Showing posts with label mobile advertising. Show all posts
Showing posts with label mobile advertising. Show all posts

Thursday, October 20, 2011

Mobile Commerce, Payments Inflection Point?

There have been a couple other mobile inflection points in the mobile business recently.

It appears as though 2008 was noteworthy in several respects. It was the year the global "Great Recession" hit. It also seems to have been the year for big changes in the global mobile phone business.

Notably, it seems to have been the year that the iPhone began to stamp its leadership on the device market. It also seems to have been the year that prior successful feature phone strategies began to unravel. 
iPhone inflection point

Mobile advertising remains a small part of overall spending on online advertising or advertising in general. 


But it is noteworthy that the Interactive Advertising Bureau now has started to track and report mobile advertising sales volume.

That is an indicator that mobile advertising has reached an inflection point. 
Mobile advertising inflection point

Think "turning point"  or "critical mass" or "escape velocity" instead of "inflection point" and you will get the idea. 

Monday, October 17, 2011

Will Google Shatter U.S. Mobile Ad Forecasts for 2012?


Could Google grow its mobile advertising to $6 billion in 2012? Here's the math. If Google's present rate of sales were extrapolated for the next 12 months, it would represent about $2.5 billion. But the growth rate seems to have accelerated sharply of late.

Google CEO Larry Page says mobile revenue has grown 2.5 times in the last 12 months.


If that rate were to continue for the next 12 months, Google would then reach a run rate on the order of $6.25 billion by the end of the period.


Actual revenues would be shy of that figure, since the highest quarterly revenue would be seen only at the end of the year. Such growth would cause analysts to dramatically revise their forecasts By some estimates, all U.S. mobile ad revenues will reach only about 1.6 billion by 2012.


Will Google See $6.25 Billion In Mobile Ad Revenue Next Year?


Tuesday, September 13, 2011

Are Virtual Goods a Bigger Business Than Advertising?

Sales of virtual goods are a significant, and growing revenue stream for Facebook and many developers who seem to be finding that they can make more money selling digital goods than they can selling apps outright or selling advertising within games.



That isn’t to downplay mobile advertising revenues, as a longer-term source of revenue growth for many participants in the mobile ecosystem.



Mobile advertising in the United States will grow from $491 million in 2009 to $2.9 billion in 2014, according to BIA/Kelsey, a compound annual growth rate of 43 percent. The global market for ads in video games is expected to grow from $3.1 billion in 2010 to $7.2 billion in 2016, according to DFC Intelligence. Video Games: More Ad Revenue.



But revenue models often “are discovered” in the mobile and online space, rather than intentionally created, and that seems to be the case for virtual goods.



Revenue specifically generated from the sale of virtual goods in social games has increased 245 percent from $2.1 billion in 2007 to $7.3 billion in 2010, according to In-Stat. Virtual goods forecast



According to eMarketer, the U.S. virtual goods market is expected to generate $653 million in revenue in 2011, up 28 percent from 2010. U.S. virtual goods revenue



Virtual goods purchased for use in social games might already be a more-important revenue stream for game developers than advertising represents, in other words.



And that might also suggest that virtual goods could be a more important revenue source for at least some social networks, for example, than advertising. Facebook is probably the best example of that, at the moment.



A study published in 2010 by Flurry suggested that monthly average virtual goods revenue per user amounted to $7.80. This far exceeds the ad revenue earned from marketers which is about $1.20 per month per user.




According to PayPal, a facilitator of online payments, about 12 million consumers buy virtual goods every month in the U.S. Often, the purchases are all about online currency. Flurry virtual goods forecast



Virtual goods sales already represent the primary source of revenue for social gaming on Facebook.  Michael Pachter, Wedbush Morgan Securities video game analyst, reports that social gaming has grown from approximately $600 million in 2008 to $1 billion in 2009.   


Further, he forecasts that social gaming will generate nearly $1.6 billion this year, and grow to more than $4 billion by 2013. Virtual goods beat advertising





Javelin Strategy & Research predicts that U.S. revenue from virtual goods will quadruple between 2009 and 2012, from $0.6 billion to $2.4 billion.



