Following its acquisition of Quattro Wireless for $275,000,000, Apple has just announced the launch of iAd, its mobile advertising platform (see my colleague’s take here). Adding the $750,000,000 that Google is ready to invest in AdMob (the deal is still under FCC scrutiny), the two most disruptive new mobile entrants have invested more than $1 billion — a clear signal that mobile advertising has long-term potential. The main difference between Google and Apple is that Apple is only just entering the advertising business, while Google’s entire business model simply IS advertising. However, that potential has yet to be realized. Does that mean stakeholders can generate significant revenues in the short term and that operators will be bypassed once again? I have read in various places some strange comments suggesting that Google’s mobile ad revenue share with mobile operators would be a way to finance network evolution. Just compare the cost of a base station and the significant investment required to finance 4G with absolute mobile advertising revenues and you’ll quickly figure out for yourself that this is unlikely to happen anytime soon. This is more of an online advertising discussion around the Net neutrality debate (remember France Telecom’s CEO warning that he was not “building freeways for Californian cars”!) but it will crop up later for mobile.
I had the opportunity to go to the KIN launch today. My colleague Charles Golvin has a full take here.
I loved the social networking features on the phone (and the graphical interface with the "spot" though I'd need a change-up on noises). This isn't the first phone we've seen where the experience is centered on my friends and my contacts, but they keep getting better. We argued (see report) long ago as many did that the cell phone should be the hub of one's social graph and not simply an application on the handset. The KIN comes close and does many things well including:
- Offers status updates inside of my contact profiles which are "live" on my homescreen
- Allows the user to post photos directly from the phone
- Tags photos with location
- Allows me to choose one of many communication channels within profile (many options, but not my full list)
- Builds an online journal of my photos, videos, messages and contacts (looks to me a lot like the concept Nokia tried with their life blog application a while back)
What it is missing, but I suspect is in development:
- Tags (meta data) that allow me to build a richer social graph by tagging my photos with contacts, groups, trips, etc.
- Ability to help me find my friends
- Location tags integrated into maps that connect me to my friends' favorite restaurants, bookstores, etc. - or more generally their content - could also be photos, videos and posts
A recent published report called 'Mobile Coupons: Gold Rush Or Fool's Gold?' shows that both consumers and advertisers are curious about mobile coupons but that few consumers have trialed mobile coupons. Our Technographics data uncovers that only 3% have requested a coupon via cell phone, and only another 3% have actually used a mobile coupon. But mobile coupons help marketers reach new audiences, particularly those consumers ages 18 to 24 — 79% of whom typically spend less than 1 hour per week reading a newspaper. Younger consumers are most interested in mobile offers, especially for restaurants, drinks, and music/DVDs.
Advertisers will need to realize that some consumers — especially younger, new customers — may be mobile-only and that this mobile-only audience requires different promotions to encourage the behavior that merchants seek. Start with campaigns that are close to their heart (or mouth to be more precise) to win them over.
Apple announced iAd today as part of their OS 4 program today. I speculated in this post on why they purchased Quattro Wireless a few months ago, but now we have more details. This post is on iAd only - my colleague Charles Golvin has a more complete analysis in his post.
First, looks like Apple will leverage Quattro's business model and use their sales force to sell ads. This should work early on for large buys.
They are continuing to be very supportive of their developer community with 60% of the ad revenue going to the developers. Not a lot of details now, but this could be generous. Part of the revenue needs to go to the sales team as well. There will be less leftover for Apple. Models such as Admob's have more of a self-serve model that have the potential to be more cost-effective especially with smaller buys. The types of companies that will have the budgets to develop interactive ads that take full advantage of the platform - accelerometer and location plus rich media - will have the budget to spend on media as well - not just on the creative.
Beyond developers, Apple is continuing their focus on the consumer experience. They are looking to protect the quality of the user experience by controlling the ad experience. Steve has raised the bar on quality of mobile ads by keeping consumers within their existing application or experience. He anticipates that the ads will be engaging enough to be considered entertainment.
It has the potential to be more valuable than inventory on many phones.
People who own smartphone devices are more active on their cell phones than your typical cell phone owner. For simpler tasks like SMS, they are moderately more active. For more complex tasks such as shopping, using maps, banking or doing product research they are significantly more active. iPhone users are some of the most active smartphone users when it comes to commerce-related activities.
