In the first of a series of quest columns Colm Healy – Vice President of EMEA services and General Manager of Xiam Technologies, a Qualcomm company – dissects the discovery dilemma.

Search, recommendation and discovery tools are commonplace on the web. We are used to having an intermediary between us and the content that we will eventually consume.

There are many ways in which that intermediary can appear, how we access it, and how it can go about its business, but its role is the same – to enable us to find content. Content that we are looking for; content that we might be looking for; and content that providers want us to see.

The reason that these tools exist is, quite simply, because there is too much content available to do without them. We need some service in place to help us find what we want.

The same now applies to mobile content, be it content designed specifically for mobile, or web content accessed via the mobile. The amount of content available has exploded in recent years to the point where the search, recommendation and discovery tools essential on the web are equally important in our mobile experience.

Key drivers for this explosion in content creation and availability have been led, first and foremost, by the adoption of mobile as an ever-present attachment to our lives, and, in turn, the reliance on the mobile device as a device for more than simply communications.

Evolving from this is the increasing sophistication of mobile handsets – from now so-called ‘Vanilla’ phones, to feature phones, to the emergence and unremitting growth of the smartphone category – users now have mobile handsets that are capable of processing any of the content out there on the web, including HD video. Enabled by the network developments to support increased bandwidth capacity and faster peak data rates, users are now capable of consuming almost any content through their mobile handset.

The user behaviour that this creates represents an incredible opportunity for content developers and publishers. And for the retailers that provide access to that content.

Yet the challenge for all players in the mobile ecosystem is centred on enabling users – buyers – to find the content that they want.

User Research

At Xiam, we recently commissioned TNS Global to carry out transnational – UK and US – research into the experiences of mobile content users which found clear evidence that discovery was standing in the way of a satisfactory mobile user experience. More importantly for the players in the mobile ecosystem, discovery of content is standing in the way of significant revenue opportunities, and creating a user experience that deters customers and will, ultimately, lead to increased customer churn.

The study, which began with a representative sample of 2,666 mobile content users and derived quantitative and qualitative research by focussing more closely on the most active users, revealed an enthusiastic but frustrated demand for easy to use content and applications.

A key finding of the research highlighted that content discoverability was a significant issue, with eight out of ten users reporting a problem obtaining content on their mobile handsets. When it came to finally finding the content for which they were searching, mobile Internet users were, on average, unsuccessful 27% of the time.

Users were frustrated by the time required to find the information they were searching for, and access the specific content that they wanted. Slow page loads, too many layers on websites, and too much irrelevant information are frequent annoyances for mobile content users.

Yet the opportunity presented by mobile content was reiterated by the fact that almost two-thirds (63%) of consumers surveyed indicated that they would spend more time browsing and purchase more content if it was personalized and easier to find.

How We Search

Though mobile content is a relatively new arrival on our plate of entertainment and services for consumption, users are already set in their ways, accessing the same types of content and doing so via the same search tools. Both, more often than not, an extension of their traditional, online content and search habits from their laptop or PC.

Mobile web browsers tend to use search engines (with Google the most frequently referenced), bookmarked sites or to enter URLs directly.

This reflects, very clearly, that there is no significant, regular influence on users as to the content for which they search:
• Search engines are a powerful tool for giving you specifically what you were looking for, though they are far from flawless
• Bookmarked sites are sites that the user has previously visited and had a productive experience of using
• Directly entered URLs indicate that the user knew precisely where on the mobile they wanted to go

Using the mobile network operator’s content portal is one of the less often used methods for accessing content, and was rated in our survey as least effective for finding desired content. Respondents reported that the service provider’s portal was often poorly organised, and that relevant content was not easily and directly accessible.

Those same users reported that they would increase the time and money spent on mobile web browsing if relevant content was easier to find. 59 percent said they would spend more time accessing content – translating to, on average, 65 minutes more per month. And 37 percent said they would spend more money on content purchases – translating to, on average, £5 more per month.

A further criticism of service provider portals was focusing too much on content downloads (i.e. sales) rather than on providing information and a service. Information on events and special promotions, as well as relevant recommendations based upon previous choices of the individual user would enhance the operator’s value to end users significantly.

