This morning I received a message in my in-box with the subject line: "Mobile commerce has really arrived." In the associated article a range of data were cited to argue that consumers were doing more and more e-commerce on their smartphones.
While it's true that e-commerce over tablets and smartphones is growing we should be clear about what's really going on out in the real world. Smartphones are widely used by consumers as part of their shopping and purchase research -- between 60% and 80% (or more) use them in stores for product and price lookups.
Marketers routinely undervalue and misunderstand the now critical role of mobile in consumer purchase activity. Part of the reason is tracking/attribution: smartphone owners overwhelmingly convert offline (or on PCs) and much of that behavior is simply not captured.
New research from comScore, Neustar and 15 Miles reinforces this basic point. The data are based on a December survey and behavioral observation of users. The sample size was just under 5,000 US adults.
Source: comScore, Neustar Localeze, 15 Miles
The study found that 78% of local searches conducted on smartphones resulted in a purchase vs. 64% on tablets and 61% on PCs.
The majority of those purchases (76%) happened the same day and most within "a few hours" of the lookup. This reflects the immediacy of the mobile search user's need. But here's the critical point: Almost 90 percent of those purchases happened offline, in a physical store (73 percent) or on the phone (16 percent). Eleven percent were e-commerce transactions.
Actual transaction data (as opposed to self-reported survey data) from e-commerce software provider ShopVisible found that 85% of e-commerce transactions in 2013 were PC based, only 4% came from smartphones.
Marketers need to recognize that most smartphone users are going to consult their mobile devices throughout the purchase cycle but largely aren't going to complete a transaction on that device. If they don't understand this behavior and account for it they're going to fundamentally misunderstand the role of mobile and undervalue it significantly.
This is partly why online-to-offline analytics/tracking is such an important development -- and one that we'll be exploring in depth at Place 2014.
Yesterday Twitter, Yelp, AOL and Pandora released quarterly earnings. AOL said that mobile was one of several drivers of 50% ad revenue growth. Yet it didn't break out any mobile numbers. The other three did, illustrating the degree to which each is or has become a mobile-centric company.
Below are the mobile highlights . . .
Twitter beat financial analysts’ expectations with $243 million in Q4 2013 revenue ($220 million in ad revenue). However that strong revenue growth was undermined by weak user growth. The company said it had 241 million monthly active users and nearly as many (184 million) mobile users.
Amazingly, 75% of the company's ad revenue for Q4 came from mobile. In real dollar terms that represented $165 million for the quarter.
Yelp reported just under $71 million in Q4 revenue. There were 53 million mobile users (120 million total users). Yelp also reported that 30% of new reviews were coming from mobile devices, since it started allowing reviews to be written via mobile.
Yelp added during the earnings call that 59% of search queries were from mobile: 46% from its app vs. 13% from the mobile web. In addition, 47% of ad impressions were served on mobile devices in Q4.
Revenues for the full year were roughly $638 million. Pandora brought in just over $200 million in Q4. Of that, $162 million was ad revenue. Mobile was responsible for 72% of that ad revenue or just under $117 million. The company also said that 80% of Pandora listening happens via mobile devices.
All three companies started on the PC and have evolved into mobile-centric entities in response to user behavior. Indeed, Pandora's iPhone app is largely responsible for the company surviving and going public. Overall for these companies most of the ad growth, revenue and usage is now in mobile.
This morning Google released the results of an extensive study conducted among US mobile users with Nielsen in Q4 2012. The survey explores mobile search behavior in particular and uses a combination of interviews, online survey data, diaries and search query logs to get a holistic picture of search activity on smartphones. Tablets weren't part of this research.
Among the many interesting findings there are two big ones that stand out: 77% of mobile searches happen at home or work, even when there's a PC nearby. And 55% of mobile-search related conversions (call, store visit, purchase) happen within "one hour or less" of query completion.
These two stats illustrate two larger "truths" about mobile. The first is that mobile devices are increasingly "primary" for people as a method of internet access. Speed and convenience were cited by respondents as reasons for substituting a smartphone for a PC in a search context.
