Christian Louca
With thanks to: Mobyaffiliates
Archive for the ‘Mobile Advertising’ Category
Tamome CEO shares his vision of mobile & technology with launch of his new business
Posted: November 16, 2012 in Ad Industry, Advertising, Affiliate Marketing, Affiliate Networks, Affiliates, Digital Display Advertising, Digital Marketing, Display advertising, Industry News, Information communications technology, M-Commerce, Marketing, Mobile Ad Networks, Mobile Advertising, Mobile Affiliate Networks, Mobile Affiliation, Mobile Developers, Mobile Industry News, Mobile Search, Mobile SEM, Mobile Technology, Performance Advertising, SEM, SEO, Tablets, Tamome, Technology, Technology Evolution, Technology Theory, Wireless TechnologiesTags: advertising marketplace, Internet, market segment, Mobile Advertising, Technology, utility suppliers
Tamome – Mobile Affiliate Advertising Marketplace launched by Founder & CEO Christian Louca
Calling Partnerships
As Founder & CEO of Tamome I announce we are open for partnerships within the mobile affiliate advertising market sector. The Tamome team have been quietly building our technology since February of this year and we are now live with major clients. We are looking to extend partnerships with advertisers, affiliates, publishers and app developers. The time has come for the birth of mobile affiliation, a massively overlooked market segment that warrants some attention.
We have strong ambitions to drive this froward; with all our knowledge, insight, motivations, passion and general love of the industry we hope to disrupt the market through creating exciting opportunity for all our partners and partners customers alike. We invite you to participate in the next generation of mobile advertising.
A little bit of vision
With smartphone and tablet penetration accelerating across the globe and with more and more people using this as their means to stay connected with the world; always on, always connected and always with us. This has become the preferred method of; communicating with friends, family, colleagues, TV Shows, entertainment, finding out what is happening in the world, sharing content on a global scale in seconds, navigating our way around the worlds cities and towns, letting our utility suppliers know how much we owe them, staying in touch with what is important to us, researching, understanding perceived value of anything through to buying digital goods, products or services and making payments. It is no wonder that in such a short period of time where this is happening right in front of our eyes, we still cannot even begin to imagine where it will take us in the future.
Technology is so powerful; it has allowed the human race to advance in ways that were just simply not even conceivable before its time. ‘Before its time’…I am not sure what I mean by that. Since technology has been around longer than the human race. It seems strange even writing that; but I believe the reality of technology starts with life itself and the evolution of the world that we know and live in today. Mobile technology is just one element of a whole world of biological and non-biological technology evolutions. Non-biological evolutions need a creator, a creator can exist because of biological evolutions. Make sense? I think ‘technology’ is an almost impossible thing to define but I think we have to split this in these two pieces.
Biological Evolution of living technology
‘Technology that were Creators’
Biological evolution of the Human Race
Non-Biological Evolution of non-living technology
with the biological evolution of technology that were creators
‘technology that was created’
Technology that was made by technology that were creators
So it should be clear now that mobile sits within the Technology that was made by Technology that were creators space. Why is this important? We need to understand the context of the bigger picture rather than just looking at mobile.
Technology evolution depends on its creators. That is you and I. Creators evolve according to their natural evolution (remember we are biological technology). Now the lines start to blur because you could ask ‘are we evolving according to the technology that we are creating?’ Anyway, another time for that one.
We have since life began carved, manufactured, developed, created concepts of technology to ultimately make our existence on earth enriched, easier and healthier. The internet has enabled us to put all our thoughts, ideas and concepts all into one place, like a giant brain. Thanks to mobile technology this brain is now accessible to us all across the connected world like being on a drip. We can open it and close it as and when we feel. Its always there, its always on but we are in control as to when we use it to make our days enriched, easier or healthier. This is the power of mobile and why like no other industry it is growing at a rate that we have never seen before anywhere else in our time. I am proud to be part of such an amazing evolution of technology and communication that is simply extraordinary.
