mobilestance.com

Google’s Newfound Strategic Advantage in US 4G Market Goes Largely Overlooked.

While coverage of last week’s WiMax Mega-Deal largely focused on how the new venture would affect Sprint, Clearwire, and its largest investors (Comcast and Intel), there was strangely little attention payed to the tremendous up-side Google stands to reap from its relatively minor investment of “only” $500 million (as compared to Comcast’s $1.05 billion, Intel’s $1 billion and Time Warner’s $550 million investments).

With little fanfare, the WSJ reported that “Google will become the preferred software developer on the WiMax network, meaning its search service would be the default on new mobile devices.” Additionally, Sprint “agreed to put Google’s mobile operating system, Android, in some Sprint phones.” While the second point is not that surprising (Sprint, as well as Intel, are both members of the Android-focused Open Handset Alliance), the first point may have tremendous impact on the long term landscape of the US mobile search market.

Historically, the major US carriers have been reluctant to grant Google access to their customers, resulting in the search giant’s well-documented difficulties in penetrating the domestic on deck Mobile Search market. Now, as WiMax is likely years ahead of competing domestic 4G technologies such as LTE, Google sits atop a de facto mobile search monopoly in the US wireless broadband space (3G services, while a significant improvement from their predecessors, can hardly be deemed a true “broadband” product experience).

This is a tremendous strategic advantage that may extend beyond mobile search into other highly lucrative areas such as mapping, email, and perhaps event streaming video (YouTube), depending on what Google’s position as the venture’s “preferred software developer” ultimately means. True, consumers will likley be free to navigate to and/or download competitive services from the likes of Yahoo!, MSN and even IAC, but we all know that the majority of users will be content using the default services preloaded on the device.

Google’s advantageous position is further enhanced by the venture’s aggressive cable system partners (Comcast, Time Warner and Bright House), who view the platform as the ultimate response to the “quad-play” service bundles currently offered by Verizon FIOS and AT&T U-verse. The cable companies are locked in a no-holds-barred, block-by-block, all out war with the telcos, and no one should doubt the MSO’s willingness to fiercely market their advantage in wireless broadband. Google, of course, will profoundly benefit from these marketing efforts.

All told, the real value of Google’s first mover advantage in the domestic 4G space will be their opportunity to define their mobile brand in the best of environments, while Yahoo! and company must more or less wait for AT&T and Verizon Wireless to roll out their LTE networks - content with their standard 3G-based services that will no doubt seem primitive in comparison to Google’s souped-up WiMax products.

Verizon, FOX Take on Additional Sales Partners as US Mobile Ad Inventory Glut Continues.

Millennial Media recently announced an agreement with Verizon Wireless which allows the ad network to begin selling a portion of the carrier’s on deck mobile ad inventory. Prior to this move, AOL’s Third Screen Media was the only third party repping Verizon Wireless inventory. It is believed that Third Screen will continue to sell a portion of Verizon’s on deck ad inventory as well as act as the carrier’s primary ad server.

In a similar move, Cambridge, Massachusetts-based mobile ad network (and white-label search provider) JumpTap announced that had signed deals to sell the mobile ad inventory of both NBC Universal and FOX’s Mobile Entertainment Network (which includes Jamba, as well as mobile extensions of FOX programs such as Family Guy and 24). Millennial Media currently is FOX’s exclusive third party sales partner for all FIM mobile sites, such as mySpace mobile, FOX Sports and rottentomatoes.com.

All these moves would be enough to drive media planners crazy, if only they were paying attention - and therein lies the heart of problem. With well more than half of mobile ad inventory going unsold over any given period, its no wonder publishers are feeling a little antsy about the ability of their sales partners to close the deal. And why aren’t buyers buying? That’s really the question, and we’ve a hunch the publishers wont find relief simply be adding additional sales partners.

For our friends on the supply side of the mobile advertising market, we offer the following advice:

1. First, you must accept that you are selling a niche media product - a situation that probably will continue for the next three years at a minimum. This means stop with the “reach story.” Stop telling buyers that “over 250 million US consumers own mobile phones” and start with a more sophisticated segmentation strategy that tells buyers that you can efficiently deliver a specific audience against their specific needs. You’ve already got a solid out-of-home story, but why not do what the niche cable nets and magazines do - start by investing in some real research that shows how your audience indexes against specific product categories (MRI would be a good start).
2. Second, try really experimenting with pricing models other than CPM. Sure, AdMob and a few others have brought text-based CPC inventory to market, but what about getting bold and offering up display-based CPC inventory as well? This will do much to alleviate the inherent risk that buyers must accept in your untested and unproven form of media, and with most of your impressions going unsold month after month you have very little to lose. What’s more, if we’re to believe that mobile click-thrus are really averaging over 2%, then surely you wouldn’t mind putting your numbers on the line with a model that pays out based on campaign performance?
3. Finally, get togther with each other and figure out a way to track uniques across all publishers, ad networks and carriers. Without this, there is no way your media fits into an (even soft) reach/frequency model - the backbone of modern media planning. Saddle up and get it together. You can’t blame media buyers for this one…