Marketers need to be cognizant of the fact that large numbers of people will be using their smartphones (and tablets) at home to search for things, whereas before they might have used a PC. At work people may be motivated by other considerations, such as privacy, to use mobile devices vs. corporate-provided PCs.
The other "truth" is illustrated by the 55% figure: conversions often happen very quickly after a mobile search. This reinforces the notion of the focused, "need it now" mindset of many mobile search users. Mobile searchers take a variety of actions after completing their queries. They go to websites and do additional research, they make phone calls and they go into stores. They buy things.
But marketers can't see most of that activity, hence the complaints about mobile ROI. Most marketers get confused and "lose the trail" when users go offline. You can track calls and site visits, you can capture email addresses and you can monitor e-commerce transactions via mobile. However it's challenging to get complete visibility on all the ways that mobile is influencing purchase behavior.
The slide above illustrates the range of activities mobile search triggers. But more importantly, Google and Nielsen found that 45% of mobile search queries were undertaken to help make a purchase decision -- so-called "goal oriented" searches. And most of these will result in a conversion, often offline.
The totality of the data released in this study (download the pdf) show that mobile users are more focused and are typically farther down "in the funnel" than PC users. Mobile (search at least) is clearly driving lots of conversions. Marketers just need to open their minds about what constitutes a "conversion" and get creative about ROI and attribution.
Otherwise, they're not seeing what's really happening with their customers and how critical a role mobile is playing in the overall marketing and sales process.
Social navigation app Waze and xAd announced a partnership at Mobile World Congress in Barcelona today. Waze intends to deliver ads to users "along [the] designated navigation path." The company is not the first to try and do this; Mapquest initiated something similar with national advertisers a couple of years ago but in an incomplete way.
Waze has a very engaged audience and has benefitted from the initial stumbles and challenges of Apple Maps. It was one of the alternative mapping and navigation apps recommended by Apple. Telenav also mixes location-based ads and navigation in an app.
According to the press release this morning:
Through the use of xAd’s proprietary technology, ads can be further targeted based on context factors such as past anonymous search behaviors while leveraging the unique functionality of Waze to serve ads at the most relevant time along their route – when the consumer is likely to see and engage with the offer…. at zero speed.
In addition to its own social data, Waze integrates social and location-specific content from Yelp, Foursquare, Facebook and YP into its app. Users can choose results from any of these sources when they conduct a local search via Waze.
According to the press statement xAd will be the exclusive provider of both search and display ads in Waze. I was unable to find any example ads this morning in the app. I'm sure the integration will be thoughtful however. Waze recognizes the need to preserve the integrity of the user experience. Too many or irrelevant ads would risk alienating its audience.
Despite all the activity and hype in the segment, mobile payments and mobile wallets have been adopted by relatively few consumers in North America to date. It's well below 10% of the smartphone population according to data I've seen. Lack of availability, lack of awareness and consumer security fears are among the reasons.
Despite slow consumer adoption of mobile payments, companies such as Square, PayPal and Intuit are making major inroads on the merchant side. For example, Square is processing millions of dollars of payments per day at local businesses.
Its main product relies on a traditional card swipe, so the consumer does nothing new and needs no new apps or equipment. PayPal and Intuit have essentially copied Square's product. In particular PayPal's brand awareness and footprint have helped the company generate significant, immediate demand for the new PayPal Here product.
These and other mobile payments apps (e.g., Levelup) include directories of merchants using their payments systems. It leads me to think these payments apps could become the next generation of LBS or local directory apps. It's natural for them to try and build out more comprehensive local listings, as well as get more deeply into offers and deals (not to mention analytics and CRM).
It also makes sense for a company like Foursquare, which already has a large user footprint, to acquire or create a mobile payments capability itself -- as a complement to its positioning as a loyalty tool for SMB marketers.
This morning Groupon and Deutsche Telekom announced a "strategic partnership" that will deliver Groupon deals to Deutsche Telekom customers throughout Europe. The deal is significant for both parties. Deutsche Telekom has a presence in 10 European countries.
According to the release:
The partnership marks the first time Groupon will partner with a multi-national service provider to distribute its products and services across a wide international network. It is also significantly enhances Deutsche Telekom's position as a leading provider of the latest applications for its customers.
