MSearchGroove

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Despite a few false starts over the last seven years, it looks like mobile media might finally happen-proving the cynics wrong. So now the question becomes: where will the mobile media profits be?

To date, there have been many more disappointments than successes. While I couldn’t even count the number of billion-dollar businesses spawned off the Internet, I can’t think of a single one in the mobile media industry.

Few venture capitalists can claim to have made money on a mobile media company. Jamba was the only European mobile media company that enjoyed a substantial exit when acquired by Verisign for $273 million in 2004 , but its business model suffered from a severe backlash against subscription services directly following the acquisition. In the United States, m-qube was sold for $250 million also to Verisign in 2006, but there again, the long-term value of that business is questionable: Verisign has recently announced that it is refocusing on its core Internet business and divesting its other businesses, presumably including messaging .

Musiwave’s $120 million exit to Openwave wasn’t good news either: Openwave recently announced a $70 million write-down and sale of Musiwave to Microsoft for $46 million . The one and only exception, of course, is Jamdat, which went public in 2004 at a valuation of $16/share, valuing the company at $312 million, and was sold a year later to EA for $680 million.

The outlook isn’t great in the public markets either. There’s Itouch-which went public in the summer of 2000 at a valuation of GBP 200 million and was sold to For-side five years later for GBP 181 million. In the UK, the large majority of mobile value-added services companies that went public between 2003 and 2006 on the AIM market are now trading at significant discounts to their IPO price. While there haven’t been as many IPOs on Nasdaq, Glu Mobile went public at about $12/share in March this year, and is now trading at less than $5 on the back of lower than expected quarterly revenues.

The reasons for the paucity of successes in mobile media are well known and mostly related to the structure of the industry: Carrier control over billing and distribution, closed operating systems, multiplicity and complexity of developer platforms and handsets, and the absence of flat-rate data packages, to name a few.

The good news? Most of these restrictions are gradually being stripped away. Carrier control over billing and distribution is weakening in most of the world, and there is a clear trend toward off-portal distribution. Flat-rate data packages are mushrooming, though have yet to enjoy significant traction. Google’s release of Android has focused the industry on the potential for an open mobile OS that could quickly become a standard.

So this naturally brings us back to our original question: where are the mobile media profits?

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• Posted in
• Mobile Social Networking, Web 2.0, Mobile Search, Mobile Music, Mobile Advertising, Mobile Content, Content Discovery

Any brand wondering about how D2C mobile content services are going to work could do well to take a look at what UK premiership football clubs have been doing over the past year, as “the beautiful game” is offering a real insight in to how the off-portal model can work.Michael Tomlins, commercial director of Infomedia, told me earlier this month at  World Telemedia in Prague that premiership football clubs such as Manchester United, Chelsea and Liverpool (all Infomedia clients) typically send out some 1.2 million SMS to fans a year, with a spectacularly high ‘read rate’. 

Moreover, fans are, on average, looking at a staggering 14 WAP pages each time they log on to the mobile sites of these clubs. And, perhaps most interestingly, buy far more football related content from their team portal than from any mobile network operator platform. If ever there was a demonstration of how a brand, rather than the network operator, owns the mobile consumer, it is in mobile football sites.

Football clubs have two huge advantages when it comes to offering D2C mobile services: they come ready wrapped with a huge, loyal audience in the shape of their fans and they have an ongoing and almost inexhaustible supply of content that their audience will pay for.

The simple thing is that, with such a wealth of users - who are very unlikely to churn - and access to content ranging from simple SMS news updates, through ringtones, logos, wallpapers, photos and clips, right up to full blown video interviews with players and even buying a replica shirt through a mobile commerce site, football clubs own the value chain.

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• Posted in
• Personalization, Mobile Content, Mobile Advertising

Jason Spero, AdMob VP of marketing, pre-briefed me on the company’s key metrics, data that now makes up a must-read monthly report aptly titled the AdMob Mobile Metrics Report. Why does the company produce the report in the first place? Because the mobile advertising community needs data to plan campaigns and track results. AdMob, in the role of a mobile advertising marketplace provider, serves graphical banner and text links on mobile web pages for more than 2,000 publishers and has served more than 11 billion ads across 160 countries since the company launched in January 2006 (breaking a few records along the way that MSG reported here).

AdMob also stores and analyzes data from every ad request, impression and click and passes it on to publishers, so they can optimize their site performance across handsets, and advertisers, so they can understand demographics and device capabilities. In fact, AdMob this month beefed up its report, adding the top 20 handsets per country. The November report will reveal some data on the iPhone in Europe, so watch this space.