Of course, blame cannot be lopped only on the supply side of the equation. Our friends on the buying side have their work cut out for them as well:

1. Stop complaining about the “unattractiveness” of existing mobile ad units. Sure, mobile banners are small - but that’s not the point. When viewed as a percentage of the screen they actually are quite reasonably-sized. Hold your phone up to your face (as one does when one browses the mobile web) and it will take on the prominence of a 65″ plasma. Unfortunately mobile is just too new a medium to start messing about with seriously interruptive forms of advertising. Waiting for Verizon to approve that full screen “roadblock” ad unit? Don’t hold your breath.
2. Take the time to understand what’s really out there. Shaken by rumors of $50 mobile CPMs? You might be surprised to learn that quality mobile display inventory can be had for under $5. Still not happy with mobile ad banners? Well, folks like Greystripe have full screen units for sale, and there are plenty of content integration options with the likes of Buzzd, UpSnap and Free-411. These guys are simply dying to meet you and tell you about what they’re got for sale, so do everyone a favor and put aside 30 minutes a week to meet with them. Get smart on the mobile publishing side and your clients may just reward you.
3. Finally, challenge the publishers and ad networks to craft real solutions to your clients business objectives. This means sharing (some) information on what you’re trying to accomplish on the media side in terms of strategy, reach and intended action. Too often media salespersons are simply left guessing as to what value their product can add a larger media plan. Is it any wonder they often fall short? I know from experience that these media sales people are a very creative, sharp and hardworking sort. Give them the information they need to succeed and they just might surprise you with a program that makes you both look like rock stars.

We don’t pretend to have all the answers, but we’re more than comfortable with the concept that the more things stay the same, the more mobile advertising will stagnate.

Agree? Disagree? Leave a comment and continue the conversation.

Who Among Us Can Argue with the Time-Tested Wisdom Of “Whoever Denied It, Supplies It?”

There are few gadgets, mobile or otherwise, more eagerly anticipated than the release of the world’s first handset running on Google’s Android operating system.

So when leaked details from HTC’s upcoming Android handset hit the web late last week many were quick to take notice. The handset, dubbed “Dream” by HTC’s Philip K. Dick-loving creative team, includes “a large touchscreen and a full (flip/slide out) QWERTY keypad,” this according to Infoworld. According to an unidentified source “close to the situation” the “HTC’s Google handset is just over 5 inches long and 3 inches wide, with a keypad underneath the screen that either slides out or swivels out… Internet navigational controls are situated below the screen on the handset.”

The source claims that “the handset will likely hit the market near the end of this year” and that the handset may be the first “Google Android” phone on the market. HTC would not comment on any specific details of the handset, other than to confirm its existence.

The HTC “news” comes on the heels of a string of related Android-related rumors of variable accuracy. Back in January Dell was rumored to be working on the world’s first Android phone that many speculated would be announced in Barcelona at the Mobile World Congress the following month. This rumor ultimately turned out to be false, as not only did Dell officially deny any such handset or future Android-related products were in development, but it was also a no-show at 3GSM.

Not to be left out, serious rumors began swirling around Samsung’s Android designs following a Robert X. Cringley post claiming that the Korean handset manufacturer would be releasing two Google-branded Android handsets in 2008; a high-end model in September and a lower-end device around the holidays. Cringley also cites an unnamed person (”you know who you are”) as the source behind the leaked information, who goes on to claim that “both [devices] will include WiFi… The high-end phone will look somewhat like a Blackberry Pearl, but the screen flips up and there is a keyboard for texting. No word on pricing for the high-end phone, but the second model is intended to be less than $100 — AFTER Christmas.” The post identifies both T-Mobile USA and Verizon as potential carrier partners.

We find it curious that the Samsung handset described by Cringley is eerily similar to the leaked details of HTC Dream (including the swing out QWERTY keyboard), perhaps giving more credence to the adage “Whoever Smelt it, Dealt it.” Regardless, mobilestance.com will continue its Android Watch series until an actual sighting appears in the wild. In the meantime, please send us any unsubstantiated rumors, gossip or just pure speculation relating to what will likely be the biggest moment in mobile for 2008: Day one of the Android Invasion.