This element – recommendation enabling discovery – is primary to any mobile content service as it cuts through the time consuming search procedure, and improves the experience of the user. The model adopted and made famous by Amazon – ‘if you liked this, you might also like this’ – is a simple and effective one. The more sophisticated this can be, the more effective the results will be.

And with the myriad different types of content and applications available, a tool to enable the discovery of content that is highly relevant but might otherwise go unnoticed can be especially valuable. Valuable to the user; valuable to the manager of the portal or store; and valuable to developers and publishers of the content, who will focus their efforts towards a provider that can enable their offering to be discovered.

One of Qualcomm’s key messages to the industry is that the mobile experience has to evolve beyond simple search and move toward personal discovery, making the user’s experience more intuitive. These results point to a huge opportunity for operators to increase mobile data usage and sales by providing personalized mobile apps, content and services.

Colm Healy is vice president of EMEA services and general manager of Xiam Technologies for Qualcomm Internet Services (QIS).  QIS helps accelerate consumer adoption and consumption of mobile content across all networks and devices by delivering a more engaging mobile experience that is contextual and relevant to consumers’ personal interests. In his current role, Healy manages all business relationship and deployments of Qualcomm’s services solutions within the EMEA region. As general manager of Xiam Technologies, a wholly owned subsidiary acquired by Qualcomm in March 2008, he continues to lead the team’s efforts in selling and deploying Xiam’s discovery and recommendations products to a worldwide network of mobile operators including Vodafone, Orange, O2, AIS and Globe.

Disclaimer: Xiam is an MSG supporter.

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

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

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

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

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

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

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

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

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

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

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

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

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

Listen to the podcast here. [15:12]

Related posts:

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

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

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

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

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

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

ANDROID SHIPMENTS

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

GOOGLE’S GAIN

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

RIVAL AD NETWORKS

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

GOBLET OF ROCK

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

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

Until next time – keep it fun!

Listen to the podcast here, [17:27]

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.

Mobile advertising must deliver value.

It’s the key takeaway that has run through each of the 20+ industry events I have attended/chaired over the past year like a leitmotiv. However, the value of mobile advertising is changing.

At first, many brands/agencies were convinced that their value proposition was inextricably linked to their level of cool. In line with this mindset, they focused on fun campaigns around free content such as branded games, ringtones and images, as well as some viral elements people could pass around to their friends.

The strategy has paid dividends for brands such as Coca-Cola.

A textbook example is the Fanta Stealth Sound System, which harnessed high-pitched frequencies that are audible only to youth thus providing young people a new way to communicate with each other without adults listening in. Another campaign that generated buzz (and impressive results) was Fanta Virtual Tennis. The world’s first 3D augmented reality tennis game let players use their mobile devices as tennis racquets to hit a virtual ball.

COKE MOBILE MILESTONES

At Mobile Marketing Forum (MMF) Europe, Hinde Pagani, Coca-Cola Senior Mobile Marketing Manager, Global Interactive Marketing, treated attendees to a string of case studies that included these gems. But the real excitement was about simple SMS campaigns that employed a mechanism known as UTC, or under the cap (unique codes inserted under each soft drink bottle cap) to engage people and increase brand trust.

Coke still offers its demographic fun, free content. (It boasts three iPhone apps, including a runaway success that has been downloaded 500,000 times in two months – without promotion!) But it’s campaigns that combine free content with free airtime that are the real crowd-pleasers. In fact, this winning combination has allowed Coke in India to count a whopping 5 million responses in just four months. Coke in Germany has also run a similar campaign, offering customers three minutes or three SMS free of charge.

Read between the lines, and value has new meaning. It’s still about delivering cool content, but it’s also about delivering a service that teens (and their parents) appreciate.  As Hinde put it: “(With these campaigns) we gain teens’ trust and please their moms.”

PROCTER & GAMBLE CAMPAIGNS

Another company that benefits from a sharp focus on sensible service is P&G.