But first, the highlights of this month’s report:

•	AdMob Network impressions were up 3 percent over the previous month, growth driven by Europe and specifically the U.K.
•	Motorola KRZR gained share in the U.S. to claim the top handset position. The top devices in India (Nokia 6030), South Africa (Motorola v360) and the U.K. (SonyEricsson K800i) remained the same.
•	Apple iPhone doubled share in the U.S. from 0.4 percent to 0.9 percent. The iPhone continues to show heavy mobile internet usage.
•	And some good news for developers who think they have to test on every handset on the market. The top 20 devices represent 50 percent (+/-) of impressions in individual markets. (The exception was the U.K. where the top 20 handsets accounted for 44.4 percent of impressions.)

Top Device Mfrs % of Imps Nokia 32.1% Motorola 13.3% Sony Ericsson 12.2% Samsung 12.0% RIM 7.1% LG 3.9% Sanyo 3.7% Other (1) 15.7%                                                 Total 100.0%

Top Handset Models   % of Imps Motorola RAZR V3 3.7% Motorola RZR K1c 3.0% Nokia N70 2.3% RIM BlackBerry 8100 2.1% RIM BlackBerry 8700 1.8% Nokia 6600 1.6% Nokia 6030 1.5% Nokia 6680 1.2% Sony Ericsson W810i 1.2% Nokia N73 1.1% Sony Ericsson K750i 1.1% Nokia 6630 1.1% Samsung A900 1.0% RIM BlackBerry 8830 1.0% Samsung I607 BlackJack 1.0% Nokia 3220 1.0% Samsung E250 0.9% Nokia 6020 0.9% Sanyo SCP6600 0.9% Nokia 6230i 0.8% Total   29.2%

Handset Capabilities % Capable Supports Polyphonic Ringtones 82.8% Supports Streaming Video 42.2% Able to Download Video Clips 65.3% Supports WAP Push Messages 84.0%

I asked Jason for his take on the highlights, a lively conversation that turned into an impromptu Q&A. Here is an excerpt of what we discussed on-the-record. (But no worry about missing the rest, Jason has promised MSG will be among the first to break the news…)

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• Posted in
• Mobile Advertising

As I prepare to speak at the Location Based Services World Forum 2008, taking place in Amsterdam (January 14-16) and organized by Marcus Evans, it’s natural that location-based companies and technologies that effectively “location-enable” mobile search and mobile advertising schemes are high on my radar. (My personal thanks to Bouchra Chakroune, Producer, IT and Telecoms Division, Marcus Evans Ltd., for reaching out to me; I look forward to connecting with the impressive roster of location-based experts from mobile operators including 3, O2, Orange, Telefonica, Telenor and Vodafone.)

In my view, Web 2.0 was all about the tools and technologies that allow users to freely create, share and connect around content with members of a larger mobile community; the next evolutionary step is Mobile 3.0, which places location and the mobile device at the core of this exchange, empowering users to make their experiences personal, relevant and much more compelling when they’re on the move. And I’m not alone on this one. Portal providers, such as Google, Microsoft and Yahoo, have placed location at the core of their offers, pairing communication services with maps and local mobile search and mobile advertising. At the other end of the spectrum, individual vendors are using location-based services to turn mobile search services into profitable value propositions.

My research has turned up some newcomer companies in this space that peg my “cool meter,” so check back regularly for podcasts and exclusive interviews with the thinkers sure to leave an indelible mark on this nascent market. (Consider the attention given to GeoSentric’s location-social networking service GyPSii and news that Nokia will deliver the service on its N95 and 6110 handsets. This is no fad.)

One must-watch company is Skyhook Wireless, a Boston-based company whose investors include Intel and Nokia. Skyhook has quietly and cleverly developed a game-changing, software-only positioning system that leverages Wi-Fi technology to deliver precise location data. Because the technology relies on Wi-Fi rather than satellites or cell towers, developers no longer need to ask operator permission to add location to their services and apps.

Users can also location-enable services by downloading Loki, Skyhook’s location-based Internet search and navigation tool, which SearchEngineLand likens to “the Firefox of local search.” In a nutshell, this app (which is currently in beta) removes the need to enter location when performing a local search, and lets users find their exact physical location using Wi-Fi technology and triangulation. Check it out for free at www.loki.com and download the mobile app here.

I caught up with Ted Morgan, Skyhook Wireless CEO, to get an update on Loki and the inside track on the company’s future roadmap. Skyhook, which has been mapping Wi-Fi networks in all of America’s most densely populated areas and is now expanding to Europe, has created a reference point that can help location-based applications orient themselves when GPS won’t work.Ted told me mobile content companies and mobile search companies are lining up now that they “get” the value of this approach. To date, he’s in discussions with all the usual suspects. Predictably, brands and advertisers are just beginning to get their head around contextual advertising, but the scenarios are nonetheless exciting.

