Location-based and WiFi ad network JiWire is out with its Q1 insights report. The document contains a range of information drawn from surveys of mobile users who access the internet at mostly JiWire-powered WiFi hotspots. This quarter the company zeroes in on behavior in the travel vertical and examines multi-screen activity and cross-platform conversions accordingly.
We know that travel is a very mobile-centric vertical with lots of apps for smartphones and tablets. And JiWire confirms extensive multi-device usage for travel research and purchases:
Next comes a fascinating chart showing the multi-screen purchase process in travel (a microcosm of consumer behavior more generally). Google documented this phenomenon previously in research showing that 90% of consumers move “sequentially” between different screens throughout the same day.
Below is the JiWire chart showing how consumers start on one device and often convert on another:
The latest installment of "Mobile Path to Purchase" research from Nielsen, xAd and Telmetrics drills down into retail-shopping attitudes and behaviors. As with the broader study, previously released, the findings show a significant percentage of users are doing shopping research exclusively on mobile devices.
The Mobile Path to Purchase study is in its second year. The findings are based on an online survey of 2,000 US smartphone and tablet owners and “observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users.”
According to the report, 42% of smartphone and tablet owners did not consult PCs at all as part of their retail shopping research. The broader study found the overall number to be 46%, who didn't use PCs. This is a staggering data point in my opinion.
Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013
If we extrapolate these "mobile only" numbers, assuming they're representative, we're talking about a potential audience of perhaps 54 million in the US who may be relying primarily or exclusively on smartphones and tablets to shop.
Other noteworthy findings from the study include:
The retail report also seeks to debunk a couple of "myths" about mobile usage. The first is that smartphones are used predominantly "on the go" and/or near the point-of-sale. The study found that smartphones were used throughout the pre-purchase research process and that the largest percentage of use was in fact "at the start" of shopping rather than near the end.
Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013
The second "myth" debunked (though not quite as easily) is the notion that most smartphone owners are "showrooming" whenever they shop. The report says that showrooming (in-store price-comparison shopping) is relatively rare and practiced by a very small minority of users:
Only 6 percent of smartphone users conducted their most recent mobile retail search in-store . . . Mobile shoppers are in fact using their devices for comparison-shopping before and after an in-store visit.
However previous survey findings from the Pew Internet Project and Google argue that significant numbers of smartphone owners do compare prices while in stores. For example, Pew's research found that 72% of smartphone owners used their devices while in retail stores. And the more recent Google-sponsored study reported the top in-store smartphone activities were the following:
What the Nielsen-xAd-Telmetrics data argue is that most of this type of activity occurs before or after someone goes into a store. It may be that the wording of the questions influenced these results, though it may not be possible to entirely reconcile the conflicting findings. Regardless, the more important point is that smartphones and tablets are heavily used by consumers as part of their shopping research.
Accordingly, retailers that are not aggressively addressing the mobile audience are completely missing huge numbers of people and potential sales.
The American Customer Satisfaction Index (ACSI) has released new data on mobile phone satisfaction. Apple (iPhone) comes out on top, as it does in the JD Power surveys. However the iPhone has lost two satisfaction points, while Samung jumped seven points, since last year.
The iPhone may be losing ground because Android devices are being released more frequently with a range of feature improvements and form factors. For example, the iPhone 5's screen, which was enlarged vs. the 4S, looks puny by comparison to some of the Samsung devices.
Most other competitors on the ACSI list gained vs. last year except LG, HTC and BlackBerry. Immediately below are the ACSI rankings.
For comparison purposes, here are the JD Power rankings. After Apple, Nokia came in second beating Samsung. Motorola, second in ACSI's list above, was fourth overall in the JD Power rankings.
The ACSI people will tell you that satisfaction ratings matter because they're broadly predictive of future sales performance. I accept that as sound. However the data from year one have not always correctly predicted market share or sales performance in year two. One case in point is online search, where ratings declines for Google have not translated into market share loses and vice versa for other competitors.
It's also worth noting that the satisfaction rankings differences between JD Power and ACSI are probably the result of a focus on different criteria and different questions to consumers. Thus both lists may not be entirely complete measures of consumer satisfaction. However the iPhone did top both lists, which is significant.
Millennial Media reported Q1 earnings yesterday afternoon. The company said that its revenue grew to $49.4 million from $32.9 million in Q1 2012. However the company saw a $3.8 million net income loss vs. a $4 million loss a year ago.
