Google testing location-based ads

According to BusinessWeek (print edition dt April 20, 2009), Google is testing location-based advertising to drive more bang for the advertising buck. In March, Google started placing local-business ads on Urbanspoon, A GPS enabled mobile app. This app has capability to identify the user’s location and then recommends places to eat nearby. This allow Google to provide a better return on advertising dollars. In a down economy, advertisers are looking to get better return on their advertising investments.

Three human needs beyond the basic

Beyond basic lifestyle needs and things of necessities (food, water, shelter, domestic needs, clothing, reach/mobility), all other Business models revolve around three basic human needs : community, sensory satisfaction and information.

Humans have a need to commune, to socialize (Need 1). The second need humans have is to get gratification (Need 2). Gratification relates to one of the sensory perceptions – looks, taste, smell, touch or hearing. The third thing humans like is information (Need 3). There is an innate desire to be aware, of being well-informed. These ideas are reflected in all successful business models as well. Most business models are either satisfying human need to commune and network, providing sensory gratification or providing information. However in today’s world, the last one has become difficult (to make money on) as there is lots of free information. One can argue that free information providers want to provide a place of community to the users. So strategy based on the Need 3 is to ensure the Need 1 and in the process make money.

Some examples to make it clear :

Internet search engines and portals : Search / Information

Social Networking : Commune

Conferences, Meetings : Commune

Education : Information

Entertainment (music, video, theatre) : Sensory Gratification

Partying : Commune and Gratification

Garden and landscape : Sensory Gratification

Advertising and Marketing : Commune and Information

Print and Publishing : Information

 

Just some philosophical ideas. How about Charity. It is not a business and hence does not fit any “Need” profile.

Startups can take notice of the above.

twittering

We started twittering today. Amazing experience. Quite a service. Of course we are twittering from our iPhone using twitterific app also in addition to twittering directly on the twitter website. We immediately got 12 followers and we started following 12 interesting personalities.

Follow us on twitter at : http://twitter.com/CellStrat

More on this as time goes on.

CellStrat on twitter now

We are pleased to announce that CellStrat is on twitter now. So if you are really really interested in checking what we are doing at the moment, feel free to follow us on twitter.

http://twitter.com/CellStrat

We will be providing tweets as they call them. Tweets are text-based posts of up to 140 bytes in length. Twitter is an interesting micro-blogging service to post one liners – it is what they are now referring to as “Real-time Web”. A web which changes by the minute and people publish their thoughts on the go. Other people can follow the tweets by a person whereas that person can follow other peoples’ tweets. It becomes more relevant from a mobile perspective as one can post tweets while on the go. So we downloaded the twitter client “twitterific” from iPhone AppStore. This has been created by a firm called “the iconfactory“. Twitterific is fabulous as is twitter.

This is a new model which has evolved over last one year. It has been adopted by one and all around the world from celebrities to businessmen to evangelists.

So chase us on http://twitter.com/CellStrat …

Attended Atlanta Interactive Marketing Assoc Seminar on Ad Networks and Exchanges

I attended a very interesting session at the Atlanta Interactive Marketing Association (AIMA)’s March event. The topic was “How businesses can leverage Ad Networks and Exchanges to drive sales in a down economy“. Four leading ad networks were present to show how their customers are using their platforms in unique and creative ways.

The panelists were :

Lexi Reese, Director Google Ad Network

James Fellows, VP Product Management, Platform-A (AOL)

Marc Grabowski, Executive Director, Yahoo Network Sales

Jay Sears, EVP Strategic Products and Business Development, ContextWeb/ADSDAQ

Moderator : Joel Lunenfeld, Chief Innovation Officer, Moxie Interactive 

 

It was an interesting discussion with lots of insights on internet ad networks and the success factors in internet advertising. Here are some key discussion notes from the panel discussion :

Ad Networks are growing much faster than the overall display market. Advertising is at an all time low but this offers opportunity for advertisers in various ways. The merger and acquisition market is going wild with all sorts of media, tech and ad firms buying each other across industry categories and business verticals. The ad network exchange is now called the super network.