BTW, a recent AOL deployment gives us a glimpse of how Skyhook might plug the gap in location-aware services. Back in March, the portal added Skyhook Wireless’s Loki location awareness capabilities to enable desktop AIM instant messaging users to share their current or future location with AIM buddies using Skyhook’s Wi-Fi Positioning System. It’s easy to imagine similar schemes that make use of mobile to deliver local search and location-aware advertising going forward.

Listen to the podcast here [11:32]

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• Posted in
• Mobile Social Networking, Web 2.0, Mobile Search, Mobile Advertising, Local Search, Podcasts

Note: James, in his capacity as a conference organizer at IIR Ltd., is attending Mobile Advertising in Budapest until November 28^th. It’s a conference he was instrumental in developing and we’re looking forward to his take on panels and participants including 3 Austria, 4^th Screen Advertising, Blyk, CNN, Orange France, Vodafone, WIND and Yahoo among many others… In the meantime, here are his thoughts from SurfKitchen’s mobile advertising roundtable:

Despite the release of guidelines and a wealth of industry metrics to support the mobile advertising cause, real market growth and large scale campaigns are yet to materialise. Some of the brightest minds in mobile are still trying to work out the best way to deliver monetiseable ad solutions without drowning the mobile audience in a tsunami of spam.

In an effort to provide some answers to these pressing questions SurfKitchen, a major provider of on-device portal solutions to encourage content discovery, recently put together a mobile advertising roundtable, featuring some of these brightest minds from across the mobile advertising value chain, including tier one mobile operators, advertising agencies and mobile technology vendors, as well as media and analyst commentators to discuss the opportunities and challenges presented by mobile advertising. (Checkout the MSG exclusive podcast with SurfKitchen here.)

It concluded that growth in mobile data services, coupled with the decline in traditional advertising effectiveness in print and on TV etc, gives the industry a massive opportunity to marry together mobile data and advertising. However, the key is to play to mobile’s strengths of ubiquity and personalisation, which make it arguably the most influential medium for advertisers.

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• Posted in
• Personalization, On-Device Portals, Mobile Search, Mobile Advertising

MOBILE CONTENT: We have written many times that the mobile Web won’t take off if the developer community is not involved, supported and enthused about the prospect of developing cool apps that work on a multitude of devices. This won’t happen overnight, but anything that gives developers shortcuts and support along the way is a good thing. And Volantis has worked this out. It is open sourcing its server, allowing anyone to download and run their content-optimising system for free. Developers can now use the server to create mobile applications that are compatible on different devices and even allow for bugs or inconsistencies in different versions of the same device. Volantis has opened up its database of 4,500 devices, with 650 attributes stored for each device and paying customers will receive a daily update to ensure the very latest bugs and handset versions are supported.

MOBILE MUSIC: The jury is still out on whether the ad-funded business model will make content affordable, attractive and usable, but when MySpace starts using it, you know it’s time to sit up and take notice. Ad Week reports this week that Myspace has paved the way for fans of punk band Pennywise to download the band’s entire album for free by adding Textango, a mobile music distributor, as a friend on their MySpace profile. This is the first test by MySpace of whether it can marry its music label with advertising to create an alternative distribution model. Other bands including Radiohead and 60s crooner Cliff Richard have also offered their music online for free, further proving the change in business model in the music industry - keep your eyes on MySpace.

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• Posted in
• Mobile Social Networking, Mobile Search, Mobile Advertising

Improving the relevancy of results is key to delivering the next generation of mobile search advertising services. This special three-part podcast series - sponsored by JumpTap, a white-label mobile search and advertising company– kicks off with Adam Soroca, JumpTap Vice President and General Manager of Search and Advertising Services.

The tectonic shift away from plain-vanilla mobile search to delivering the right results to the right users - more importantly, displaying these results together with targeted advertising the user finds genuinely useful - changes all the rules. The end-game isn’t about teaming up with branded search providers to provide a list of links; it’s about partnering with search and advertising companies that will allow mobile operators to control and improve the data they collect from users while they search, shop and interact with content and apps, on and off-portal.

Against this backdrop, any strategy that surrenders control of this data to a branded search/portal provider, for example, is fatally flawed. This is the view of Adam Soroca, JumpTap Vice President and General Manager of Search and Advertising Services. MSG caught up with Adam to learn why relevancy is king and the ways operators and advertisers can harness targeting to drive paid search revenues.

Listen to the podcast here. [10:55]

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• Posted in
• Personalization, Recommendation, Mobile Search, Mobile Advertising, Local Search, Podcasts

Mobile IM: Vendor spin aside it certainly looks like instant messaging is poised to be the killer opp (opportunity) for mobile operators moving forward. Already 25 percent of mobile users send instant messages from their phone, according to a recent AP-AOL Instant Messaging Trends Survey. This figure is even higher for teens (32 percent) who use IM more than email and are more likely to IM others from within their social networking sites. And it’s not just consumers. The study (which examined the usage habits of 1,246 IM users) found 27 percent of respondents use IM at work (Peggy is always IMing me with the latest news, so I can vouch for that trend) and half of users say IM makes them more productive.