Christian Louca
Mobile advertising hits £500m in 2012
Posted: October 9, 2012 in Ad Industry, Advertising, Digital Display Advertising, Digital Trends, Display advertising, Industry News, Mobile Advertising, Mobile Industry News, Mobile SearchTags: Advertising, Business, Facebook, Google, IAB, Internet Advertising Bureau, Mobile, Mobile Advertising, Mobile phone, Mobile Search, PwC, uk internet advertising
Posted By } Mark Sweney guardian.co.uk,
The explosion in the popularity of smartphones and tablets has led to mobile advertising revenues nearing £500m in 2012. Photograph: Lee Jae-Won/Reuters
The explosion in popularity of smartphones, tablets and the app revolution has fuelled a more than doubling in mobile advertising to £500m this year – just four years after the sector struggled to attract £25m.
UK mobile advertising grew a staggering 132% in the first six months of this year to £181.5m, according to the latest Internet Advertising Bureau (IAB) report conducted by PricewaterhouseCoopers.
Breakneck growth is continuing in the second half – fuelled by the popularity of Apple and Google’s app stores as smartphone ownership nears 60% of the UK’s adult population – with forecasts putting UK mobile spend at as much as £511m for the full year.
In 2011, the IAB put mobile ad spend at £203m.
Mobile display and video advertising almost doubled in the first six months this year to £50m, with mobile search soaring by more than 150% to £132m.
Mobile search accounts for almost three-quarters of all UK mobile ad spend.
Total UK internet advertising spend rose 12.6% year on year in the first six months to £2.59bn, comfortably on track to pass £5bn for the year. The total digital display advertising market, including mobile, rose 10.6% in the first half to £591m.
One of the biggest beneficiaries of the rise of digital display advertising, albeit not on mobile, has been Facebook. Enders Analysis puts Facebook UK’s full-year ad revenues at £236m, a healthy 35% year-on-year rise.
However, these figures actually represent a cut of 18% on more bullish estimates made earlier in the year.
Enders analyst Ian Maude said the downgrade is the result of factors including a steeper-than-expected slowdown in the rate of Facebook’s ad revenue growth, marketers reassessing the value of ploughing money into gathering friends and likes to brand pages, and the social networking site’s well-documented struggle to make money out of mobile.
Jamie Matthews, chief executive of Initials Marketing, believes the scope for growth for mobile marketing remains massive.
“The £500m mark is just the start,” he says. “Facebook is racing to develop a mobile ad strategy to tap into its 550 million monthly mobile users, and more than half of big companies do not yet have a coherent mobile marketing strategy. I would expect mobile advertising to continue to grow at a staggering rate for some years yet.”
The biggest segment of the internet advertising market continues to be paid-for searches, which are dominated by Google.
Spend on search advertising rose 16% in the first half to crack £1.5bn, a 60% share of the overall market.
The rise of mobile ad spend in the UK
2008: £25.45m
2009: £37.6m, up 32% year on year
2010: £83m, up 116% year on year
2011: £203m, up 157% year on year
2012: £181.5m in the first half, up 132% year on year.
Via: http://www.guardian.co.uk/media/2012/oct/09/mobile-advertising-500-million-pounds-2012?newsfeed=true
Infographic – Mobile Advertising Landscape (The Players)
Posted: August 1, 2012 in Ad Industry, Advertising, Display advertising, Industry News, Location Based Services, Mediation Platforms, Mobile Ad Exchanges, Mobile Ad Networks, Mobile Advertising, Mobile Applications, Mobile Platforms, UncategorizedTags: 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
Understanding Mobile Advertising
Posted: April 19, 2012 in Ad Industry, Advertising, Digital Display Advertising, Mobile Advertising, Online AdvertisingTags: AdWhirl, Apple, Clickthrough rate, Cost per mille, CTR, eCPM, iOS, iTunes, Pay per click
My Comments:
A nice article summing up the basics of mobile advertising. I would point out that another Key Metric is Conversion i.e what happens after the click: download a piece of content, register to a service, make a transaction etc etc.
