Archive for the ‘Location Based Services’ Category
Tags: Ad Servers, Agencies, Analytics, Demand Side Platforms, Discovery, In App Payments, LBS, Mediation Platforms, Mobile Ad Networks, Mobile Advertising, Mobile Analytics, mobile exchanges, Rich Media, RTB, Search, video, virtual currency
Tags: Advertising, Business, Christian Louca, Evolution of Communication, Mobile Theory, Telecommunications, YOC
I have now left YOC after 4 years since launching their UK operations. It has been an absolute pleasure working for such a fantastic organisation and I wish my old colleagues all the best for the future.
I am now looking at the next big thing and will update all via my blog in due course. It is exciting times for mobile and we are all moving at an incredible rate. So many fantastic new start ups with so many ingenious ideas all to make our lives better. I believe we strive to help people communicate, engage, consume, learn, inform and so much more.
This global society that we have born is the future and will change lives forever to come. No borders, no politics, no fuss. A generation of globally connected people wanting to share experiences and information from across all corners of the globe.
I am privileged to be part of such an amazing evolution of communication…
Tags: Borrell Associates, Business, Groupon, Mobile Advertising, Mobile marketing, Mobile media, Mobile phone, Online Advertising
Borrell Associates, which specializes in research covering local and online advertising, issued a new report this week called “Main Street Goes Mobile” that examines the role that mobile media is projected to play in local business marketing over the next five years.
Pointing to a business and consumer environment ready to embrace mobile advertising, Borrell cites statistics indicating that a full third of website readership already accesses information via mobile devices. Meanwhile, half of local businesses report plans to engage in mobile marketing.
These local marketers plan to commit roughly 20% of their budgets to this effort. Will they follow through? While mobile marketing (and hyperlocal efforts in general) can be turnkey in some respects, there are still costs to consider, along with the navigation of complex technologies and new business relationships.
The difficulties most local (and national) businesses encounter with online and mobile implementation have led directly to the rise of a media middleman — Groupon is a well-known example. Whereas traditional ad agencies and marketing firms handle creative and placement, taking fees directly from advertisers, many local advertisers are opting for promotions and other efforts that come without a clear price tag attached. Using the model embraced by many group deal sites, advertisers actually receive money from these middlemen (albeit much less than they would from traditional customer engagements) rather than doling it out.
Borrell projects that, by the end of 2011, 1/3 of all mobile phone users will have smartphones. Soon, mobile capabilities will be the price of entry for marketers. Advertisers are looking to firms like Groupon, LocalUp and GeoIQ to keep their advertising efforts streamlined, transparent, and supported on multichannel platforms.
We’re talking about real money here. Borrell projects that local online advertising will reach $18 billion by 2016, with local mobile couponing at $3 billion. While this growth is occurring at a rate much faster than the slow initial shift to online advertising, we need to remember that there is already what Borrell calls an “installed base”: advertisers and consumers comfortable with online marketing, for whom the addition of mobile is simply a shift within a familiar environment.
In an important divergence from ads of the past, “the medium is no longer the message,” according to the report.
Borrell asserts that “mobile is not a channel — it’s a [series of] platforms,” allowing real-time engagement with consumers. Within mobile usage lie options for email and paid search advertising. Both of these highly popular functions provide a fertile environment for mobile advertising. But advertisers are also examining text / SMS, downloaded apps (a key opportunity) and in-game environments. And not all these channels will grow at the same rate.
In an important divergence from ads of the past, “the medium is no longer the message,” according to the report. With content and channel decoupled, advertisers need to consider that communication can be delivered in a number of ways at a number of different moments in a consumer’s day, and need to plan their messaging accordingly. Even the way the industry measures and tracks marketing success will need to change, since we are going beyond eyeballs and “impressions” to assessing the distinct action a consumer takes (or doesn’t take).
The research firm notes that local radio companies have largely missed the boat when it comes to online marketing opportunities, leaving the spoils to companies like Pandora and Slacker. This is a useful observation, as local radio really does seem half-hearted about its online presence; it will be interesting to watch future activity in this space.