The increased use of virtual currencies and socially networked payments present new challenges to traditional payments services providers, regulatory bodies, and even cross-border economies. Virtual currency issues

Wednesday, September 7, 2011

Report: Facebook Doubles Revenue

Facebook has doubled its revenue in the first half of 2011, Reuters reports. Facebook made $1.6 billion in the first six months of this year, nearly double what it made in the same time in 2010. Facebook doubles ad revenue

The largest portion of Facebook's revenue is believed to come from advertising, showing that the company has created a viable ad business. Facebook Doubles Revenue

It isn't yet clear what the composition of the advertising was, but display advertising is where Facebook has been growing rapidly, outpacing Yahoo, which had a big head start, and Google, which is growing its display revenue fast, a business it has not been part of, in the past.

Nor is it clear whether local ads have started to have impact. Many of us probably suspect Facebook has done best in national advertising.

eMarketer_Dispay Ads June11.jpg

Monday, May 16, 2011

Mobile Advertising Hits Inflection Point

Mobile advertising remains a small part of overall spending on online advertising or advertising in general. But it is noteworthy that the Interactive Advertising Bureau now has started to track and report mobile advertising sales volume.

That is an indicator that mobile advertising has reached an inflection point.

One might argue that mobile advertising is just about 10 years behind online advertising in its development.

Saturday, May 7, 2011

Local Mobile Marketing Spend to Grow 2.5X by 2015

mobitrove-us-mobile-promotions-2010.gifTotal U.S mobile promotional spend in 2010 shows a pronounced focus on national., rather than local, campaigns, according to Mobitrove. Almost $2.9 billion of $3 billion worth of "promotions" spending was for national promotions, or about 97 percent of mobile promotional dollars spent in 2010.

One suspects that is going to change over the next several years, as social shopping capabilities and focus starts to grow. The changes might be quite gradual for the first four to five years, as typically is the case when a new business segment gets traction.

After five years, growth is likely to be substantial, as retailers learn how to use local promotions with location services and social networking.

Sunday, May 1, 2011

Millennials Most Responsive To Text Ads

ad-response-by-age.gifGFK MRI has found that the Millennials (born between 1977 and 1994) are 57 percent more likely to recall seeing a text message ad on their mobile device, compared with the average mobile phone user. More importantly, they are 93 percent more likely to have responded to a text ad or made a purchase using text messaging.

Overall, the study found that about 6.2 percent of adults with a mobile phone had looked at an ad sent by SMS. In terms of response, 2.65 percent had used SMS to respond to an ad or make a purchase during the last 30 days.



Sunday, January 23, 2011

Mobile Advertising Could Have a Big Year in 2011

Mobile marketing is finally catching on as a viable marketing and advertising platform, and will be the fastest growing of digital formats in 2011, according to a survey conducted by Deutsche Bank.

In addition to mobile, the fastest-growing online advertising categories in 2011 will be social media and online video, all of which are believed to be gaining share of wallet within online marketing budgets.

Classic display appears to be the most vulnerable to this shift. In fact, half of the respondents think display is losing share, and only 20 percent consider it is gaining share.

“It finally feels like the tipping point for mobile is here,” Deutsche Bank says in its report. “According to our media buyers, mobile will represent roughly five percent to seven percent of online budgets in 2011. That would imply spending of about $1 billion to $1.5 billion in the U.S. market, assuming total online spending of $28 billion.

Monday, December 13, 2010

Mobile Ad Trends 2011




Tuesday, November 2, 2010

Typical U.S. Mobile Ad Campaign is 2-3 Times Bigger than Similar European Campaigns

The United States is the second largest mobile advertising market in the world, behind Japan, Nick Lane, mobileSQUARED chief analyst says. In 2010, the US mobile advertising market will be worth $797.6 million, rising to $5.04 billion in 2015.

As with other forms of online advertising, most users exposed to ads do not actually "click" on mobile ads. (Click on image for a larger view of the data)

In and of itself, that is not a particular problem, as nearly all forms of advertising involve much "waste" (users are exposed who are not actually "prospects").

Because of the country’s vast population, the average mobile campaign spend is significantly larger than anything witnessed in Europe, for example. In the United States, the average mobile advertising campaign spend is between $75,000-100,000.

On average, creatives receive 10 percent to 15 percent of the budget which could total $15,000, for example.  In the UK for instance, the average creative budget would be approximately $5,000 maximum.

