operations Director of RingRing Media Ltd., an independent media agency in the U.K., pointed out during the conference Mobile Advertising Research UK and again in a private briefing with MSG: the amount spent on paid search (from his vantage point) is considerably less than display. The reason: mobile search is “not up to scratch” and fails to deliver people “information in a digestible format as quickly and as conveniently as they need it.” (During the conference Harry raised eyebrows when he identified mobile search as a chief obstacle to mobile advertising – period.)

Harry further tells me the poor mobile search experience means fewer people use search, and that has resulted in a “lack of depth” in search terms. While the terms “plumber” and “London” might draw crowds of online searchers, they can’t pack them in on mobile – yet. “And until they do, search queries will continue to be focused on branded terms like ‘Facebook’ and ‘MySpace,’ and used as navigation.” Despite these issues, Harry reports conversion rates for search are higher than display. “This indicates a positive future for mobile search advertising, but the repeat usage and quality of results isn’t good enough yet.” (Ironically, this sentiment is echoed and documented in the summary analysis of the Masterclass below.)

But there are some bright spots. Harry, who knows mobile search inside out from his previous experience at Medio Systems, a mobile search provider, gives high marks to Taptu, a socially-assisted service that tackles issues such as poor quality results and even worse rendering by summarizing the content/search results in a page that allows people to pre-screen the results before clicking. He is also upbeat about other vertical solutions such as directory assistance search services that are designed from the ground up to give searchers what they need on the move.

MOBILE SEARCH MASTERCLASS

A summer highlight for me has been participating for the second successive year in the mobile search masterclass, a course delivered as part of The City University London’s Masterclass series. Once again I joined an impressive roster of industry authorities from companies, and once again Colin Bates, CTO of Mobile Commerce Ltd., presented some amazing insights into mobile search usage, trends and behavior.

It’s worth sitting up to take notice because Mobile Commerce, like an honest broker sitting between all the major U.K. mobile operators and all the mobile search engines, effectively powers customers’ search boxes. In a nutshell, Mobile Commerce takes the search terms people type into operator portal search boxes and federates them out to a variety of information retrieval sources to deliver a results set made up of  regular Internet search results (Google, Yahoo Microsoft), specialist mobile search results (local search and a variety of verticals), and paid search advertising linked to keywords. Mobile Commerce also offers an increasing number of content owners/publishers a similar service through its Monetised Mobile Search solution, a plug-in service that allows client companies to put a search box on their mobile site and generate revenues from paid search advertising.

As a result, Mobile Commerce has an invaluable insider’s view into what people search for and the results they receive. The bottom line: Nearly 12 months on from Colin’s last presentation and mobile search is still (!) broken.

VOLUME

The surprise: mobile search volume has doubled and in some cases tripled. However, part of the reason for this meteoric rise could be Mobile Commerce’s own success in signing up customers (such as major U.K. newspapers and Virgin Media). Colin put it down to growth in mobile publishing and the number of publishers that placed a search box on their pages. [Hmm - will more publishers take charge of content (and advertising) by controlling the search box?] And let’s not forget the impact of the iPhone and other cool handsets that make the Internet fun to surf on our phones.

What are people searching for? The stellar growth Colin sees – partly because Mobile Commerce powers mobile search for The Sun – is in a category he calls “Glamor,” a term that comprises all the hot half-nude models (Page 3 girls) featured on the newspaper’s third page.

More people are using mobile search. Are they getting what the want?

In a word, no.

Colin’s road test of mobile search services offered by Google and Yahoo (similar to last year) makes it clear mobile search has a way to go. While the search engines excel in Internet search on a mobile phone, their mobile-specific results are – well – “rubbish.” A search for directory assistance delivers a link to the media relations department for World Aids Day, and a simple search for nearby post offices delivers a list of locations no longer in operation. As Colin put it: “The tools (such as Google Maps) are great, the data is out of date.”

Why are mobile search results served up by Internet search engines so poor?

1)    Mobile robots can’t spider the “mobile Web.” There is no sure-fire way to identify a site by URL (for a while .mobi or m.sitename. was a help). The advance of the iPhone and multi-mode sites that adapt content and change markup to match the incoming device type also muddy the waters.

2)    Indexing mobile pages – where information is dynamic, spread across multiple pages and impacted by user input and user-generated content – is a nightmare to index.

3)    The existence of data silos (such as downloadable content) and the lack of cross-linking data make it difficult to rank results and power PageRank algorithms.

4)    People have little say in their search results. On the Internet what we click on (or don’t) is important feedback (an indication of what we find relevant) that fine-tunes rankings and results. We do this on mobile too, but relevant results are often too many clicks away to be seen, used or appreciated.

PERSPECTIVES

Despite the many shortcoming of mobile search, people are using it more than ever before.

What are the drivers?

For one, supply. More players offer mobile search this year than last.

All the U.K. operators offer mobile search on their portals and an increasing number of publishers have also implemented Mobile Commerce solutions.

(In fact, this flurry of activity prompted Mobile Commerce to launch its Monetised Search service in the U.S., where U.K.-based search engine Taptu has signed up as the first client. Bob Last, SVP of Business Development at Taptu, said in a statement: “Working closely with Mobile Commerce since last year, Mobile Commerce significantly improves the availability of relevant ads for our users. The U.S. is our busiest market for mobile searches at Taptu and we are very pleased to be extending our involvement with Mobile Commerce to monetise more of this U.S. search traffic.”)

Demand is also a factor.

People are using mobile search – but it’s not the way they use it on the PC. It’s more about snacking, snippets and quick answers than research and information retrieval. This is what Mobile Commerce concludes (and proves) after a thorough analysis of search terms, search results and what people clicked. Because it powers the complete process it can make the connection between what people query and what they consider a valuable (accurate) result.

The company has developed a system of some 20 categories, ranging from Single User Search (which comprises all the Long Tail terms that literally only came up once in 12 months) to Social Networking (which accounted for a 16 percent of searches over the last year).