Posted By } David Hillis (@davidhillis)
So you have built your mobile website or app and now you want to monetize it. You have a few options: you can sell apps on iTunes or other stores, charge a subscription or paywall, or make your content free and subsidize it with advertising.
The best approach will be determined by your audience, the value of your content or service and your distribution model.
If you are looking to grow your user base substantially, advertising is one of the only effective approaches. By some estimates an app distributed for free will have 10 times more downloads compared with a paid application.
With the growth in smartphones, mobile sites and apps, mobile has become the fastest growing category in advertising. According to eMarketer, mobile advertising spending in the US will grow 80 percent to over US$ 2.6 billion in 2012. And many experts expect mobile advertising to exceed desktop web advertising in the next few years. Whether you are a developer, a publisher or marketer, mobile advertising is a hot topic.
Yet, despite the increased spending in mobile advertising, publishers and advertisers alike are challenged with understanding the key metrics in mobile advertising, as well as finding a reliable way to forecast mobile advertising revenues and ROI.
The opportunity for mobile advertising far exceeds display ads. From location-based services, to bluecasting, to video, to interstitial web pages, there are many ways to create sponsorship. But for most sites and apps, mobile advertising is still focused on display ads. When using display or banner advertising, there are a few key metrics that provide the foundation for nearly any mobile advertising campaign.
Key Mobile Ad Metrics
eCPM
The estimated cost-per-thousand (or Roman number M) is the key metric in mobile advertising. This is the amount that a publisher is paid on average per 1,000 impressions.
For publishers, bulk mobile eCPMs range on average between US$ 1.25 per thousand impressions to as little as US$ .25 per thousand. On the desktop web, advertising is usually sold by either CPM or PPC (pay-per-click). In PPC, also called CPC (cost-per-click), the publisher only gets paid when a user clicks on an ad.
Mobile advertising differs from the desktop Internet in that some networks, like Apple’s popular iAd program, provide a blended model that provides a minimum CPM rate as well as an incremental PPC fee. Of course Google is still one of the major advertising players in mobile and, as with desktop advertising, heavily slants towards PPC.
Regardless of whether you use CPM, PPC or a blended model, forecasting will still use CPM units with an assumed click-thru rate (CTR), which is why the “e” for estimated has been appended to the CPM metric.
CTR
The click-thru rate, or conversion rate, is how often a user actually clicks on an advertisement compared with how often an ad is shown. If an ad is clicked on one time per one hundred impressions, the CTR is one percent.
Impressions
Each time an ad is displayed it creates an impression. How a site or application is created and which ad network or server is utilized will impact the number of impressions.
Refresh Rate
Refresh rates are how often a new ad is loaded.
Many mobile ad networks have a refresh rate of 30 seconds. Thus, a two minute session on a mobile application will generate four impressions. However for Apple iAD the refresh rate is every three minutes, which would result in only one impression within a two minute session. Moreover, some ad services will create a new impression for every page view on a mobile website.
When forecasting your impressions you need to know the ad refresh rate, the average duration of an app session per user, and if page views and/or duration are used to create impressions. You also need to determine which refresh rate will create the most click-through rates for your ads.
Fill Rate
The fill rate is how often an ad is delivered compared to how many times it is requested.
Mobile usage far exceeds the amount of available paid advertising, and fill rates for mobile websites and applications are notoriously low. Although fill rates vary between networks, Apple iAD often only delivers a 25 percent fill rate, or in other words only one ad delivered per four requests. Other networks boast higher fill rates, but often with substantially lower CPMs.
Ideally, publishers will utilize multiple ad networks to fill 100 percent of the inventory. This may be supported through client-side script in the site or app, or by using a mobile ad server, such as AdWhirl, that can broker the ad requests.
