T-MOBILE CZECH STUDY SAYS SMS/MMS AD RESPONSE RATE 27 TIMES HIGHER THAN INTERNET BANNER CAMPAIGNS.  The project confirmed the high response rates of SMS and MMS ads, based on campaigns from 22 advertisers, including Coca-Cola, Nestle, L’Oreal, Ford, Komercni banka and Eurolines. The most successful campaign had a response rate of almost 12 percent, while even the results of the least successful campaign were three times higher than the average response rate for Czech internet campaigns. Source

The bottom line: These results highlight the potential of compelling, relevant and properly targeted messages. In particular, they illustrate how much more likely are consumers are to respond to SMS and MMS ads than simple Internet banners.  Peggy adds: Mobile Advertising Research U.K. confirms this, but there’s also a lot of mileage left in banners. For more on what makes for a great mobile advertising experience and a balanced value chain check back tomorrow for my take on a new-launch Hardees campaign.

***

TOP APPLICATIONS ON THE APPLE APP STORE HAVE MORE THAN 1 MILLION USERS, according to AdMob’s latest Mobile Metrics Report for May 2009. The report found that the most popular free applications in AdMob’s iPhone network generated the majority of usage, with the top 5 percent of applications garnering more than 100,000 users in May, and some apps showing more than 1 million active users.

A further 14 percent of applications had between 10,000 and 100,000 active users, while 54 percent of applications had less than 1,000. AdMob reached 15.1 million unique users through iPhone and iPod touch devices across 2,309 applications in May, with the average user accessing four applications.  44 percent of iPhone ad requests came from devices running the new version 3.0 of the iPhone OS, compared to just 1 percent of iPod touch requests.  Source

The bottom line: These numbers from AdMob underline the ongoing popularity of apps on the iPhone. But they also offer some insight into the potential value of in-app advertising for developers and content providers, since the apps in AdMob’s iPhone network are all free to download, and earn money solely from advertising.

***

SUBSCRIPTION VIDEO AND MUSIC ACCOUNT FOR 40 PERCENT OF MOBILE DOWNLOADS IN THE UK, according to a study from GfK, as the model grows in popularity against pay-per-download sales. The research also states that casual and classic trivia and word games lead the mobile gaming market with 27 per cent of sales, while the budget sector (£3 or less) is also enjoying success through basic and retro games.  It also adds that nine per cent of the mobile tariffs signed up in the UK in Q1 have bundled-in flat-rate data.
Source

The bottom line: This study illustrates the growing popularity of the flat-rate model, both in mobile data access, but also in content subscriptions. Still, the content-subscription model contrasts with the booming pay-per-download app store model.  Will one triumph over the other?

***

AD-FUNDED MMS REVENUES TO HIT $8.7 BILLION by 2014, says Juniper Research in a new Mobile Messaging report.  The report says that annual growth rates are reaching 94%, with SMS and mobile email continuing to dominate the person-to-person (p2p) mobile messaging market.

The report, entitled “Mobile Messaging & IP Evolution”, found that the Far East & China would lead the global ad-funded MMS market by a considerable margin, followed by North America and Western Europe.  The adoption of push MMS and SMS in mature and emerging markets has enabled network operators to support ad-funded voice and SMS tariffs, and combat falling ARPU, while providing brands with new advertising channels. Source

The bottom line: These are bold projections from Juniper.  P2P MMS messaging still has a way to go before it reaches the usage level of SMS, but these projections suggest that MMS advertising could prove to be a lucrative revenue stream in its own right.

***

MORE THAN 60 PERCENT OF MOBILE USERS STILL ONLY USE THEIR HANDSET FOR VOICE AND TEXT, according to a KPMG survey. The survey of 4,190 consumers in 19 countries also says that consumer satisfaction rates with mobile services have increased. Music satisfaction is up to 66 percent, video 52 percent (from just 14 percent), IM 44 percent and live TV 38 percent.

The factors influencing users’ next mobile content purchase, according to the survey are, in order: clarity of pricing, cost, ability to save content, download speed and the ability to try content before purchasing it.  36 percent of respondents said they would accept mobile advertising, while 49 percent said they would accept it in music and 28 percent in games.  Source

The bottom line: The level of acceptance of mobile advertising is encouraging.  However, the headline is arguably the most pertinent point: for over 60 percent of consumers, the mobile internet doesn’t exist and text messaging is the only data application of a mobile device.

***

MOBILE ENTERTAINMENT REVENUES ARE EXPECTED TO GROW 28 PERCENT ON AVERAGE over the next year, according to the Mobile Entertainment Forum’s quarterly Business Confidence Index, up one percent from its last survey.