Connect the dots, as Colin did, and specific categories (such as Social Networking) are about navigation. In other words, people are typing them in order to find the mobile site. This is further supported by the dramatic dip in searches for Facebook plummet right around the time the social network launched a proper mobile property.

REVENUE

Mobile search may broken but paid search advertising – at least for a few categories – is paying dividends. Specifically, the categories Adult, Games and Personalization (downloadable mobile content) received the largest ratio of clicks against paid search adverts in the results set.

Read between the lines, and we have a confirmation of the pivotal role of paid search advertising in content discovery (a trend I have tracked and documented in articles such as this one for New Media Age – subscription  required).

Why should mobile content companies harness paid search ads to promote their content? Because it works. As Colin put it: “The mobile search model is broken, and publishers have very little control over how their sites appear in the results set – if at all.” In practice, using advertising – specifically text and banner ads – enables content discovery and drives results. It’s also cheap discovery since (at least in the U.K.) CTRs for display ads have tumbled from GBP 15 per CPM to “around GBP 5.”

The avalanche of mobile content – and now mobile apps – turns up the pressure on publishers and developers to rise above the noise and make their stuff findable and buyable. Until companies fix the bugs in mobile search, display and banner ads remain the only sure-fire way to get the message out.

BETTER MOBILE SEARCH

But publishers and brands don’t have to limit their focus to the usual suspects (Google, Yahoo, Microsoft). The real excitement is in search tools and technologies that make the most of mobile and even harness other people to improve the overall experience.

An example Colin offered is Shazam, which he described as “mobile content search without the box.” The phenomenally popular mobile music discovery provider grew from 20 million users (in September 2008) to 35 million worldwide (in February 2009), with over a million tracks now being tagged every day across the world. (Release) It has deployed by 75 carriers across 60 countries, and is a popular application in the Apple App Store, the Android Market and the BlackBerry App World.

In Colin’s view, “mobile-specific search tools” that enable made-for-mobile search (as opposed to universal Internet search) are bound to improve mobile search and make money for the companies that develop them.

In my own Masterclass presentation (and ongoing mobile search research) I have taken it a step further, identifying 10+ categories of mobile search and assembling a list of super-cool companies harnessing context, location and the wisdom of crowds to improve the precision of search results and the quality of our mobile search experiences.

A welcome addition to the list is Alabot, a mobile search provider based out of Pune, India, with offices in Kuala Lumpur and London. I first met Akshat Shrivastava, Alabot founder, at a mobile search conference, where I had the pleasure of presenting him with the Bronze in the category Best Technology Innovation – Software. Earlier this week Akshat sent me a DM via Twitter (@peggyanne) with the great news: Alabot has secured funding from a global innovation fund and sealed a deal with a Malaysian mobile operator to develop a multi-lingual (English, Bahasa, Chinese, Tamil) mobile content vertical search service.

The text search service will start off serving up ringtones and wallpapers from the operator’s online content stock, or “low hanging fruit” Akshat tells me is just the beginning. As he put it: “Content services that require a syntax or Internet access aren’t getting traction [in that region] because they are not intuitive or interactive.” Moving forward, Akshat tells me plans are to extend the service to other content verticals and expand reach via deals with several OEMs. Rock On!

SEARCH AS CONVERSATION

Strong demand for more interactive (translated: natural language search services) isn’t limited to emerging markets.

In North America, ChaCha, a people-powered search service that uses specially trained individuals ChaCha calls “guides,” has answered more than 150 million questions via mobile phones and the Internet, making it one of the leaders in SMS search.

Intrigued by the power and potential of voice search on the iconic iPhone, Peggy Albright and I recently completed Pump Up The Volume: An Assessment of Voice-Enabled Web Search on the iPhone, a performance analysis of voice-enabled mobile search services offered by Google, ChaCha and Vlingo (a spoken interface to the Yahoo search engine). Download the free white paper here.

A chief finding: ChaCha “proved superior” to the two other voice-enabled search options for the iPhone. Specifically, ChaCha proved to offer exceptional results, with its human guides interpreting the search query accurately in the majority of cases.

To be clear, the study was not a road test of speech recognition technologies. To evaluate the overall performance of voice-enabled mobile services offered by ChaCha, Google and Vlingo for iPhone with Yahoo!, the researchers asked a series of 18 queries representative of six typical mobile search categories (Navigational, Directions, Information Local, Information General, Social, and Long-Tail). For each query the researchers evaluated nine performance characteristics including response time, results accuracy, voice recognition accuracy, number of results received, keytaps required, relevancy of the result, location awareness, use of advertising, and presence of other value-added features.

According to the study, ChaCha interpreted natural language search queries, that is, queries asked as questions, accurately in 94.4 percent of the tests and delivered an accurate search result in 88.9 percent of cases. The Google voice recognition technology interpreted queries accurately in 16.7 percent of tests and delivered accurate search results in 22.2 percent of tests. The Vlingo for iPhone voice recognition technology correctly interpreted queries in 72.2 percent of cases and delivered accurate results (via Yahoo!) in 27.8 percent of tests.

A clear finding that emerged is the importance of people-power. As Peggy Albright pointed out: “The use of human agents [by ChaCha] to help interpret spoken queries and conduct searches makes a positive difference in the quality of results delivered when compared to traditional search engines that use algorithmic software to find requested documents or information on the basis of keyword matches.”

In the report I also identified a key advantage ChaCha has over its competitors: Its keen focus on social search, an approach that effectively infuses human preferences and human judgments into computer algorithms to pinpoint truly relevant information and potentially better answers.

Beyond tipping the scales back in favor of results that are relevant rather than search- engine optimized, social search also lays the groundwork for a conversation with people on their terms, paving the way for the delivery of mobile advertising that is relevant and more likely to be appreciated.