Ad Units
The ad unit refers to the dimensions of the mobile ad.
Ad unit standards are in a bit of flux, complicated by the sheer number of handsets and screen sizes on the market. But the most popular smartphone banner size is 300 x 50 pixels.
The Mobile Marketing Association advocates the following ad units.
Full-Feature and Smartphone Standard Ad Units:
- 120×20
- 168×28
- 216×36
- 300×250 (Smartphones Only)
- 300×50 (Smartphones Only)
- 320×50 (Smartphones Only)
Tablet Standard Ad Units:
- 300×250
- 468×60
- 728×90
- 1024×90
Category
The subject of the app or mobile site is referred to as the “category.”
Some categories have much higher eCPMs compared to other categories. When purchasing mobile advertising you need to think about which categories you want to support based on the positioning and relevancy of your product or service.
Publishers need to understand that the topic of the app or site will dramatically affect the rate that advertisers will pay to place ads. For instance, according to a recent report published by Velti, the weather category averages over twice the eCPM of games.
Platform
The platform is the type of device that the mobile ad is delivered on.
Platform can impact the eCPM earned for ads as well as the ad units required to deliver those ads. The most popular platform is Apple iOS, accounting for over 50 percent of all mobile ad impressions and often generating the highest eCPMs for mobile ads.
Forecasting Mobile Ad Revenue for Publishers
As a mobile web or app publisher it can be challenging to forecast mobile ad revenue, especially if you are using multiple ad networks to fill the available advertising inventory, and if those networks use a CPM or PPC model. To make an accurate forecast you need to make some broad assumptions.
The first item to forecast is how many impressions you think you can generate. This will be calculated by:
- The number of times per month people will use your mobile site or app
- The average duration of each session of usage for your mobile site or app
- The refresh rate for how often the ads are loaded with the app or web page
Once you understand how many impressions you can generate, you need to calculate the eCPM rate for each thousand impressions. This will be impacted by:
- The category of your app or website
- The click-thru rate for ads on your app or site
- The platform(s) your app or site are delivered on
Lastly you need to calculate the fill rate for how much of the available ad inventory will be filled by an ad network. Assuming you are using multiple networks to increase your fill rate, you need to determine which percentage of requests will be filled by which network, and at which rates.
Conclusion
Mobile is the future of advertising. It delivers location, context, behavior and other dimensions that promise to make advertising more relevant for end users and more profitable for publishers.
Yet today mobile advertising is in a bit of a freefall, with mobile usage growing faster than available advertising, resulting in falling eCPM rates. On the other side, the growth of mobile is creating more impressions, which equates to more revenue for publishers. Deciding if mobile advertising fits your business requires building a strong forecast model and then testing those assumptions as you go to market.
Whatever direction you take, the one thing you can count on is that it will all change tomorrow. The mobile industry is evolving at such a fast pace that any advertising program will need to be readdressed on a near continual basis.
Feel free to share your thoughts and questions on mobile advertising in the comments below.
Via: http://www.cmswire.com/cms/customer-experience/understanding-mobile-advertising-015180.php
What’s Trending in 2012?
Posted: January 9, 2012 in Ad Industry, Digital Display Advertising, Digital Trends, Display advertising, Industry News, Mobile Advertising, Mobile Applications, Mobile Internet, Online, Online Advertising, Performance Advertising, TabletsTags: 2012 Mobile Predictions, Advertising, Android, Apple, Facebook, Interactive media, ipad, Mobile Advertising, Smartphone
Posted by } Alex Spencer
Image via CrunchBase
2011 was a year of rapid growth and change in the mobile advertising industry. It was the year that saw smartphones, Tablets and the mobile internet become mainstream among consumers, and that saw marketers and advertisers increase spend and begin prioritising mobile. 2012 looks set to be even more of a critical year in the development of the industry. From Adfonic’s own data and knowledge of the industry we predict that the following developments will become hot topics over the next 12 months.