Content owners are much more optimistic about their revenues, with the anticipated average income up from $6.1 million to $17.1 million.Revenue in Western Europe is expected to be down 10 percent, North American revenues are predicted to be up 8

percent. 81 percent of respondents said they were as confident as last year about the future of their business. Source

The bottom line: This MEF study illustrates a bullish mobile entertainment market, unbowed by the economic climate.  It could be that, aside from the natural obligation towards market confidence, stakeholders believe the purchasing of relatively low cost content through microbilling will remain popular as consumers delay the big ticket items and seek alternative forms of entertainment.

***

APATHY AND PRICE RULE IN NOT SELECTING THE iPHONE, say the latest findings from The NPD Group.  The study showed that the primary reasons consumers do not want to purchase an iPhone are “lack of interest” (55 percent) and “high price” (42 percent).

One in five mobile phone owners say they want to purchase an iPhone, but have not yet done so, and NPD’s report indicates data plan pricing and exclusivity remain key obstacles.  18 percent of consumers who have not purchased an iPhone cited the expense of the data plan, while 21 percent said they didn’t want to switch carriers.  Source

The bottom line: Reasons why Apple’s iPhone isn’t persuading everyone to leave their current carrier and device seem quite simple: they aren’t actually that bothered.  Given the previous data point, which revealed that 60 percent of people only use voice and text, this shouldn’t come as much of a surprise.

***

iPHONE USERS TOP SMARTPHONE LOYALTY ratings, according to a new survey by Crowd Science.  It also says four out of ten BlackBerry and other smartphone users would switch to Apple’s iPhone as their next smartphone purchase.

On the other hand, only 14 percent of non-BlackBerry smartphone users would switch to a BlackBerry for their next purchase. Meanwhile, a huge 82 percent of iPhone users are loyal to the brand. Source

The bottom line: In contrast to the previous report, this one highlights the attitudes of smartphone users who, almost by definition of being smartphone users, care a little more.  The study is as much a study of consumer brand perception, and the iPhone steals the show as expected, but BlackBerry may take note of the small minority who would switch for their next purchase.

***

MORE THAN HALF HAVE MOBILE SECURITY FEARS, according to mobile security specialists, Cloudmark Inc.  The report says mobile spam now affects two in three consumers, more than 50 percent worry about mobile security, and only 7 percent believe the information they send over the phone is secure.

Cloudmark also says the concern about mobile security is detrimentally affecting the adoption of mobile services such as banking and e-commerce, with more than two thirds (69.3%) of consumers stating that they wouldn’t use value-added services such as mobile banking.

Two thirds of consumers (65.9%) have received unwanted or unsolicited messages (spam) on their mobile phone. While a majority of spam messages could simply be seen as a nuisance, 29% of respondents had received malicious spam such as phishing messages, fraud messages or messages containing inappropriate content.  Source

The bottom line: This report highlights the ongoing fears around the security of mobile devices, which will likely become more prevalent as smartphones become more pervasive, and spammers and malware authors pay more attention to mobile. However, we should also remember that the mobile security specialists who produced the report might have a small agenda of their own.

It has been a crazy-busy, exciting week at MSG! The Mobile Advertising Research U.K. report, which combines desk research with extensive primary research and surveys to offer invaluable insight into the attitudes of people and companies across the emerging mobile advertising business ecosystem, is ready for release after receiving the final polish.

Regular readers will recall that MSG was commissioned to conduct Mobile Advertising Research UK, a project research endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA), to expertly document the state of the mobile advertising industry in the U.K. and identify growth opportunities in the emerging mobile advertising marketplace.

The report — which combines valuable consumer insights gathered by ÆNEAS Strategy Consulting and Management (coordinated by my esteemed colleagues Tarik Fawzi and Atva van Zanten) and qualitative research based on more than 20 interviews with operators, enablers, agencies and brands contributed by MSG — marks the first in a series of region-specific reports that will include Germany (2009) and North America (2010).

During the inaugural event (Mobile Advertising Research U.K.) last week in London, Tarik and I presented an overview of key findings (documented by MSearchGroove here) and revealed the results of an online survey of over 1,000 British. consumers. Pricing is GBP 2,999 ($4,866) for the report, and a 500 GBP discount is available for MMA/IAB members, and people who attended the event. For more information, email James Cameron (james@camerjam.com) or call +44 7940 749874.

And speaking of reports, I am pleased to announce that I will provide a sneak-peak at the results of a performance analysis of voice-enabled mobile search services from search giants Google, Yahoo! & ChaCha during a special Mobile Search Masterclass in London on June 30.

