gigaom: Why the Golden Age of Mobile and Online Advertising Is Upon Us

Morgan Stanley analyst Mary Meeker, head of the firm’s global technology research team, says the mobile market is growing at a phenomenal rate, that online advertising could finally be entering its “golden age” and that online commerce is also slated to take off, thanks in large part to the growth of mobile. Meeker, one of the most prominent brokerage analysts during the early days of the consumer web in the late 1990s, made the projections during a presentation at the Conversational Marketing Summit in New York today. She also said that the level of innovation in the technology sector was currently one of “unprecedented intensity,” both from incumbents and newcomers. The full presentation, which is available on SlideShare, is embedded below.

Meeker said that smartphone shipments will soon exceed those of PCs shipped (both desktops and notebooks), likely in 2012, in what she called an “inflection point” for mobile advertising and e-commerce. Smartphone shipments should also overtake the number of regular (in other words, not Internet-enabled) handsets shipped sometime next year, she said. Meanwhile, use of mobile apps and mobile browsers has doubled in the past year, she noted, adding that the U.S. passed Japan as the country with the most 3G users last year, with more than 123 million to Japan’s 99 million.

The biggest sign of a potential boom in online advertising, according to the Morgan Stanley analyst, is the gap between the time users spend with various forms of media and the amount of money advertisers are devoting them, which she said was still “out of whack.” In particular, time spent with print makes up just 12 percent of users’ media consumption habits, but consumes 26 percent of the ad dollars; Internet usage, meanwhile, accounts for 28 percent of media consumption but just 13 percent of the advertising dollars spent. That, Meeker said, is “a $50 billion opportunity.”

Meeker also said that the Apple iPad was “one of the fastest-growing new consumer computing devices ever” — taking just 28 days to sell a million units, something that took the iPhone more than twice as long (the only two things to hit one million faster were the Nintendo Wii and the Nintendo DS, both of which launched during the Christmas shopping season). Apple iPad Internet usage is more like that of a desktop PC than a smartphone, Meeker said, in terms of monthly page views per device.

The analyst also said that there is now an “unusually high level of innovation from incumbents” such as Apple, Google and Amazon, as well as Nintendo, Microsoft and PayPal, but also said that the technology sector is seeing a high level of innovation from “new attackers” as well, including Facebook, Skype, Zynga and Twitter. And when it comes to cloud computing, Meeker said consumers are ahead of businesses in their adoption of the cloud, which has a number of implications (for more discussion of the cloud and its impact, come to GigaOM’s Structure conference in June), among them:

* -the quality of home-based computing has been evolving at a faster pace than enterprise computing for years, and cloud-based connectivity has become so pervasive that enterprises are finally being forced to play catch up.
* -wireless device (smartphone/tablet) adoption has encouraged consumers to expect (and demand) cloud-based high-speed wireless connectivity at all times.
* -recession-related technology spending delays allowed cloud-based services to evolve/develop to levels that are more ‘enterprise-ready.’
* -cloud-based security concerns have abated somewhat as enterprises realize the difference in risk profile between internal and external environments is lower than they once believed.

Meeker also reiterated points made in a similar presentation at Google in April, including the fact that mobile Internet usage is ramping faster than desktop Internet usage did, with Apple “leading the charge,” and that media consumption is becoming much more social, with social networking activity surpassing email...gigaom

Canadian Marketing Blog - Canadian Marketing Association: Mobile Commerce & Retailers

A previous post of mine talked about the rise in retailers focusing on mobile marketing strategy to increase their awareness, drive traffic to stores and keep customers engaged via their mobile device. The mobile ecosystem is evolving extremely quickly and I’d like to continue the theme of retailers but will take this opportunity to focus in greater detail on mobile commerce.