Using a wide range of marketing and sales tools, varying from promotion activities to deeply integrating Groupon services in selected fixed and mobile services, Deutsche Telekom will offer Groupon services directly to its customers. Scheduled to be available in the first half of 2012 Deutsche Telekom mobile customers will enjoy Groupon's mobile services on their devices without the need for a separate download providing easy access to the best local deals in their area.
To those who dismiss Groupon as a business without a future, this deal is a powerful reminder of the strength of the Groupon brand and its near-global footprint.
The key to success will involve two things: deal coverage and execution. How much inventory is offered and how well presented are the deals?
Groupon Now, the company's mobile offering, in the US has so far not been a success. Accordingly that experience raises questions about how this might play out in a mobile context with Deutsche Telekom's subscribers. However it will not be limited to mobile.
By contrast UK carrier (Telefonica) O2's opt-in "O2 More" partnership with Placecast to deliver local coupons/deals has proven to be very successful. So there is a precedent that shows this could play out in a very successful way for both companies if well executed.
Tomorrow at 1 US Eastern, 10 Pacific is our free webinar: The Convergence of Local and Mobile Marketing. I'll be providing a broad market overview on the following issues:
AT&T Interactive’s Executive Director of Product Management Matthew Goldman will offer their view of the mobile market "on the ground." What are consumers really doing in mobile and what are they looking for? How are they responding to mobile ads? And, beyond surveys, is there truly demand among SMBs for mobile marketing? If so, where is that demand concentrated?
We'll also take questions from the audience on these and related issues. If you're operating in the local-mobile segment or selling to small business advertisers you won't want to miss it.
To attend you must first register here.
Yesterday Millennial Media released its latest SMART report for May. It shows advertiser trends and marketing tactics on its network. There was a drill-down focus on automotive in the report (which I'm not going to focus on except in one respect). The data indicate the increasing nuance and sophistication of mobile marketing programs.
There are a wide range of goals/objectives that marketers are pursuing via mobile: local, social, demographic targeting and so on. These tactics and objectives defy easy assumptions about the trajectory of mobile advertising over the next several years.
Mobile is a branding and awareness medium, it's also a local ad medium and it will be used in tandem with other media. It's not going to be primarily one thing (e.g., LBS). There will be enormous diversity in the campaigns and tactics seen. Indeed, I've argued before that mobile is a better branding medium than online display. That assertion is supported by the data.
Immediately below is the mix of targeting methodologies used by marketers on the Millennial network in May. The number of campaigns that were targeted in some way has remained relatively constant on Millennial's network for roughly the past year. But of that targeted advertising geo/local has grown and so has demographic targeting to some degree.
Compare the data for Q3 2010 (below). Geo-targeting was the primary targeting method employed by marketers in 42% of all targeted campaigns on Millennial's network. In May, 2011 that was smaller percentage of targeted ads but a higher percentage of them used local targeting (which can be state, city or zip).
Automotive advertisers were much more local in their mobile marketing efforts (chart below), seeking to send people into dealerships or to generate phone calls. They were less interested than advertisers generally in getting people to Like them on Facebook ("mocial").
As a general matter Millennial said:
Below is the mix of advertiser goals and "landing pages" they sent clicks to.
Compare Jumptap's data showing some similar things around targeting or post-click activity. Jumptap also shows consumer click metrics and the improved lift of local + demo targeting.
T-Mobile USA is becoming a deals aggregator, with a new Android app called "More for Me." It's available today for any Android smartphone running OS 1.6 or higher. LivingSocial is the only deal source mentioned although the word "aggregator" implies a broader array of sources.
T-Mobile claims that the app is the first of its kind from any US mobile carrier. AT&T (the would-be owner of T-Mobile) similarly aspires to be a major player in the deals space and has a existing relationship with Placecast to deliver geo-fenced "shop alerts." That's not the same as "daily deals," but it's location-based discounts and offers nonetheless.
According to the T-Mobile press release:
The T-Mobile More for Me application is customizable, enabling consumers to find the most relevant deals, closest to their exact location. Users have the opportunity to see deals from a variety of retailers, in nearly any city, with many deals tailored to meet their specific interests and preferences.