In the United States, this equates to a little under 8,000 mobile advertising campaigns, and an average of 21.8 new campaigns each day.


According to ZenithOptimedia, part of the Publicis Groupe, the US is set for a 2.4 percent increase in advertising spend to $151.5 billion in 2010, with global ad spend for 2010 expected to be worth $449.5 billion. For the U.S. advertising industry, mobile represents one percent of total spend.

Enterprises Dominate Mobile Ad Spending

More than a third of interactive marketers have implemented or plan to pilot mobile search and display advertising in the next year, according to Forrester Research analyst Melissa Parrish. And just about everyone believes such spending will grow.

For that reason, Forrester Research expects that interactive marketer spending on mobile search and display will grow at a 28 percent compound annual growth rate over the next five years.

Forrester expects that mobile Internet usage will increase at a compound annual rate of 12.7 percent, with 117 million people — 36 percent of the US population — searching and browsing while using their mobile devices by 2015, Parrish says.

Mobile marketing opportunities will grow as more people use the mobile Internet, of course. At the end of 2007, only 10 percent of U.S. adult subscribers used the mobile Internet. In 2010, mobile Internet usage is up to 27 percent of mobile subscribers, representing 64 million consumers in the
United States market.

Mobile Internet users also are learning to use their mobiles to make purchases. And they aren’t just looking for the nearest coffee house; they’re buying airline tickets, researching cars, and receiving coupons for products like coffee or detergent.

Forrester forecasts that mobile search and display dollars will grow to $2.8 billion by 2015, at a
28 percent CAGR.

But critical mass still is lacking. Though mobile Internet usage is increasing rapidly, marketers still can’t get enough eyeballs on content to justify spending big bucks in the space, says Parrish.

Currently, 78 percent of the US population access the Internet at least monthly while only 21 percent access the mobile Internet. By 2015, mobile Internet usage is expected to reach 43 percent of total desktop Internet usage, making the mobile medium a much more viable channel.

Inability to track performance against spend. More than half of interactive marketers feel they have no capability to measure the ROI or brand impact of their mobile marketing campaigns.

Interactive marketers prefer performance-based campaigns and are willing to pay more for these metrics. Vendors like Google and Bing offer cost-per-click pricing for click-to-call and click-to-get-directions type activities, but mobile display is still largely based on potential impressions, an unsatisfactory metric to most marketers.

Additionally, the holy grail of mobile is location-based marketing, but it’s still unclear how the connection between location-marketing efforts and in-store purchases will occur. Vendors must develop the tools for marketers to track performance and then help marketers understand the value and how to use these new tools.

·Spending by small and mid-sized business is not having too much impact, says Parrish. Forrester’s data suggests that fully 95 percent of mobile advertising dollars currently come from companies with more than $100 million in revenue.

Though the value of mobile advertising is highly relevant to small and mid-sized businesses, which benefit greatly from local and location-specific advertising, smaller budgets and less marketing
expertise will make the percentage of overall spend from SMBs consistently less than eight percent of total mobile spend.

Concerns over privacy, specifically location and carrier information, could provoke a backlash among consumers, leading to some caution as well. Consumers consider mobile phones personal devices to a greater extent than PCs and, for that reason, might continue to expect greater privacy in a mobile context, Parrish suggests.

Monday, October 25, 2010

U.S. Mobile Ad Forecasts: Take Your Pick

Analysts at Borrell Associates admit they are "shocked" by their own analysis of mobile ad growth in the U.S. market, but stand by their forecasts.

Most other researchers take a more "linear" view.

Most new markets grow in a linear fashion until an inflection point, and then growth goes parabolic.

The issue is how soon an inflection point is reached. Borrell Associates obviously believes we are closer to an inflection point than nearly all other observers.

see more here

Wednesday, October 20, 2010

Mobile Advertising Grows 79% in 2010

Some people might say an upside surprise for mobile advertising spending in 2010 means that mobile marketing has broken through to reach the mainstream of digital advertising in 2010. Others would be happy to note the unexpected growth, even if it is still a bit premature to call mobile advertising "mainstream."

This year, U.S. mobile ad spending will be up 79 percent to reach $743 million, eMarketer now forecasts. That growth will slow somewhat to still-dramatic double-digit rates as spending hits over $1.1 billion in 2011 and more than $2.5 billion by 2014. 