The report includes a number of insightful charts projecting revenue and growth rates for components within mobile advertising. While national ad spending continues to rise in some channels, it drops in others, and local ad spending is projected to rise across the board.
An especially interesting point is the blurred point of difference between promotions, which have traditionally been more B2B-focused, and advertising, historically a B2C effort. Driven by coupons and discounts / deals, mobile marketing is starting to move across each category of US promotional spending.
Coupons, discounts and deals have “evolved,” Borrell says, to a balance point where they are both easy to execute and appealing to consumers. Other, more complex promotions prove to be more challenging to implement. An example: proximity marketing is enjoying press exposure right now. Borrell projects that the nascent marketing structure will hit its stride about two years from now. For the moment, promotions involving geolocation and “fencing” are too complex, data-driven and expensive for all but large national advertisers to take on.
It would seem that there is a major creative opportunity for middlemen — or traditional ad and marketing firms — to help develop effective and simple creative to push through these new channels, allowing advertisers to retain their hands-off status. Gradually, however, the creative quality will be forced to improve, based on consumers’ heightened expectations and the risk otherwise of saturation.
Borrell’s report effectively illustrates the skyrocketing growth of mobile marketing and advertising, as well as clarifying the multiple channels that fall within our current definition of “mobile.” They do remind the reader, though, that this all exists within a much larger bucket of money still being spent by national advertisers on traditional marketing and advertising efforts. Mobile marketing is an infant: tiny, but loud, and getting louder.
Tags: Android, Computer Fraud and Abuse Act, Data Privacy, Google, Google I/O, IOS (Apple), iphone, Mobclix, Search Engines, Searching
Google and mobile advertising metrics companies Flurry and Mobclix were sued last week in San Jose, Calif., for allegedly harvesting location data and device identification numbers, and for “introducing a computer contaminant,” code that reports metrics.
The lawsuit, filed on behalf of plaintiff Juliann King, claims the companies violated federal computer fraud law and California laws governing computer crime and business conduct, in addition to breaching an implied contract.
The complaint asserts that Android users have downloaded apps that include embedded information-harvesting code–APIs for gathering advertising and app usage metrics–that sends detailed information about users, including their locations and unique mobile identifiers, to mobile advertising companies. This information, the complaint claims, is then used to track, profile, and personally identify users.
Past news reports about Android app security appear to have led to the lawsuit. The complaint cites findings by corporate and academic security researchers that reveal, for example, that half of 30 Android apps tested “transmitted the user’s physical location and, in some cases, phone number, to defendants, without disclosing such transfer to the user, for purposes unrelated to the advertised purpose of the app and, in most cases, in plain text.”
Google declined to comment on pending litigation. The company has defended its handling of location sharing on Android devices, noting that Android location sharing is opt-in and that Google provides “notice and control over the collection, sharing, and use of location.”
Flurry, and Mobclix did not immediately respond to requests for comment.
The complaint arrives amid growing unease about data collection and privacy. Last month, Apple was forced to defend its handling of location data after researchers raised questions about the presence of a Wi-Fi hotspot database stored on iPhones. Apple has since released a code update to address the issue.
Lawmakers have been mulling limits on online data collection for months and on Friday, Senator Jay Rockefeller (D-W.Va.) said he planned to introduce Do-Not-Track legislation, which requires companies to honor consumer choice when consumers say they do not want their online activities tracked.
While some of Google’s competitors like Microsoft have voiced support for a Do-Not-Track law, Google itself has not. Google relies on data to monetize the free services it provides and has consistently defended its stewardship of user data and the utility of anonymized aggregated data to improve its services.
Venkat Balasubramani, an attorney with Seattle-based law firm Focal PLLC and a contributor to Eric Goldman’s Technology & Marketing Law blog, characterized the suit as a rehash of tracking cookie lawsuits in a mobile context. “I think this is just seizing on the public reports and zeitgeist,” he said in a phone interview.
The lawsuit’s assertion that the inclusion of mobile metrics code in an app constitutes trespass isn’t likely to get very far, he suggested, noting that past claims that spam is equivalent to trespass because it slows machine performance have been shot down. The lawsuit’s characterization of the apps as engaging in “unauthorized access” in violation of federal and state laws face similar challenges, he said, noting however that courts have shown willingness to treat access that exceeds authorization as a violation of the Computer Fraud and Abuse Act in some contexts.