In fact, the presentation from Dagmara Brylak, Proctor & Gamble’s CEEMEA Mobile Subject Matter Expert, was my personal favorite because it illustrated how brands can deliver value by providing guidance, advice and education. (All the more important that brands take this responsibility since the mobile screen is the only screen in emerging markets.)

Case in point: an ingenious text-to-win campaign for Pampers diapers in the Philippines to increase brand loyalty and boost sales. Rather than offer the usual mix of coupons, free samples and assorted goodies, P&G cleverly chose to focus on what matters most to young mothers: their babies.

Understanding the importance of higher education in the region and the anxiety of new mothers about their toddler’s future, P&G offered participants the chance to win a free university scholarship for their child. Predictably, the campaign was an overwhelming success.

But it didn’t stop there. To create an on-going dialogue with the customer P&G launched a brilliant campaign to deliver young mothers healthcare information relevant to their own baby’s stage of development. (Moms gladly volunteered their baby’s date of birth to P&G because the value-add they received in return was so significant.)

Connect the dots, and P&G delivers more than a mobile advertising message. It delivers a public service that customers appreciate.

MMA LEARNINGS & LUFTHANSA

After the event I caught up with Paul Berney MMA Managing Director, Europe, after the event to compare notes and observations. Kudos to Paul and his team for organizing a high-caliber event that showcased key learnings and best practice from an exciting roster of global brands including Nike Turkey, Coca-Cola, BMW, Lufthansa, Proctor & Gamble, Autotrader, Deutsche Post, Pepsi, Nestlé and BBC Worldwide, to name a few.

We agreed that this event (with its impressive line-up of brands and solid focus on ROI, response rates and other key metrics) represented a welcome departure from the hype that has characterized the vast majority of mobile advertising events.

As Paul put it: There is a “groundswell of understanding” among brands and agencies that mobile is part of the marketing mix. More importantly, brands are thinking through where “mobile fits in the customer journey.”

An excellent example is Lufthansa. At the MMF Marcus Casey, Lufthansa Head of E-Commerce and Mobile, walked us through the airline’s end-to-end mobile-only service that allows people to check in, select their seats and receive a boarding pass directly to their mobile phone in only five steps. Some figures that speak volumes (literally):

•    Pageviews: approx. 1.5 million per month
•    Number of customers using the mobile boarding pass service: 90,000 per month with 60 percent email and 40 percent via SMS
•    Visits since launch: +11 percent growth month over month (steady)

Encouraged by these results Marcus said Lufthansa will focus efforts on moving its mobile service portal into a full-fledged sales channel, complete with up-to-date travel information, commerce (to book flights on the fly) and after-sales extras including baggage tracing.

The takeaway: A paradigm shift takes places when technology becomes invisible in our lives. I would argue the same holds true for truly valuable mobile advertising. When it is so firmly established in our lives, then we can conclude that the industry is out of the bowling alley and well across the chasm. (To borrow from the must-read high-tech marketing book by Geoffrey A. Moore.)

The MMF showcased many positive examples of what can happen when mobile is properly integrated in the customer journey. Brands that get this right deliver real value – and examples such as P&G open up a world of possibilities.

P&G has placed mobile at the center of an exciting value proposition that transforms adverting into educational content. Mobile isn’t another screen – it is the way mothers in the Philippines learn how to care for their babies. Put another way, the P&G brand message has become part of the how these people live their lives.

Granted, fun is still a selling point. (As Marc Mielau, BMW Head of Digital Media, pointed out: Mobile advertising value is about “saving time or killing time,” so lots of potential in campaigns that entertain us or simplify our lives.) But it may be the more common-sense campaigns (tuned into the lifestyles, life stages and personal concerns of the people they want to reach) that deliver real value and real results.

***

By way of background, Marc’s full presentation (and video) is available here. A highlight: his lessons learned at a glance.

1.    Mobile does not function in a vacuum.
2.    Mobile marketing has to deliver value. (Sound familiar?)
3.    Megaportals are helpful as distribution channels.
4.    Users want to get inspired and involved.
5.    If you cannot track it – kill it!