Advertisers have held back on spending more on mobile marketing for many reasons. One of the primary reasons has been their inability to demonstrate the effectiveness of the medium or calculate an ROI. It gets a lot easier to calculate the ROI when consumers are buying items or using services such has mobile banking to deposit checks. Consumers are spending real money. My colleague Sucharita Mulpuru will be working on a mobile commerce forecast later this year. Anecdotally, we saw consumers spend in the hundreds of thousands of dollars with individual merchants/hotels/restaurants in 2009. We're likely to see run rates in the low millions for a few companies within a few industries by the end of this year.
The more consumers spend, the more advertisers will be motivated to spend. Consumer product and service companies will invest in mobile services such as "find the nearest," consumer reviews, available inventory, etc. to support commerce-related activities. The greater the supply of services (of great services), the more adoption and usage we'll see among consumers. Then consumers will spend more because the experiences will be convenient - it'll be easy to buy books or toothpaste.
Conventional wisdom in the mobile industry is that Japan and South Korea are the most advanced mobile markets worldwide while US is lagging behind and Europe somewhere in the middle. This is less and less true.
Throughout, as various members of the press have mused about the death of Amazon's Kindle, I feel compelled to point out that, contrary to popular belief, Amazon is in a better position now than it was before the iPad. That's right, if Amazon comes out swinging, Round 2 will go to Amazon. Here’s why:
Online banking has shown a fair amount of growth over the years in Europe. Forrester's Technographics® data shows that more than 50% of European Net users bank online today, up from about 35% in 2002. Northern Europe leads in the adoption of online banking, with 90% of Dutch and 87% of Swedish online consumers having used it in the past three months.
Interestingly, the countries that close the list with regards to online banking are actually leading the uptake of mobile banking in Europe. In Spain and Italy, about one in five mobile phone owners uses some kind of mobile banking — for example, to check their account balance, transfer money, or pay bills using text messaging (SMS) or the mobile Internet.
Marketers must follow the FTC’s CAN-SPAM guidelines as they apply to transactional messages; however, transactional emails are frequently embedded with promotional content. We’ve found that retailers can, on average, generate an additional $2.9 million annually by including promotions in their transactional communications. When content gets mixed in together, we often hear clients asking: where is the line drawn between promotional and transactional messages?
While there is no silver bullet for determining the difference between each message type, there are some guidelines that can help you determine whether or not the message will be subject to the CAN-SPAM Act. The FTC places a great deal of weight on the subject line of a message, so if the subject line would lead the recipient to think it’s a transactional message, it’s a transactional message for CAN-SPAM purposes. Additionally, the content of the message matters. If the majority of the message is commercial, or the bulk of the transactional part of the message doesn’t appear at the beginning of the message, CAN-SPAM considers the message a commercial one.
Regardless of message type, there are a few best practices to keep in mind to comply with CAN-SPAM (and maintain a good sender reputation).
I'm pleased to announce that "The Forrester Wave™: UK Interactive Agencies — Web Design Capabilities, Q1 2010", is now available to Forrester clients on the Forrester Web site.
This report is an evaluation of the Web design capabilities of leading UK design agencies: AKQA, Amaze, Detica, EMC Consulting, LBi, Reading Room, Sapient Interactive, VML London, and Wunderman. Putting this together took six months of effort by a hard-working team that included Harley Manning, Angela Beckers, Richard Gans, William Chu and Shelby Catino.
In our research, we found that Detica and Sapient Interactive led the pack for transaction-led projects, due in large part to the high usability scores earned by the client reference sites they provided for evaluation. AKQA, EMC Consulting, LBi, Reading Room, and Wunderman were Strong Performers for transaction-led projects, with AKQA's exemplary Brand Image Review scores moving it into the Leaders' circle for image-led projects. Rounding out the field, Amaze showed strength in multilingual projects and image-led projects, while VML London earned top scores from both reference clients for the business results it produced. Both agencies came in as Contenders.
All nine vendors in this report have significant market presence and capabilities to service large clients. They are all ranked in the top 25 UK agencies by fee revenue (using data published by New Media Age).
What sets the Wave apart from other industry rankings and awards is the transparent, fact-based evaluation that underpins it. Forrester clients have the ability to look at detailed vendor scorecards and see what the strengths and weaknesses of each agency are.
To gather information on the strength of each vendor's current offering (represented on the vertical axis) and strategy (represented on the horizontal axis), we used the following methods: