What do developers really want/need in order to make apps and (ultimately) make money?

Why is this question key? Put simply, the companies that get this right will have insights to build the correct mix of capabilities to forge and support a tight-knit developer community, creating relationships that will allow them to take a central spot in the emerging apps value web (not chain – it’s not that kind of a game).

There are no easy answers, but the panels and discussions during the dev day confirm that developers — creative people who are interested in cash AND community – are likely to gravitate to platforms and app stores that help them cultivate and connect with their fans.

LITMUS LEARNINGS

I first started thinking this through during Mobile World Congress (MWC) and the no-holds barred session I moderated on OneAPI. The panel – made up of the architects behind this milestone move: Nauby Jacob, VP, Users Experience, Bell Canada; Larry Baziw, Director Next Generation Services Strategy, Rogers Wireless; SandipMuckerjee, VP of Business Strategy and Marketing, Alcatel Lucent; Shane Logan, Director, Services and Collaboration, Telus; and Al Snyder CEO, Aepona – examined what developers require and how/why operators and enablers can/must work together to deliver. The positive feedback has been overwhelming and I have reached out to each of the participants to participate in a follow-up roundtable podcast on MSG, so watch this space.

(By way of background, the GSMA launched the commercial pilot in Canada as part of its OneAPI initiative, working with Canada’s leading operators to demonstrate the viability and benefits of providing developers standardized APIs for mobile networks. The pilot in Canada – the topic of my MWC panel – represents the first time developers are able to gain commercial access to the network assets of multiple operators from a single gateway. )

But it was the opening presentation by Paul Golding – pioneer, long-time thought leader in the mobile applications space and, more recently, a consultant to O2 Telefonica — that challenged everything we (think) we know about developers.

When Paul took the podium and showed the opening slide – where he had purposely crossed out the title of the planned presentation and replaced the words “Supporting Developers” with “EmPOWERING Developers” — it was clear that this was no marketing-speak. His message to us: Developers need feature-rich APIs and much, much more. (Indeed, Paul’s thinking on this topic left a deep and lasting impression, and I am pleased to report that Paul has agreed to join MSG’s roster of authors and contribute a guest column that builds on his simple, elegant and path-breaking ideas.)

In his presentation (here on SlideShare) Paul introduces three kinds of “power” that interest/attract developers most.

CONNECTED POWER is all about the APIs and platforms that allow developers to reach customers; CASH POWER is all about the APIs and platforms that allow developers to earn money (directly or indirectly); and COOL POWER is all about the APIs and platforms that allow developers to do something cool and interesting (translated: innovate).

Sure, it’s about technology (CASH POWER). But it’s also about harnessing everything we know from the business books about encouraging and channeling creative energy to cultivate developer communities that make great apps to delight the customer (CONNECTED POWER).

And – with a nod to Eric von Hippel, my favorite interview, author of Democratizing Innovation and THE authority on innovation – it’s about connecting developers with their lead users — the users who have a high incentive to solve a problem and the ability to innovate (COOL POWER). Combine all that (translated: enable all that) and it can yield a developer community and a selection of apps that can truly set the bar.

As Paul pointed out: O2 Litmus has recruited 7,000+ O2 UK customers and then helped developer connect with them to gain insights and – interestingly – lay the groundwork for a kind of app developer fan club that provides developers important feedback and critical buzz. (After all, fans will share their picks of favorite apps and cool developers with others – creating the same kind of virtuous cycle than can catapult local bands to rock heroes.)

Paul has an even better idea: Operators can help the process by simply putting fans in touch with developers. “Add some other cool brands to the mix and then let things happen.”

At this juncture, I am also reminded of Mob4Hire and the traction it has gained for its awesome concept which combines crowd sourcing with app testing. It’s a super-sharp business model that Paul Poutanen, Mob4Hire President and Founder, tells me he is expanding to allow people testing the apps to rank/share the ones they like most with everyone else. A great grassroots way to help apps get discovered and gain mindshare. More about this in an exclusive interview with Paul later this month.

The takeaway here: helping developers connect with people (fans) is emerging as key requirement of app stores and platforms.

NOKIA DEV DAY

When Mobile Monday Austria reached out to me to speak at its event over the weekend, one that also allowed me access to developers and other people who love mobile, I was thrilled. It offered me an important opportunity to sanity-check some of Paul’s key messages and test a few of my own ideas about the future of app marketing.

Cool Power: Yes, it matters – a lot! An informal poll of developers yielded a welcome confirmation of the qualities platforms/app store providers must have beyond awesome, rich-feature APIs. Put simply, developers require “partners” that help them create apps and generate revenues. And they will align themselves (eagerly) with those companies that make a conscious effort to help them connect with customers, cultivate fans and allow them to feel that they have made a contribution that matters in the scheme of things. For some developers, a functioning feedback loop tops the list. For others, being able to believe that the platform provider really listens, absorbs, respects and internalizes constructive criticism is paramount.

This came across loud and clear when naxxatoe, a developer in the audience, took the microphone to tell Nokia execs what should be at the top of their Ovi agenda. “It’s about connecting people,” he said, unaware of the play on Nokia’s own motto (Connecting People).

Kudos to naxxatoe for saying what had to be said and my respect goes to Jure Sustersic, Forum Nokia Biz Dev Manager EMEA, for seeking out naxxatoe and other developers between sessions to hear them out on what they loved – and hated – about Ovi. (Inspired by this exchange I have decided to produce an informal series of podcasts to give these developers a voice. My sincere thanks to naxxatoe for challenging me to think and see things very differently. I look forward to showcasing his ideas in the first in the series later this month.)

SUPERMARKETS VS FARMERS MARKETS

Regular readers will know that I am a great believer in the individual. We will accept the content we want on our terms – and we are most likely to accept content (and mobile marketing/advertising can be considered a form of content) if it is in tune with our interests, passions and context. Mobile (an intensely personal device) allows us to communicate all of the above, allowing (with our permission!) content and services companies a way to connect the dots and provide us with stuff (content, services, apps, advertising and all things digital) we are likely to appreciate.

Obviously, there is little room in the scheme of things for one-site-fits all. In fact, our requirement (even demand) for stuff we want the way we want it sits at the core of the Long Tail. While Chris Anderson didn’t explore mobile in his milestone book, we have nonetheless witnessed the impact in mobile. It began with an avalanche of content and then a plethora of portals where we could find it. (Well – content discovery and search is another issue altogether…)

Fast forward and we are witnessing the emergence of a Long Tail of app stores.

My Mobile Monday presentation (which included the findings of the recent Netsize Mobile Trends Survey) explored the evidence for this mega-trend and why this could be good news for developers. For one it means more choice for us (a key requirement for a successful app store, according to the Netsize survey). But it also means more choice for the developers, many of whom told me they are actively seeking alternatives to the Apple app store where they have to beg for shelf space (so that their app might be accepted/included) and then pray for promotion (so that their app might be featured where people can find and buy it).

With 25+ app stores and counting we can’t say we have a Long Tail. But there are more options then ever before. Want an enterprise app? A good chance you might find it at Ondeego. How about a porn app? MiKandi is a good bet. And the list goes on…

With these observations (and in preparation for my talk) I reached out to Mike Lurye, Director, Product Marketing Amdocs Interactive. After an invigorating brainstorm session we agreed that there will be many kinds of app stores, managed in many different ways.

There will be Supermarkets (app stores such as the Apple app store) where the provider gives suppliers shelf space, sets the prices and is pretty much focused on moving merchandise and making money. And there will be Farmers Markets (niche app stores and operator app stores – and combinations of the two) where the relationship between the supplier (a farmer with fresh produce) and the customer (people who really appreciate the opportunity to buy organic) is what clinches the deal.

Surprisingly, it was this observation and the suggestion that there will be marketplaces that fit their needs that got the buzz. Developers took the microphone and told me they  would indeed want to sell their apps via a farmers market – if they could. Several even asked me how they could get into contact with a Long Tail app store.

And – thanks to Mike – I can point to a little known example that shows this approach is not only an ideal – it is also an ideal business model making money – now. (BTW, I am also pleased to report that Mike has also agreed to a podcast to explore the supermarket/farmers market analogy and much more! I’m scheduling the appointment as we speak, so check back regularly or follow us on Twitter.

MALAYSIA SHOWS THE WAY?

Malaysian mobile operator Maxis has an app store and a mission: “to nurture and foster interesting developer applications for our community.” (An excerpt from this must-see video interview with Nava Wathan, Director 1Maxis, Maxis Communications.)

In Nava’s view, the operator app store is not impacted by handset app stores because consumers “will go both ways.” They will go to the Supermarkets (my wording) and they will also visit the Farmers Market. In the case of Maxis, the farmers market approach revolves around its sharp focus on local Malaysian apps “more relevant to the Malaysian consumer.” Thus, Maxis is the place to go for “something that is Malaysian.”

But it’s not just about enabling choice; the operator benefits from enabling payment. Maxis has opened up billing APIs for micropayments in apps and is looking to do the same for location, P2P sharing and advertising (allowing the developer to pull an add from Maxis instead of talking to ad agencies around Malaysia).Finally Nava sees that his company can also play a key role in connecting its developers with markets outside Malaysia. Put another way, Maxis can expand the reach of local developers by “surfacing our apps from our local developer community” on app stores run by the handset makers.

My take: As my upcoming series of podcasts will show, developers want to make money but they also demand a feedback channel that will allow them to consistently create better apps for their fans/customers. (After all, recurring revenues are the key to real and sustainable business). They also want some more say in how their apps are marketed and assurances that the app store/platform provider that they – like a farmers market – will do what they can to help developers build and nurture the relationships they need to innovate and – ultimately – succeed. One-off sales or fan following? Developers appear to want the latter. It’s now up to the providers to decide what they want to be (supermarkets or farmers markets) and execute. I know that Nokia has taken careful note of developer’s gripes and suggestions during the event and I will reach out to Nokia soon for their thoughts.

***

My personal thanks to the organizers of this excellent event — Aleksandra Schmid and Philipp Nagele (Mobile Monday Austria) and Mark A.M. Kramer. It was a great idea to link a mobile developer event with a Mobile Monday. It has exposed me to new ideas and allowed me to make some new friends. Warmest regards to naxxatoe and to the other developers who connected with me to share their platform likes/dislikes, and to Dave Dempsey from Radio FM4, who moderated the event and brought some valuable views into the discussion. If ever someone has the interest and empathy to bridge the divide between developers and everyone one else it’s Dave. I hope someone reaches out to him to do just that…I’m sure the results would rock!

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.

Last year was one company milestone after another: Nimbuzz updated the app on iPhone, released a version for Blackberry, introduced VoIP for Android and launched Twitter for Symbian handsets. It also sealed deals to be pre-installed on the T-mobile Tap Phone in the U.S. and on the Toshiba TG01 handset offered by O2 in Germany.

To connect the dots in last year’s accomplishments and get the inside track on Nimbuzz’ next moves I caught up with Tobias Kemper, VP of Nimbuzz Inc. USA. Many thanks to Tobias for a straightforward interview and unexpected insights into the product roadmap.By way of background, Nimbuzz – winners of the Techcrunch, Webby and Red Herring awards – counts over 14 million users in 200 countries, a number growing at around 40,000 new users per day (that’s 1 every 2 seconds). It counts over one million voice calls per day (over 300 million per year).

Other podcast highlights:

PLATFORM STATS: Nimbuzz supports all the usual suspects: Symbian, J2ME, Android, iPhone, iPod touch, Windows Mobile and RIM. So what flies? “Symbian is definitely our number one, directly followed by Java and the iPhone.  We’ve only just launched a native RIM client with massive uptake….The iPhone has definitely done a tremendous amount and continues to, but Symbian is the most dominant player.”

USAGE & BEHAVIOR: There are distinct and interesting differences depending on the geography. “In the Middle East, for example, people use our products like nothing else to meet people [and] enter the chat rooms. They treat those like mini-social networks, so it’s really going beyond the technology of just making a free call….In the developed countries — Western Europe and North America — it’s all about being able to monitor your friends, having everyone in the same place, reading everyone’s status messages and being able to tap in and say ‘OK I want to get in contact with this person right now.’”

BUSINESS MODELS: Mobile marketing and advertising are candidates, but mobile CRM is highest on the radar. Even better if it involves brands. As Tobias put it: “A mobile social messaging application like ours is perfectly positioned to foster brand engagement.  It is something that we’re looking at because it’s an always on product, it’s a very intimate device that the product is based on and it is something that we are going to be exploring more in the next year.  It definitely makes sense, it has to be done right and it has to be with the user focus.”

NEW FEATURES IN THE PIPELINE: Look for some surprises and more mobile operator partnerships. Again, Tobias is understandably reserved. What we know: “There’ll be a whole bunch of features that are going to be built on top of location-based services that are being built out and become more contextually relevant.”

My take: Hmmmm… contextual relevancy is an element of a range of exciting – and potentially lucrative –services.

So, will Nimbuzz join the group of hot mobile location-sharing services that includes Foursquare, Gowalla, Brightkite and Loopt – to name a few?

It’s a tough one to call, but Nimbuzz could make the move.

What does Nimbuzz think? Tobias is understandably tight-lipped but his admiration for companies like Foursquare and plans to add “similar features” comes through loud and clear. As he puts it: “It’s about moving beyond the technology and doing that face-to-face meeting. [It's about] what we can do to make that easier and aid users in using that feature and making real-life interactions happen through our application.”

Communication and community are baked into the app, and a whopping 98 percent of people who use it recommend it to a friend. That keeps Nimbuzz’ marketing budget down and boosts its viral appeal. Surely those metrics lay the groundwork for a more ambitious strategy and a new ecosystem around personal recommendations of real-life places and establishments…

Listen to podcast here [15:50]

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

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

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

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

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

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

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

MOBILE MATTERS

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

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

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

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

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

WHY WILL MOBILE GROW

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

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

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

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

WHO WILL “GET” IT?

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

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

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

WHAT WILL MAKE A WINNER?

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

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

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

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

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

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

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

WHERE ARE THE LOCAL CONTENT OWNERS?

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

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

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

WHAT DO THEY NEED?

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

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

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

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

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

Overall, the mobile ad market is projected to rise from $160 million to $3.1 billion by 2013. Source

The bottom line: The prediction that search will take a growing chunk of mobile ad spending is a good one, but there’s one issue with this report: it ignores the idea that some other forms of mobile ads will emerge over the next few years. We’re still very early in the evolution of mobile marketing, so it’s reasonable to think that more forms, apart from the three mentioned here, will emerge. Peggy adds: This point has come through in my own mobile advertising research project, where executives revealed that  (surprisingly)ad spend on sponsored search and related schemes were low on the agenda. t The reason: mobile search is still riddled with shortcomings. More on why mobile search is broken here.

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NORTH AMERICANS ARE TAKING OUT MULTIPLE MOBILE SUBS, says Wireless Intelligence. It says that in the US and Canada, the average consumer had 1.3 mobile connections in Q3, and that while average revenue per connection is dropping, ARPU is actually going up – it’s just spread across more than one connection. The group says that real ARPU in North America has gone from $60 in 2006 to $64. Source

The bottom line: Expect to see this trend continue as more and more consumers adopt mobile-enabled netbooks, data dongles and other connected devices.

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MORE PEOPLE ARE FINDING THEIR WAY VIA MOBILE, according to a new report from Berg Insight. The firm says that the number of mobile subscribers downloading navigation apps and routes to their mobile devices doubled to 28 million in the first half of 2009 from the year-earlier period. The firm also says that the subscriber base will see a CAGR of about 34 percent over the next six years, resulting in a 160 million users by 2015. Source

The bottom line: The ability to look up maps and routes on mobile devices is one that many consumers love, and the continued growth of GPS-enabled handsets will certainly fuel growth in usage of navigation services. But the PND market won’t remain static: more and more cars will feature built-in satnav, and the price of standalone units will continue to fall, which may explain the relatively low prediction of 160 million users by 2015.