Non-US revenue was 18.4% vs. 12.1% in Q1 of 2012. Second quarter revenue guidance was $58 million to $60 million.
The company said that its network reached 420 million monthly unique users globally, including approximately 160 million monthly unique users in the United States. Millennial also said that its network was enabled on 42,000 mobile apps.
CFO Michael Avon said on the earnings call that geotargeted, demographically and behaviorally targeted ads were "growing faster than the overall growth rate of the market."
The company cited IDC's estimates that its mobile ad revenues in the US "were second only to Google." FY2012 revenues for Millennial Media were $177.7 million. However Facebook made $391 million in mobile ad revenue in 2012 and is on track to do nearly $1 billion this year.
Directory publisher and local-mobile ad network provider YP said that it had $350 million in mobile ad revenue in 2012.
The Mobile Marketing Association, in connection with its latest conference, has released what it calls the "Mobile Marketing Economic Impact Study." Authored by Columbia University adjunct professors, it's a kind of soup-to-nuts document that includes mobile marketing forecasts as well as discussion of how many jobs are created by the mobile industry. The report makes a pitch for privacy self-regulation as well.
The report asserts that mobile marketing "created 524,000 jobs in 2012." In calculating the economic impact of mobile and projecting mobile marketing spending it correctly sweeps much more broadly than mobile advertising alone. Accordingly the document predicts more than $30 billion in "mobile marketing expenditures" (defined broadly) will be spent by 2015 in the Us.
Mobile Marketing Communications Spending in United States ($Millions)
Here's the MMA's explanation of its marketing categories in the chart above:
Thus a roughly equal amount of mobile marketing spending occurs outside of the framework of "mobile advertising":
Within the overall mix of mobile marketing communications, Mobile Media Advertising will remain the largest single component of spending over the forecast period, reaching $9.2 billion by 2015. But expenditure on mobile marketing communications is not limited merely to advertising in on-device media. Expenditure on mobile direct response (DR) advertising or mobile enhancements within non-mobile media is projected to grow the fastest, growing over four fold from 2012 to 2015, to almost $3 billion; and mobile CRM will continue to be the second largest source of expenditure -- indeed, almost as significant as mobile advertising -- through 2015, when it is expected to reach $7.6 billion.
The forecast for mobile advertising by 2015 is $9.2 billion. Last year the IAB found that marketers had spent just under $3.4 billion on mobile advertising (the MMA figure is just over $3 billion for 2012). The $9.2 billion in the MMA report forecast is probably aggressive but perhaps still within reach.
According to a new forecast by NPD, tablets and touch-screen laptops (tablet-PC hybrids) will dominate the computing landscape in the coming years. More conventional PCs will be in the minority.
Tablets are a new device category really. But let's put aside the longer debate about whether or not tablets should be considered "PCs" at all. There will be more "mobile devices" than traditional PCs (including laptops) sold in the next five years.
At best forecasts can show the direction of the market. But in this case the market's direction is clear.
Global Mobile PC Shipments, 2012-2017
Last week Acer introduced a 7-inch tablet for $169, besting the aggressive pricing of Nexus 7 and comparable Kindle Fire devices. According to one rumor the next Nexus 7 will be priced at $149. But you can already buy a 7-inch Lenovo tablet for $129 on Amazon (quality is another question). The race is on for a "decent" Android tablet starting at $99. I suspect that will come in Q4 this year or very early next.
I was recently in Best Buy and Office Depot/Max and saw the displays of tablets; there are scores of them. It will be challenging for consumers to differentiate them -- especially at the lower end of the market. There will probably be three or four broad consumer criteria for tablets: OS/brand, price, size, specs like memory or battery life.
With the exception of Kindle, Samsung and maybe one or two others the Android tablet universe is a sea of no-name devices. Here the battle will largely be about price. Apple iPads will stand apart because of strong brand identity. However a majority consumers will be price sensitive and likely to simply go after the cheapest "decent" (Android) tablet they find. Indeed, the devices are getting so cheap they're almost disposable.
NPD says "Windows 8 are unlikely to be a major driver of touch adoption." I agree, as presently configured, Microsoft is unlikely to sell many stand-alone tablet devices. Surface Pro tablet-PC hybrids will sell to enterprise customers but Microsoft will struggle to sell basic tablets to consumers unless it reaches that $100 threshold first.