MY TAKE:

Universal mobile search has significant shortcomings, weaknesses that brands and agencies tell me has convinced them to put paid search on the back burner. (There are exceptions: Colin from Mobile Commerce reminds us that for some segments – specifically mobile content – paid search is a potent means to encourage content discovery.) We have a choice: we can wait for providers to improve universal mobile search, or we can harness tools and technologies to deliver a better experience NOW. An obvious and excellent alternative is social search, often called “people-powered search” because it harnesses people to deliver results tailored to searchers on the basis of who they are and what they like. The interviews and insights collected in this analysis outline where mobile search misses the mark and reveal a huge opportunity for companies (such as ChaCha) that give a personal touch to search results (a perfect fit with the mobile phone, which we’ve already established is an intensely personal device).

It’s still in the early days, but the place and the power of people in mobile search is clear. As the worlds of mobile search and mobile social networking collide, they produce opportunities for companies to tap the community – both implicitly and explicitly – for much better quality results and the delivery of much more relevant advertising.

Disclaimer: The complete report is available for free download from MSearchGroove. This white paper is published by MSearchGroove. It contains the findings of independent research and analysis carried out by Peggy Albright, Albright Communications, and Peggy Anne Salz, MSearchGroove in January 2009. The research methodology was developed by Peggy Albright. The research was sponsored by ChaCha. The opinions expressed in this white paper are those of Peggy Albright and Peggy Anne Salz, and do not reflect the opinions of the organizations referenced in this paper.

Related reading:

Context, Social Media, And Cool Interfaces Rock Mobile Search; MSG Teams Up With mTrends To Map Out The Brave New Landscape

Mobile Search Masterclass: How Google & Yahoo Really Measure Up; Is Paid Search The Path To Discovery?

Mobile Social Search Makes Its Mark; Will Group Searching, Sharing & Collaboration Take Social Networking To The Next Level?

EXCLUSIVE & EXPLOSIVE: New People-Powered Mobile Search & Advertising Solution Puts Mobile Operators Back In The Driver’s Seat; Will Search Giants Have To Watch Their Backs?

Will Tapping The Wisdom Of Crowds Outsmart Mobile Search Giants?

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…

***

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,

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

***

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

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

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

***

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

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

***

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

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

***

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.

***

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.

***

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.

***

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.

***

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.

But the real news is Pump Up The Volume: An Assessment of Voice-Enabled Web Search on the iPhone, MSearchGroove’s new-release white paper assessing the performance of voice search on an iPhone offered by ChaCha, Google and Vlingo (using Yahoo!), which you can download here. The report is especially timely, coming on the heels of today’s announcement by Google that it has fine-tuned the mobile app versions of its Google Voice service for Blackberry and Android. (More on the user experience via this detailed post at GigaOm.)

The top-level findings: ChaCha, a fast-growing SMS mobile search service available in the U.S. in the industry, “proved superior” to two other voice-enabled search options for the iPhone: the Google Mobile App with Voice and Vlingo for iPhone, a voice enabled application that allows users to direct their spoken queries to Google or Yahoo! (For the purposes of this study Vlingo provided a spoken interface to the Yahoo! search engine.)

ChaCha proved to offer exceptional results, with its human guides interpreting the search query accurately in the majority of cases. According to the study, ChaCha interpreted natural language search queries, that is, queries asked as questions, accurately in 94.4 percent of the tests and delivered an accurate search result in 88.9 percent of cases. The Google voice recognition technology interpreted queries accurately in 16.7 percent of tests and delivered accurate search results in 22.2 percent of tests. The Vlingo for iPhone voice recognition technology correctly interpreted queries in 72.2 percent of cases and delivered accurate results (via Yahoo!) in 27.8 percent of tests.

My personal thanks to esteemed colleague and associate Peggy Albright, the study’s lead analyst and principal author, and Bill Meisel, editor of Speech Strategy News and a leading authority on market and product opportunities created by the maturing of speech technology. Bill is also the president of president of TMA Associates and I look forward to showcasing his work and ideas on MSG soon.

Tomorrow: More report findings and surprising observations on the dismal state of mobile search.

Disclaimer: The complete report is available for free download here. This white paper is published by MSearchGroove. It contains the findings of independent research and analysis carried out by Peggy Albright, Albright Communications, and Peggy Anne Salz, MSearchGroove in January 2009. The research methodology was developed by Peggy Albright. The research was sponsored by ChaCha. The opinions expressed in this white paper are those of Peggy Albright and Peggy Anne Salz, and do not reflect the opinions of the organizations referenced in this paper.

ALMOST HALF OF MOBILE DOWNLOADERS GRAB APPS MORE THAN ONCE A WEEK, according to some research from GetJar.com, a cross-platform app store. GetJar’s users are an active bunch: 15 percent download once a week, and another 10 percent do it several times a month. About a third of the 5,000 respondents in the survey say they download because they always have their phone with them, while 28 percent do it to pass the time.

A third of those surveyed say they use apps while they’re commuting or on public transport, and perhaps a little surprisingly, 27 percent say they use them at home – though this follows earlier research on mobile TV usage, which found that many subscribers also used it quite often at home as a second or personal screen. Source

The Bottom Line: GetJar has been around for several years, and is the largest independent source of mobile app downloads in the world, so its data can be quite useful to get an idea of what users of devices other than the usual smartphone suspects are doing. These figures show that it’s not just iPhone users who have a voracious appetite for apps – a point that’s often missed by many.

***

ONE OF EVERY 7 MINUTES OF US MEDIA CONSUMPTION NOW COMES FROM MOBILE, according to new research from ad agency Universal McCann and AOL. They also report that 80 percent of US smartphone users are satisfied with the quality of the internet service on their mobile device. Almost 40 percent said they’d taken action based on mobile ads, and 22 percent said a mobile ad had influenced a purchase decision they made. Still, reach remains something of an issue: the survey says there are 63 million mobile web users in the US, with 19 million of them accessing the mobile web on a weekly basis. Source

The Bottom Line: More evidence that mobile is already an established part of the media landscape, and one to which marketers need to be paying attention. Furthermore, the survey highlights the viability of mobile ads and their ability to influence viewers.