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SYMBIAN TO SHIP 180 MILLION HANDSETS A YEAR BY 2014, says Juniper Research. Despite the emergence and growth of other smartphone platforms, the firm says that shipments of devices running the Symbian platform will more than double over the next five years. Coupled with Android and LiMo devices, Juniper estimates the market for open-source handsets will be more than 220 million per year by that time.

Juniper further contends that the market will migrate towards open-source platforms, despite the popularity of the proprietary iPhone and BlackBerry platforms.  Source

The bottom line: Any decent smartphone OS should show volume gains over the next five years as sales of smartphones skyrocket. That said, the mass market doesn’t care about open-source vs. proprietary – they want devices that meet their needs, and there are multiple ways to skin this proverbial cat. The choice of open-source vs. proprietary is less important than getting the basic OS right, and then having an open enough platform to support app and service development.

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.

Mobile Groove, the monthly podcast that focuses on the news and companies that matter most in mobile — is back with a great line-up of topics and the usual mix of insights and outspoken observations from co-host Inma Martinez, my über-connected and always professional partner in crime. (We missed posting on Friday, but the reason for the delay will be clear when I take the wraps off an all-new MSearchGroove, so watch this space.)

Mobilize, the conference Inma attended in September, left a lasting impression. Her SWOT analysis: a great line-up of startups and a high level of energy and VC activity in the Valley. Where does this leave Europe? Inma (also based in London) connects the dots in some recent investor reports and concludes Europe may see its best and brightest in mobile “defect.” Is the U.S. the place to be if you are a mobile entrepreneur? Listen in and let us know what you think.

Speaking of startups, Inma also outlines the highlights from Seedcamp, a program created to jumpstart the entrepreneurial community in Europe by connecting next generation developers and entrepreneurs with over 400 mentors from a top-tier network of company builders; including seed investors, serial entrepreneurs, product experts, HR and PR specialists, marketers, lawyers, recruiters, journalists and venture capitalists. One company that stood out: VouChaCha, a U.K. startup that delivers vouchers to your mobile phone. Where is the hold up in Europe and why aren’t coupons a de facto part of our daily mobile routines (as they are in the U.S.)? You tell us!

Other success stories Inma shares: Flirtomatic, iScoot and eBuddy.

CONTEXT MATTERS?

Will location-based services excite women? Well, we beg to disagree.

Listen to the lively podcast here [23:54].

What about women who are interested in bargains are willing to drive miles in pursuit of discounted designer clothes, for example. (Think of the success of outlets in the middle of nowhere?!) Will an app that tells women what’s on offer nearby fly or fail? And where are the female-focused apps anyway? Men may have their iPhone app that celebrates flatulence – but where are the apps that target women? Talk about leaving money on the table!

BLYK MEDIA & SOCIAL MEDIA

In a follow up to the last podcast Antti Öhrling, Blyk Co-Founder, joins Inma for lunch and the opportunity to explain Blyk’s real business objectives. It’s not about mobile advertising; it’s about mobile media. Inma tells us it is an ambitious model – but one that could work well for Blyk. Listen in and find out.

And we discuss the buzz around social media, giving Vodafone (and the fast-followers sure to make headlines in the next weeks/months) huge credit for Vodafone 360. Why is social media big in mobile? Inma tells us that part of the reason could be the popularity of Twitter on mobile. (She should know; when it comes to mobile London is the Twitter capital.)

We also revisit Spotify and dissect its mobile ambitions. Is it gearing up for a showdown with Apple? Listen in and let us know what you think.

RAISING OUR GOBLET

This time Inma salutes Mark Curtis, the mastermind behind Flirtomatic, a phenomenally successful freemium flirt and fun service.

Fresh from several mobile advertising events, I raise my goblet of rock to Dagmara Brylack for sharing a milestone mobile advertising case study during Mobile Marketing Forum Europe (which I analyze here). I also recognize Mark “Mr. Mobile” Wächter, for his work to launch MMA Germany. When it comes to mobile advertising, Germany is a potential powerhouse (!)  and future posts here on MSearchGroove will highlight the stats, campaigns and companies that make this market the one to watch.

Until next time – keep it fun!

PERSONAL THANKS

Our thanks to the Grant Butler Coomber team (and Billy Burnett) for their continued advice and support on how to build awareness of this podcast series and other MSearchGroove initiatives.  I fully recommend them as our PR team of choice if you want to build your brand in Europe. In the U.S. I am indebted to Jeff Fishburn (“always-on” at OnPR) and Liz Erk, whose agency, The Jaxson Group, also advises MSearchGroove. Her talent: securing major media placements and speaking engagements for client companies.

But most of all – thanks to you, our listeners. We welcome your ideas, suggestions and elevator pitches. DM us on Twitter (@mobilegroove) or email us at mobilegroove AT msearchgroove DOTcom.

Related posts:

PODCAST: Thought-Provoking Mobile Groove Series With Inma Martinez Debuts Today; Offers Inside Track On Industry Disasters, High-Flyers & What’s Highest On Investor Radars

The bottom line: Finally Google reveals the terms that deliver results in mobile search. But mobile search usage is still lagging, no doubt due to a laundry-list of universal shortcomings MSearchGroove has analyzed in this recent post. The new Google Keywords Tool is good news for marketers and publishers, but another proof that mobile search as a service has a way to go. Peggy adds: Or does it simply underline the pivotal importance of content discovery – not mobile search – as a primary means to explore the wealth of content at our finger tips and find what we are likely to appreciate?

***

MORE THAN HALF OF INDIAN COLLEGE STUDENTS USE THE MOBILE WEB, says a new survey from Indian mobile ad firm InMobi, and a third of the students engage with brands that advertise online. The students’ favorite sites to visit on their mobile devices are search engines, news sites and social networks, and the company says that mobile internet usage is spread across a multitude of income groups. Source

The bottom line: More evidence pointing to the popularity of the mobile internet in emerging markets, and the ability of mobile ads to reach consumers there.

***

MOBILE APP STORE SALES WILL HIT $4.2 BILLION IN 2013 in the US alone, says a new report from the Yankee Group. It calls the sales growth, along with a quadrupling of US smartphone users to 160 million, a “gold rush”. The firm also offers some advice to developers: they say those with consumer apps should focus on BlackBerry, while enterprise developers should focus on the iPhone and Android platforms, because of the lack of those types of apps for each respective platform. They also add that pricing and marketing are important considerations for success.

The company says that one out of four downloads in 2013 will be for paid apps, and predicts an average price then of $2.37. It also puts the value of this year’s US download market at $343 million. Source

The bottom line: This is a very bullish prediction, without a doubt. The 160 million smartphone figure is pretty brazen and clearly based on the belief that most devices sold over the next four years in the US will be smartphones. The advice about choosing platforms seems a little odd, considering that to drive downloads and sales, developers may be better off going where the users they want to target are.

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ONE OUT OF FOUR PEOPLE INTENDING TO MAKE A PURCHASE IN MOBILE OPERATORS’ SHOPS LEAVE WITHOUT BUYING, according to a new report from Amdocs. The company says that retailers could save half of those lost sales opportunities by improving the customer experience (and, of course, Amdocs has a solution for that — you didn’t think it was just sharing this info for fun, right?). It cites the main reasons for the lost sales as an inability to get a device right away, the inability to get the “touch and feel” of a device before buying, and a lack of experts to consult about devices’ features. Source

The bottom line: The reasons Amdocs sites as barriers to purchase all ring true — and combined with the general unpleasantness of many operator retail outlets thanks to long lines, dummy devices, and other factors, it’s not hard to see why many would-be buyers end up frustrated.

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CONSUMERS WILL DRIVE MOBILE HEALTH SERVICES FORWARD, NOT COMMERCIAL PRODUCTS, says the analyst firm Berg Insight. Remote medical monitoring and diagnostics have been hyped for quite some time, but the applications and devices have been slow to emerge. The firm suggests instead that it’s consumer applications, such as smartphone apps and networked personal medical devices, that will lead the way. Source

The bottom line: The personal, always-on, always-with-us nature of mobile devices makes them perfect for medical applications, while their growing functionality makes them ever more useful in this area. In addition, software apps promise to deliver many of the benefits of dedicated mobile hardware at a lower price to consumers.

***

65 PERCENT OF APP DOWNLOADERS ARE MALES AGED 18-34, says GetJar. This demographic is prized by many marketers, even though they often find it difficult to reach, suggesting that apps are a great way to do so. 81 percent of all downloaders were male, while almost two-thirds of them download apps 3-4 times a week. GetJar’s research also found that 72 percent of its app downloaders use the mobile internet more than the internet on PCs — and this isn’t just limited to emerging markets, with 62 percent of US GetJar users and 69 percent of UK ones agreeing. Source

The bottom line: It’s clear that GetJar has some seriously dedicated users, who could serve as a useful bellwether for the overall apps market. It’s not too surprising to see the young male dominance — but also suggests that developers and app stores may not be doing a great job of reaching other demographics.

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

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

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

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

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

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

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

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

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.

The bottom line: This is sort of a chicken-and-egg situation. Does the fact that roughly a fifth of tweets come from mobile users make location information slightly irrelevant, or will the availability of the location info drive more mobile usage? We’ll take the glass-half-full view: getting 20 percent of tweets from mobile devices is a solid amount, and giving users the chance to leverage their location should increase it further.

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MOBILE AD BUDGETS BUCK THE WIDER DOWNWARD TREND, and will hit $5.7 billion by 2014, says Juniper Research in a new report. While overall ad spending is being hit by budget cutbacks, mobile is set to grow, as it offers engagement with the consumer and a more quantifiable ROI than other mediums.

Still, that $5.7 billion will only account for 1.5 percent of the total global ad spend in 2014, with many advertisers as yet unconvinced that mobile has a big enough reach to justify higher spending. Source

The bottom line: Mobile advertising’s characteristics – quantifiable ROI, direct engagement with consumers – mean that it’s more than just a fad, and will be a valuable tool for marketers. Still, questions persist about reach, even if they show a slight misunderstanding of mobile, because it’s not particularly a broadcast medium. Where mobile will succeed is in getting advertisers connected to the right individuals directly, rather than by the broadcast, shotgun approach.

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US MOBILE MUSIC CONSUMPTION DOUBLES, BUT REMAINS LOW, according to new research from Forrester. The firm says that 10 percent of US adults listen to music on their mobile devices at least once a month, compared to a quarter of people in the UK and a staggering 70 percent of Chinese citydwellers.

Revenues remain low, though, and are projected to hit just 866 million euros in Europe and $263 million in the US in 2013, with almost two-thirds of US people surveyed saying they had no interest in buying songs on their phones. Source

The bottom line: Mobile isn’t immune from the malaise in the wider music business, with consumers reluctant to pay for songs on their handsets. This shouldn’t be at all surprising: there’s really nothing about mobile that makes it much different than any other platform, since consumers haven’t shown a lot of interest in buying songs over the air. Streaming and radio-like services look like they might enjoy more success on mobile.

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SMARTPHONES GRAB THE HEADLINES, BUT FEATURE PHONES GRAB THE SALES, says NPD Group in a new report. In the second quarter, feature phones accounted for 72 percent of all handset sales in the US, though this is down five points from the previous year. Smartphones accounted for the other 28 percent, although they saw almost 50 percent growth from the previous period. Overall, NPD says that unit sales were up 14 percent in the US in Q2 from the previous year, with the ASP up 4 percent to $87. Source

The bottom line: It pays to keep in mind that while the likes of the iPhone dominate media coverage, the vast majority of users are still on feature phones – so developers, marketers and content producers need to keep them in mind.

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SMARTPHONE APP STORES TO DELIVER 6.67 BILLION DOWNLOADS IN 2014 in the US alone, says Frost & Sullivan. The firm appears to believe that much of this will come from free applications, but doesn’t offer any guidance on revenues. Source

The bottom line: It doesn’t seem like much of a stretch to see lots of app downloads coming as more and more app stores come online from handset vendors, OS providers and operators. But if most of these apps are going to be free to download, where are the revenues going to come from? Paid sponsorship by brands or in-app ads?

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.

On the heels of the extremely popular posts on Blyk and MSG’s exclusive interview with Pekka Ala-Pietila, CEO and Co-founder of Blyk, the timing is perfect to deep-dive into Orange UK’s mobile advertising aspirations now that it has formally folded Blyk’s MVNO activities into its wider strategy.

The first service that draws from Blyk’s mobile advertising model – an approach built from the ground up to encourage a dialogue between brands and people that want to her their message by delivering people relevant advertising in tune with their preferences and profiles – is Orange Monkey.

The first Pay As You Go (PAYG) package for the U.K. market offers free music to customers when they top up their mobile. (Although PaidContent suggests the service is not about free music since the tunes you get to listen to (not own) when you top up add up to about 600 minutes each month. This translates into GBP2.14 ($3.53) for customers regularly paying GBP30 ($49.23) in phone credits. But that may just be picking nits since people are getting music at no extra cost.)

More about Monkey: it provides exclusive music, pre-release tracks and other content from Universal Music’s catalogue and relies on British broadcaster Channel 4 to get the word out to the target demographic (16-34 year-olds with mass market phones) via the Channel 4 portfolio including 4Music, billed the most watched music channel in the U.K. A clever twist and nod to the power of multi-channel promotion: The 4Music team will be the editorial voice of the official Monkey website which will carry news, artist features, playlists, exclusive content and competitions. (Check out the Orange site for more details and a video demo of the service.)

The promotion is about building buzz, loyalty and community. So, where does/will Blyk’s mobile advertising approach come in?

The focus on engagement and social networks is baked into the offer. As well as free music, Monkey offers customers free texts, allows for playlists to be shared on social networks, and it “delivers great offers from relevant brands direct to their mobile.”

Prior to the Monkey launch I was pre-briefed by Marc Overton, Orange VP of Wholesale, Business Development & Partnerships, who walked me through the concept and – more importantly – where brands and Blyk fit in the scheme of things.

AN EXCERPT OF OUR Q&A

Q: To backtrack for a moment, Orange essentially owns Blyk and the capabilities it has built to deliver targeted information and ads. What is the plan here?

A: We have been keen to get this [Blyk's end-to-end capability] as a core part of the Orange organization. We already have mobile advertising and cross-platform capability, and for us, this allows us to have fundamentally different relationship with our customers. It’s not about ad hoc adverts or repurposing display adverts; this is about targeting and tailored information delivered in a timely fashion as part of a broader proposition that has great benefits.

Q: Blyk has run over 2,500 campaigns. What sets the stage for what we might see from Orange?

A: The Lucozade campaign stands out. It gave out vouchers and consumers could redeem them for a free bottle of Lucozade. The response rates were overpowering just based on a [Blyk] subscriber base of 200,000. If we can start delivering that to our subscriber base of 16 million, then we can generate results and create something quite special. (By way of background, the Lucozade Energy campaign, documented in this case study, delivered vouchers via a bespoke WAP site Blyk members could visit to read about the promotion. A click on a link on the site sent an SMS voucher sent to their handset. Voucher requests from the Blyk activity accounted for 35 percent of total requests for 1 percent of the media spend.)

To do this you need the ability to design an end-to end creative campaign that delivers campaign and targeted to consumers. It’s something that isn’t easy to do. To do it ourselves means we would be sitting here in a year to 18 months having a similar conversation. It [the partnership with Blyk] gets us to market ahead of the rest of the competition in the U.K., and gives us the experts [Blyk support] that have been doing it and establishing the category so we can have these conversations [with brands] and off the back of it we can do develop some unique and unrivaled propositions.

Q: Such as?

A: Keep in mind that we have also signed a strategic partnership with Barclays in the U.K. to develop mobile payments and that will come online in the next year to 8 months. Linking mobile payments with mobile messaging – being able to tell people about relevant offers and where to redeem those offers – is going to be an exciting proposition, particularly combined with location services.

At a larger level, it’s about us as an operator having a deeper relationship with our customers and giving them assistance beyond telling them what their bill looks like. We are the place they can come to for great offers and benefits that they wouldn’t know existed if we didn’t have this [advertising] ability.

From an awareness level – telling customers about new products coming to market and get that community, dialogue and click-through going on between customers and brands – we are looking to target different segments with different types of messaging and campaigns. It’s a bit of a journey, but we’re confident we’ll get the right mix.

Q: What does this push look like on a practical level? Who is in charge of what and what is my relationship – as a brand or advertiser – with Orange?

A: Orange will do the ad sales, supported in this by Blyk. I see this as a team effort and the way we work together and reward each other is based on that team working. It is without a doubt a different skills set that Blyk has built, and there is a credibility and value to having Blyk support our ad sales force.

Q: You mention other segments and I left us hanging in our last post with the observation that operators can use the Blyk approach to target more than youth. What are your plans in this direction? Will we see a Blyk-like offer for customers over the age of 24?

A: Absolutely. We’re keen to offer this capability to all our customer segments. The model will likely change depending on the segment and type of customer, so it is our intent to have this as a core capability for our media business. We’re not restricting it just to the youth market and not just to consumers; it will be business professionals as well. In our view, Blyk has created a highly intimate way for a mobile operator to communicate with its customers, and it shouldn’t just be restricted to young people.

Q: Would it be a messaging option you offer to brands? Or would you use this to promote your own offers and perhaps also do your part to solve the content discovery dilemma: surfacing all the apps and content people can’t find and buy because mobile search doesn’t cut it yet?

A: It’s a conversation and we could us it to draw customers’ attention to a variety of offers, including our own [two-for-one price movie deal] Orange Wednesdays. We could also use it to launch propositions for [content/app] partners, or simply package it up for advertisers. Filling up the pipeline won’t be a problem.

Q: Earlier you referred to Orange as a ‘media company.’ That’s very different thinking for a mobile operator. Can you elaborate on this strategy and how it ties back in with the group and what I imagine would be your big-picture goal to offer brands a cross-media approach?

A: You’re right about the cross-media possibilities. That’s the group ambition and one that brings together other [group] capabilities such as our heritage as an Internet provider and portal provider with Wanadoo, our content production facilities in Spain and our mobile ad sales force in the U.K. We have capabilities – from a media perspective – that other operators don’t have. It’s a core part of our strategy to leverage these assets and capabilities and relationships into the media world. We’re doing a launch in a couple of weeks and talking to the media agencies about our ambitions in this space. We can brief you on this, if you like. This is a serious part of our business and the upcoming announcements demonstrate this.

Q: Sure thing –let’s connect then!

MONKEY BUSINESS

Since Marc couldn’t go into the specifics of the Monkey launch, I checked back in with Mat Sears, Orange Head Corporate & Consumer Communications, to fill in the gaps around the service and find out how it’s done to date.

Predictably, Mat couldn’t provide stats on a service that only launched July 30th. However, he did say the offer is “flying off the shelves.” Will advertising follow? Orange is getting in gear, and MMS and SMS ads (again, following the Blyk blueprint) are next on the agenda. The focus is on lifestyle companies around music (clothes, cosmetics, soft drinks), rather than other music labels or individual artists (extending their message to the community through a dialogue), although we may also see some campaigns to promote music and related events.

WHAT WORKS?

My take: Orange ranks high in my book as a mobile operator making the inevitable shift from access company (telco) to audience company (media player). It was one of the first operators out of the gates with a comprehensive mobile advertising offer, opening its Orange World portal to advertisers back in August 2006. Incorporating Blyk’s operations is a logical step in the strategy and choosing to focus on segments beyond youth makes hard business sense. I wonder if Orange will crack the code and grab the attention of the prosumers or any of the other potentially lucrative segments Novarra outlined it is path-breaking report. (Look for more on Novarra, next in the series Getting Personal, a special MSG report on personalization technologies.)

While it’s a smart move for Orange to target other segments, it begs the question: how should Orange tweak the Blyk blueprint to achieve its business objectives?

Free content/services works with cash-strapped youth. But how do you get the attention of affluent mobile professionals or life-stressed muli-taskers? (And let’s not forget the same dilemma faces Blyk copy-cat service providers such as Croatia’s ad-funded MVNO Tomato Plus and Gigafone, a mobile marketing services group that borrowed more than a page from Blyk’s founding concept.)

Happy coincidence that I was thinking this through when I bumped and connected with Alan Moore, an esteemed colleague and renowned social media/engagement marketing  pundit you’ll see a lot more of on MSG. (In fact you can get in the mood for our regular laid-back, hands-on look at what YOU need to know about social media marketing by checking out my two-part interview with him on behalf of bnetTV here.)

So, what are the do’s and don’ts for Orange (and really any company serious about advertising) moving forward?

1)   Think beyond offers that are about content and apps. Youth may like them, but the real value may lie in the mashups that bring it all together (with calendars, contact books, communities, you name it!) to simplify/enhance our lives on mobile.

2)    Don’t get hung up on free. As Alan pointed out in an invigorating rant on Skype, and again in his must-read post, Spotify is a case book example of how functionality (allowing people to do something with the content they get for free and share the end-results with the people who matter to them most) beats out freebee. As Alan puts it: “Last.FM or Spotify have understood that “FREE” is not the kicker, it’s the quality of the service that ‘enables’ its users in a rich variety of ways. Playlists, recommendations, personalization, discovery, contextualization, location, sharing are again part of this new vocabulary.”

3)    Think big – and think networked. Enabling people to interact with content on their terms is they way things are. Get it right and reach will follow.

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?

Regular readers will recall that MSG was commissioned to conduct Mobile Advertising Research UK, a project research endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA), to expertly document the state of the mobile advertising industry in the U.K. and identify growth opportunities in the emerging mobile advertising marketplace.

The report — which combines valuable consumer insights gathered by ÆNEAS Strategy Consulting and Management (coordinated by my esteemed colleagues Tarik Fawzi and Atva van Zanten) and qualitative research based on more than 20 interviews with operators, enablers, agencies and brands contributed by MSG — marks the first in a series of region-specific reports that will include Germany (2009) and North America (2010).

During the inaugural event (Mobile Advertising Research U.K.) last week in London, Tarik and I presented an overview of key findings (documented by MSearchGroove here) and revealed the results of an online survey of over 1,000 British. consumers. Pricing is GBP 2,999 ($4,866) for the report, and a 500 GBP discount is available for MMA/IAB members, and people who attended the event. For more details, click here.

And speaking of reports, I am pleased to announce that I will provide a sneak-peak at the results of a performance analysis of voice-enabled mobile search services from search giants Google, Yahoo! & ChaCha during a special Mobile Search Masterclass in London on June 30.

By way of background, this course is part of The City University London’s Masterclass series, a collaboration between the giCentre and the Centre for Interactive Systems Research at the University. It will be run for the second year following from feedback last year and is endorsed by the Mobile Data Association (MDA). Registration is GBP295 and the organizers tell me there are still a few seats available, so email Mark Firman (mfirman@soi.city.ac.uk) to reserve your place.

The complete findings will be released in July, but I can say that ChaCha, a fast-growing SMS mobile search service available in the U.S., “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.

To evaluate the overall performance of voice-enabled mobile services offered by ChaCha, Google and Vlingo for iPhone with Yahoo!, we 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, we 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. The study further took into account that a service could deliver its search results in the form of answers (as ChaCha offers) or as links to Web pages (which Google and Vlingo deliver); for each query tested, an accurate result could be achieved in either form.

In addition to going over some high-level results, I will also present an overview of the mobile search landscape, focusing particular attention on the 10+ categories of mobile search gaining significant traction, including multimodal (voice/visual), mobile vertical search (music/games) and social search, a people-powered search approach that effectively infuses human preferences and human judgments into computer algorithms to pinpoint relevant information and better answers.

This presentation is based on the work I did with Rudy De Waele, blogger at mTrends and dotopen founder, in preparation for a workshop on Mobile Search Future Prospects organized by JRC IPTS (Institute for Prospective Technological Studies of the European Commission).