***
Note: I also joined with bnetTV to conduct interviews during the event with companies including Mobixell and Alcatel Lucent, video segments I will showcase on MSearchGroove over the next weeks. bnetTV has also partnered with the MMA to create a compilation DVD (of speaker presentations and exclusive interviews) you can purchase here.

Finally, I encourage companies across the mobile advertising ecosystem to contact me directly with case studies and story ideas. I have some exciting projects in the works and I’m eager to hear what YOU have to say.

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

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

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

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

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

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

I look forward to seeing you there!

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

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

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

***

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

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

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

***

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

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

—–

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

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

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

***

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

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

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

***

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

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

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

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

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

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

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

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

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

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

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

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

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

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

***

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

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

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

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

Thanks to COM contributors and readers.

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

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

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

OUTRAGEOUS & INSIGHTFUL

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

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

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

Listen to the podcast here. [22:25]

A ROUND OF THANKS

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

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

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

Regular readers will know that I work with a variety of organizations and publications, evaluating companies and candidates for awards ranging from the Meffys (awarded by the Mobile Entertainment Forum to recognize excellence and innovation in mobile entertainment and services) to the Smaato Mobile Advertising Awards (recognizing the best in mobile Web and in-app advertising) to the EContent 100 (a list of the 100 companies that matter most in the digital content industry).

I am proud that EContent named me to its panel of judges to evaluate the 100+ candidates across the categories: classification & taxonomy; collaboration; content commerce; content creation, production, & digital publishing; content delivery; content management; content security; fee-based info services; intranets & portals; mobile content; search engines & technologies; and social media. I’d like to take this opportunity to thank the many mobile and Internet companies that have contacted me to be considered for inclusion in the list, and issue a final call for candidates.

Round 1 of the judging wraps up on September 1, so please reach out to me this week. (Please note that your contacting me does not compel me to put any company name on the final list of contenders and, of course, in no way guarantees that any company will be named to the list.)

This year my participation in the judging team has not only introduced me to a number of new mobile industry innovators (companies you’ll see profiled on MSearchGroove in the coming weeks). It has also exposed me to new thinking about digital content creation and distribution.

The industry is at a critical crossroads. A milestone that speaks volumes: the storm brewing the media and digital industries after Rupert Murdoch’s very public announcement (after posting record losses of $203 million last quarter) that his News Corporation intends to charge for online newspaper content.

WILL WE PAY FOR CONTENT?

Artesian Solutions, a company specialized Web-based market intelligence and surveillance software (automating the process of search through machine-based surveillance), has an interesting take. Artesian CEO Andrew Yates issued a statement today arguing that Murdoch’s brave strategy may just (literally) literally pay dividends.

As Andrew puts it: Murdoch’s play is “based around ‘quality’ and this is tough call for a commodity that people are not currently prepared to pay for…. However he argues that one positive consequence of charging for content is that through targeted information and the learned behaviors of the subscribers, newspapers will be able to build a 24 hour, 7 days a week relationship (rather than once in the morning) with the subscriber and therefore tailor content to the demands of those paying for the service. The subscriber will get what they want, when they want it on whatever device they chose. Surely, this will be good for the consumer.”

Intrigued by this view I caught up with Andrew to ask why he can be so sure that we – people that have grown up accustomed to free content, search and social networking services – will change our habits and pay for news, for example. A few minutes into the call we were passionately debating the pivotal importance of personalization, relevancy and context – and the value they bring to our content experiences across platforms and devices.

CONTEXT & RELEVANCE

Artesian, for example, has built a B2B business model on providing its clients content in tune with their profiles, preferences and strategic focus. Using a variety of tools and techniques (advanced algorithms, natural language search the order and frequency of keywords, for example) Artesian effectively filters out information that we don’t want and gives us what we do.

In this scenario, the value of content is its quality – which is a function of context and relevance. Put another way, customers pay for genuinely useful content and they pay a premium for the choice of having what they need where and when they need it. With this in mind, the next deliverable on the Artesian roadmap is a service that delivers a daily dose of information to customers on their portable devices (PDA, smartphone, iPhone etc…).