This week was marked by an extraordinary series of high profile Mobile Web developments… which, when viewed in aggregate, were seen by many as evidence that the nascent channel has finally reached an inflection point.

All three major areas of the mobile web “ecosystem” (carriers, publishers and advertisers) announced significant site launches, partnerships and traffic milestones, including several blue-chip advertisers and content publishers such as American Airlines, YouTube, Yahoo!, NBC, ABC, A&E and the New York Times.

Despite these encouraging developments, several notable marketplace events served to point out the shortcomings of the emerging mobile web space, including a reminder of a glaring limitation of the mobile web from a metrics and reporting standpoint, as well as accounts of a public tirade involving nearly the entire mobile value chain - from one of the mobile industry’s more prominent (and animated) executives.

A busy week in the World of WAPcraft to be sure… here’s some of the major highlights:

• Carriers. Last week’s most significant Mobile Web development came from AT&T Mobility, who announced a strategic alliance with Yahoo! whereby the internet giant will begin serving ads on the carrier’s “MEdia Net” mobile portal. Under the terms of the agreement, Yahoo! and AT&T will divide up the on-deck advertising inventory for sale and/or for internal use. Additionally, AT&T ’s yellowpages.com will now power local search on both AT&T’s Mobile and Wireline Web properties. AT&T has not yet announced when these changes will take affect.

  AT&T Mobility’s move follows earlier moves by Sprint and Verizon Wireless. Collectively, the three carriers represent approximately 78% of the US mobile market. T-Mobile, the last of the “big four” US carriers without an on-deck mobile advertising play, has tied up with Yahoo! to serve ads on its UK “Web’n'Walk”mobile portal. Clearly the announcement from AT&T Mobility would inhibit T-Mobile’s ability to expand their Yahoo! relationship here in the US.

• Publishers. This week witnessed an abundance of mobile website launches and/or relaunches from many of the larger content providers. YouTube announced the launch of its new Mobile Web site (m.youtube.com), as well as a new J2ME application (supported on Nokia 6110, 6120, E65, N73, N95 and Sony Ericsson k800 and w880). NBC announced the launch of 40 new WAP sites (as well as 3 new mobile video channels), including dedicated mobile web sites for NBC programs such as 30 Rock, ER, Friday Night Lights and Saturday Night Live. Not to be outdone, ABC News announced that its mobile site (m.abcnews.com) would be providing “real time” US presidential election results, although Mobile Marketer reports that ABC refreshes its mobile website content [only] on an hourly basis.

  On the cable side, A&E Television announced the launch of mobile the A&E Network portal (mobile.aetv.com), as well as dedicated sites for The History Channel (mobile.history.com) and The Biography Channel (mobile.biography.com). The A&E mobile sites feature fairly standard mobile web fare, including “What’s on Tonight”, “Program Descriptions and Photos”, “Fan Polls and Trivia Games” and “Downloadable Wallpapers and Ring Tones.”

  Finally, moconews.net reported that the New York Times mobile website is now generating an average of 10MM page impressions per month, a 600% year-over-year traffic increase.

• Advertisers. American Airlines announced the launch an extravagant new mobile web site that is sure to raise the bar for mobile websites in the airline category. The site utilizes a common URL approach (www.aa.com), which automatically redirects mobile users to device-appropriate site versions (although mobile users have the option of reverting to the full HTML site, an option that hopefully will soon become a standard feature on most mobile websites). Currently the AA.com mobile site features include the ability for users to “check in for a flight, view their itinerary, check schedules, check the status of their flights, get information on destinations, weather or airports and contact American Airlines.”

  Future AA.com mobile enhancements targeted for a Spring ‘08 launch include the ability for users to “book flights, change their reservations, view fare specials, request upgrades and enroll in” American’s AAdvantage loyalty program. Additionally, the carrier states that “many pages also will be viewable in Spanish.”

• Criticism. UK SEO provider AccuraCast cast a spotlight on Google’s inability to effectively track conversions generated from AdWords Mobile. The challenge faced by Google is that its ability to track conversions relies on either Java script (embedded on a publisher’s page) or tracking cookies - technologies not supported by most (if not all, in the case of Java) mobile web browsers. To its credit, Google acknowledges its system’s shortcomings, noting that “conversion rate, cost-per-conversion, cost-per-transaction and value/click are adjusted to reflect only those sites from which we can track conversions.”