Tags: App store, Apple, Apple App Store, Facebook, Google, ipad, mobile commerce, Mobile Trends 2011, Research in motion
Posted By ] Mickey Alam Khan
While projections on mobile advertising still can’t be trusted – safe to say that brands will spend more than $1 billion on display, rich media, search and text ads – one thing can be said for sure: 2011 is mobile’s year to lose.
As editors and reporters Giselle Tsirulnik, Dan Butcher and Rimma Kats so ably demonstrate in Mobile Marketer’s Mobile Outlook 2011, all facets of mobile marketing are gaining currency with brands, ad agencies, publishers and retailers. Thank-you to them for this Classic Guide that should be read cover to cover.
Of course, for all the enthusiasm about mobile, budgets are still not where they need to be.
After all, it is expected that sometime this year or next, one out of two subscribers nationwide will have smartphones enabled with Internet and applications. Just imagine how that will change consumption of content and marketing, communications and conduct of commerce.
Marketers will get religion. As reported daily in Mobile Marketer and sibling publication Mobile Commerce Daily, the nation’s leading brands are now increasingly bringing mobile to the front of the bus.
Marketing needs to be where consumers are, and consumers are on conducting much of their work, play and personal lives on mobile devices, be it phones or tablets.
So here are some trends and influencing brands seen from this perch in mobile and the overall digital space:
Social networking: Facebook will cross 700 million users. While social networking is now ingrained communications behavior, the jury’s still out on Facebook’s ability to monetize. It is hard to see a networking audience buy from a store on Facebook, but who knows?
Moreover, Facebook still relies on a 1990s revenue model: clicks on banner ads next to user-generated content. And how to monetize the Like feature when brands are already using it and launching Facebook pages to great success – for free?
In the mobile context, around 200 million Facebook users use the service on their mobile phone. Facebook hasn’t shown how it can monetize mobile when eventually in three years or so mobile will be the primary form of social-networking access.
Privacy: A Do Not Track law may not harm mobile as much as online since it is hard to cookie mobile sites. But marketers do collect data via applications, especially the app stores. What will such legislation from the Federal Trade Commission mean for mobile advertising and database marketing?
Silence from mobile marketers in the privacy area may mean consent to straitjacketing mobile advertising and marketing to a point where neither the consumer nor the marketer benefits. Speak up and speak now.
Apple dominates: Does Steve Jobs ever rest? Expect Apple to dominate the airwaves, newsprint and online chatter with a new version of the iPad tablet, an iPhone for another wireless carrier besides AT&T and milestones achieved in applications – a half-million sometime this year.
Of course, banish the thought that Apple will share application usage and deletion data on an aggregate basis or that it will lower its 30 percent take from revenue generated in the Apple App Store. Flash on mobile devices? Not on Mr. Jobs’ watch.
Google dazzles with numbers: Google will dangle stats on the number of Android-supported mobile phones and devices and how it surpasses any other smartphone platform. Well, if only those numbers could be monetized.
Google has yet to show how it will monetize its mobile offerings, aside from display ad revenue derived from the AdMob mobile ad network purchase last year.
Indeed, Google’s danger is that these new mobile ventures are still backed by a company whose primary source of revenue is search engine marketing on the traditional Web – how 1998. And what happens when all search activity migrates to mobile – can Google support its 20,000-plus engineers on mobile revenue?
Oh, and what if Facebook launches its own search engine within the new walled garden?
Research In Motion plays catch-up: The BlackBerry maker just cannot articulate what it stands for and why new customers should buy its devices over Apple’s or Android’s. How long before Apple and Google crack the enterprise market?
Microsoft – spend now: Please buy a mobile advertising or mobile commerce company – or Research In Motion. Microsoft cannot let Apple and Google divvy up the mobile field between them.
Tablet remedy: Sorry, the category belongs to the Apple iPad. It’s not just the device, it’s the experience and the applications and the marketing and the buzz and Mr. Jobs. What does Samsung’s Galaxy Tab and Research In Motion’s PlayBook have over the iPad? A smaller screen, Flash and faster Internet? Wait till iPad 2 is out.