Other masterclass speakers and sessions will examine a range of topics and developments, including: mobile search statistics and surveys, key trends and developments, location services and search user interfaces and usability, and the range of content and advertising monetization models involving mobile search. I’m honored to join an impressive roster of industry authorities from companies including AmbieSense Ltd., a provider of ambient search services; Microsoft Research (Cambridge); g8wave Ltd., a mobile marketing company; and Mobile Commerce Ltd., a provider of location-based services that also possesses what the founders call a “piece of enablement” that gives them deep insight into the search queries passed through the operator portals in the U.K., and the results set returned to the user. This central position, combined with the company’s prowess in search advertising, makes MC a top address for the inside track on the quality of the mobile search experience offered by Google and Yahoo!, as well as their ability to deliver relevant results to users’ queries.

Last year, the case studies and analytics provided by Colin Bates, Mobile Commerce CTO, data also reported on MSearchGroove, provided invaluable insight into the most popular categories of mobile search queries and what users really want from their mobile search experience. The eye-opening observation: “Users are grazing, not researching. They are looking for time-fillers rather than facts, and they are using search boxes for site-finding rather than data-finding.”

It will be exciting to explore how mobile search has moved on and discuss where it is going. If you plan to attend and would like to meet up or catch up, please contact me directly (peggy@msearchgroove.com) or arrange an appointment with Andrea Henninge (andrea@msearchgroove.com). I hope to see you soon and will circle back with analysis after the event.

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.

***

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

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

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

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

At a glance:

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

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

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

Rory Sutherland audio interview

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

A few excerpts that made us think:

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

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

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

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

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

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

By way of background, Rory’s bio:

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

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

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

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

Listen to the podcast here.

Yankee further suggests smartphones are the most competitive battleground in wireless today, and predicts U.S. penetration will reach 38 percent by 2013.  More competitive device entrants, tighter budgets, and increased consumer expectations are factors that will force OEMs and operators to collaborate in order to grow. Source

The bottom line: The proliferation of full-featured handsets and the advance of payment mechanisms (other than the ones operators offer) have created some tension, making this an interesting space to watch.   It’s also worth pointing out that, while 41 percent will choose smartphones, the majority (59 percent) of consumers are not going for smartphones as their next device, nor may they even care to upgrade.

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IDLE SCREEN TECHNOLOGY ENGAGES 82 PERCENT IN TRIAL by Celltick’s LiveScreen Media platform. The Telefonica mobile operators group announced the launch of an innovative idle screen marketing solution, Livescreen Media, which broadcasts news, sports, business, entertainment and lifestyle teasers – as well as advertising messages directly to the mobile idle-screens.

Movistar, the Mobile Phone Company from the Telefonica Group, tested the service as part of a six-month trial in Mar del Plata, Argentina, involving around 5,000 customers, and results showed 82 percent of users engaged with the new communication channel on the idle screen.  The platform is also able to segment users based on location, handset type and areas of interest which are generated from tracking user response to idle screen messages. Revenue is generated from content downloads, subscription services and advertising fees.  Source

The bottom line: As I posted on my own blog, the Idle Screen presents an enormous opportunity to drive increased data traffic and service engagement, if issues of bandwidth and battery life can be overcome.  82 percent engagement is a massive proportion of users, albeit in a local and rather limited trial. In my book it begs the question: Is further proof of concept really required?

***

PURCHASES ON MOBILE CONSIDERED SAFE BY 71 PERCENT consumers, says an eMarketer summary of recent mobile commerce statistics. The round up reveals the kind of products people want to buy from their phones, which include pizza, movie tickets, hotel rooms, and fast food the most popular.  Internet Retailer, a ranking of America’s 500 largest e-retailers, provides us more proof that mobile commerce is gaining some traction in the U.S. It reports that 5 percent of the top 500 online retailers offer m-commerce sites or iPhone apps. It estimates the U.S. m-commerce market will total $1.6 billion in 2009. Source

The bottom line: This report suggests that the U.S. is ahead of the game in m-commerce. Peggy adds: It also lends credence to the view that mobile advertising (communicating the brand message via mobile) could be just a side-show. The real excitement is building around selling stuff via mobile, a scenario that could put mobile operators (with their trusted payment mechanisms) back on center stage.

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EUROPE TO HAVE 130 MILLION MOBILE LBS USERS BY 2014. A Berg Insight report predicts that the number of European users of mobile location-based services will grow significantly from 20 million users in 2008, propelled by local search, navigation, and social networking services.

Among the drivers: On-device application stores will provide greater access to mobile services for a broader audience, flat-rate data plans will make pricing transparent and more operators are opening their location platforms up to third parties.  More than 20 percent of mobile handsets shipped in 2009 will feature GPS, and the installed base in Europe will surpass 50 percent of total handsets in 2013.  Source

The bottom line: Berg adds more fuel to the location fire with this report. Technological penetration, consumer education, and basic marketing remain key to the success of location services. And we shouldn’t forget that there’s a big difference between having the technology and using it on a regular basis.

***

NOKIA ANNOUNCES OVI STORE VISITS FROM CONSUMERS IN 152 COUNTRIES.  Two weeks after the initial Ovi launch, Nokia has revealed a range of statistics about the service. It says that the Ovi Store is accessible from over 75 Nokia devices in five languages and taps into mobile billing from 27 operators. When it comes to free downloads, the Applications category tops the list. Games is the top catgory in premium content.  Many of the most popular applications involve messaging, such as Twitter, Facebook and SMS applications. Source

The bottom line: All-systems go for Ovi. After what I described as a difficult launch, these statistics illustrate that the Ovi Store is now bedding in and beginning to enjoy use with a broad reach.  With improved user experience (which will come when the store becomes pre-installed on devices) will come increased, carrier independent use with a significant global footprint.

***
MOBILE REVENUE GROWTH SLOWS TO 3 PERCENT in Q1 2009, according to a Strategy Analytics report. Down from 8 percent a year earlier, the report, “Wireless Operator Performance Benchmarking, Q1 2009,” says nearly 40 percent of all mobile operators saw revenues fall in Q1 2009, compared to just 16 percent in the same forecast period in Q1 2008. The research, which tracks the operational and financial performance of over 175 mobile operators who account for 80 percent of global subscribers, found that a quarter of the operators in emerging markets also saw service revenues fall in Q1 2009. Source

The bottom line: Bleak reading from Strategy Analytics illustrates that the economic downturn has made a global impact on operators, and very few are immune.

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U.S. FLIRTING ADDICTION SEES AN AVERAGE OF FIVE DAILY LOG-INS AND 26 SENT MESSAGES.  Statistics from Flirtomatic, a U.K.-based mobile and online flirting service that recently launched in America, reveals mobile flirting behavior using their service is remarkably similar on both sides of the Atlantic.  This has allowed Flirtomatic to reach critical mass in the U.S. – much earlier than expected.

By way of background, Flirtomatic, with 1.3 million U.K. users and a frequent listing in the top 5 mobile websites, stands out as one of the mobile Internet’s social networking success stories. It also offers an effective platform for advertisers, and reports an impressive 10 percent CTR.  A witty and effective campaign for Storngbow cider in the U.K. resulted in users sending (gifting) their buddies a whopping 340,000 drinks (delivered as drink tokens to their mobile phones) in just two weeks. Source

The bottom line: Given the previous gloomy story, I thought it reasonable to conclude Data Points on a lighter note this week.  Flirtomatic’s story illustrates what can be achieved if the platform, offering and audience are all in synch and the effort is made to benefit consumers, carriers, advertisers, and partner brands.

***

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 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.

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

It was refreshing to hear an advertising executive (other than Jonathan MacDonald and, more recently, WPP’s Mark Linder) provide reasons why the individual(!) sits at the center of a newly- emerging (and ever-evolving) mobile advertising value web. But now we have proof that what many suggest is idealism, can actually provide the basis for an ideal business model.