The three pillars of the ad ecosystem are :

Technology, audience and data. All three interplay to provide a compelling ad offering.

According to eMarketer/ComScore, the highest ad network inventory is with Platform A (AOL) although this may be disputed by Google and Yahoo. The latter two follow close behind according to eMarketer.

Lexi’s (Google) presentation :-

With merger with DoubleClick, Google has seen acceleration in display ad category.

Savvier customers are turning to web. 54% customers researching products online before they make buying decisions. Reach is a key factor. With perspective to Reach, Long Tail (vast customer base) drives engagement.

Lexi mentioned that 2x more customers look at niche ad sites. Providing user with choice drives value. Transparency and Flexibility drive ROI.

Lexi gave an example where a major retailer drove down cost of online card redemption by 77% by reviewing Google reports on ad placement and success. Google is also using tools like Conversion Optimizer to determine what price leads to most conversion.

James (Platform A/AOL / advertising.com) :

According to James, the challenges for an advertiser include Fragmentation, Reach, Lack of trust, Quality, Need for ROI and Results. James mentioned that ad market is highly performance oriented now and pays for performance. Platform A’s predecessor Advertising.com is the leading web display network. It has #1 reach, experience and high quality to serve advertisers. Platform A has tools like AdSonar for premium placement targetting. It also offers self-service management for advertisers which is a popular concept.

Marc (Yahoo) :-

Marc mentioned some ideas from perspective of Yahoo :

– It is a matter of reach vs frequency. Frequency is important in advertising.

– Context makes difference.

– Place where an ad is exposed matters. Yahoo ranked within top 3 in 26 vertical categories (eg Sports, Finance etc)

– Specialization is key. This is where Yahoo’s extensive partner network helps.

Jay (ContextWeb) :-

We are in Media Buying 2.0 phase. There is a concept of Fat Tail vs Long Tail of Ad audience. While most eyeballs are spread across Long Tail, 77% of dollars are in Fat Tail. Audience are leaving portals and search is becoming the default portal. There are 100,000 blogs created everyday (wow!). There are 160 million registered web domains today.  As to how marketplace is reacting to the media world now :

Google bought DoubleClick

Yahoo bought RightMedia and BlueLithium

Microsoft bought aQuantive and adECN

AOL bought Tacida and Quito to create Platform A

Agencies are busy building “demand platforms” for ads. 

 

As to what is the way these ad networks differentiate from each other :

Google – targetting

Yahoo – data. Has user attributes and their web behavior stats.

Platform A – Technology and Complete Package plus the ability to act on these factors.

 

All panelists agree that emotional aspect needs improvement in ad business. Eg Video Advertising brings up human emotional aspects.

On Mobile Advertising (the topic we love) : the panelists said that it is a new area yet to be cracked. There are massive liquidity and technology issues in mobile. Although personalization is more advanced in mobile. But really mobile is another channel for advertisers to reach their audience.

iPhone 3.0 OS Overview

I wanted to write about the new Apple news – that of iPhone 3.0 software. Apparently it is a version which will fulfill many of the things which were missing before :

– 100 new features
– Search iPhone
– Cut, copy and paste capability – sorely lacking in prior versions
– Send photos, contacts, audio files and locations via MMS
– Read and compose email and text in landscape mode. Earlier the safari browser allowed this but not the email and message box. Now the latter will allow landscape also.
– 1000 new APIs for developers
– enable in-app purchase of content like subscriptions, additional game levels and other content
– apps can communicate with other hardware via Bluetooth
– push is available to developers to push content
– multitasking so multiple apps can run simultaneously
– developers can use the map feature of iPhone in their apps
– developers can access the iPod music (or podcasts etc) library stored on the device and use them innovatively in their apps

 

This is a sample list – we will write more as we learn about this exciting new announcement from Apple – we remain die-hard fans of iPhone which is a true mobile revolution as far as we are concerned.