Mobile commerce boom: This year and the years ahead belong to mobile commerce. All retailers must have mobile commerce sites and applications. To not have a mobile presence is to lose a customer, once and for all.
Mobile Web: Betting long on mobile Web. Mobile sites will be a requirement, while applications will remain a preference.
Amazon: The world’s largest online retailer is set to change the world of retail. Its mobile application and site are a Trojan horse in a retailer’s store. Expect more consumers to use Amazon’s mobile presence to search and compare prices while at a rival retailer’s store. A race to the bottom for offline retail? Perhaps.
EBay bids for success: The world’s No. 1 mobile retailer will hold on to its title. Eventually, most eBay transactions will close on mobile. The one online-only retailer, along with Amazon, that has got mobile right.
Publishers: A mobile presence will not save publishing, but it’ll be a must. The biggest dilemma will continue: how to monetize mobile readership? Mobile ad revenue will not suffice. And consumers have shown a marked reluctance to pay for news content online or on mobile – bar The Wall Street Journal, Consumer Reports and the Financial Times.
The mobile editions will sooner or later cannibalize online and print. Publishers are running out of time to come up with new ideas. Tip: ditch print, stick to online and mobile, cut overhead and stay lean and mean. But knowing publishers, these steps will be forced on them.
Mobile advertising: Agencies need to bundle mobile buys with online. Don’t discount mobile. Mobile ads – banners, rich media, search, SMS, voice and sponsorships – will boom with more inventory becoming available.
Fragmentation: Here to stay. Live with it – disparate operating systems, browsers, screens, units, phones and devices and app stores. No solution in sight, so why worry? It is what it is.
People to keep an eye on: Steve Jobs, Marc Zuckerberg, Jeff Bezos and Angry Birds.
Mickey Alam Khan
In the Harry Potter books the Weasley family has a “whereabouts clock”. It looks like a grandfather clock but shows at a glance where each member of the family is located.
We currently have similar services such as Google Latitude, Facebook Places and FourSquare, but they are based on expensive technologies and only work on high-end smart phones.
Understanding why the whereabouts clock is not commonplace on all handsets is an instructive way to understand how the mobile operators have failed to understand user requirements and deliver against them.
Cellular operators have a terrible track record in delivering applications. Their attempts to introduce e-mail services failed until Blackberry arrived, effectively bypassing the operators by installing devices in the corporation and software in the handset.
Their efforts to introduce internet access firstly via WAP and then using “walled gardens” such as Vodafone Live gained little traction.
It was the introduction of the iPhone and associated browser which translated any web page into a form ready for use that revolutionised the mobile internet.
Picture message has never been a success – although users are now directly uploading pictures to social networking sites, bypassing the operators’ messaging systems.
Group calling was touted as the next big thing but failed to make even the smallest splash, similarly mobile TV. Video calling was promoted heavily by 3G operators as the “must have” feature of their system but ignored by all – those who wanted to video call used Skype.
And attempts to introduce location-based services by the operators mostly failed, it has again been Apple that has achieved much in this space using simple information such as cell location, bypassing the operator.
But they are hopeless at delivering applications to run over the top of them. Instead, it has been companies like Apple, Google and Blackberry that have set the pace here. Why is this?
Firstly, it is not the operators’ core expertise. For example, they have less understanding of location-based services than mapping companies or organisations such as Google that have integrated mapping data and location into much of what they do.
Secondly, they are trying to extract more revenue from the service than is viable, or that consumers are prepared to pay.
Thirdly, they do not have the right image with consumers. While they have a very strong brand it is associated with being a bit-pipe – with the provision of voice and data to a mobile phone – and not with innovation, with being cool or even with being a trusted entity.
That is why individuals are much more willing to try a new service from Apple or Google than they are from Vodafone or Orange. Equally, they probably would not want Apple to deliver the voice service that they rely on as a core part of their life. Brand can be critical in these areas.
Fourthly, they have to ensure any new service runs across all the handsets on their network – which can extend to hundreds of models.
