Changes afoot for iAd

According to reports in the digital media press, iAd is contacting UK agencies about changes in their pricing policy and structure. In the US, the minimum spend has already been reduced from $1m to $100k, but it seems there will be even further developments. Currently iAd uses a ‘hybrid’ (or double) pricing model of both CPM and CPC for its advertising, which is a major barrier for advertisers. Apple are also expected to increase payouts to developers in order to create further distribution of ad content.

The expected changes come at a time when the mobile advertising market is hotting up. Google’s Admob has moved closer to the Adwords model and Facebook are likely to launch a major mobile ad initiative before the spring. Back in June 2011, I wrote that Apple seemed to be losing interest in iAd and a report by The Digital Times suggested that the recent moves are a last-ditch attempt save the project. Apple have driven the consumer market in mobile, but have failed to ignite the world of advertising. With the amount of profit they’re making, I suspect they’re not too worried about it.

‘No Ads’ says Jobs. So where does that leave iAd?

Interesting to see that amongst all the figures showing Apple’s mobile dominance at the developer’s conference, there was no mention of iAd. Although Steve Jobs didn’t dismiss iAd as such, when he was speaking about iCloud he said:  “We build products that we want for ourselves, too, and we just don’t want ads.” Hmm. OK, so it’s a different channel to iAd, which is focussed on rich media advertising delivered via apps. But it isn’t exactly an endorsement of it.

Apple as an advertising network doesn’t seem to sit comfortably with their great product design/user experience philosophy. Having had some conversations with iAd in the UK last week, they still seem to be finding their feet with it. The minimum spend has been reduced, but it is still more than most brands total mobile marketing budget. Neither is there is an ad management platform or automated reporting – something that many brands and agencies would want in order to book and refine their campaigns.

Another update to iOS, the Safari Reader will remove ‘clutter’ from browsed sites. That could well include ads, but in spite of enquiries from the marketing press, Apple failed to shed any more light on it. If it does strip out advertising though, then the new update could scupper the rapidly growing mobile advertising market. iPhone users are important to this channel as they tend to be more affluent and browse the web more than anyone else. Without that market, what are the implications for Google’s Admob, Millenial and InMobi?

Both the lack of mention for iAd and the possible change in Safari could be a really big deal for mobile advertising.
More on the iAd snub here. 

More on the Safari update here.

I Can’t Believe it’s not Better!

OK, bad grammer but the title is an excuse for a pun on the marketing failure of the brand ‘I can’t believe it’s not butter’. They have produced a series of iPhone ads linking to a non-mobile optimised site. The banners were placed in the app What To Expect, and links to their standard, multi-column formatted website. iPhone users would have to zoom in to read the text. It seems that some brands still don’t get the point of optimising for mobile.

Mobile Location Advertising 20 Times More Effective than Online Banners

Although this figure comes from the CEO of HopStop, a digial advertising specialist, it seems to ring true. “We’re seeing click-through rates on the mobile Web and on our apps that exceed our online ads by 20 times,” said Joe Meyer CEO of HopStop speaking at an online advertising conference in the US. Many of the examples come from the likes of McDonalds and Starbucks. Inevitably multi-location outlets like these are the most likely to attract impulse offers, so it is impossible to say if the 20 times figure applies to other sectors.

Also at the conference were research company InsightExpress who revealed some interesting figures about where people use their phones: 82 percent said in a store, 55 percent said in a doctor’s office or hospital, 36 percent said at a sporting event, 17 percent said during a movie at the theater (the film must have been very dull), 14 percent said while flying on a plane and 7 percent during church service (yes, really). The research also showed that it’s good news for mobile retail, with 56% of people visiting a retailers mobile web site. Consistant with previous studies, such as the IAB, they found that 48% of people would prefer to use the mobile web whereas 36% have a preference for apps (the remainder didn’t mind).

The conclusion was that mobile advertising can be 2-3 times more effective than online, in both awareness and click through rates. A spokesperson for the company said: ‘High mobile ad awareness has a lot to do with rich-media ad units and social media integration. Two words, relevancy and respect, and that is what it comes down to—keep those two buzz words top of mind.” Well said.

Where do AdMob’s 2 billion daily requests come from?

The Google Mobile mobile ads blog has given some insight into the countries that generate the most traffic to their mobile Ad network, AdMob. The 80:20 rule still seems to apply, with just 17 countries out of 190 served, providing 80% of the traffic. Whilst North America is the biggest region, Asia takes second place, with Europe in third. Surprisingly India saw the most ads served in Asia. Although the country has a large mobile population, it is generally represented by lower end handsets and small data usage. However this shows the trend towards more smartphones and a growing middle class population. In Europe, the UK represented 1/3rd of advertising traffic, with France and then Germany some way behind.

With 1000% rises in traffic in some territories, Google predicted that 2011 would be a ‘break-out year for mobile’. It looks like mobile advertising has really come of age.

Review of Mobile for 2010

Last year (and the year before) I made a number of predictions about mobile and mobile marketing for the year ahead. 2010 was a good one for mobile marketing. Mobile advertising came of age with AdMob and Apple’s IAd. Many retailers got into mCommerce. And Foursquare showed the potential of location-based marketing with their check-in offer. That’s just a few examples. Looking at last year’s predictions is also a chance to review the year as a whole. So how did the predictions fare? See below – I’ve marked myself out of 10 for accuracy.