“LivingSocial works directly with merchants in all of our 260+ global markets to craft great deals that drive our valuable members through their door,” said Jake Maas, senior vice president, corporate and business development, LivingSocial. “We are excited to bring our handpicked experiences to the millions of consumers who will enjoy T-Mobile’s new More for Me app.”
What's unique here is not that T-Mobile has built a deals app or even that it's created by a carrier. Rather it's the idea that a carrier is creating an app extending beyond the borders of its own subscriber network. Given the availability of branded deal apps from Groupon, LivingSocial and others, however, it's very unlikely that More for Me will see much adoption beyond T-Mobile subscribers.
As you've no doubt seen by now WHERE.com was acquired by eBay for an estimated $135 million. WHERE had 2010 revenues of $17 million and projected revenue for 2011 was $40 million.
WHERE has a bunch of assets: great domain, strong mobile app, mobile ad network (120K-130K advertisers), deals functionality and a strong team. The company was reportedly offered a bunch of VC money but chose to take eBay's buyout offer instead.
They were right to do it. While it's possible that WHERE could have built a great deal more revenue and usage, the company also faced massive challenges from larger players such as Google, Facebook, Yelp and Foursquare. It also faced challenges from newer entrants (flavor of the month).
In addition WHERE.com, the PC site, is a huge opportunity that the company has not been able to develop successfully -- so far. Let's see if eBay can do it.
WHERE's ascendancy might be peaking now and a year or two from now the company might not be in the same position of strength. It's possible that WHERE could have grown much bigger if it were to remain independent but I'm not so sure.
Accordingly I think it was smart to take the money and run.
Directory publisher DexOne has upgraded its smartphone apps across mutiple platforms, with an emphasis on the iPhone, Android and RIM. The company has also broadened out the app's content considerably from the previous version, integrating events, movies, gas prices and other non-standard YP content. There are also a range of new or enhanced social features.
Users may now directly write and submit reviews through the app, which will be incorporated into the DexKnows online directory as well. Consumers can also share listings information via Facebook, Twitter and email. The Facebook and Twitter sharing/notification is tantamount to a "check-in" though there's no formal check-in capability in the apps at this point.
In addition to the new and improved native clients, there's an upgraded mobile browser experience and an improved "WAP" browser experience for lower-end phones. Users can also conduct transactions (if available), such as buying movie tickets or making restaurant reservations through OpenTable.
Deals are coming in the future. Advertisers are incorporated into listings and search results throughout but not specifically "called out" as sponsored links or ads. However they're only presented (at the top) if they're relevant from a location and category standpoint.
The homescreen of the iPhone app is animated, which can't be turned off right now (though I would recommend that capability). It rotates through a series of widgets, giving users a tour of the app and showing relevant local listings or other content.
I can certainly offer some critical remarks but, overall, there's much more visual appeal, design flair and "personality" in this app vs. the previous one. It should prove to be more engaging and drive new user behaviors among Dex's customer base.
Mobile marketing platform provider WHERE.com has teamed up with small business email vendor Constant Contact to combine the benefits of mobile and email marketing. Email marketing, though "old school" compared to mobile, is highly effective and so regarded by many small businesses. Indeed, they often rate it as the most effective or one of the top three most effective marketing tools they use.
The WHERE-Constant Contact deal contemplates that WHERE daily deals and offers can be marketed to existing customers through email via Constant Contact. And the reverse is true: Constant Contact users can now reach WHERE's consumer audience and mobile ad network (a combined 50 million people) with deals and offers.
This is an oversimplification, but WHERE sees itself as the new customer acquisition platform while Constant Contact is the CRM tool:
This integration will allow small business owners to create daily deals through WHERE and market them to their current customers through Constant Contact’s email marketing tool, as well as to WHERE’s 50 million mobile consumers. WHERE merchants can also add Constant Contact’s “join my mailing list” (JMML) button to their listings, an easy way to grow their email subscriber list. The collaboration will enable Constant Contact’s customers to utilize the WHERE platform to deliver deals to their existing customers, while reaching new customers through WHERE’s location-based mobile advertising. In addition, WHERE’s recent acquisition of LocalGinger.com , a pioneer in the local group buying category, gives merchants interested in group buying deals a massive platform to help drive foot traffic.