And finally, many of their business models have concentrated on how they would add value to users by allowing them to conduct business on the move or to save time, whereas users often want entertainment and to waste time (but in an enjoyable manner).
So, back to the whereabouts clock. It would be easy for an innovative application developer to deliver one if only the cellular operators would release the location information of their subscribers (under the instructions of the user and with strict privacy control of course).
However, the cellular operators believe they could use location information themselves to deliver such a service and so are disinclined to do so, despite a track record that clearly shows they are unlikely to succeed. And as a result the whereabouts clock is still nowhere to be seen.
But this will not be the case forever.
Eventually, the cellular operators will accept that their role is one of a “bit pipe” and reorganise around delivering this functionality effectively.
They will open up access to their networks enabling a range of new mobile applications and facilitating the mobile playing a key role in entertainment, healthcare, home networks, smart grids and enhanced location services.
Being mobile in the next decade will be all about your relationship with your mobile and how it changes your life.
Getting the mobile operators to understand their key role in this is just one part of the puzzle along with new technology, changed behaviour and new types of social interaction.
Watch out for the whereabouts clock as a key indicator that a wider range of new mobile applications will be coming your way soon.
Professor Webb is visiting Professor at The University of Surrey and the author of Being Mobile.
Tags: YOC, YOC Ad Plus, YOC Group
Tags: iAD, Wilkinson Sword, YOC, YOC Ad Plus, YOC Group
Mobile agency YOC has unveiled its rich media advertising platform, Ad Plus. Developed specifically for use within mobile applications, the platform offers advertisers the ability to embed video, picture galleries and 360-degree rotation into their mobile advertising. The platform can be used now on Apple iPhone and iPad and, says YOC will soon be available for other operating systems, including Android by the autumn.
YOC Ad Plus also offers precise targeting capabilities by location, age & gender, time targeting, and frequency capping. The platform also offers content targeting, enabling advertisers to precisely define which mobile applications they wish to advertise on.
“YOC’s release of YOC Ad Plus puts us in a very advantageous position in the mobile advertising market, as we are the first company to offer advertisers such a rich format on a premium open network,” says YOC advertising director, Gary Danks. “YOC Ad Plus’s ability to deploy multimedia will engage mobile users much more so than standard mobile advertising, and this should in turn generate strong campaign performance for advertisers, and a higher brand awareness.”
When a user clicks on a YOC Ad Plus ad banner, it opens full screen and enables numerous interactive communication elements for the advertiser. These range from picture galleries, video and 360-degree rotation, to the integration of couponing, wallpapers which can be downloaded directly from the ad, and social networking tools.
When engaging with the advertising activity, a user will not have to leave the application initially accessed, which benefits both the user and the app publisher. One click on the Close button of the ad and the user returns to the application.
Advertisers can choose from reliable measurement tools to control and optimise existing advertising campaigns. They can evaluate, for example, page impressions, clicks, and the frequency of use of the integrated ‘Tell-a-friend’ feature.
Tags: Bravo TV, Facebook, Foursquare, Google Latitude, Location Based Services, Social Networking, Starbucks, The New York Times Company, Zagat’s
Foursquare, the social networking service that allows users to broadcast their location to friends from a mobile phone, announced on Tuesday that it had raised $20 million from venture capitalists.
Since it was introduced last March, Foursquare has amassed more than 1.8 million users and says it is adding new ones at the rate of roughly 10,000 a day, Jenna Wortham reports in The New York Times.
Dennis Crowley, who founded the company with a fellow entrepreneur, Naveen Selvadurai, said the fresh cash would largely be used to develop its technology infrastructure, expand its staff of nearly 30 employees and relocate to office space in New York, where the company is based.
“The capital goes to building out our team and bringing on people we need to meet engineering needs,” Mr. Crowley said.
Foursquare previously raised $1.35 million in cash from a well-known list of financiers, including O’Reilly AlphaTech Ventures and Union Square Ventures, which has financed Web companies like Twitter, Tumblr and Etsy. The new investment places the company’s valuation at $95 million.