***

MOBILE DISPLAY ADS INCREASE BRAND AWARENESS AND RECOGNITION, says the IAB UK, based on research by Brand Driver using banner ads for Kit Kat candy. The group says that being exposed to mobile banner ads significantly raised spontaneous and first-mention awareness of Kit Kat, and was particularly effective at doing so among 18- to 34-year-olds. It also says that incentives are important to mobile ad viewers, with 51 percent in the survey saying they were more likely to interact with a mobile ad that offers something to them in return. Meanwhile, creative is also important, as 41 percent says they clicked through just because they were interested in a particular ad. Source

The Bottom Line: Taken in concert with the above data from the US, once again this research reinforces the utility and ability of mobile advertising to effectively engage audiences. The ability to incentivize advertising also gives mobile a leg up, by making it easier for marketers to offer something in return, such as free downloads or the chance to enter a competition, as Kit Kat did here.

***

SALES OF LOW-COST HANDSETS AND OPEN-SOURCE OS SMARTPHONES ON THE RISE, says Juniper Research. The company predicts that annual sales of low-cost handsets will rise 22% through 2014, to over 700 million, as growth in emerging markets continues for mobile operators. Meanwhile, it separately predicts that the number of smartphones running open-source operating systems (such as Symbian and Android) will grow from 106 million this year, to 223 million in 2014. Source

The Bottom Line: Emerging markets continue to be a strong growth area for the mobile industry, and content providers should keep them on their radar. Meanwhile, the diversity of smartphone operating systems isn’t going away, meaning developers will still need to deal with the hassle of fragmentation to hit their target markets.

***

MOBILE MORE IMPORTANT THAN PCS FOR YOUNG AMERICAN WOMEN, according to research from SRG. Its recent Women and Digital Life Study found that women under 25 spend twice as much time – 2.8 hours per day – on their phones, compared to the 1.2 hours per day for women over 40. The young women spend slightly more time on their PCs (2.9 hours) than their mobiles, whereas older women spend significantly more, 3.5 hours per day. Unsurprisingly, the study found that younger women also used more features of their mobile more often than older women. Source

The Bottom Line: It shouldn’t be too surprising to discover young people using their mobiles more frequently and for more activities than older users, but perhaps the biggest takeaway here is the length of use figures for PC vs. Mobile. They’re essentially equal for young women, showing that mobile can be just as viable a way to reach young women as the web via PC.

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MOBILE M&A ACTIVITY STANDS OUT, while much of the rest of the market is quiet, says The Jordan, Edmiston Group. The company tracks merger and acquisition activity in the media, information, marketing services and technology sectors, and says 171 deals worth a collective $4.1 billion were done in Q2. While activity is still down significantly over previous years, the company says it has seen an uptick in recent weeks, and that mobile remains something of a bright spot. Activity in the Mobile Media & Technology sector was up 46 percent in the first half of 2009 over the previous year. Source (PDF)

The Bottom Line: Like many other corporate transactions, M&A activity remains low given economic factors. But mobile is still a hot area, and one that’s widely tipped to outpace many other technology sectors in the short to medium term. Still, it’s a buyer’s market, at least for those with access to capital, particularly as many startups and smaller players struggle to find the funding they need to keep going, and keep growing.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Among the overall findings:

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

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

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

Based on these observations and segmentation the report concludes:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

IS THE APP INDUSTRY WORTH NEARLY $7 BILLION? Will Apple do nearly a billion dollars in revenue in its first year of the App Store? While the exact numbers are debatable, you can’t ignore the monster success Apple has had with its store (which also drives device sales, by the way). How much money has Apple made? This post, titled Apple has made no more than $20 – 45m in revenue from the app store, gives us a figure. One I might add is not too shabby for a product yet to see its first birthday. What makes this more remarkable is that Apple has captured between 1-2 percent total market share worldwide (including feature phones), and only 10.8 percent share worldwide in the smartphone segment. Few (save Juniper) have taken a stab at valuing the total app industry.

StatCounter’s recent announcement that Opera Mini surpasses the iPhone’s Safari as the most popular web browser for mobile phones is testament to the potential of the greater industry. Opera Mini is the most downloaded Java application of all time. So, while I am excited about the enthusiasm for the iPhone, I find the conversation is missing a big-picture perspective. The question we should be asking is: What is the total app market worldwide really worth? After all, Opera Mini’s success story underlines the potential of the app market beyond just the iPhone.

So, allow me to take a shot at valuing the total app industry, worldwide, for pay-apps (apps you pay to own on your phone).  This is the total value excluding Of course, we have to exclude free apps like Opera Mini.

In a nutshell: If Apple can do nearly $1 billion in sales its first year and has 10.8 percent smartphone market share worldwide, how much is the total smartphone app market worth?

This post from AppleInsider tells us that Apple could do $777 million in App Store downloads in 2009.

A 10.8 percent worldwide smartphone market share implies that the total mobile app market is $7.2 billion, if all smartphone users spend as much on apps as iPhone users do. We know that this won’t be the case. A much more likely scenario is one in which smartphone users will spend far less.

So, let’s assume users with these handsets (other than the iPhone) spend half (50 percent) of what iPhone users on App downloads. Now let’s do the math.

$7.2 billion is the extrapolated industry valuation of direct revenue from apps if consumers spent as much on apps for other platforms as they do the iPhone. Let’s take $7.2 billion minus $777 million (iPhone app share), and multiply that by 50 percent. That gives us a valuation of $3.2 billion for the non-iPhone app market, or $4 billion total, including the iPhone.

($7.2 billion – $777 million) * 0.5 = $3.2 billion non-iPhone app market.)

Given these assumptions, the total addressable market for non-iPhone smartphone users is approximately $3.2 billion in 2009 alone. This, of course is direct app revenue, and does not include advertising, in-app sales, carrier data revenues, feature phone app sales, and other yet-to-be-developed revenue models.