My take: Artesian is one of a new breed of cool companies that makes its money by making choices for us to provide us choice content we appreciate. By spidering the indexes relevant to our interests and objectives (and not attempting to index or deliver the entire Web), companies such as Artesian are defining paid-content models that hold a great deal of promise for publishers everywhere (particularly in mobile). I would certainly pay for a daily dose of exactly what I want (gleaned from the sources I know and trust, as well the social media spaces, such as Twitter) delivered to my BlackBerry. All the more valuable if the technology employs explicit and implicit personalization (as Artesian does). Will we, as my close colleague Alan Moore suggested, pay for quality content? I vote ‘yes.’ As they say in Cologne, where I am based: What costs nothing, is nothing.

KOOABA MAKES MEDIA INTERACTIVE

Another value to focus on (because it can pave the way to effective/engaing advertising and increased revenues for publishers) is interactivity.

The merging of the digital and physical worlds is a hot topic at MSearchGroove and a big part of the Netsize Guide 2010. (Netsize has commissioned me to write it for the third year running and we just kicked off this exciting project at a meeting at Netsize HQ in Paris last week). But it’s more than a good read; it’s a great business model for the companies that can bridge those worlds.

Kooaba, a visual search and image recognition company and I have had high on my radar from the start (and that goes back almost two years), has an approach that spells good news for old media (specifically, print) anxious to get more mileage out of their content assets.

It’s hot off the presses (no pun intended!) and I caught up with Herbert Bay, Kooaba CEO and founder, to get the inside track on this new Kooaba and where it’s heading.

By way of background, Kooaba, which offers the Kooaba App for the iPhone and other devices, is strong in image recognition. It’s one of a number of companies providing the technology that allows people to interact with content and advertising using their cameraphones, paving the way for the all-important transaction.

(Little wonder why Amazon acquired visual search company Snaptell last month and this month released Amazon App for Android, an app that includes the experimental Amazon Remembers feature. With it people have two ways they can use their device camera to find and remember items available for sale on Amazon.com: they can either snap a photo of an item or scan a barcode.)

Kooaba’s new-look website is chock-full with information about the Kooaba App and case studies from clients ranging from BMW and EMI to Heineken – all a testament to the power of this technology to enable advertising and encourage commerce.

But the real news for me is Interactive print, Kooaba’s solution that effectively gives old print media a new lease on life.

In practice, people capture the content with their cameraphones and Kooaba makes the connection between the printed content and the cool interactive stuff it links to (videos, interviews, and special offers/discounts – the works). Additional functionality in the back-end lets people search, archive and even share this content. Read a job offer in the classifieds, save it for yourself in your personal library or share it on Facebook. Read an interview, get one-click access to the video and then pass it around.

Will people pay for that interactivity? Perhaps… But it’s likely the real money will come from advertisers willing to pay a premium to deliver a more interactive advertising experience and – more importantly – measure the results. (Kooaba’s solution has analytics/tracking baked in.)
Herbert is bullish about the power shift that can happen when publishers are back in charge of their content and their advertising revenues (as opposed to aggregators and search engine companies.).

But I am even more excited about the potential for interactive learning. This technology can literally make books come alive! (A wonderful boost to the quality of education in the developing world.)

The bottom line: Relevancy rules! Whether it’s built into the algorithms that allow companies such as Artesian charge for relevant content or architected into Kooaba’s solution that makes print content contextually-aware (because it can morph to match the context of the people who activate it with their cameraphones), we want what we want and will gravitate to those companies that can give it to us.

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.

—–

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.

—–

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.

—-

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.

—

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.

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

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

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

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

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

Listen to the podcast here. [15:30]

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

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

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

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

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

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

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

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

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

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

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

Other observations from Adrian:

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

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

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

***

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

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

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

***

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

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

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

***

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

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

***

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

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

***

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

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

***

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.

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

***

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

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

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

***

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

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

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

***

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

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

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

Source

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

***

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

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

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

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

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

***

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

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

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

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.

***
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.

***

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.

***

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.

***

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.

***

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.

***

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