Mobile commerce means different things to different people, depending on who you’re talking to. I’ve come across the following definitions of Mobile Commerce:

• PSMS (Premium SMS) where a user’s mobile bill is invoiced due to a user sending a premium rated SMS to a short code (MO) or by the user accepting a subscription type billing for alerts.
• NFC (Near Field Communication) where an OEM (Original Equipment Manufacturer) equips handsets with Hardware/Software that facilitates a wave and pay type of solution. (May also use RFID – Radio Frequency Identification, Bluetooth, enhanced SIM cards)
• Other often used terms are Mobile wallets, where users can use third party providers like PayPal to facilitate transactions.
• Mobile banking is another popular term that gets thrown into the mix, however M-Banking has very little coverage in this post.

The M-Commerce I’m talking about is payment of products or services via credit card (debit card) using an encrypted mobile internet protocol to facilitate purchases. You’ll also hear the term PCI DSS compliant in this mix (for those not familiar with this acronym, it means Payment Card Industry Compliance Data Security Standard). It’s designed to mask/encrypt the credit/debit card information.

Our discussions with retailers have yielded some thought provoking information, most significantly that consumers are making purchases from their mobile devices on NON mobile friendly e-commerce sites. Not surprisingly the benchmarks for time on site is lower, bounce rates are higher, basket size is lower and drop-off is higher when comparing the experience to established e-commerce portals. Nonetheless the major point here is that PEOPLE ARE BUYING!

This begs the question of the ROI (the Hard ROI not media ROI) of developing a commerce portal that is mobile friendly where benchmarks narrow. To me, this seems like one of the easier business cases to build especially considering the enormous momentum of web friendly handsets, affordable data fees, and increased propensity by consumers to use their Credit Cards on mobile devices.

Mobile marketing will reach new heights because transactions will close communication and campaign loops to purchases. Now we have scenarios where end of the season clearance sales will live inside mobile portals. It’s also worthy to recognize other channels of mobile marketing that will benefit from commerce like SMS. Reward your loyal SMS subscribers with first to know and exclusive offers and alerts of discounted items. Use mobile display banner ads and yield exceptionally high click through rates of featured items and convert to checkout. Develop mobile friendly versions of emails for those consumers who read e-newsletters on handsets. Explore affiliate mobile networks (and cross retailer downloadable applications) and pay the content owners or application owners upon conversion to sale. I’d like nothing better than to see SMS joke of the day ads replaced by “Be the first to own an iPad! Click here”.

Some thought starters…

Go to your webmaster and ask him/her to pull the web reports on types of browsers accessing your site. Parse the data and look at bounce rates of mobile browsers vs. traditional browsers. Take a quick audit of your page views accessed through mobile browsers, what information is being viewed? Some of my guesses are Store Locator/Maps, Store Hours, Specials and Price Comparison tools.

Pull the report from your email CRM activities, see how many page views are coming from Mobile browsers – and then look at your newsletter on your handheld.

Start asking for mobile numbers and opt-ins from your sign up section of your website – you’ll be shocked at how many consumers are willing to give up their mobile number.

Look at using web to mobile tools like “send to my mobile” for online flyer/catalog searches that will send wish lists, product information, mobile coupons, store address etc. direct to you via a shortcode (or by updating your native application through the PUSH API).

Tag offline media like flyers, FSIs, POS, print, newspaper, OOH with mobile messaging calls to action and start changing impressions to interactions and now transactions.

If your site has e-commerce does your commerce provider have the ability to use webservices? You’ll need to decide on a transcoded (operation of changing data from one format to another, such as an XML to HTML, so the output will be displayed in an appropriate manner for the device) mobile site OR to build from scratch (potentially using a mobile internet middleware solution) optimizing navigation and content for groupings of mobile handsets based on form, feature and function. Do NOT compromise on user experience.

The advent of mobile transactions will better equip marketers to assess the dollar value of a mobile number, which in my mind is critical for next generation mobile strategy. Our industry must move beyond last of the budget and end of the year throw in experiments. Above all focus on utility, don’t think of mobile as native application, OR messaging, OR mobile web, OR mobile advertising – these are all ANDs.

Finally don’t build your mobile strategy on an island – it must integrate and fit within your overall communication plan...Canadian Marketing Blog - Canadian Marketing Association by Brady Murphy