What does this figure represent? Is this pent-up demand in search of a marketplace? It sure looks like it. In any case, the number is staggering, and why this fact hasn’t gotten more attention is surprising.

But I can tell you from my experience at Opera, the success of the iPhone app store is great for the industry. Apple’s app store (although benefiting from massive multimedia marketing campaigns) is the proof-point our industry needed to see its own much greater potential. Apple gets high ranks for making the job of marketing or selling an app that much easier. Mainstream consumers now realize it’s not rocket science to load an app on their phone. Now it’s part of an every-day routine for many mobile users.

Apple has created a market, but does it dominate it?

AdMob’s Mobile Metrics Report recently released compares mobile Web usage to market share of mobile devices. As this chart from AdMob shows, the iPhone literally tops the charts for mobile Web usage – and that despite the fact the device only accounts for 10.8 percent market share of devices (according to Gartner’s latest estimate).

Symbian is next, followed by RIM and Windows. With the launch of the Palm Pre, greater penetration of Android devices soon to come, and Microsoft opening its Windows Skymarket app marketplace, it’s a safe bet that consumer spending on apps on other platforms might total half of what iPhone users spend on apps (If you disagree, please make your case for lower estimates in the comments below, or email me – ben@mobspot.com .)

Let’s put a growth-figure in here. If we accept the figures from Ovum, which predict 15 percent per year growth for smartphones, then you end up with an app industry worth nearly $7 billion.

Not bad. We are excited about the App Store concept, which has taken much of the pain out of discovering and buying apps. Now is the time to get equally excited about the opportunity for apps on all platforms.

And why shouldn’t we be excited? Apple’s App store has caused a shift in consumer behavior. It has captured our interest (even passion), encouraged us to explore the mobile Web, and put downloading and purchasing apps central to our daily mobile routine.

Where does this leave Apple?

It may be riding the cool factor now, but where is it written that cool apps will only be created for the iPhone? I’m confident developers are already working on more great apps for other platforms.

Apple also doesn’t have a monopoly on delivering a great consumer experience. I’m sure developers are hard at work coming up with new approaches that likewise set the bar.

My take: Apple has created a market. But it has also paved the way for some fast followers to follow suit – and even go one better. I’m excited about the avalanche of apps we’re sure to see available across all platforms, and the impact on mobile industry and consumer behavior at all levels. What do YOU expect?

About the author:

Prior to founding Mobspot, Ben was Director of Global Marketing at Opera Software, where he led multiple record-setting product launches of Opera Mini. Opera Mini is the most downloaded mobile application in the world. He has a BA from the University of Washington and an MBA from Copenhagen Business School.

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Is the global downturn for real? It may have impacted the mobile industry at all levels at the start of the year, but the message at the Mobile Marketing Forum was that mobile is bucking the trend.

Between panels and during networking breaks I learned that more brands are taking mobile more seriously. Specifically, those brands that have successfully experimented with mobile in the past are now including mobile as a key component within their marketing mix. The top-notch spot of mobile in the advertising mix – and the mix of brand success stories we heard during the sessions – are sure signs that brands are coming on board. But don’t just take my word for it. Mike Wehrs, MMA President/CEO, reported that marketers are becoming more comfortable integrating mobile within traditional campaigns. As he put it: “Mobile is moving from experimental to essential.”

Indeed, mobile advertising in North America, Europe and APAC has experienced sustained growth. While you can argue that actual growth is still marginal, the development is nonetheless a positive if we consider that budgets earmarked for traditional media have been slashed.  What do the numbers tell us? Peter Johnson, VP Market Intelligence and Strategy at MMA, reckons mobile advertising revenues will increase from $1.36 billion in 2008 to $1.7 billion by end-2009, and rise again to $2.16 billion in 2010.  Peter concluded that, based on his recent research, more consumers are accepting mobile marketing as a relevant and valuable part of their digital lifestyles.

Brands and agencies are understanding the value of mobile advertising, and becoming more adept at using mobile in innovative ways. Highlights included exciting new campaigns from Coca Cola Zero, Sunglass Hut, Kodak and Johnson & Johnson’s Baby Center, and MGM Hotel. Whether the format was text, MMS, display, rich media inside gaming, or couponing – or a combination – the point is: Mobile delivers results and a positive ROI.

A cross-media approach that stood out in my book was Coke’s campaign. The company teamed up with Nokia to emblazon Coke’s distinctive red on Nokia handsets and rounded out the offer with an assortment of Coke ringtones and wallpaper for free download.

Other campaigns illustrated how mobile can connect real world experiences with real results. Using mobile to trigger interactivity and brand interest at the point of purchase (POP) Sunglass Hut encouraged its young customers to be glamorous fashion models and capture their image with their cameraphones and upload it to the Sunglass Hut website to enter a contest to win a free trip valued at $10,000. But the real appeal of the campaign was how the brand connected with young people, thus demonstrating how mobile can be an emotional branding mechanism. Put simply, it’s an innovative and emotive way to convey the essence of the brand. It’s also a magical moment when a brand can inspire this excitement at the all-important point of purchase.

The example of a campaign run by MGM Hotel in Las Vegas showed how mobile marketing can be harnessed for effective direct marketing and sales promotion. In this scenario, the brand used a mix of mobile messaging and highway billboards to connect with consumers and allow them to book a room from the road by sending the request to a shortcode.

In addition to streamlining the reservation process and delivering a confirmation directly to the consumer’s mobile phone, the campaign also continued the one-to-one conversation with consumers when they arrived at the hotel. The result: A continuous conversation that drives continued sales. Consumers stay on the hotel premises and are invited to enjoy perks such as discounted snacks and treats, free dinners and a range of incentives around the casino. The brand’s objective was to reward customers and keep them on the premises, and the ongoing conversation via mobile text achieved this.