(BTW, mobile IM is gaining serious traction with the youth segment. Swiss operator Swisscom, for example, “gets it” and offers a mobile IM only device which is really cashing in on this phenomenon.. Indeed, a successful mobile IM offer – aligned with factors such as pricing and device form - could be the centrepiece of a ’sticky’ mobile content portfolio.)

AD-TRACKER: Some good news for marketers sorely in need of a feedback loop and a means to monitor the current inventory of mobile ads. M:Metrics, a company that specializes in measuring consumer consumption of mobile services and apps, has launched M:AdTracker - it does what it says: tracks ads. The service is available today in the U.S. and will be rolled out to the major European markets in 2008.

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• Posted in
• Mobile Content, Mobile Advertising

What is Google’s strategy for mobile? The fact that we must divine its strategy from the clues and leaks it leaves in the blogosphere is already unsettling; even worse is the reality that we can still only guess its true intentions. Via the Wall Street Journal and other credible sources it seems ever more likely that Google will bid for the 700Mhz spectrum license on 3 December when the FCC begins preliminary bids for these redundant 2G networks. All evidence indicates that Google is set to spend up to $4.6million on the license on its own rather than as part of a consortium.The move would give the search giant the capability to build out its own mobile broadband network, but at what cost? Including the license fee, the cost of rolling out a network is being conservatively estimated (via GigaOM) at ‘at least $7 billion’ all in.

More importantly, it would put Google in direct competition with AT&T and Verizon, both of whom are chasing the spectrum to build their own wireless broadband networks. Such a license bidding war and any subsequent move to build its own network could damage Google’s existing relationships with network operators globally, many of which have already - perhaps unwittingly - surrendered the ownership of the search page to Google, thus putting Google in front and center of the mobile search experience. And let’s not forget the ongoing tension over who controls the user data.

In a word, this could all turn quite nasty. (Peggy adds: It would have been far smarter for operators to incorporate Google results into their own balanced mix of links and results. More about that in my next white paper - freely available on MSG.)

But could Google be planning to simply spend its way to the top in a sort of mobile cold war stand-off?

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• Posted in
• Mobile Search, Mobile Advertising

U.S. FIGURES: The Mobile Marketing Association (MMA) released figures from its annual U.S. Mobile Attitude and Usage Study this week. The study (carried out by Synovate) is based on 1,405 online interviews using a nationally representative consumer online panel of over 1.5 million households, and gives the stat hungry the chance to evaluate U.S. mobile user trends over the past 3 years.

·       25 percent of respondents expressed an interest in mobile marketing; only 6 percent were highly interested (19 percent moderately interested)

·       25-44 year olds showed the highest participation rates for mobile marketing. 8 percent of 25-34 year olds and 7 percent of 35-44 year olds have opted in or participated in a mobile marketing campaign

·       Voting campaigns are used by 45 percent of respondents, followed by status alerts (33 percent)

·       Only 10 percent have used their mobiles to redeem coupons, and 16 percent for discounts on products and services

·       No surprises, but worth noting – the 13-24 age group send the most text messages, averaging over 50 per week

·       More newsworthy:  54 percent of 13-34 year olds use SMS for social networking

Overall, the MMA indicates users are utilising more of their phone features, creating additional opportunities for marketers to reach them with coupons and other relevant, exclusive to mobile information. Granted, the MMA has an interest in encouraging brands to get in and test the waters, but the survey nonetheless reinforces the importance of the mobile channel. And, with users slowly warming to mobile campaigns, there’s no time like the present.

MOBILE DIRECTORY ADVERTISING: U.S. mobile operator AT&T has agreed to acquire mobile search specialist Ingenio in a move that will see the pay-per-call technology integrated into AT&T’s search and directory portfolio (YELLOWPAGES.COM Network, AT&T Real Yellow Pages and 1-800-Yellow Pages). Mobile local search has long been trumpeted as a perfect fit between mobile and advertising, although inroads into this space have seen slow growth. However, Ingenio’s system enables advertisers to track call generation and hence enable AT&T to charge them performance-based fees depending on volume.

This purchase shows clear intent from AT&T. Both Microsoft and Yahoo had been mooted as potential suitors for Ingenio, but by stepping up to the plate, AT&T is clearly positioning itself as a direct competitor to the behemoths of search advertising.

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• Posted in
• Location-based services, Mobile Search, Mobile Advertising, Local Search