By way of background, this course is part of The City University London’s Masterclass series, a collaboration between the giCentre and the Centre for Interactive Systems Research at the University. It will be run for the second year following from feedback last year and is endorsed by the Mobile Data Association (MDA). Registration is GBP295 and the organizers tell me there are still a few seats available, so email Mark Firman (mfirman@soi.city.ac.uk) to reserve your place.

Regular readers (and Twitter followers — @peggyanne & @msearchgroove) may recall that I teamed up with Peggy Albright, owner of Albright Communications and veteran writer in the wireless industry,  to research and write Pump Up The Volume: An Assessment of Voice-Enabled Web Search on the iPhone.

The complete findings will be released in July, but I can say that ChaCha, a fast-growing SMS mobile search service available in the U.S., “proved superior” to two other voice-enabled search options for the iPhone: the Google Mobile App with Voice and Vlingo for iPhone, a voice-enabled application that allows users to direct their spoken queries to Google or Yahoo! For the purposes of this study, Vlingo provided a spoken interface to the Yahoo! search engine.

To evaluate the overall performance of voice-enabled mobile services offered by ChaCha, Google and Vlingo for iPhone with Yahoo!, Peggy asked a series of 18 queries representative of six typical mobile search categories (Navigational, Directions, Information Local, Information General, Social, and Long-Tail). For each query, we evaluated nine performance characteristics including response time, results accuracy, voice recognition accuracy, number of results received, keytaps required, relevancy of the result, location awareness, use of advertising and presence of other value-added features. The study further took into account that a service could deliver its search results in the form of answers (as ChaCha offers) or as links to Web pages (which Google and Vlingo deliver); for each query tested, an accurate result could be achieved in either form.

In addition to going over some high-level results, I will also present an overview of the mobile search landscape, focusing particular attention on the 10+ categories of mobile search gaining significant traction, including multimodal (voice/visual), mobile vertical search (music/games) and social search, a people-powered search approach that effectively infuses human preferences and human judgments into computer algorithms to pinpoint relevant information and better answers.

This presentation is based on the work I did with Rudy De Waele, blogger at mTrends and dotopen founder, in preparation for a workshop on Mobile Search Future Prospects organized by JRC IPTS (Institute for Prospective Technological Studies of the European Commission).

Other masterclass speakers and sessions will examine a range of topics and developments, including: mobile search statistics and surveys, key trends and developments, location services and search user interfaces and usability, and the range of content and advertising monetization models involving mobile search. I’m honored to join an impressive roster of industry authorities from companies including AmbieSense Ltd., a provider of ambient search services; Microsoft Research (Cambridge); g8wave Ltd., a mobile marketing company; and Mobile Commerce Ltd., a provider of location-based services that also possesses what the founders call a “piece of enablement” that gives them deep insight into the search queries passed through the operator portals in the U.K., and the results set returned to the user. This central position, combined with the company’s prowess in search advertising, makes MC a top address for the inside track on the quality of the mobile search experience offered by Google and Yahoo!, as well as their ability to deliver relevant results to users’ queries.

Last year, the case studies and analytics provided by Colin Bates, Mobile Commerce CTO, data also reported on MSearchGroove, provided invaluable insight into the most popular categories of mobile search queries and what users really want from their mobile search experience. The eye-opening observation: “Users are grazing, not researching. They are looking for time-fillers rather than facts, and they are using search boxes for site-finding rather than data-finding.”

It will be exciting to explore how mobile search has moved on and discuss where it is going. If you plan to attend and would like to meet up or catch up, please contact me directly (peggy@msearchgroove.com) or arrange an appointment with Andrea Henninge (andrea@msearchgroove.com). I hope to see you soon and will circle back with analysis after the event.

QUARTER OF GLOBAL USERS ACCESS MOBILE INTERNET VIA NOVARRA PLATFORM.  Novarra announced its Mobile Internet Experience Update with the news that two thirds of U.S. mobile phone users and one quarter of all global users have access to some form of mobile Internet service via the Novarra platform today.  A benchmark report gives a broad overview of how consumers access and use the internet via mobile phones with Novarra’s Vision browser and mobile Internet platform.