What do these varied success stories have in common? All these campaigns were simple, innovative and effective. A clear message to brands that they don’t need whiz-bang technology or high-cost production to drive positive results. Peggy adds: Another confirmation of the key message of my recent mobile advertising white paper: The innovation is not in advertising formats, but how we use them.

But it’s not just brands that are waking up to the pivotal role of mobile in the advertising mix. As Charles Johnson, General Manager, Microsoft Mobile, put it:  “There is growing realization that mobile is the only medium that can complete the entire marketing cycle from awareness and activation to engagement and sales.” Microsoft is walking the talk, taking the wraps off  Bing, an online search portal designed from the ground up to give consumers more relevant search results. Microsoft intends to elevate the mobile search and advertising experience in a similar fashion. In fact, the company’s search and advertising platform, which is media agnostic, is geared to serve adverts that are highly targeted and contextually relevant.

Another factor that contributes to the sustained growth of mobile advertising, and the increased interest of big-name brands, is the proliferation of smartphones. The phenomenal popularity of these devices – specifically the Apple iPhone – has triggered an astounding shift in user behavior. In fact, Paul Palmieri, CEO, Millennial Media, counts 59 million uniques (that means 59 million advertising opportunities).

The MMF showcased the progress made by brands, but it also reminded us of the work ahead to define and refine the metrics that will help marketers measure success as well as failure. Fortunately, Markus Munkler, Senior Manager, Industry Initiatives, Vodafone, could update us on some significant progress. He pointed out that there are cross-industry efforts underway in the U.S., bringing together the MMA, the Interactive Advertising Bureau (IAB) and the U.S. Media Rating Council, to standardize ad measurement and reporting.  The initiative – which is similar to the one spearheaded by the GSMA aimed at generating cross-operator mobile advertising metrics based on usage data submitted by all five U.K. operators – is a vital step in creating a framework for global media planning.

Connect the dots, and there is a groundswell of interest and enthusiasm around mobile advertising across the ecosystem. As Paul from Millennial Media, pointed out: Following the post 9/11 downturn, online advertising enjoyed “hockey stick” growth between 2002 and 2005. Mobile advertising is likewise close to a tipping point, an impressive growth trajectory we will likely see as the global recession recedes and markets recover.

My takeaway: Kudos to the MMA for once again assembling industry leaders from all corners of the ecosystem. Communication, education, and understanding how companies up and down the value chain view the opportunities and obstacles are imperative to get the industry on track. Signs of progress are abundant and inspiring: These folks are serious about success and determined to develop standards and metrics to create a level playing field and foster global trade. Where are the brands? For the most part, brands are content to stick their toes in the water. What will move them to take the plunge? The industry must provide brands reach, standard formats across channels, standard metrics and reporting, and the ability to tap into mobile operator’s vast stockpile of subscriber intelligence for better targeting and relevancy. That’s the brief, and we shouldn’t believe that a single entity can fulfill the vision of mobile. Cooperation and collaboration are essential, and there is no market to fight over until we create it – together. Only then will the mobile advertising industry realize its full potential, and deliver an effective and engaging brand message that will revolutionize they way we communicate, respond to marketing and consume content.

The bottom line: It’s encouraging to see traction for this particular approach to mobile search. Peggy adds: The question remains: Will mobile-only search, which essentially promotes a subset of wealth of content/apps/stuff out there, continue to flourish? Or will it be Web search scenarios, enabled by the usual list of suspects all over again. I have some positive views on the potential of social search in mobile, and share these via podcasts (such as this one) and my contributions to mobile search white papers.

And while we mull over the prospects for mobile search, I invite you to consider the graph below from StatCounter Global Stats (based on aggregate data collected by StatCounter on a sample exceeding 4 billion pageviews per month collected from across the StatCounter network of more than 3 million websites) showing the companies that lead in online search . Charles Knight – my esteemed colleague and the “voice of alternative search” at MSG partner site AltSearchEngines - has launched a contest and asks: What is the one word that best describes Google’s lead? (Google is the read line at the top.) “Alarming” is my pick…

Since AltSearchEngines doesn’t focus on mobile search (which is why we have partnered), allow me to share the StatCounter Global Stat chart for mobile search, and likewise ask your views. Why does Google lead the pack? (Particularly when the mobile experience offered by Google is known to be unsatisfactory…) What do YOU think?

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OPERA BROWSER EDGES OUT iPHONE IN MAY, according to Web-analytics firm StatCounter.  The Norwegian browser firm Opera Software saw its mobile browser surpass the iPhone’s popularity last month. Based on aggregate data findings on a sample of over 4 billion page views per month, the study said 24.6 percent of Internet pages downloaded to mobile devices went through Opera’s mobile browser, and 22.3 percent through the iPhone. Source

The bottom line: Although Opera would likely have lost out if the iPod Touch had been counted, these figures are still significant. It can also be read as an indicator of BlackBerry’s mobile Internet dominance.  The American smartphone is widely perceived as THE corporate device, so while Internet appetite might wane after some time for the casual user, maybe it’s BlackBerry’s leagues of loyal prosumers that keep Opera that little bit ahead of iPhone.

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MOBILE ADVERTISING IS EXPECTED TO BE WORTH $5.7 billion by 2014, according to Juniper Research. The report says a need for customer engagement and a quantifiable return on investment will drive growth in mobile advertising, but brands are still doubtful that “mobile has sufficient reach to warrant substantive ad spend.” 

Mobile will still account for only 1.5 percent of total global ad spend by 2014. Jupiter points out that, although this year will see the mobile Internet become the most popular delivery channel for advertisers, CPCs and CPMs have fallen sharply over the past year.  But there is a bright side: Response rates in mobile advertising remain substantially higher than those in other media. Source

The bottom line: A mix of good and bad news on mobile advertising from Juniper, and another voice supporting changes many in the industry agree are critical:  More engaging mobile advertising campaigns and agreement on key performance indicators and measurement tools. Let’s hope Juniper’s advertising spend proportions are a just a miserly prediction.  Peggy adds: After all, word is – and this was expressed at this week’s Mobile Marketing Association (MMA) event in NYC – that the industry is only waiting for a few solid success stories to drive significant ad spend. More on the mood/news at the MMA event in a special report from Jim Levey, a former mobile advertising executive at Amdocs, whom I am proud to report has joined our roster of authors and correspondents. Jim will be tracking and commenting on mobile advertising industry developments that matter.