Tablet boom
With the iPad being one of 2011′s most popular Christmas presents, and with the new Kindle Fire making tablets more affordable and accessible, we can expect to see tablet devices replacing lower-end laptops and notebooks over the course of 2012. It is not unrealistic to expect that Tablet ownership will more than double.
Rich media going mass market
Rich media is already emerging as a game-changer for the mobile advertising industry, as it offers the consumer a more engaging and interactive experience and facilitates superior branding opportunities for advertisers. Until now, rich media advertisements for mobile have, for the most part, been offered as a premium or niche service across a small number of high end mobile publishers. In 2012, mobile ad networks will be offering rich media on a global scale, giving advertisers access to millions of consumers and challenging budgets across other media channels.
Advertising spend shifting towards mobile
As smartphone penetration booms, consumer mobile usage will continue to increase and extend across new times of the day. For example, one of the most quoted use cases in 2011 has been consumer use of tablet or smartphone devices during TV commercials. Consumers are browsing mobile sites and using apps on their tablets and smartphones in place of TV commercial consumption, which suggests that the perception of mobile as primarily an extension of the PC internet will finally disappear. It is becoming increasingly clear that mobile operates as an alternative to the “fixed internet” for many people and this can no longer be ignored. Advertising budgets will increasingly follow the consumer over to mobile.
Phasing out of feature phones
Smartphones are now becoming more economically accessible to all consumer segments as a result of the large range of Android devices coupled with Apple’s pricing strategy for older phones. As the number of services and options begin to concentrate on tablet and smartphone platforms, advertisers and agencies will slowly phase out features phones from their plans.
Apple and UDIDs
During 2010 and 2011, much investment poured into app tracked campaigns enabling advertisers to deliver installed apps at low cost. A new common approach, superseding UDIDs, will become mainstream across agencies, advertisers, ad networks and other players in the ecosystem, as Apple plans to phase out access to the UDID on its mobile devices.
Mobile web versus applications
During 2011, there were hints (driven predominantly by large industry players opting for HTML5 over a multi-app approach) of the mobile web challenging applications as the way forward for mobile internet usage. During 2012, we are likely to see this debate evolve with the potential for some major decisions by digital players to impact the market and force some rethinking.
Geo-location services
There is likely to be more integration across marketing channels, platforms and other parties that will enable geo-location services and advertising to ramp up during 2012. Driven predominantly out of the US (where most geo-location business is currently concentrated) we are likely to see more demand for campaigns targeted to smaller areas (ring-fencing) with a view to driving footfall into retail stores, restaurants and other outlets.
Increasing use of mobile payments
While this may not be the year that mobile payments become mainstream, many players will come together to make significant progress in piecing together the mobile commerce ecosystem. The success of Google Wallet last year will drive industry players forward in 2012, with major advertising events like the Olympics providing a springboard for new, exciting innovations around mobile commerce.
Facebook and mobile advertising
Facebook has been holding back on pushing mobile advertising aggressively. With close to 1bn users online, and over 300m users now accessing Facebook via their mobile, it provides a significant game-changer and possible milestone for the mobile advertising industry. However Facebook decides to execute on mobile advertising will, without a doubt, have a big impact on the digital industry in general.
Further progress on standards and privacy
With mobile advertising moving at such a fast pace in terms of innovation and market demand, there will be increasing requirements for further standardisation (ad formats, for example, including rich media) and frameworks and policies driven by the trade bodies on privacy and data.