Among the overall findings:

• Devices don’t’ matter (much): Users with standard feature phones will use the Web as much or even more than a smartphone user if the mobile Internet experience is good
• There is a ‘long tail’ in the mobile Internet: The top website typically accounts for 5 percent of total mobile page views. The number two site accounts for less than 1 percent of traffic. And the top 500 sites account for only 25-30 percent of all page views
• Sessions vary: 40 percent of mobile internet sessions are under five minutes and 40 percent are over 15 minutes

The report further groups mobile users into ‘tribes’ based on their distinctive user profiles. These are:

• The Business Pro - Dependent on their mobile to be more productive and to handle all their communications
• The Mobile Millennial - Early adopters and young adults with disposable income
• The Connected Kid - Children and teenagers who have grown up with technology from a young age
• The Multitasking Parent - Use their mobile phone to stay in touch and manage family schedules
• The Frugal Fanatic - Cost conscious of spending, usually opting for a free handset

Based on these observations and segmentation the report concludes:

• Multitasking Parents and Mobile Millennials are the most active user populations, generating nearly 2/3 of mobile browsing sessions between them
• Business Pros even with their highly capable devices, generate less mobile browsing sessions than expected. They also use news, sports and information sites twice as much as nearly all other groups and are lowest for social networks
• Mobile Millennial and Connected Kids are by far the heaviest users of social networks
• Frugal Fanatics utilise handset customisation services more than twice as much as any other group
• Connected Kids have far more page views relative to sessions than any other group, indicating they tend to surf more for entertainment purposes
• Source

The bottom line: The Mobile Internet, and indeed many mobile services, would fail to survive and thrive without technical companies such as Novarra, largely unknown to the masses, but which provide critical back-end solutions. Peggy adds: Kudos to Novarra for an excellent report! Not a lot of rocket science here, but an important confirmation of the groups of people on the mobile Web and an overview of what they do. Read between the lines, and you’ll see there is a great deal of untapped value in developing (and branding) life-enabling/life-simplifying services for the Multitasking Parents and Mobile Millennials, who are the most active user populations and - potentially - most responsive to companies that make their lives easier. (I highly recommend you check out my fireside chat with Ogilvy’s Rory Sutherland, packed with some surprising business model suggestions, supported by the findings above.)

***

LOCAL MOBILE CONTENT ATTRACTS SIGNIFICANT AUDIENCE. Local content views are up 51 percent over the past year, according to comScore figures. Research also reveals that application downloads are leading the growth.  It observes an 83 percent increase in the number of subscribers to local content via applications since March 2008, with text messaging services also outpacing average growth.  The study shows a 72 per cent increase in SMS subscriptions in the 12 months to March 2009.

Meanwhile, browser based access continues to grow at a rate of 34 percent year on year over the same period and, despite the slower growth rate, remains the dominant method for retrieving local content.  It accounted for 63.7 percent of all downloads in March 2009. Earlier research by comScore found younger mobile users tend to retrieve more entertainment content, while older users across Europe usually prefer financial information. Source

The bottom line: These generally encouraging comScore statistics confirm our hunch that applications downloads and mobile Internet usage are on the rise. However, the surge in local mobile content may not reflect a universal trend. It’s likely that the popularity of local content is a product of context. In other words, local content thrives in a handful of large, dense, urban regions where high-speed network coverage and captive audiences are the norm. Peggy adds: These stats also question our assumption that the global giants we know rule the roost. Take Skyrock in France, which is bigger that Facebook can ever hope to be. The popularity and reach of local content - particularly on personal devices such as our mobile phones - is sure to climb.

***

MOBILE ADVERTISING FOR MOVIES AND ALCOHOL SET BENCHMARK for industry, according to a study by Amethon Mobile Internet Insight.  The study also states that despite high CTRs, brands should focus on the quality of engagement.

Analysis of traffic to more than 100 mobile advertising sites found that consumers view just over 3 pages per visit for best-in-class campaigns, while the average across all campaigns analyzed was only 1.53 pages. Only 33 percent of consumers venture beyond the first page of mobile campaign sites, which the research says suggests mobile advertising campaigns need more compelling content within the microsite to engage consumers more effectively.

The report found that movie related campaign sites achieve the highest engagement levels, visitors viewing an average of 1.65 pages per visit, a figure that also accounted for a 21 percent share of overall audience. Alcohol campaigns achieved a similar share of audience but suffered from poor engagement, with users often not navigating beyond the age verification page.

Portal and directory service campaigns were the most common (22 percent of all campaigns), but had a relatively low audience share and below-average engagement.  Meanwhile, content downloads such as branded wallpapers or videos in the microsite did not significantly improve engagement. Source

The bottom line: This detailed study of mobile advertising offers insightful statistics to support what many have been saying all along: Advertising must be relevant and engaging.  While it probably comes as no surprise that interest in advertising around films takes the top shot, a lot of work has to be done in the way of creative thought to the landing page and what people do after they click through. This is particularly pertinent in view of the drop off in popularity of wallpapers and video.  The other issue of poor engagement in popular alcohol campaigns, possibly due to age verification process is disappointing but not surprising or uncommon.  I explore age verification issues in more detail in a recent post here.