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AVERAGE MOBILE MARKETING BUDGETS WILL INCREASE 26 PERCENT this year, even as overall marketing expenditures decline by 7 percent, according to new Mobile Marketing Association (MMA) research presented at its New York conference. 

But although mobile is fighting against the downward momentum of spending, at 1.8 percent it still only makes up a small fraction of total marketing budgets. The MMA projects that mobile ad spending will grow from $1.7 billion this year to $2.16 billion in 2010.  MMA says SMS campaigns remain the most common at 66 percent, followed by having a mobile Web (53 percent), and mobile email marketing (33 percent). Source

The bottom line:  This research puts a more positive spin on the state of the market (as opposed to Juniper’s rather sobering report above). That mobile marketing spends are going up during a generally down time can only be encouraging.  However, the challenge must remain in convincing brands to dedicate a greater proportion of their budget to an exciting new medium, whether that’s through tried and trusted messaging campaigns, or using richer new mobile media.  Growth and innovative mobile development still needs risk-takers and brave allocation of budget from the big-name brands.

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GLOBAL MOBILE VIDEO USERS WILL total more than 534 million by 2014, according to a forecast issued by Pyramid Research.  It says a strong percentage of mobile net additions will come from emerging markets. The study adds that mobile video subscribers will rise roughly 8.5 percent by 2014, citing the availability of improved devices and networks as the keys to driving adoption. The Asia Pacific market will lead the mobile video growth spurt, claiming 281 million subscriptions by 2014, and India will also experience a dramatic uptake. Source

The bottom line: Mobile video has only very recently begun to penetrate western markets, thanks to the improved user experience and larger screens available with the latest smartphones.  Although eastern markets are ahead of the game in this respect, and the projections largely focus on these geographies, the predictions still seem bold. The provision of adequate bandwidth and the development of LTE technologies will be critical for the global take-up of mobile video, whether it’s accessed via streaming, downloads, or by accessing the 3G Video Call channel.

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NOKIA’S POPULARITY IS FADING FAST AMONGST TEENS reports online teen hangout, Habbo Hotel.  A survey asked 112,000 teenagers in 30 countries to choose their top cellphone brand, and just 21 percent of respondents chose Nokia, down from 29 percent last year. Source

The bottom line: The Habbo survey numbers are reported to have excluded key emerging markets (such as India and China, where Nokia is market leader), and may also have had a strong bias towards respondents from America, where Nokia’s market share is much less.  However, there’s probably some truth in the suggestion that Nokia could do with re-energizing their brand for the global youth market.

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NEARLY 60 PERCENT OF U.S. MOBILE PHONE OWNERS TEXT, with 94 percent of teens the largest user group, and 20-somethings at 87 percent.  So say results from the second annual Vlingo Consumer Mobile Messaging Habits Report. Among those in their 40s, usage jumped from 56 percent in 2008 to 64 percent this year, and for those in their 50s it jumped from 38 percent to 46 percent. The report explains that texting is also gaining on sending/receiving calls as the primary use of mobile phones, with 35 percent of all respondents using their phones for texting more than for calls. Almost half of respondents do both in equal numbers.  Text message volumes have risen across all age groups, although the 13 to 19 age group remains the most active with an average of more than 500 texts per month.  It also claims that more than a quarter of mobile users drive while texting. Source

The bottom line: The rise of messaging in the U.S. appears undaunted in this report, with ever-climbing numbers not always reflecting responsible use of America’s favorite non-voice mobile communication channel.

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!

The bottom line: Another reason to be optimistic about the development of the mobile advertising market in the U.S.  Forecasts that growth will be stunted in 2009 are now tempered by bullish predictions for 2010. Advances in handset penetration, the spread of ad-funded content/services schemes, and a wealth of app store offerings should result in an even greater take-up of mobile advertising.

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THE MOBILE INTERNET, MOBILE EMAIL AND MOBILE SOCIAL NETWORKING ARE USED BY MORE THAN HALF of mobile phone users. A mobile Internet poll carried out by user experience consultancy Webcredible showed that of the respondents who used the mobile Internet (52 percent), over half (55 percent) used it primarily for emailing and social networking. Source

The bottom line: We know that the growth of mobile Internet usage is linked to the youth demographic and their particular usage pattern (transferring their fixed-line Internet/PC behavior to mobile). This study provides us with some numbers to back this up.

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SMARTPHONES REPRESENT A MINORITY of U.S. mobile device purchases, accounting for 23 percent of handset sales volume in Q1, says recent data from market research firm NPD Group. Yet as a percentage of overall handset sales to consumers in the U.S. from January through July 2008, smartphones represented 19 percent of all handset purchases compared to just 9 percent for the same period in the previous year. This rise was put down to declining prices, streamlined form factors, and Internet connectivity bringing devices into the mainstream. Source

The bottom line: It’s easy (particularly if you are focused on the mobile content industry) to lose sight of the fact that smartphones, despite the hype and their urban cool factor, remain a minority in the marketplace. The percentage is rising, but there is no doubt a large and untapped market opportunity in catering to plain-old, low-end devices.

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51 PERCENT OF U.S. SUBSCRIBERS ACCESS ENTERTAINMENT, games, news, and social information via their mobile phones every week, according to a new study published by research and consultation firm Frank N. Magid Associates. Based on a January 2009 survey of 4,000 U.S. consumers between the ages of 12 and 64, Magid says mobile content users now spend about the same amount of time with content (39 minutes) as the average user does sending text messages (38 minutes) or talking on their handset (44 minutes).