This collaboration aspires to be a kind of "360 degree" solution for small business to help drive people from the Web into stores. Constant Contact reported that it had 415,000 paying customers as of the end of Q3. Yesterday Constant Contact released an iPhone application.
Constant Contact's customer base offers a massive potential audience for WHERE, which offers mobile landing pages and a wide array of promotional opportunities for SMBs.
On Friday Mobile Marketer published an article, based on a talk given by Google's Mike Steib in New York. The article appeared to "announce" a new Google couponing effort called "Google Offers":
“The Holy Grail for local advertising is location-targeted coupons, and we’re building Google Offers to enable that, as well as click-to-call functionality for nearby businesses,” Mr. Steib said. “If you have the ability to reach out to consumers nearby and pull them in using mobile, it’s great for consumers and advertisers.”
I had an opportunity to talk to Google on Friday (though not Steib) about this, as well as its $1 billion in mobile ad revenues and other subjects of interest. Most of the conversation was off the record. However my conclusion is that "Google Offers" is much more of an idea than a product at this point. What the talk in New York really means is that Google sees locally oriented advertising on mobile devices, driving calls and foot traffic into stores, as very powerful and desirable both for consumers and merchants.
Part of that calculus is coupons, which more than any other advertising vehicle have a direct impact on consumer purchase behavior. Currently SMBs and others with Places pages on Google can offer coupons. However Google needs to do a better job of surfacing those coupons in order to gain consumer notice and further merchant adoption. Somewhat more visible are Google "Tags," which can also be coupons.
There's also the broader question of how deeply Google wants to get into coupons. Does the company, for example, want to integrate them into Google Shopping/Product Search or limit them to service businesses exposed via Local/Maps? Would Google create a "coupon destination," as others have done, including Yahoo and Ask?
I'm sure that Google has looked carefully at the "daily deals" segment as well. But so far the company has declined to either buy a company or mimic the offering. However it did recently invest in a company called Signpost, which is in the same general space.
It's clear that Google does want to get more deeply into local deals and coupons and is trying to figure out what's the best, most scalable way to do that. It also appears there's no new product (ad) announcement coming in the immediate future.
Local ad platform xAD (formerly V-Enable) just announced that it had raised $4 million Emergence Capital. It also announced that it is profitable, growing 20% per month and "serving 200m local search ad requests per month." The company also says it delivers 10 million calls per month.
xAD said it will use the money for technology upgrades and development.
The company operates LocalAdXChange which was one of the first local ad networks for mobile. It takes inventory (ads) from many sources, including yellow pages publishers, and delivers those ads to a growing list of publishers across its network. It also optimizes ads across sites and by geography.
In the past 12-18 months a number of other local and local-mobile ad networks have launched:
AT&T Interactive should also be considered a network and provides lots of inventory to others, including Bing.
Where there was once almost nothing now the segment is very crowded with local and local-mobile networks. That's good for advertisers and publishers both.
Generally speaking CTRs, engagement and performance of mobile ads beat the PC. In my previous post I discussed data that suggest mobile uses are better and more immediate prospects for local ads (or locally targeted ads) than PC users.
Google has been telling people that "one-third" of mobile queries have a local intent. But this is based on a BIA survey number (probably extrapolated from roughly 1K respondents) and should be taken with caution accordingly. It's probably not a "bad" number but it's ultimately a directional estimate. Google should come forward with a mobile number that's based on its own query data internally.
By contrast to the survey number, Google reported some time ago that about 20% of PC queries had a local intent. That was based on actual query observation and it's only a very general estimate. I would argue the number is actually larger but it gets into gray areas quickly. Regardless, it stands to reason that the local number should be larger in mobile.
The challenge of course is defining what is a local query. On the radical fringe I argue that most product-related searches should ultimately be considered local because more than 95% of products are purchased in stores. However that's not a position held by anyone else to my knowledge.
Microsoft recently presented a mobile query analysis on a panel I moderated at the SMX conference in New York earlier this month. Below is a slide that Microsoft's Jamie Wells showed during that panel. It reflects, based on Microsoft internal analysis, that 27% of queries in mobile show intent to take action locally. It also shows that mobile searches tend to be more commercial than PC based searches.