YOC no more
Posted: November 18, 2011 in Ad Industry, Affiliate Marketing, Augmented Reality, Automotive, Content management, Customer Relationship Marketing, Data Privacy, Developers, Digital Display Advertising, Digital Marketing, Digital Trends, Display advertising, E-Commerce, Email Marketing, Industry News, Information communications technology, Internet, Location Based Services, M-Commerce, Marketing, Media & Entertainment, Mediation Platforms, Mergers & Acquisitions, Mobile Ad Exchanges, Mobile Ad Networks, Mobile Advertising, Mobile Applications, mobile banking, Mobile Developers, Mobile Gaming, Mobile Handsets, Mobile Industry News, Mobile Internet, Mobile Payment Solutions, Mobile Phones, Mobile Platforms, Mobile Privacy, Mobile Search, Mobile SEM, Mobile Social Media, Mobile Social networking, Mobile Technology, Mobile TV, Multichannel Marketing, Online, Online Advertising, Performance Advertising, Publishing, Publishing Industry, Retail, Smartphones, Sms, SMS Advertising, SMS Marketing, Social Media, Social Networking, Tablets, Technology, Telecommunications, Wireless TechnologiesTags: 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…
Borrell: 20% of Local Marketing Budgets Planned for Mobile
Posted: August 17, 2011 in Ad Industry, Digital Display Advertising, Digital Marketing, Display advertising, Industry News, Location Based Services, Mobile Advertising, Mobile Industry News, Multichannel Marketing, Online AdvertisingTags: Borrell Associates, Business, Groupon, Mobile Advertising, Mobile marketing, Mobile media, Mobile phone, Online Advertising
Image via Wikipedia
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.
Via: http://streetfightmag.com/2011/08/12/borrell-report-local-marketing/
HOT NEWS: Apple’s IAd Mobile Business Is Said to Trim Prices as Advertisers Defect (up to 70%)
Posted: July 7, 2011 in Ad Industry, Display advertising, Industry News, Mobile Ad Networks, Mobile Advertising, Mobile Industry News, Mobile Platforms, Mobile TechnologyTags: Admob, Apple, Citigroup, Google, Greystripe, iAD, iphone, Krishna Subramanian, Millennial Media, Mobclix Inc, Noah Elkin, Steve Jobs, ValueClick
Posted By ] Adam Satariano
Apple Inc. (AAPL)’s iAd mobile-advertising business has cut rates by as much as 70 percent as some marquee clients are using rival services, two people with knowledge of the matter said, signaling the company is struggling to parlay its technology leadership into success in the ad industry.
When Apple rolled out iAd a year ago, companies such as Citigroup Inc. (C) and J.C. Penney Co. were being charged $1 million or more to run ad campaigns. Today those brands aren’t using iAd, and Apple is offering packages for as little as $300,000, said the people, who asked not to be named because the rates are private.
Even with lower prices, some advertising agencies are balking at iAd’s cost, especially because the promotions only reach Apple users. They’re turning instead to Google Inc. (GOOG)’s AdMob, Millennial Media and Greystripe, which serve a range of devices. That means Apple risks losing ground in a market that will generate $2.5 billion by 2014, according to EMarketer Inc.
“Apple’s closed ecosystem may have been interesting in the short run for advertisers, but in the long run they priced themselves out,” said Thom Kennon, senior vice president of strategy for the Young & Rubicam ad agency in New York.
Makers of applications, who benefit from iAd by selling advertising, are getting only 5 percent to 15 percent of their space filled by the Apple system, according to Mobclix Inc., an exchange for buying and selling mobile ads.
Lower Prices
Apple has cut the minimum ad purchase from $1 million to $500,000, and it’s offering agencies deals for as low as $300,000 if they bring together multiple campaigns, the two people said.
The company still has the advantage of offering the biggest selection of mobile applications. Its App Store, which provides software for its iPhone, iPad tablet and iPod Touch media player, has more than 425,000 programs. When an ad runs within an app, Apple gives the developer 60 percent of the revenue.
Natalie Kerris, a spokeswoman for Cupertino, California- based Apple, said the company continues to sign some of the world’s leading brands.
“In its first year iAd has launched more than 100 campaigns in seven countries,” she said.