I'm a big opponent of using "shipments" as an indicator of market share. It may be a directional indicator of market share in some cases. But there are times when "shipments" is simply the wrong metric. IDC's latest tablet numbers offer a case-in-point.
The firm reported the following tablet shipment figures globally for Q1:
Basically the positions of Android and iOS tablets have reversed since last year. Shipments are put forward as a proxy for market share by IDC. However that's a dubious proposition at best. Shipments do not equal sales, let alone usage.
The following chart reflects North American tablet traffic share as of March, according to Chitika. After the iPad's 82%, Kindle Fire has a 7% share of traffic. Samsung Galaxy tablets come in at 4.3%. Needless to say these actual traffic data show a massive discrepancy vs. IDC's shipments estimates.
Below is StatCounter data from 2012 (via Royal Pingdom) -- I was unable to find more recent global traffic data. These data reflect something very consistent with the Chitika data above.
In these various geographic markets the iPad is generating around 80% or more of tablet traffic. Even if we assume iPad share has fallen by 10 points since last year, these data are still a radical departure from the IDC figures.
Undoubtedly lower-priced tablets and the sheer proliferation of devices will necessarily diminish the iPad's "shipments share" over time. But it remains to be seen how actual usage is impacted. For the moment market share (as measured by consumer usage and traffic data) looks nothing at all like IDC's projections.
Facebook announced Q1 revenues of $1.46 billion and net income of $219 million. Most usage and engagement metrics were up: daily, monthly and mobile active users. On the latter point Facebook announced 751 million mobile active users, up from 680 million in Q4 2012.
Mobile only users were 189 million vs. 157 million in Q4 2012.
Total ad revenue in Q1 for Facebook was $1.245 billion, which was 85% of total revenue. Of that $1.245 billion ad revenue, 30% was mobile. That's up from 23% in Q4. What that means, as a practical matter, is that Facebook made $373.5 million in mobile ad revenue in Q1.
Facebook COO Sheryl Sandberg characterized Facebook is a “mobile-first” company and offered several examples of the company's mobile success during the earnings call. For example, she said that "3,800 mobile app developers used these ads to drive nearly 25 million downloads."
Facebook's FY 2013 global mobile ad revenues will probably land somewhere between $1.6 and $1.9 billion.
The T-Mobile-MetroPCS merger is now complete. The newly combined company, which is majority (74%) owned by Germany's Deutsche Telekom, debuted on the New York Stock Exchange today under the ticker symbol TMUS. The stock was up about 6% in early trading.
Post-merger, here are the most recent subscriber counts for the four major US wireless carriers:
That makes a total of 301 million accounts, not including smaller regional carriers.
There are approximately 312 million people in the US. Some percentage of the 301 million are obviously second accounts. Measurement firm comScore counts the total US wireless population at 235 million, whereas CTIA says that, as of Q2 2012, there are 321.7 million "wireless subscriber connections."
The "right" number is probably about 250 million. Smartphone penetration is 57% according to comScore and roughly 60% according to Nielsen. Accordingly the US market is closing in on 150 million smartphones. Total US internet penetration stands at 221 million according to comScore.
Within three years (perhaps 24 months) there will be more "mobile devices" and wireless internet penetration than PC internet users. Just under 40% of total media time is now spent on mobile devices (including tablets). However current mobile ad spending is only 9% of the US digital total according to the IAB.
Apple has just released earnings. The company reported quarterly revenues of $43.6 billion. Second quarter revenues in 2012 were $39.2 billion. Total 1H 2013 revenues were $98 billion.
There were better-than-expected iPhone and iPad sales in the quarter. Gross margins came in at 37.5%. This compared to 47.4% last year.
Now the device numbers:
On cheaper devices: There were lots of questions during the earnings call about Apple's competitive position and ability to compete in markets around the world. CEO Tim Cook repeated several times that an aggressively priced iPhone 4 is the crux of Apple's strategy to attract first time smartphone buyers in developing markets.
This is a product, however, that's two generations old. While Apple says it won't make "cheap products" it's very likely that Apple will develop a less expensive iPhone to compete in those markets where "first time buyers" can't afford the state-of-the-art iPhone.
On mobile payments: Tim Cook was asked about getting into mobile payments. Cook responded that the market was in its infancy, implying that Apple would be waiting to enter it in earnest (if at all).
On the prospect of a larger iPhone screen: One of the financial analysts asked about a larger iPhone display. Cook respondend, " The iPhone 5 has the absolute best display in the industry." However he acknowledges that "some customers" value screen size. He explained that larger displays require trade-offs in quality. He then said that the company won't ship a larger iPhone display "while these trade-offs exist." That in turn implies that a larger display may be on the iPhone 6 or a later model.
Samsung is the undisputed ruler of the Android roost. On a global basis it's the dominant handset OEM and there's no real challenge in sight -- other than the iPhone. Samsung continues to eclipse fellow Android manufacturers LG, HTC and Google's own Motorola in terms of sales and market share.
In that context one might expect Samsung to dominate Android-based advertising. Indeed it does. Mobile ad platform Velti has released data that show that Samsung mobile devices see nearly 70% of all Android ad impressions in the US market. This refers to display advertising but it probably extends to search impressions as well.
However on the tablet side, Samsung is second behind Amazon in the US market. There Samsung has had much less success and has yet to product a breakthrough device -- although its Note "phablet" has done well.
The following chart shows Android market share by ad impressions.
Yet when it comes to ad impressions on tablets the iPad and iPad Mini control more than 95% of the market according to Velti's network data. Chitika, another mobile ad network, puts the iPad's traffic share at about 82%, significantly lower though still dominant.
There has been some "cannibalization" of the iPad by its younger and smaller sibling. The Mini is less expensive and has lower margins than the iPad. Indications that the larger iPad's sales have declined in favor of the Mini have, to some degree, contributed to investor anxiety about today's Apple earnings (coming up shortly) .
Mobile payments -- as in buying things in a retail store with a mobile device -- still appear to be years away. Two weeks ago the IAB and InMobi released survey data that showed a range of payment and financial-related activities in mobile.
The survey, conducted in Q1 this year with roughly 1,200 US adult respondents, showed that there were pockets of mobile-financial activity: people capturing coupons, buying digital content and paying selected bills via smartphones. But the road to in-store mobile payments adoption is much longer (say 3 years or more).
In contrast to other types of "mobile payments" and financial services, mobile banking has taken off more rapidly than financial institutions anticipated. However mobile banking is really a case of people accessing information via tablets and smartphones that they already get from a PC. There's essentially no new behavior here, with the exception of mobile deposits (not yet widely performed).
Are you aware of any mobile financial services features from your bank?
Source: IAB, InMobi (n=1,242 US adults)
Capturing and redeeming mobile coupons was the most popular financial-related activity among this pool of respondents (57%). There's no surprise in that finding; mobile coupons are hugely popular.
There's also a significant amount of mobile bill paying (probably credit-card bill paying) according to the survey (46%). Mobile phone bill payment is also popular (42%).
In terms of in-store/offline mobile payments, 34% of these respondents said they had conducted such a transaction. This number is probably higher than the "real" number if we were able to look at a nationally representative sample of mobile users. I suspect the number is much closer to 10% or 15% perhaps (unless everyone is talking about a loyalty app such as Starbucks).
Have you ever used your mobile phone to make a payment?
Source: IAB, InMobi (n=1,242 US adults)
It would also be useful to get some additional insight into what "Paid a business for real-world goods/services by mobile" actually means. Unfortunately the survey doesn't further unpack the finding. For example, is it PayPal usage; is it use of a credit being accepted or read by a Square dongle? Is it a loyalty app, as I suggest above?
Among financial-related apps, PayPal is easily the leader. (The company is now rolling out its in-store payments system through the Discover network.) In the chart below 37% of survey respondents said they had PayPal on their phones. The survey asks about "downloads" rather than active usage. Thus we don't know how often or whether people actually use these apps.
Downloads without more insight into active usage is an almost meaningless statistic.
Have you downloaded any of the following apps to help you make payments or keep track of your finances?
Source: IAB, InMobi (n=1,242 US adults)
Square, which is probably the only other mobile payments brand known by consumers, stands at 8% penetration. This of course is not Square the credit-car-reading smartphone dongle, but the "Pay with Square" app that permits a "contactless" payment where both sides have a Square account. (The "Paid a business for real-world goods/services by mobile" answer probably includes use of the Square dongle.)
Google Wallet seems completely stalled at 7%. The widespread availability of NFC in Android and Windows Phones is unlikely by itself to jump-start NFC payments in North America. However that could change if the iPhone 5S were to include the capability.