The most recent round of fund-raising involved earlier investors and added a new partner,Andreessen Horowitz, the venture capital firm led by the Internet pioneer Marc Andreessen, who co-founded Netscape, and his business partner, Ben Horowitz. Mr. Horowitz said that his firm zeroed in on Foursquare because of the vast market potential for mobile services and applications.
“There are already over 200 million smartphones out there and growing fast,” he said. “We’d like to see them build out the company to capture that opportunity.”
But Mr. Crowley said the company decided it was too soon to sell. “We’ve got this robust and ambitious road map,” he said. “I really feel that we haven’t gotten far enough through it and we’re still scratching the surface for opportunities.”
A big part of Foursquare’s appeal is that it turns location-sharing into a game that lets users compete for points, badges and “mayor” status at bars and restaurants. Mr. Crowley said the rewards players received could be a valuable marketing tool for local businesses and advertisers.
“We’re really after connecting local merchants with their best customers,” Mr. Crowley said. “The opportunity here is much larger than we originally thought.”
The interest in Foursquare goes beyond the simple appeal of allowing users to figure out where their friends are migrating for happy hour, said Charles S. Golvin, an analyst withForrester Research.
The goal is more targeted advertising. “The big audiences already out there on the Web are fairly well addressed,” said Mr. Golvin. “Hyperlocal is where the next big wave of mobile advertising opportunity is, because it ties into that belief that location is going to be a big enabler for marketers to more deeply engage with their customers.”
But Foursquare is not the only mobile company hoping to make money from advertisers eager to understand more about the habits and behavior of consumers, said Jeanine Sterling, a senior industry analyst at Frost & Sullivan.
In addition to rivals start-ups like Loopt, MyTown, Gowalla and BrightKite, Googlehas been aggressively promoting its mobile social network, Google Latitude, andFacebook is expected to introduce location features at some point as well.
“It’s a very real threat,” Ms. Sterling said. “But Facebook and Google have their own vulnerabilities, too. Foursquare can position itself as offering capabilities and features that Facebook can’t provide, such as privacy.”
Tags: Admob, AKQA, Android, Apple, AT&T, Best Bu, Blackberry, Branded Applications, Citi, CPC, CPM, Gap, GE, Google, iAD, Interpublic Group, ipad, Mobile Advertising Pricing Models, Mobile Apps, mobile statistics, Nike, Nissan, Publicis Group, Smartphones, Target, The New York Times, U.S Mobile Ad Spend forecast, Unilever
What the duel between Google and Apple’s operating systems means for brands
Posted By, - Joan Voight, June 27, 2010
No question, placing ads or branded apps on mobile phones promises to be the Next Big Thing. The problem? People have been saying that for the last three years. Or, has it been five.
For mobile marketers, the hurdles are still everywhere. First, there’s market penetration. Even though it might look like everybody and his uncle has a smartphone, the truth is that less than a third of Americans (30.6 percent) are mobile Web users, according to eMarketer. So while brands like the idea of wireless marketing — nearly 65 percent said they plan to invest in mobile apps this year, also per eMarketer — they have reasons to be wary, too.
According to eMarketer, U.S. mobile ad spending is forecast to be a relatively skimpy $593 million through the year (up from $416 million in 2009). And a study by Worthington, Ohio-based BIGresearch released late last year revealed that 52 percent of Americans consider mobile advertising to be an invasion of privacy — and that number is growing.
There are also technical issues. For instance, when Dockers decided last year to reach fashion fans via their smartphones, it had to create two different mobile initiatives: one for the iPhone and one for the BlackBerry. (The iPhone had an interactive, motion-sensitive ad that ran on game apps; the BlackBerry, which sponsored the launch of the Pandora Radio app, offered users a link on the app to a coupon on its Web site.)
But new technologies and devices are paving the way for marketers to be both more efficient and more effective in the mobile space. As a result, mobile marketing seems to be getting closer to the promises made in 2002, when the first BlackBerry hit the market, for a powerful new revenue stream that could change the way most companies market their brands. Today, researchers at Borrell Associates in Williamsburg, Va., predict that mobile could well account for up to 60 percent of online advertising in the next five years.