Predictions from 2010

2010 will be the year of mobile advertising
8/10 a number of things happened to make mobile advertising a significant channel this year. At the end of 2009 Google acquired AdMob. Big. In June, Apple announced IAd. Very Big. OK, you may say, IAd has a tiny reach, but Apple announced that they had secured a number of brands, and significantly 21% of the mobile advertising market. Add to that the operator DM channels such as O2 More and Orange shots, and you can see that there was significant marketing activity. However, there’s still a long way to go – so I drop two points for that.

Mobile payments will become more common place
8/10 this was a pretty good prediction. I’ve taken off a couple of points as in-app payments haven’t taken off as expected, although the ‘freemium’ model has taken hold. Significantly, the number of mobile retail sites grew rapidly throughout the year. At the start of 2010 no high street UK retailer had a transactional mobile site. By the end, M&S, John Lewis, Tesco Direct and Debenhams all had full mCommerce sites (not to mention Barney’s in the US), with other brands such as Argos to follow very soon. Tesco’s did a study which showed that 10% of people will use their mobile for their Xmas shopping this year. In the world of apps, the likes of Ocado established themselves fully. At the start of the year they took 5% of their orders through their mobile app. By the end of the year it was 10%. Ebay and Amazon expect mobile commerce to overtake the fixed internet within the next few years.

More commercial and branded apps
9/10 with a few notable exceptions, they’re all at it. It seemed like every brand launched an app whether their customers needed it or not!

Behavioural targeting will be on the rise
5/10 it all depends on what you count as behavioural targeting. If you look at the mobile operators, there is very little targetting going on. The direct channels are opt-in to selected sectors, rather than targeted at consumer behaviour. That’s probably a good thing, as the public are very wary of this type of advertising. Still, I drop 5 points for getting it slightly wrong. However, it is strong and growing strong in other ways. Facebook is the ultimate behavioural targeting, and their ad revenue rose significantly. IAd is also a form of targeting, although it is through the apps they use rather than their actual behaviour online.

Privacy
10/10 it’s an issue that won’t go away. Facebook came into major conflict with their users over changes in their privacy policies. There was the Openbook controversy, which showed how much people allow the world to see, and not forgetting the Foursquare inspired, Pleaserobme.com. Although Facebook seem to have placated most of their users for now, it will run and run. Then there was Google’s legal problems over their storing of personal WiFi data … I could go on! When it comes to mobile in particular, the personal-ness of the device will always require careful consideration on the part of brands.

Android will become a major player in mobile OS
10/10 Easy! It’s strange to think that 12 months ago Android was nowhere. By Q3 it had overtaken the iPhone and BlackBerry to become the second biggest mobile OS. Much of that came not from Google’s phone, but a couple of excellent handsets from the likes of HTC and Samsung.

Mobile content and social media aggregation
7/10 I was correct in the intent – we want our social media and our content in one place. However the results weren’t quite as expected (hence the 3 point drop). For example, Vodafone’s 360 was poorly executed and even more poorly advertised. By the end of the year they had quietly dropped it. What happened was that the aggregation went on in the places that the users were already in. The main place is Facebook. With the addition of their email, Facebook are telling people ‘why go anywhere else?’

Apps will still grow – the mobile web cannot replace them
9/10 apps have grown massively this year in large part through Nokia’s OviStore, Blackberry World and Android Market. The mobile web has not replaced apps at that level. What has happened is that the mobile web offers a different user and brand experience. Many brands are developing both web and apps.

Augmented Reality and Image Recognition will not significantly take off
8/10 arguably it’s easy to predict things that won’t happen, but there was a lot of talk about these two in 2009. We’ve seen some great stuff with Layar on the AR side and Google Goggles on the IR side (hence the two points I’ve taken off). However, they are far from mass market. Most mobile AR apps are little more than location services. There were a couple of exceptions, such as the excellent Berlin Wall project. These show the direction it could go to make AR more exciting. Google’s Goggles is a great concept – image based search – but have you tried it? It simply doesn’t work very well. Whilst the possibilities are there, Forrester predicted that it would be some years before AR takes off on mobile.

Mobile social networks will not go it alone
10/10 yes we saw Foursquare and Gowalla, as(almost) pure mobile social networks, but Facebook is THE place for mobile. In the UK 50% of status updates come from mobile phones, and over 150 million of their users update via mobile. Foursquare, on the other hand has a tiny number of users, not only that but it has had to allow status updates straight into Facebook. And anyway, Foursquare isn’t social media, it’s a game. So yes, 10 out of 10 for the prediction!

Ad Agencies like iAd (some do, at least)

Whilst I have been a bit sceptical about both the cost and reach of iAd, it seems that some ad agencies and clients think its pretty good. In an article in emarketer, the overall conclusion was that iAd was good for business. This is not in terms of response rates, but more in terms of branding, mobile media and mobile advertising as a whole. One interesting point was that iAd offers a ‘return on innovation’. Apple is currently the coolest brand out there, certainly in the techie sector, so if you want to be seen as a cool, cutting edge brand, then iAd offers an opportunity to associate with that.
iAdThe other key point is that Apple has brought mobile advertising and in-app ads especially, up the agenda and shown the possibilities of mobile as a branding channel. Even iAd’s (indirect) competitor, AdMob, have said that the awareness of the channel is good for business by raising mobile marketing’s profile.
I previously blogged about comments from a Publicis director who felt that iAd had a tiny reach, was too expensive and will ultimately fail. I agree there are issues, but if you want to appeal to a particular, option forming tech savvy audience then iAd offers some real possibilities. As long as you have the budget.