The data above present a picture of increasing, incremental usage of mobile financial services and "payments" by the US smartphone population. That will continue as more services adapt to mobile and consumers become increasingly comfortable with using their mobile phones for a range of transaction types.
However the much-anticipated day when everyone is carrying a digital wallet and using it to buy goods and services in the real-world is still much more hype than reality.
Consistent with what could be projected from the 1H numbers the IAB released, the trade group reported this morning that mobile ad revenues in the US for 2012 were just under $3.4 billion. This number is below what many other firms had projected but still represented more than 100% growth.
Overall, mobile ad revenue constituted 9% of total internet ad revenues for the year, which were $36.6 billion. Retail and financial services are the top two ad categories. And over time more of that digital retail ad spend should migrate to mobile. Within a few years, we should probably expect that about 20% to 25% of the overal digital spend should go to mobile. That will still lag consumer behavior but be more in line with it.
The following are the breakdowns by category and format for US online advertising as a whole:
There was no sub-category breakdown provided by the IAB for mobile. However search dominates, followed by mobile display. The full report, which isn't yet out, may provide further insight into the division of revenues.
It turns out that despite lots of media coverage and celebrity personality Alicia Keys as "creative director" most North Americans don't know about the launch of BB10. That's according to a survey commissioned by MKM Partners. The poll of 1,500 adult consumers (conducted during the past three weeks) asked about device adoption and future purchase intentions. It found, consistent with other data, much higher recognition and interest in Apple and Samsung. Others generally fared poorly.
The survey found that 51% of respondents owned smartphones, with 39% saying they bought their in the last six months.
Ownership breakdown by handset OEM:
Current mobile OS:
Future purchase intentions:
Asked about BlackBerry 10, 83% of respondents indicated they weren't aware of the launch. Asked about Windows Phones, 61% lacked awareness of the OS. When asked about interest in BB10/BlackBerry or Windows Phones the majority of respondents indicated indifference.
Separately investment firm Piper Jaffray conducted another wave of its research among US teens about device ownership and future intentions.
Notable findings include the following:
In both cases iOS was dominant. However Android has made slight gains in both smartphone and tablet categories since the previous survey was conducted last fall. And aggressive pricing, especially in the tablet category, may drive Android penetration up vs. iOS among younger users.
A week ahead of the actual mobile ad numbers from the IAB IDC has released its estimates of 2012 US mobile advertising, as well as projections for 2013. The company says that mobile ad revenues were $4.5 billion in 2012 and will reach $7 billion this year. Our view is that the actual 2012 number will come in just under $4 billion.
According to IDC, search advertising represented 61% of mobile ad revenues in 2012 or $2.8 billion, while display brought in $1.7 billion or 39%. Directionally those numbers are right though the precise proportions may be off. For example, IDC's estimates of Google's share of search advertising is 79%, which is too low. It's more like 94%.
The most interesting part of IDC's figures and analysis is its juxtaposition between social networks (publishers) and mobile ad networks. Here are IDC's 2012 mobile ad revenue estimates for the major social networks/publishers (Pandora isn't a social network obviously):
And here are the IDC-estimated mobile display ad-network revenues:
The argument is that publishers/social networks have beaten the mobile ad networks. Online publishers essentially lost out over time to the ad networks on the PC internet because of traffic fragmentation and limited reach of most publisher sites vs. networks. The question is: will this happen again as real-time bidding and mobile exchanges become established? Or will major sites/publishers retain their ability to capture and control significant mobile ad dollars?
One point to be made here is that sites like Facebook and Twitter offer a multiplatform solution (and so does Google) that enables marketers to reach users on the PC and mobile simultaneously and usually with a single buy and single ad creative. That represents an efficiency advantage over most ad networks.
Two mobile ad forecasts were released last week almost on top of one another: one from eMarketer and another from BIA/Kelsey (BIA). (IDC is slated to come out with theirs very soon.) The figures they project for mobile advertising in four years are $10 billion apart.
In one way or another most forecasts turn out to be wrong. Forecasts typically either fail to anticipate technology shifts or they have the opposite problem. They are often aggressive in assuming how quickly technology adoption will happen or change the market. Think about past predictions regarding the rise of digial advertising and the erosion of traditional media. It's happening but years after many thought it would.
I've certainly been guilty of incorrect predictions and aggressive forecasts in the past. So I now generally prefer the IAB's methodology, which reports on actual revenues after the fact.