It seems the Golden Age of Mobile Marketing is approaching fast. But its entrance is being accompanied by a dustup at the gates: the rivalry between Google and Apple over advertising on the former’s open-source Android (the upstart Google purchased in 2005) and Apple’s proprietary iPhone-based operating systems. But the question of which will be bigger and better is perhaps less important to marketers than a clear sense of which operating system will be the best platform for their brands. While some say Apple, with the introduction of iAd, which allows video/interactive ads to be placed inside apps, will lead companies to the promised land, others claim they can see the future — and apps are not in it.
To understand what this all really means, however, we first need to scan the smartphone landscape.
In Q1 2010, the number of smartphones sold worldwide jumped 49 percent from a year earlier to 54.3 million units, per technology research firm Gartner. Sales of Android-based phones increased a staggering 707 percent in North America (more than a dozen vendors use the Android OS on more than 30 different devices), with more Android smartphones shipping in this country during the first quarter than iPhones. NPD Group found that Android phones took a 28 percent share of the U.S. market for units shipped in Q1, ahead of Apple at 21 percent. (A version of the iPhone operating system is also used on the iPad, which was not counted.) Globally, however, the iPhone operating system was still ahead of Android by more than 3 million units during the first quarter.
Race for penetration aside, Apple is ahead in the swagger department, and not just because its iPhone and iPad tablet have added sizzle to the industry while also being highly user-friendly. Now, Apple is using its iAd mobile-advertising platform to sell interactive ads embedded in the iPhone’s apps.
“With cool new stuff … Apple is driving clients to allot money for mobile, and making them eager for a mobile marketing strategy,” notes Alexandre Mars, head of mobile at Publicis Groupe and CEO of mobile marketing agency Phonevalley.
But Apple’s iAd platform isn’t cheap. It computes its prices both on CPMs (cost per 1,000 views) and click throughs. A campaign with a 1 percent click-through rate, for example, has a CPM of about $30. Other mobile ad networks usually charge one or the other.
Insiders say that four of iAd’s inaugural clients will spend up to $10 million each — more than some clients’ entire digital budgets. (Earlier this month, Apple reported that it sold iAds to brands including Nissan, Citi, Unilever, AT&T, GE, Target and Best Buy.)
Google, on the other hand, offers inexpensive search, banner and expandable video ads and analytics tools for various phones. For instance, AdMob (which Google not only uses, but recently acquired) charges, on average, a $10 to $15 CPM and doesn’t add costs per click.
Higher costs aside, however, some say Apple’s strategy could juice up the entire mobile industry — raising both ad rates and quality simultaneously. According to Tom Bedecarre, CEO of agency AKQA, Apple is reaching out to leading ad agencies (including his own) in hopes of securing about a dozen inaugural advertisers willing to spend over $1 million each.
“Apple has a clever strategy to feature iconic brands like Target, Nike and Gap to generate solid case studies supporting mobile marketing spending,” says Bedecarre. To date, there have been few such notable case studies. “The creative messages in these inaugural ads will be tweaked and optimized by Apple to ensure quality, to remove any bugs and to give iPhone owners a quality experience with brands they admire,” he says.
Bedecarre adds that if Apple’s plans work out with category-leading brands, it could have a trickle-down effect. Because the experimental nature of mobile advertising still causes many companies to look warily on spending money in the space, successful case studies “will help legitimize mobile ads for the whole category,” he says.
Another potential game changer: the quality of the iAds themselves. When a user clicks on a banner ad within an app, he or she will see the screen fill out with a variety of interactive options. Essentially, says Richard Ting, ecd of the mobile and emerging platforms group at R/GA, brands can create mini branded apps. Clients can provide richer, more emotional experiences, giving them and their agencies a simpler alternative to building out a mobile app or mobile site platform, says Ting.
“Up to now, advertisers have not been able to have an Apple-like user experience in an online ad unit,” explains Keith Johnston, head of digital at Butler, Shine, Stern & Partners. “The iAd offering provides more interactivity and more engagement than what has been out there — an advantage for lifestyle brands.” The agency plans to use the platform for sports apparel client Columbia Sportswear later this year.