Previously Microsoft reported that 70% of mobile (Bing) users start and complete a search process ("query chain") in one hour vs. one week on the PC for comparable behavior.
Taken together these data communicate that mobile users are doing more commercial searches, which are more likely to be acted on locally -- and generally within a very compressed time frame (an hour or so). All this means that ultimately mobile is going to be a better platform for locally oriented advertisers than the PC.
Location platform and data provider deCarta made a flurry of announcements today that seek to position the company as the leading alternative to Google for local search content, maps and related services for carriers and handset OEMs. The company announced some new partnerships, a new navigation application and an upgraded map-based local search offering, MapSearch.
Here are the components:
The quote in the release from deCarta CEO Kim Fennel is very telling in terms of the pitch to partners: "MapSearch is all about delivering control of state-of-the-art mobile local search applications back to the MNOs and Handset OEMs."
Telenav offers a similar value proposition and positioning, although it's not quite as broad a product offering.
Canada's Yellow Pages Group annonced that its popular YPG mobile app would be pre-loaded on some BlackBerry devices from carrier TELUS:
Starting in October, TELUS will preload the popular Yellow Pages™ mobile application on select TELUS BlackBerry™ smartphones activated by TELUS consumer clients. The app, which has already been downloaded over one million times, allows users to quickly look up information about millions of Canadian businesses by category, name, or location. Business lookups conducted on the TELUS mobile web portal will also be powered by the YellowPages.ca search engine.
But what's most interesting is that the app will include connection to an enhanced DA/concierge service:
This partnership also includes options for TELUS mobile customers to complete a voice-assisted search and to receive confirmation or address information via text message. An optional "concierge" service will also be made available allowing mobile users to connect with a TELUS 411 agent to provide additional assistance such as driving directions or accommodation reservations related to search results.
There's no word on pricing in the press release but I suspect this service is billed on a per call basis. But because of its tie-in with the YPG app it is differently positioned than pure DA. You'll invoke it when you need specific, additional help. I'll be interested to hear how the app and the DA feature work together and how popular the enhanced service is.
To my knowledge this is a novel implementation and integration of DA into an app, although I know that Tellme had some very ambitious and non-traditional plans for "enhanced" DA services (which may never be realized).
Last week Nielsen released data based on a recent survey of 4,000 mobile users (geography uncertain) who had downloaded an app within the past 30 days. The survey found that iPhone owners had "an average of 40 on their phones . . . while Android owners report having 25 apps on their phones . . . and BlackBerry owners report having 14."
Nielsen also reported that "Facebook is the most popular individual app on all of the major operating systems." In terms of categories, games leads followed by weather (strangely) and maps/search.
Here I assume that "search" refers to map-based search or local search given the way the Nielsen has grouped them together -- although it could just refer to general search.
Apple has collected about a dozen location-based apps in a new featured iTunes area called "On the Grid." While there are many more apps that offer location as a central element of the experience -- yellow pages apps for example or various cityguides -- the bias appears to be toward check-in style apps.
Apple should recognize that location and check-ins are not entirely synonymous. And I would expect the selection to grow over time. Here's what's there now:
Third party sites that monitor the app store recently indicated that it now exceeds 250,000 apps from more than 50,000 developers. Here's the distribution of apps from 148Apps.biz. Somewhat surprisingly books has taken the top spot from games.
There have been other mobile classifieds marketplaces but none with the potential heft of Nokia. Craigslist has many associated third party apps on the iPhone that mobilize its listings content; eBay of course has had great success in mobile, to name two big names.
Nokia has now created Listings, a sales and services marketplace aimed right now at the developing world. It's only available in India during the beta test.
The downloadable app features several categories of information:
The success of such a service is all about penetration and inventory. If lots of people use the service it could become quite successful and potentially generate meaningful revenue on a global basis. User experience is key but more important is getting the listings content into the system so that users show up.
The service is also more likely to succeed in countries where there aren't already established online marketplaces, which means developing nations primarily. Yet if the content is there and the UX is good enough it could potentially compete elsewhere in world, in Europe perhaps.