Let's take a look at and compare the eMarketer and BIA mobile forecasts, which are strikingly different. BIA says that US mobile advertising in 2013 will be worth $5.4 billion and $16.8 billion by 2017. By comparison eMarketer is much more bullish, saying that US mobile advertising will be $7.3 billion this year and $27 billion by 2017. The 2017 number is almost certainly way too aggressive.
New York-based eMarketer pegged 2012 mobile ad revenues at $4.1 billion. However my view is that when the IAB numbers come out we'll see something closer to $3.5 - $3.8 billion. However it's possible that eMarketer has it right. Google told financial analysts several months ago that the company's mobile "run rate" was $8 billion globally (including non-ad revenue).
BIA has raised the amount of its overall forecast from last year considerably but dialed back somewhat the portion allocated to local. That's because the firm began to recognize marketers weren't buying local fast enough. SMBs aren't buying mobile ads directly and brands have only recently started to explore local targeting in earnest. Depending on several variables that may accelerate in the next 12 - 24 months.
YP said that it had $350 million in mobile-ad revenue today. It's not selling mobile advertising directly to the company's mostly small business advertiser base. Rather this is how the company is allocating or attributing revenue from ads that appear on mobile devices but are originally sold as part of a broader package.
The local portion of BIA's forecast is dominated by search advertising, which has been the major contributor to local-mobile ad revenues. BIA maintains the assumption that search will continue to dominate local advertising throughout the forecast period. And mobile paid search is consistently expected to have more than 2X local ad revenues vs. mobile display in the BIA forecast.
Yet there are many more display impressions (in apps for example) than search queries. I don't know ratio off the top of my head but it's quite significant. If we're going to see billions in local-moble ad revenue it can't all come from search queries on Google. (Almost all paid search revenue in mobile [95%+] will go to Google for at least the foreseeable future, if not indefinitely.)
Today paid search represents just under half of all PC-based ad revenue. It's likely that will track with mobile over time.
I do believe that location will increasingly be used by mobile display advertisers, networks and exchanges. But it will also be used together with other variables as a way to reach particular audiences. Location will be both simplified for advertisers and incorporated into larger mobile ad-targeting concepts ("context"). Thus location will be a layer, among other variables, in mobile display and probably not remain a single targeting methodology -- except in geofencing and related "conquesting" scenarios.
Emarketer projects that the majority of mobile revenues will be controlled by a small number of companies: Google, Facebook, Twitter, Apple, Pandora, Millennial Media and "other." Other includes a large number of companies, including Microsoft, Yahoo, mobile exchanges/DSPs and still others.
The collective "other" category above is probably much too small. However I do agree that a relatively small group of large companies with significant scale will control and collect the lion's share of mobile advertising in the US, just as on the PC. Google, Facebook and Twitter will certainly be among them.
Google is accelerating the growth of mobile ad revenue with its recent introduction of Enhanced Campaigns, which will push more AdWords advertisers into mobile at higher CPC rates. And by bundling PC and tablet advertising together paid-search on tablets will also grow much more quickly. Location-based ad targeting on tablets is a bit of a wild card: location matters somewhat less on tablets than smartphones but the "ad canvas" is much richer on tablets.
Facebook has also been dialing up the amount of ad revenue it generates from mobile, simply by showing more ads in its apps. Home is a wild card and may or may not favorably impact mobile ad revenue for the company.
What qualifies as a "mobile" ad may become murkier and more of an attribution question as in the YP example -- such as combined tablet and PC ads in search or Facebook ads that appear equally in mobile and on the PC. And what qualifies as "local" ad in mobile is also a bit of an issue. I would argue a local ad in mobile is one that includes an explicit location mention in the ad creative (or landing page). A "local ad" can also be one that has no location mention but uses explicit location targeting at a DMA level or "below." Ads that target by state, province or region should probably not be considered "local."
Google's Enhanced Campaigns and related simplification of media buying and location targeting will significantly boost ad spending attributable to mobile. I think however the eMarketer numbers for 2016 and 2017 are still too high. I also believe the BIA position that most mobile ads will be localized is also incorrect -- unless the definition of local is radically enlarged.
Last week there was a Reuters report asserting the next Google-ASUS Nexus 7 will have an improved screen and may cost as little as $149. The current entry level Nexus 7 is $199. Reuters also said that if it's not the new Nexus 7 than the existing tablet's price may be reduced. The current entry level Kindle Fire from Amazon (with ads) costs $159.