Some mobile marketing experts note that the iAd platform is a good option for upscale, cult brands, as well as for advertisers that have a reputation for innovation. Rachel Pasqua, director of mobile at search marketing agency iCrossing, says iAd is well suited for “brands with household names that are similar to Apple in spirit and brand allegiance — for instance, a Whole Foods type of brand that targets suburban moms who use smartphones.” Such an advertiser, Pasqua notes, might want an in-app ad that would make it easy to find stores, learn of events and check local inventory. “If you want to reach the kind of person who reads the The New York Times on the go, your ad on the NYT app has to be on iAd because Android doesn’t have it,” she says.
But what happens when the novelty wears off and the iAd platform is no longer the shiny new toy of the digital marketing world? Some say it might find itself limited to high-end niche brands. Amelia Milo, director, media strategy and integration at Ansible, Interpublic Group’s mobile marketing agency, says, “The Apple OS has high barriers to entry for the average brand. [The cost is] incredibly high and metrics aren’t even close to being normalized this early on—certainly not enough to qualify for a brand seeking a specific demo beyond ‘early adopter.’”
Also, there’s the question of how much longer consumers will be enamored with mobile apps in general.
Some experts, such as AKQA’s Bedecarre and BSSP’s Johnston, anticipate that consumers love affair with apps will continue. “Applications create the opportunity for innovation,” Johnston says. “They largely free people from carrier or network limitations. They are unique experiences … tailored for specific consumers and their needs. Why would they go away?”
But, Ansible’s Milo says, “we study the target audience’s mobile persona, such as the devices and carriers they use and the content they access, and then we present a solution — whether or not that includes an app.”
And Publicis Groupe’s Mars (shown) says apps seem less relevant when it comes to the marketing plans of traditional, multinational brands. These corporations, he says, are asking his agency “to build mobile Web sites so they don’t lose the relationship with their end user when that user is mobile. With the mobile Web the reach is there; with apps, the reach is not there.”
Meanwhile, when it comes to Web-based mobile ads, Google’s open-source Android can benefit advertisers. They get Google’s distribution at an inexpensive price, along with the growing potential of mobile search, including voice-, image- and location-based searches. And many brands, such as teen retailer Abercrombie & Fitch, are learning that most of their users are on Android phones, according to iCrossing’s Pasqua.
But if Apple’s Achilles heel is its dependence on novelty and control, then Google’s weakness is its complexity. Android has multiple versions (1.1, 1.5, 1.6, 2.0, 2.0.1 and 2.1), which makes it difficult for developers to create pristine experiences across all devices, notes Milo. Because of the hardware differences and desire to create apps with quality experiences across all versions, developers say they don’t have the quality control that they’d like and are becoming overwhelmed. Also, Android phones don’t prompt users to update their software or apps as iPhones do, exacerbating the quality issue.
But more importantly, when Google can compete with its own in-app ads on the Android platform, the rivalry with Apple could shift dramatically. And Google’s acquisition of AdMob does clear the path for it to release an in-app advertising option similar to iAd, say agency experts. Those ads, however, would still face the complex technical issues. Also, a controversy is brewing over whether Apple intends to exclude AdMob from the iPhone OS.
Mobile search certainly has huge marketing potential for Google, but it’s still in its infancy, with most people searching the Web on desktops and laptop computers.
For now, cult, lifestyle and innovation brands aimed at people who use iPhones and iPads might be the best fit for the iAd platform. Android might be a better deal for everyone else, say some experts. In time, marketers will likely see Google offering in-app ads with comparable interaction and immersiveness as those on the iAd platform, and the iAd will likely be dabbling in mobile ads beyond apps.
In the meantime, mobile marketers and their agencies will have to deal with a battery of companies investing in smartphones and mobile operating systems — including Nokia, Microsoft, RIM BlackBerry and HP, the new owner of Palm.
From a consumer point of view, iPhone users will continue to see ads from Google and other networks when they use mobile search or cruise the Web, and iAd ads popping up on their apps. Android phone users will see Google Web ads also, as well as inexpensive in-app ads from sources other than Apple.
And who will emerge as “victor” in the Android versus iPhone OS war? Most agency insiders seem to be betting on Google, with its girth and advertising know-how. But they have been wrong before.