Areas of mobile marketing that need attention in 2009

On a global perspective, top three areas of focus are :

1. More mobile knowledge experts.
2. Greater case study sharing. &
3. Creation of guidelines around mobile measurement.

Mobile knowledge experts

There is a huge need in the global mobile marketing industry to pass our collective mobile expertise off to new entrants to expand the knowledge base of those able to evangelize.

More case study sharing

Already a strong proponent of information sharing, the MMA encourages all marketers to continue to share their successes and failures regardless of size of campaign, target demographic or results.

Measurement

Yes, mobile has been challenged with creating consistent metrics and reporting in order to drive greater spend in the mobile channel – like all media in its early days.

The MMA has launched its Measurement Committee and hopes to release its guidelines forMobile Web Measurement early in the third quarter of 2009.

Attended the Wireless Technology Forum (Atlanta) General Meeting on Wireless Consumer Apps

I visited the Wireless Technology Forum‘s General Meeting today. WTF is the top wireless networking group in Atlanta with 550 members and growing rapidly. The topic for today’s session was “Where is the Money in Wireless Consumer Applications?”

The WTF session today had an excellent panel :

Ken Hayes, EVP – Carrier Relations, ThumbPlay

Rob Hyatt, Executive Director, AT&T Mobility

Andy McGuire, VP Mobile Innovation, GSM Association

Andrew Dod, VP Marketing, Whoop Mobile

Ron Kozoman, Director, Mobile Operations, Turner Broadcasting Systems

Moderator : Maury Margol, Sr. Director, Client Relations, Nielsen Telecom Practice

Here are some highlights from the panel discussion :

As one would expect, iPhone has come to dominate all things mobile internet in current times. Basic theme all throughout the discussion was that the iPhone is a game changer in mobile app world. It has shown the world how the mobile user experience should be and how to influence consumer adoption with a compelling application portfolio.

Which mobile apps are making money today ? Ken suggested it is the iPhone apps with its AppStore strategy.  3 years from now, it will be LBS which will be main revenue generator in mobile apps. Andy McGuire suggested that 800 million iPhone application downloads so far is the tip of the iceberg. It is an indicator that developers and consumers are there if the ecosystem is right.  He mentioned that in future, one might see utility models like medical and home apps on mobile phones. One panelist opined that in spite of all the iPhone AppStore hoopla and massive no of apps available, money is still being made in limited categories like games and music.

On the question of wired devices, the panel was of the opinion that in future there will be lot of wireless devices which will preclude the need to have a wired network but higher speed apps will still find a use for wired networking eg in case of high speed TV. Andy quoted Sony CEO’s statement that in the future, 90% of devices may be wirelessly-enabled. Clearly wireless is the future for all networks but for reasons of speed and niche uses, wired devices and network will still prevail in some areas. Some interesting uses of wireless will be wireless blood pressure monitor, reservoir monitors etc.

On the question as to how a carrier like AT&T makes money in “open mobile” environments like iPhone AppStore, Rob from AT&T mentioned that iPhone has increased data plan sales for AT&T and also AT&T itself makes some of the iPhone apps.  Plus AT&T attracts a huge no of new subscribers due to the iPhone exclusivity. In essence, AT&T has lots of monetization models around iPhone type of devices where the volume of customer adoption more than covers for the revenue lost due to “open” mobile gardens like iPhone AppStore.

Next there was a question – how can developers make money in mobile apps? The panel was of the opinion that there are lot of apps being made and put out most of the times for free. Lot of these apps are simply experimental in nature or are hobby apps with no business model around them. The panel suggested that developers need to think through the business model when writing apps. Most apps peak and then are forgotten in the ever increasing mass of mobile apps on iPhone AppStore. As to mobile ads inside the mobile apps, it is a nascent idea at this point but in future, this will become a bigger source of revenue vs a download fee. One panelist suggested that considering the fact that there are 4 times the no of mobiles in the world compared to no of PCs, there is a dearth of content for mobile so that is an area which developers can look at. Also RIM has stated that minimum pricing for BlackBerry App Store app will be $2.99 – this may invite more serious developers who have a revenue-generating business model in mind.