As this all indicates there's a kind of "race to the bottom" going on that may radically depress margins on Android tablets. Furthermore we're likely to see a decent $99 7-inch Android tablet in the next year.
The growth of smartphones and the emergence of these reasonable-quality low-cost tablets such as the Nexus 7 are accelerating a trend toward mobile device adoption at the expense of PCs and further extending PC replacement cycles. In developing countries PCs will likely never reach penetration levels seen in North America or Europe.
In its latest device forecast Gartner joins the party, affirming what we already know about PC erosion in favor of smartphones and tablets on a global basis. In its projection Gartner sees Android as the big winner, effectively replacing Microsoft as the dominant OS on tablets and smartphones.
The particulars and timing of this forecast will undoubtedly turn out to be wrong. However the direction of the forecast is probably accurate. With its resistance to matching price competition (probably wisely) Apple iPads will not reach tablet penetration levels of low-cost Android based tablets (though the company is considering a lower-cost iPhone).
So far, Microsoft's "2.0" efforts in mobile, Windows Phone and Surface tablets, have only made modest gains in selected markets. However Microsoft still makes money from Android OEMs via patent licensing fees. If it has to rely on licensing the company's future will be pretty grim.
If these figures are anywhere near accurate tablets are poised to become the primary computing (and advertising) platform. Yet we're likely to see quasi-converged devices (i.e., tablets with keyboards like the Surface Pro) become laptop replacements in the near term.
Here's another one of those surprising and paradoxical Android vs. iPhone reports: according to January comScore data Android's US smartphone share was 52.3% to the iPhone's 34.3%. However Safari's mobile browser share of US web traffic is now 62%.
This represents the combined smartphone and tablet market share for iOS, according to Net Applications. By comparison the Android browser had roughly 22%. Chrome (which may be on iOS as well) had about 2.5%.
By comparison, according to StatCounter, the iPhone and iPod Touch combine for roughly 52% US mobile browser market share. Android has 37%. The iPad is not included in these data however. So it appears the two sources are generally in alignment.
Despite Android's continuing market share gains and lead its users are much less active on the mobile internet than iPhone users. This is probably because the Android user base is more economically and demographically diverse than iOS users.
On a related note, Google changed the way it calculates Android version share on its developer website. It has moved from total activations to Google Play visits to reflect more active and engaged users.
A new forecast from eMarketer estimates more than half of Twitter's ad revenues (53%) will come from mobile advertising this year, up from virtually no ad revenue from mobile in 2011.
In total, eMarketer estimates global ad revenue at $528 million for 2013, pushing upward to $1 billion for 2014.
But ads on mobile devices are driving incremental growth over the next two years. By 2015, Twitter is expected to pull in $1.33 billion in worldwide ad revenue, more than 60% of which will come from mobile advertising.
The rapid growth in mobile ad revenue is due in part because "Twitter has ultimately benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices," says eMarketer. Advertisers are clearly showing more interest spending money on mobile ads.
The report shows Twitter ad revenue is slowly shifting globally with 83% of 2013 ad revenue from the U.S., down from 90% in 2012.
As Apple reportedly prepares to release a less expensive, plastic version of the iPhone to boost sales in the developing world, it's trying to strike a balance between cost and quality. It will simultaneously have to make the phone appealing (perhaps with a slightly different design and color) while not cannibalizing its flagship.
The perception of higher quality is one of the few remaining advantages that the device has over Android rivals, who over the past three years have dramatically closed the quality and features gap. Despite these gains, the iPhone has consistently beaten its smartphone competitors in customer service ratings from JD Power. The latest survey is no exception.
JD Power surveyed nearly 10,000 US smartphone owners. The satisfaction criteria, in order of importance, were the following:
This is the ninth consecutive time that the iPhone has ranked #1. JD Power said the Apple device did particularly well in the areas of design and ease of operation.
In a bit of a surprise, Nokia edged Samsung in the survey. However Nokia has many fewer users (by an order of magnitude) than Samsung, whose Galaxy smartphone line is the best-selling Android handset in many markets around the world.
It's interesting that LG performed so poorly given the success of the LG-made Nexus 4, which repeatedly sold out and to date remains overall best Android handset on the market. In contrast, among feature phone OEMs, LG performed best, which is somewhat curious.