The news is today’s announcement by Reebok that it has launched Your Reebok, the world’s first iPhone app that allows us to customize our sneakers (an app created by Inside Mobile). Your Reebok launches initially in the U.S. and the U.K. but the service will go live in Germany, France, Belgium, Holland, Austria, and Ireland in the coming months. But the real news for me is the sea change in mobile advertising/marketing thinking this made-for-mobile app represents. I caught up with Dusan Hamlin, Inside Mobile Managing Director, to talk about what the app does now, and what we can expect next.

At first glance, the cool factor is how this app uses the features and functionality of the iPhone, such as the accelerometer, to take mobile interaction to another level. In addition to being able to customize up to 23 areas of the show with a choice of 19 colors, people can also shake the iPhone to mix and meld colors in truly one-of-a-kind random designs.

Do you like what you see? Then share it with a friend. But this time we’re not talking about just another app that lets us show stuff to people in a one-way (one-to-several broadcast) exchange. Dusan made a conscious choice to enable mobile community collaboration. “You share the sneaker with friends and say ‘what do you think?’ They edit it [your design], make some changes and send it back, saying ‘it was cool before, but I like it more now.’” (Yes, another example that plays in favor of the much larger – and I would argue – inevitable trend to co-creation. I am immediately reminded of the work of Eric von Hippel, Professor and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management. Democratizing Innovation, his must-read business book published in 2005, strikes a new chord when we apply it to mobile.

Beyond collaboration, the app lets us tag our design, add it to a Google map, and view all the other tagged designs worldwide.

Location awareness is an element in the service, and plays a significant role in the service roadmap, but Dusan’s plans are light years ahead of the stale location-based advertising approaches I hear at conferences and industry get-togethers. Dusan has developed a strategy that turns location into a core element of a much larger (and vastly more exciting) personal creativity app. Location-based inspiration is the buzzword here. In a future version of the app, the service will suggest ideas/motifs to people (to help them customize their sneakers) based around their location and time of day. “If it’s 2am and you’re in London, the app will show you designs that fit with nightclubs, clubbing, and the mood of that moment.” Likewise, switching the app on when you’re on a beach in the middle of the afternoon might deliver designs based around muted natural colors, cloud shapes, and holiday fun.

But Reebok doesn’t only boost brand awareness. It offers people a chance to buy the shoes they customize. For the moment, that’s the only aspect of the service that is online (as opposed to mobile). In practical terms, people (when they have completed customizing their sneakers) have to click on an option to email the design to their PC, where they can complete the transaction. (No bill-shock here. The app tells you – as you design the sneaker and choose from materials such as suede and leather to complete the look – exactly how much the shoe will cost. The fully customized shoes range from GBP80 to GBP110, depending on the shoe, materials, and optional extras.)

Moving forward (and no doubt after successful negotiations with Apple – amazing how they have become a gatekeeper in mobile apps and commerce!),  a future version will let people buy the shoes using their mobile phone and credit card. It will be interesting to see what cut Apple takes for the transaction…

My take: Communication, creativity, collaboration, and commerce. Impressive! Connect the dots, as Dusan and I did, and it’s all about making long tail marketing possible. All the more effective since the process from end-to-end involves us, turning us into proud creators, brand ambassadors, and new recruits in the army of fanatics that brands like Reebok need to succeed. (Once again borrowing a disruptive concept from my favorite source: Jonathan MacDonald…)

So, does the Reebok app cover the bases to make the jump from social activity to social community? Yes, but Dusan is more interested in enabling a community than building one. “That part of the API will be open. So if people want to build a community around a design, or create a kind of work group to develop a design, it’s up to them. No one is in control here.” (And no one should be.)

My take: Inside Mobile’s goal was to create a new kind of brand sponsorship model and encourage empowered people to spend more time (on their terms) with the brand using their mobile phones. In my view, the company has succeeded on all counts.

With all the excitement (check out this recent report on CNN) around location-based advertising, it’s a given that coverage of this trend will have a top-notch spot in both research projects I outlined above, as well as MSG analysis going forward. (A great example is an upcoming column from Nate Janewit, computer scientist, location expert, and frequent contributor to thinking spaces and websites such as ReadWriteWeb. I just went over the draft with Nate yesterday and greatly look forward to the industry discussion it will spark when I post it later this month.) Another indication of how big location is: MetaPlaces 09: How to monetize location data and services (September 22-23 in San Jose, CA), an exciting industry event that will discuss context-enabled content and the service models that will benefit advertisers. MSG is proud to be a premium media and marketing partner and will circle back with exclusive pre-event promotion content, such as podcasts with keynote speakers and in-depth Q&As with key players.

A company that has caught my attention, with a potentially path-breaking approach to location-based advertising, is BipBip, the brainchild of Lasse Larsen, Chairman of the Board, WIS  International. (Wireless Information Services). The company – headquartered in Riga, Latvia – has an impressive stockpile of patents around the service, and ambitious plans to  launch BipBip worldwide (including the U.S., China, India, and 21 cities across Europe) following a successful pilot in Denmark last month. (My personal thanks to Lasse for contacting me on Twitter (@peggyanne) and for giving MSG the exclusive.)

What is BipBip? On paper the ad-funded service fulfills the criteria mobile advertising evangelists Andrew Grill and Jonathan MacDonald would no doubt agree are essential to delivering effective advertising services. I’m thinking here of the 3Ps: Permission (people will decide what brand messages they interact with); Privacy (people will decide where their data is collected and how it is used); and Preference (people will decide what content they find relevant).

The permission-based BipBip advertising scheme requires users to log onto the service via their mobile or PCs to provide personal data (gender, location – zip code), but there’s a twist. It also collects information from consumers (Preference) who sign up for the service on what products they are interested in (a sort of combination shopping list/wish list), and the price range that would make them buy, and a proximity that would clinch the deal. (Privacy, because users decide what happens to the data. It is passed on to retailers, who can only deliver a coupon discount on the wish list item when it matches the conditions (price and proximity) the user said they would accept.

At the other end of the spectrum, BipBip has pulled together retailers and advertisers that have the goods/services and discounts to make consumers an offer they are likely to appreciate. The back-end system makes a match, and location technology closes the loop, alerting consumers via free SMS to when they are in the vicinity of an item on their list at a price they are willing to pay.

But the real differentiator is an even cleverer feature that turns greed-is-good bargain hunting into a mission to make the world a better place.

This is because BipBip donates up to 50 percent of its profits (what it earns when a user agrees to receive a text ad/coupon) to a good cause that the user has chosen (as part of the opt-in process).

Do the numbers add up? Lasse tells me they do. Because BipBip has cut deals to buy text messages in bulk at good prices (and developed IP that prompts the SMS gateway to send cheap texts (from advertisers) to users on the move. With no mobile operator to feed in the value chain (even payment is outside the operator with transactions handled by PayPal and credit card companies), the company only spends 5 percent of its income (from advertising) on sending SMS advertising and coupons on behalf of the advertiser. Plenty left over to donate to the user’s favorite cause, organization, or local soccer league.

My take: Give consumers what they want? It’s possible because BipBip plays the role of an honest broker, bringing people together with the nearby offers they want most (otherwise they wouldn’t have put them on their wish list). Supply and demand are in synch, and BipBip makes its money in the middle. What’s more, BipBip doesn’t pay lip-service to the causes and concerns that motivate a large number of today’s empowered and socially responsible consumers. It pledges to spend real money on real non-profit organizations (in fact, no user can sign up for the free service without naming the organizations that should benefit from them accepting text advertising and coupons). I’ll reserve judgment until the service is live. However, a mobile advertising model that allows consumers to do good while they do their shopping sounds like a good deal all around.

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

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

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

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

Today marks the debut of these new segments on the MSG video jukebox (located in the right-hand sidebar). This week’s focus, and feature video in the player, is my interview with Shane Lennon, Senior Vice President, Marketing & Product Development at GyPSii, a must-watch company leading in the race to deliver connected and cool experiences combining information, entertainment, social networks,  and location/navigation. In our interview we connect the dots in the recent string of announcements and discuss the significance for brands and advertisers.