  In lighter news, this week at the AlwaysOn Media event in New York City Cyriac Roeding, SVP of CBS mobile, unleashed a public rant against the complexity and inherent dysfunction of the mobile ecosystem. Apparently no one was spared from Teutonic executive’s assault on the mobile industry; From the carriers (there’s too many of them! lack of technology standards! too many pricing options! too many service packages! poor marketing!) to the publishers and handset manufacturers (poor usability! content poorly organized!) and even the advertisers themselves! (they don’t understand mobile or the value it brings!). While attendees reported that Mr. Reoding’s “marketplace observations” were greeted with wild applause, mobilestance finds it ironic that the current Chairman of the Mobile Marketing Association Board of Directors would choose to publicly rebuke, ridicule and embarrass nearly all of the organization’s members.

Analysis: While development of the mobile web ecosystem seems to be accelerating, it remains to be seen if a critical mass has been achieved - both in terms of users - as well as content. Still, all the major players in the space (carriers, content publishers, and advertisers) are taking the necessary steps to advance the channel towards reaching the seemingly inevitable goal of mainstream use. That said, it is clear that several prominent hurdles (most notably usability issues such as UI and network speeds, as well as the inability to cookie most mobile devices) still stand in the way of large scale consumer adoption and commercial exploitation of the mobile web.

Last week was punctuated by a steady stream of mobile marketing-related announcements, studies, partnerships and launches - some interesting, some not so much… and none of which truly worthy of a dedicated post.

Nevertheless, taken in aggregate these moves represent an ever-advancing industry, charging forward on the backs of the innovators, the followers, and the “never say hype” over-enthusiastic forecasters.

We give you then, the first of mobilestance.com’s “This Week in Mobile Marketing”

TWIMM: We read the domestic Mobile Marketing trades, studies, announcements and insane market forecasts… so you don’t have to!

• Mobile Search. Nielsen Mobile (formerly Telephia) announced that “46 Million [US] Mobile Data Users Used Mobile Search Functions in Q3 2007.” But before you get all excited, keep in mind that “The most popular form of mobile search among data users in Q3 2007 was 411 (18.1 million users), followed closely by SMS (text-message) -based searching, which was used by 14.1 million data users during the same period.” Yep… the “big news” is that folks are mostly using mobile search to look up local phone numbers - not exactly a headline generating statistic. Still, “while local listings were the leading search objective in terms of users, (27.1 million data users searched for local listings in Q3 2007), 14.8 million said they searched for information such as sports scores, news or weather, while nearly a quarter (11.3 million) said they searched for mobile content.” Good news for SMS Ad Networks such as 4INFO . Notably absent from the announcement was any mention of WAP-based search offerings such as those by Google, Yahoo, Jumptap and the like - other than a brief mention that “61% of 411 search users are female, while 60% of WAP (or mobile web) search users are male.”
• Meanwhile in related news, Nokia’s head of search Jussi Pekka Partanen simultaneously hyped local search while taking shots at Google, as reported moconews.net. At the the Visiongain mobile search conference in London last week the handset giant contended that mobile search will be more context-focused than the existing page rank-driven engines currently dominating the desktop search market. Nokia’s current “Nokia Search” product seems more evolutionary than revolutionary, combining web search with local (meaning: on the device) content search.
• The Mobile Web. 40% of web publishers have launched mobile sites, with another 25% planing to do so in the next year, this according to Jupiter Research in a report entitled “Mobile web sites: Designing for mobility.” The number is somewhat misleading, insomuch as “this number… likely reflects mobile versions that consist of frames and offer a kludgy user interface,” or so says Mediapost. The report states that only 3% of the above mobile sites are “mobile advertising enabled” - in that they have the ability to optimize ad delivery based on whether the user is viewing the page via a mobile device (versus a PC). Mediapost also notes that up to 1/3 of these pages enable mobile commerce of some sort, such as “instant transactions and the ability to drive shoppers into nearby stores” - a fairly vague definition of mobile commerce to be sure.
• Notable Mobile Website launches included a dedicated mobile version of FIM’s Photobucket (m.photobucket.com), Discovery Mobile’s new mobile portal (discoverymobile.com, which houses the all of Discovery Communications’ mobile sites, such as Discovery Channel Mobile, Animal Planet Mobile, and TLC Mobile), and USA.gov Mobile (http://mobile.usa.gov - which seems to be a fairly straightforward RSS fed Gov’t info formatted for mobile).
• Mobile Content. The NBA announced that they are partnering with Turner to handle all of its mobile-related content offerings, this according to Fierce Mobile Content. Fierce reported that “the cable network will assume operational control of the league’s digital efforts, including its mobile and broadband businesses. The partnership, effective for the 2008-09 NBA season and continuing through the 2015-16 campaign, also calls for TBS to take over programming, marketing and technical operations of NBA TV, the league’s 24-hour digital television network, and host and operate the NBA.com Network, which includes the NBA.com, WNBA.com and NBADLeague.com websites. In addition, TBS will operate NBA League Pass, the league’s out-of-market game package. TBS, Inc. and the NBA will jointly sell advertising for all of the league’s digital assets.”
• QR Codes. In a rare break from our “US Bias,” mobilestance.com continues to cover The Sun’s “Babe-Infused” QR Code efforts (UK). This week the Sun announced the results of its experiment with the promising mobile marketing technology. According to the Sun, the “new mobile content service has achieved early success with around 11,000 users registered so far.” Buoyed by these numbers, the tabloid plans on publishing “another pull-out (supplement in The Sun) to further inform people on how to use QR codes.”
• Research-Driven Market Hype. The results of two “hypefull” Mobile Marketing studies were announced last week. The first was on Monday from ABI Research, who announced that “mobile marketing is expected to grow to over $24 billion worldwide in 2013, jumping from just $1.8 billion in 2007,” this according to the research firm’s study/product entitled “Mobile Marketing and Advertising” (retail price: $4500). The second came from Advertiser Perceptions, who reported on Wednesday that “26% [of advertisers] said they were currently using mobile, 20% said they planned to use it in the next six months, and 54% said they are not currently using mobile,” as reported by Ad Age. These numbers were based on surveys of “2,000 brand marketers and agencies” as part of their “Wave Eight” study that seems to cover both “hot” hand held media channels, such mobile video and search -as well as “not so hot” channels such as podcasting.
• Miscellaneous News. The FCC launched a probe to “determine whether mobile phone text messages and short codes are covered by non-discrimination provisions of the telecom act,” this according to RCR Wireless News. The FCC move comes in wake of Verizon’s recent high-profile decision to block text messages from NARAL Pro-Choice America - a decision it quickly reversed under pressure from from a successful grass-roots campaign the organization launched against the carrier. Finally, Steve Jobs announced an underwhelming firmware update to the iPhone at last week’s Macworld 2008. Among the updates included features that now allowing users to send group SMS messages (something I can do on my two year old RAZR) and the non-GPS-based “Blue Location BEacon” feature in Google Maps (something I’ve been able to do on my Blackberry since Google launched the service late last year). Baby steps, to be sure. Forget a 3G version… I’m still waiting for such standard “features” as Cut and Paste!