Apple also is taking steps to attract more advertising. In addition to offering lower prices, it hired a former ad agency executive, Carrie Frolich, who was the head of digital for WPP Plc’s MEC. And Apple added a new online design feature, called iAd Producer, to help agencies design ads more quickly.
Disney, AT&T
Twenty companies have used iAd in the past month, including Walt Disney Co. (DIS), where Apple Chief Executive Officer Steve Jobs is the biggest shareholder; AT&T Inc., a carrier of Apple’s iPhone; and insurance provider Geico Corp. About 50 campaigns will be joining the platform in the coming months, according to Apple.
The iAd system carried unrealistic expectations from developers and advertisers, said Noah Elkin, an analyst at EMarketer, a research firm in New York. Its biggest contribution is validating the nascent market of showing advertisements to people on their smartphones, he said.
“It has been successful in that it created a beacon for mobile advertising,” he said. “Advertising was always going to be a minor revenue source for them.”
Even if prices have come down, Apple legitimized the idea of spending large sums on mobile ads, said Krishna Subramanian, the co-founder of Palo Alto, California-based Mobclix.
“You can go to an automotive company and pitch a $500,000 to $1 million campaign, and it’s realistic,” he said.
Disappointing Results?
Still, iAd has frustrated some developers, which haven’t made as much money as expected, Subramanian said. They have turned to other companies to sell ad space, he said.
State Farm Mutual Automobile Insurance Co. is using competing mobile-adverting networks after being part of the initial group of companies to advertise through Apple, said Ed Gold, the insurer’s advertising director.
J.C. Penney, another inaugural user of iAd, also is working with other services, said Danika Berry, a spokeswoman for the retailer. Citigroup confirmed that it’s not currently using iAd as well. The companies said they may use iAd in the future.
Rival mobile-advertising companies have been luring clients by undercutting Apple on price and promoting their ability to run across multiple devices, including handsets from Samsung Electronics Co., HTC Corp. and Motorola Mobility Holdings Inc. – - phones that rely on Google’s Android operating system. Millennial Media also hired one of Apple’s iAd sales managers.
Limited Audience
“You’re cutting your potential audience in half by focusing on a single platform,” said Dane Holewinski, head of marketing at Greystripe, which was acquired by ValueClick Inc. (VCLK) in April. About 80 percent of the company’s advertising campaigns work across multiple devices. “Advertisers don’t care about platform. They care about audience, performance and engagement.”
The iAd system carries a level of prestige, in part because of its sleek design, said Rob Norman, CEO of ad agency GroupM North America, whose clients using iAd include Unilever NV.
“Everyone likes the consumer experience it creates,” he said. “Everyone wants to be there because they think that, possibly since television, this is one of the most elegant customer experiences.”
Still, companies must account for the cost, Norman said.
“We’d all like to stay at the Four Seasons, but not if it costs $150,000 a night,” he said. “There’s a price equation.”
Quattro Acquisition
The iAd platform was started after Apple acquired mobile- advertising company Quattro Wireless last year. It was introduced last July at the company’s annual developers conference as a way to take more interactive features, such as videos, and embed them within applications.
Apple targets ads by using data from the millions of accounts registered with its iTunes software. The pitches are made based on demographic information, along with a user’s music, movie or App Store purchases. Advertisers can choose “buckets” of users to target, based on demographics, though they can’t pick which specific applications the ads run in.
When it was introduced, Jobs said most other mobile advertising “really sucks.”
For now, many ad agencies haven’t embraced iAd as an improvement over the old approaches, said Rachel Pasqua, vice president of mobile for ICrossing, an online marketing firm. She cites the cost, time needed to get ads approved, limited size of the audience and control Apple has kept over data.
“I haven’t encouraged any of my clients towards it,” Pasqua said. “I haven’t seen a huge value proposition.”
While Apple has stumbled in advertising, its influence over the technology industry means it’s too soon to count the company out, said EMarketer’s Elkin.
“IAd may have receded in to the background, but it’s too early to assume it’s not going to come back,” he said.