The study also suggests that mobile entertainment content like games, music, and social network services are used for longer periods of time than ‘utilitarian’ content such as news, weather and sports scores. Behaviors are split along demographic lines (as you would expect). For a whopping 80 percent of 12-34 year olds, mobile social networking is the thing to do; news consumption is dominated (79 percent) by 18-54 year olds. Source

The bottom line: Encouraging stats that outline how we use the mobile Internet and underline the role of the youth demographic. The one to watch is the richer, data-heavier mobile content consumption habits of the 12-34s.  So called ‘utilitarian’ content often leads towards instant hits – quickly check the headlines, scores, and weather – but means reduced browsing time.

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AUDIENCE TARGETING MOBILE ADVERTISING CAMPAIGNS OUTPACED demographic targeting campaigns by nearly four times in April, according to Millennial Media, which has released its April brand advertiser-focused Scorecard for Mobile Advertising Reach and Targeting (SMART). It says that this translated to major increases in purchase intent for key age groups, while the complexity of mobile ad campaigns demonstrated a lift in the number of users being driven to an established destination. Source

The bottom line: These figures underline the importance of delivering relevant mobile advertising content to a known audience with known interests, as opposed to bracketing by demographics.  While it’s a given that social networking and entertainment are consumed by a generally younger demographic, the ability to tailor advertising directly for people with specific interests – whatever their age – is critical to the success of mobile advertising.

Peggy adds: Indeed, as my close friend and colleague Tomi Ahonen – a late-40-ish, Scandinavian who is totally (!) into rap music and Formula 1 racing – has reminded me many times. No one fits the mould – and no one should. Plug that in your age demographics! An approach based on demographics is fundamentally flawed, with the difference that we will perhaps tolerate the mismatch between who we are and how brands sell to us on TV (commercials for pension schemes during the network news and ads for annoying ringtones on music television), but on mobile it’s spam. I’ll have more on the Millennial Media stats in a briefing with Paul Palmieri, president and CEO of Millennial Media.

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BLACKBERRY APP WORLD’S LOCATION APPLICATIONS are four times more expensive than iPhone and Android location apps, according to a Skyhook Wireless Report. The study found a marked disparity in application cost between the three stores, with the average price of a location-aware application in the Blackberry App World store being $13.60, compared with $3.60 in the iTunes App Store, and $0.84 in the Android Marketplace.

The Apple App Store has the greatest number of location-based applications (over 2,300), and the highest percentage of paid LBS apps (over 75 percent). 67 percent of Blackberry apps are paid, and 80 percent of Android Marketplace apps are free.

The report found that the most popular location aware apps were for Travel, Navigation, and Social Networking, but new apps like Music, Finance, and Games were also beginning to gain traction. Source

The bottom line: These mobile application storefronts cater to slightly different markets, so they will price their products accordingly.  However, such an obvious inequality in pricing for similar applications using identical location technologies will surely persuade many prospective customers to think twice before joining the BlackBerry camp, especially when Microsoft and Palm application storefronts come online giving consumers more choice and increasing overall competition between storefronts.

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APPLE SOLD 3.9 MILLION HANDSETS DURING the first quarter of 2009 to more than double its market share, says Gartner. Smartphone sales hit 36.4 million, representing a 12.7 percent increase from 12 months earlier. The report also says that smartphone sales represented 13.5 percent of all mobile device sales in 1Q09, compared with 11 percent in 1Q08.  It also reflects a doubling of Apple’s market share from 5.3 percent to 10.8 percent. Source

The bottom line: These statistics make Apple the third-ranked smartphone manufacturer by volume.  Although it remains in Nokia’s shadow – Nokia still commands a 41.2 percent share – it will be interesting to see how the imminent arrival of Nokia’s application storefront, the Ovi Store, and its success or otherwise, impacts on Apple’s apparently relentless growth.
Mark Hawkins is a Director of the Mobile Data Association and a freelance communications practitioner of mobile technologies.  He previously managed global communications for MX Telecom, the mobile data aggregation group.  His personal blog can be found at http://amarkhawkins.wordpress.com

While Yahoo comes to the party more or less six months later than rivals such as Google, there is some indication that the wait was worth it if we consider that this service extends beyond allowing people to conduct keyword searches (for flight numbers, locations, Web site names, local restaurants – the works). People using the app can also use voice to customize the ‘My Interests’ tab. The procedure (according to the press release): “Simply click on ‘add anything’, speak the topic you’re interested in, then select the relevant content and add it to your page.” The Yahoo! oneSearch with voice application is currently available on more than 80 different devices and across platforms including Blackberry, Nokia, Windows Mobile, and now the iPhone – with support in eight languages.

Various bloggers have tried out the voice app, which harnesses speech recognition technology from Vlingo, and reported mixed results. But it’s difficult to judge the user experience based on random road tests. (This is why MSG has pooled its resources to produce mobile search research that, like my own mobile advertising white papers, offers readers a balanced assessment based on first-hand experience and solid methodology.)

The Yahoo app, however, comes in too late to be included in Pump Up The Volume, MSG’s own assessment of Web search on the iPhone. But that won’t keep us from conducting our own road test of the Yahoo app soon. Regular readers and Twitter followers (@peggyanne) may recall I announced the project a while back (a teaser before we had further refined our methodology to account for fundamental differences between natural language and keyword search, an important improvement that makes the results all the more compelling).

The white paper, researched and written in collaboration with Peggy Albright, MSG Associate and founder of Albright Communications, will be released next week. By way of background, our work assesses the overall performance of the voice-enabled search services offered by ChaCha, Google, and Vlingo in a typical range of use cases and scenarios. (Vlingo for iPhone converts queries into text and submits them to one of two search engines, Google and Yahoo. We chose Yahoo.)

A special highlight: A foreword by Bill Meisel, Editor of the specialist publication and voice technology knowledge destination