So much has been written in the last week or so following the announcement by Verizon Wireless that they would be opening up their network to handsets sold by third parties, and that they would be streamlining the (currently) painstaking process of third party application development.

Most have focused on the reactionary nature of Verizon’s move, that it was simply a defensive move to counter the coming Android threat, AT&T’s iPhone, as well as to satisfy the new FCC rules governing the upcoming Spectrum Auction… rules also pushed through in large part to Google’s marginally-successful Congressional lobbying efforts. In general, the bulk of the coverage from the mainstream media and major industry blogs have largely written off Verizon’s move as a token gesture that will have little impact on the market for at least the next several years. In many ways these publications are correct, yet clearly they have missed the larger picture.

But to the mobile marketing community, as well as the marketing community at large, the shift represents the beginnings of a long-awaited shift towards a working Mobile Marketing system. I say “working” because the current environment of carrier-specific technology standards and business practices makes for an overly-fragmented, cumbersome system that seems counter its own ends. Divergent carrier technologies notwithstanding, the idea that third-party developers can now publish applications on the Verizon network without having to be “approved” by the carrier is a watershed moment in US mobile marketing, opening up roughly 25% of the marketplace that was, until now, more or less unreachable to the “free to the end user,” advertising-supported model.

For US consumers, innovative and (just as important) inexpensive (handset and/or ad-supported) mobile applications will become far more commonplace, as handset manufacturers will now have the freedom of preloading applications that consumers (rather than the carriers) are interested in using. While these handsets will inherently carry a higher MSRP due to the lack of carrier subsidy, it is my prediction that pricing for “non-carrier subsidized” / D2C handsets will ultimately not become a barrier to purchase, as consumers will value the benefit of getting the handset they (actually) want, rather than being forced into the handset the carrier wants them to have.

Change is a beautiful thing.

No one really expects that they will actually win the bid, or even wants to… why then is Google engaging in this escapade?

a) to further push open standards, so as to aid in Android penetration?
b) to aggregivate Verizon, AT&T, T-Mobile and others?
c) world domination, FUD-style