Per Robb Hyatt from AT&T, iPhone took AT&T Mobility from “2nd innings straight to 5th innings” in mobile data; I found this interesting.

When asked where does Google come into picture, the panelists mused that it is one of many players unlike in internet where it dominates via search. One interesting aspect about Google Android is that it has reduced manufacturing costs for OEMs (read cellphone makers) dramatically. Eg Samsung or Motorola no longer have to spend tons in maintaining custom mobile OS for its phones. It can focus on making compelling phones and just use Android for mobile OS.

On Mobile Payments, the panel thought that Near Field Communications or NFC payments are still in infancy although other countries are slightly ahead of USA in this area.  Also consumers need to become comfortable about security before mass adoption of Mobile Banking will be seen. Andy gave an example of “Banking for the Unbanked” in Kenya on Safaricom network and its mobile payment offering called m-pesa. The 7 million m-pesa customers use mobile as a payment mechanism and receive paychecks on it. This is excellent innovation in mobile payment. Everybody agreed that mobile payments and banking is a trust model as much as it is a technology model.

Then the natural question : has recession effected mobile apps business ? Apparently not, per the panel. It seems consumers will not give up mobile and its little entertainment oriented apps just like they won’t give up on movies in a downtime. Mobile is an essential device today for a consumer.

All panelists agreed that there is lot of innovation remaining in mobile app arena. The primary gaps remain in user experience and business model evolution. iPhone experience is the beginning and not the end.

Well, very informative and highly intuitive discussion. Thanks to the panel and to the organizing team at the WTF – Maury Margol, Bob McIntyre and Steve Bachman.

CellStrat Annual India Mobile Media Survey 2009 – status

We are pleased to report that this survey that we started recently is progressing well. We have received some excellent responses from top executives who have shown high interest in mobile media and related applications on the mobile channel. Some very interesting observations are emerging (this is a sample from responses so far,  survey is still progressing so not done yet) :

– As suspected Airtel is most common operator in use and Vodafone follows after that.

– 93% execs use mobile phone for uses beyond talking

– All execs feel that mobile represents the biggest opportunity in next 5 years

– SMS is the killer data app with IVR also getting high marks

– Browsing, Search and Directions are most popular mobile web uses in that order. Banking is still low relative to these other uses – we feel trust factor is keeping banking low

– Mobile marketing campaigns are primarily about information disbursals rather than for promotions or customer service.

– Most execs give very high marks to mobile advertising. Of course SMS is the main theme here.

Well – we are confident that you will be enriched with the results of this survey. It is indeed coming out very well. We encourage media, marketing and technology heads to participate and others to get access to this survey. It is the most critical and actional business intelligence on the latest and most exciting media channel of today’s time – the mobile device.

To participate or get access to the survey report, please contact us at :

http://www.cellstrat.com/mobilemediasurvey.html

The final survey report will be available at the end of April.

VS

Mobile Advertising is still in its early stage of existence…

Advertising on mobile when compared to the other advertising mediums, such as TV, radio and print, still makes up a tiny percentage at just 0.4 percent. Even in Japan, which can be considered the most advanced mobile advertising market, it’s about 1 percent. But also, with high uncertainty in world economies, advertisers will be reducing their budgets in radio and print, and focusing on the Internet and mobile.

As per my recent conversations with advertisers in India, some still stick with the traditional media like print and radio, but still some others are getting determined slowly that print and radio won’t work, and are more costly. Although mobile is new and more difficult to understand, they are getting attracted to it by the promise of better ROIs.

Some people in India feel that SMS (which is more like mobile marketing than it is mobile advertising) will be forgotten or will become a concept of the past with iPhone coming in and better data rates. But, I feel SMS is here to stay and will remain there for atleast next 5-7 years. It’s a major revenue earner for mobile marketing agencies. It may just be a part of marketing but sooner or later will definietly be combined by innovators to become part of advertising and then it will further boost the confidence of now partially hesitent advertisers.

Vishal