Earlier estimates had called for 2010 growth to perhaps $570 million. 

For now, however, text messaging still is the largest channel, with spending of $327 million estimated for 2010. But growth is fastest for video advertising, mobile display and mobile search.

Still, $743 million is a fraction of all U.S. advertising. That is a market worth about $170 billion, so it is a bit premature to talk about how "mainstream" mobile advertising or mobile marketing has become. 

Online advertising is still about 12 percent of total advertising. If you are looking for where the growth is, online and mobile are good bets. But if you are looking at where organizations and businesses spend their money today, mobile would not be one of the largest buckets.


Thursday, September 30, 2010

Most Users Don't Like Ads, but iPad Owners are More Receptive

A new study by Nielsen suggests iPad users, who tend to skew younger and male, are the most receptive to advertising, compared to other smartphone users. Keep in mind the findings are relative. By inference, 65 percent of iPad owners do not enjoy ads on their iPads. Some 82 percent of iPhone users do not enjoy ads, while 83 percent of all connected device owners do not like ads.

Saturday, September 18, 2010

Preference for In-App Advertising Strong Across Platforms

In-App Advertising Works

In-app advertising appears to work, according to Nielsen.

In-App Advertising Preferred by End Users

Mobile advertising is increasingly finding its way into mobile apps, with teenagers being much more receptive than their elders, says Nielsen.

Fifty-eight percent of teens say they “always” or “sometimes” look at mobile ads. In general, men of all ages are more receptive to mobile ads than women. Only 37 percent of men say they are not at all likely to respond to an ad on a mobile device, compared to 44 percent of women.

Across all operating systems, apps users would prefer to view mobile ads within an app. Android users are more likely to click on an advertisement within an application, while iPhone users are the least interested in having ads take them outside of their application.

Mobile Advertising Will Be Indistinguishable from Online Advertising by 2015

About one online marketing dollar in every five spent in 2010 will go to a mobile campaign, says Borrell Associates. By 2015, the mobile share will have grown to almost two of every three dollars spent. Part of the reason for this heady forecast is the expected growth in the number of smartphones, Borrell Associates says.

The rest of the spectacular gains are simply the growing "mobilization" of consumer devices. Within five years, the majority of phones, computers, game machines, e-readers, and GPS navigation devices will be true mobile devices, each capable of receiving mobile-targeted advertising.

In effect, there will no longer be any real distinction between mobile and online, says Borrell Associates.
The other big change is that mobile campaigns will assume greater prominence for local marketers as well.
Today less than seven cents of every mobile marketing dollar is spent locally, by locally owned businesses. About 93 percent of mobile advertising is "national" in focus.

This will change as the devices themselves improve and the tools available to local marketers become less expensive and easier to use. By 2015, a quarter of every mobile marketing dollar will be spent locally, Borrell Associates forecasts.

Tuesday, September 7, 2010

Analytics is Key for All Targeted Advertising

Mobile analytics are crucial for the future of mobile advertising for drop-dead-simple reasons. The whole point of targeted and location-based marketing is that companies pay to create impressions and leads at the times when such pitches are likely to have an impact, and rarely, if ever, at other times.

That old adage about "half my advertising investment being wasted; I just don't know which half" is being challenged by targeted approaches, when it is possible to eliminate the "wasted half."

The long-term repercussions on the advertising ecosystem are hard to predict, though. One might argue that new targeting techniques will drive incrementally more spending, or incrementally less.

Wednesday, August 18, 2010

Mobile Search and Display Advertising Growing Fastest

While it's still too early for most research firms to form reliable estimates for location-based mobile advertising spending, the most relevant figures would be mobile display ad spending, which is expected to increase 59.7% this year, reaching $166 million. By 2013, eMarketer expects mobile display ad spending to reach $546 million.

Overall, the mobile advertising market will reach an estimated $593 million this year, up 42.5% from 2009. By 2013, it's expected to reach $1.5 billion.

eMarketer estimates advertising spending on Facebook will reach $835 million in the US this year, up from $500 million in 2009. Worldwide, Facebook is expected to bring in an estimated $1.28 billion in advertising revenue.

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