By way of background, I have followed the company – which is a business unit of GeoCentric, a company that provides a geo-integration platform for mobile phones, personal navigation devices, web browsers, and Internet-connected devices, including PCs and set-top boxes – since it broke on the scene last year. Unlike many companies that focus on social networking or enable location-relevant mobile marketing, GyPSii stands out as a company that connects people to people, places, and stuff across all platforms, devices and networks.

Indeed, it’s the raft of announcements over the last weeks — including a partnership to embed GyPSii’s app on a range of LG mobile phones; the tie-up with Nokia and RIM (blackberry) to make the app available on a wide variety of their devices; and a wise decision launch an open API (allowing partners to call the shots on how they integrate GyPSii into their mobile strategy and devices) – that speaks volumes about the company’s new and stronger focus. My take: GyPSii has both the ideas and the impetus to impact our mobile lifestyles.

In addition to the interview and my analysis (below), I also encourage you to read more about GyPSii in my regular column for the bnetTV newsletter, which counts some 10,000 readers. For all my coverage and columns in one place, check out this page on the bnetTV site dedicated to MSG news and views. Thanks again to bnetTV’s Michelle and Tony Sklar for promoting MSG to their growing audience of  industry executives and professionals, and to Nicole Scott for bringing it all together in some great brainstorming sessions!

An excerpt from my weekly column:

Web 2.0 was all about the tools and technologies allowing users to freely create, share, and connect around content with members of a larger mobile community; Web 3.0 places location at the core of this exchange, empowering users to make their experiences personal, relevant, and much more compelling.

The jury is out on whether location – on its own – is a service consumers will pay for. But there is no question that location brings value to a variety of everyday mobile experiences, ranging from social networking to mobile search/shopping services,  to more relevant and engaging mobile marketing campaigns. Indeed, the race is on to offer connected and cool experiences combining information, entertainment, social networks and location/navigation. And companies that deliver products and services that connect people to places and networks, from work to play to home,  across all platforms, devices and networks, will likely lead the pack.

GyPSii stands out as a company that covers all the bases with a suite of applications that seamlessly combine location, social networking, search, and Web 2.0 technologies. I caught up with Shane Lennon, GyPSii Senior Vice President, Marketing & Product Development, during Mobile World Congress to connect the dots in the recent string of announcements and discuss the significance for brands and advertisers. We covered all the key questions, and then some. A special highlight: An explanation of GyPSii’s Open Experience API (called OEx).

Unlike other mobile social networking platforms such as Facebook, which offer a subset of desktop functionality, GyPSii has effectively given its partners the last word in how GyPSii is integrated into their devices and apps – and how much of the functionality they want in the first place. Put another way, GyPSii allows its partners to do more than location-enable/community-enable their apps and devices; it gives them control of the UI and with it the user experience they deliver to their customer base. Partners can integrate anything from a single app (create a piece of geo-tagged content) to a feature (find a friend) to full-blown social network.

By way of background, features/services include: User-Gen Content (create and share geo-tagged content); Friends (create and manage relationships with GyPSii members); Explore (find places, people and stuff nearby); Communication (keep in touch using messages, email and more); Profile (tell the community who you are and what you’re doing/feeling); and Advertising (integrating GyPSii’s location-based and contextually-tuned advertising service). To round out the offer, partners leverage GyPSii’s infrastructure to get streamline delivery of services to their customers.

As Shane put it: “We decided to have a next-generation approach to [mobile phone] client development….As we looked beyond smartphones it became clear to us that taking our user interface and jamming down into a Java enabled platform or WAP-like [platform] wasn’t going to work.” The way for this to succeed is to take a more embedded client approach, which is why GyPSii’s strategy is focused on embedding GyPSii on as many devices as possible, where the actual user experience (via the UI) is owned by the customer/partner company. (GyPSii’s platform is device and network agnostic, and works across iPhone, Symbian, BlackBerry, Windows Mobile, and Web-based operating systems.)

A big part of GyPSii plans going forward is focused on mobile advertising. And with good reason since the disconnect between mobile advertising efforts and results is a growing cause for concern. Predictably, the lack of real mobile marketing success stories reduces the enthusiasm of major brands to invest in mobile advertising in the first place. And around we go. But it’s more than a catch-22 for advertisers and carriers. It’s a vicious cycle that threatens the health of the global mobile business ecosystem if we consider that the vast majority of content companies, app store developers, and mobile carriers have already bet the farm on the uptake of mobile services increasingly subsidized by mobile advertising.

Against this backdrop, GyPSii has purposely made Advertising a central focus of its OEx API, beefing up the offer with a location-specific targeting capability and the ability to deliver an integrated advertising experience/message across devices and platforms – even  gaming consoles in the future. (Makes good sense given the perfect fit between games, location, and community…)

We wrapped up the interview with an interesting look at the future of content types and what might evolve from experiences that bring together information, entertainment, social networks, location/navigation, advertising, and search on all devices everywhere. It’s early days, but GyPSii is beginning to break down the content and comments it sees into its smallest components, allowing it to recognize the associations and relationships between the content and the context. “When someone looks for something or wants it [relevant information] in a mini-feed, we want to make sure it is relevant and [fits] in the context of their world.”

The right content to the right person at the right time and in-tune with their lifestyle/life stage? It’s a challenge. However, GyPSii has the capabilities (information, entertainment, social networks, location/navigation, advertising, and search) and mindset (open APIs and a sharp focus on the user experience) that may get us there.

U.K. MOBILE INTERNET: A new report from eMarketer – true to its name always an excellent source of mobile marketing stats and insights. U.K. Mobile Internet connects the dots in mobile user behavior. How many users are there? Between just 7.2 million and 17.4 million, depending on the report you read.

But the report conclusion is hardly subject to interpretation: The mobile Web is “gaining ground in the U.K., and soon the audience will be large and broad enough to interest mainstream advertisers.” Key drivers: iPhone and similar high-end devices, cool new apps, and improved usability. Still, more of the same are sorely needed to increase the number of people using the mobile Web.

LOCAL MOBILE SEARCH: The Kelsey Group gives us hard figures on the size of the local mobile search advertising opportunity in the U.S. It reckons mobile advertising revenues (search and display) will grow to $3.1 billion in 2013, from $160 million in 2008, representing a compound annual growth rate (CAGR) of 81.2 percent. During the same forecast period, the research firm predicts mobile local search advertising revenues will increase from $20 million to $1.3 billion. On paper, local marketing looks promising. “There is a strong correlation between local search and the mobile use case, which will cause a good portion of the ongoing mobile application boom to focus on local,” Michael Boland, program director, Mobile Local Media (MLM), The Kelsey Group, said in a press statement. What’s missing is a sure-fire strategy to get local shops and businesses on board. And, if the end-game is location-aware advertising, then there are even more issues to solve before we can get to the revenues Kelsey is forecasting. The press release gleans over these details, so I suspect it’s a numbers-focused report. Nonetheless, there is some value to having the hard facts.

Among the findings:

• The percentage of mobile searches that have local intent will increase from 28 percent in 2008 to 35 percent in 2013
• Currently there are 54.5 million mobile Internet users in the U.S., representing 25 percent of online users
• Approximately 15 percent of iPhone applications are local

RINGRING MEDIA RESULTS: The email just came in that Ben Tatton-Brown, RingRing Managing Director, and I are set to discuss these new numbers and much more in a briefing later this week. In the meantime, RingRing is bullish on mobile search following some successful campaigns. We don’t know the base numbers, but the company has increased its own mobile search spending four-fold. Why? Because keyword campaigns run by RingRing on behalf of its clients have achieved click-through rates of up to 16 percent. The company says conversion rates have “peaked at over 110 percent, generating tens of thousands of content downloads at an unprecedented cost per acquisition.” As a result, clients are now attributing much more of their mobile advertising budgets to search. (By way of background, RingRing specializes in planning and buying mobile advertising and search campaigns, and has already booked substantial volumes of search this year through Yahoo and Google. This includes buying search terms across Yahoo’s mobile advertising network and on-portal directory links on mobile operators Vodafone and 3 in the U.K., as well as on Google Mobile. More on what RingRing Media does and how in an exclusive Q&A next week.)