***

40 PERCENT OF USERS ACCESS INTERNET MORE OFTEN ON iPHONE / iPOD TOUCH THAN ON PC, according to a new demographic study from comScore and Admob.  The research also reveals that 69 percent of iPod Touch users are between 13-24 years of age, while the same age segment represents just 26 percent of iPhone users. In total, 74 percent of iPhone users are over the age of 25, compared to 31 percent of iPod touch users. Over 70 percent of users on both the iPhone and iPod touch are male.

Over the next six months, iPhone users are said to be planning to buy clothing (57 percent), entertainment (47 percent), and travel (45 percent), while iPod touch users plan to purchase clothing (61 percent), entertainment (53 percent), and mobile devices (36 percent).

By way of background, the methodology used in this primary research into the demographics and behavioral characteristics of iPhone and iPod touch users in the first half of 2009 is as follows: Participants were visitors to domains within the AdMob iPhone network who were shown survey invitation banners rather than banner ads. Those who clicked through the survey banner were presented with the mobile survey. The total sample size of iPod touch participants is 3,848, while the total number of

participants in the iPhone sample is 3,454. All results were tested for statistically significant differences at the 95 percent confidence level.  Source

The bottom line: As well as the headline that 40 percent of users access the Internet via their mobile device more often than their computer, the other key finding is the age differentiation.  You could surmise from this that teenagers can convince their parents to buy them an iPod touch, but not an iPhone and all its recurring bills. Other findings such as average salary were largely in-line with the age difference.  The ongoing generation of such data is key in the production of applications and the execution of mobile advertising strategies.

***

LG EXPECTS NINE PERCENT RISE in mobile sales.  The Korean handset manufacturer has said it will sell 110 million devices this year, despite a flat global market. The company has also said this figure will rise to more than 200 million by 2012. Source

The bottom line: Handset manufacturers marginalized, at least in publicity terms, by the “bigger” names now have an uphill task to continue producing new quality devices which will gain mass market penetration and to effectively promote their core differentiators.  These bullish projections are encouraging signs of a still highly competitive marketplace.

Back from Mobile Advertising UK (Twitter feed: #maduk) in London with new and practical insights into mobile advertising and extremely positive feedback on my report findings.

Regular readers will recall that MSG was commissioned to conduct Mobile Advertising UK, a research project research endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA), to expertly document the state of the mobile advertising industry in the U.K. and identify growth opportunities in the emerging mobile advertising marketplace. The report - which combines valuable consumer insights gathered by ÆNEAS Strategy Consulting and Management (coordinated by my esteemed colleagues Tarik Fawzi and Atva van Zanten) and qualitative research based on 20+ interviews with operators, enablers, agencies, and brands contributed by MSG - will be formally released in July.

Pricing is GBP 2,999 ($4,866) for the report. 500 GBP discount for MMA and IAB members, and people who attended the event. For more information, email James Cameron (james@camerjam.com) or call +44 7940 749874. And while we’re at it: A huge around of applause for James, long-time MSG friend and supporter, whose Camerjam Events company successfully brought together 130+ professionals and pundits at this inaugural event sure to spread to other countries soon!

In the meantime, allow me to share some of the key findings and data points based on an online survey of 1,000+ UK mobile users. (And please follow along in the complete presentation below via SlideShare, and listen in to this audio interview (supported by the iPhone blogging app Audio Boo) via The Really Mobile Project, where I put some of the stats into perspective.)

At a glance:

• Today the mobile advertising market in the U.K. totals nearly GBP 30 million ($48 million).
• Mobile advertising accounts for only 0.16 percent of the total advertising market - which is where Internet advertising was in 1998.
• ÆNEAS Strategy forecasts that mobile advertising will see accelerated growth in four years and so account for a significant portion of advertising spending. Drivers include: A calculated growth rate of 99 percent in 2008 vs. 2007; the overall shift towards digital advertising; and increased demand for targeting, reach, and a medium that -like no other - allows advertisers to identify and track unique visitors. (For more on this unique capability and the benefits I encourage you to read my own road test of mobile analytics solutions.)
• Only 32 percent of those surveyed have a positive attitude about receiving advertising on their mobile phone. However, 64 percent said they would accept advertising is they are properly incentivized, and 70 percent said they would accept mobile advertising if they are incentivized AND in control.
• The majority of those surveyed felt 5 advertising messages per day was the limit of what they would accept.

Unsurprisingly, youth are most familiar with mobile advertising channels (specifically rich media such as MMS and in-game advertising (approaches we know from the likes of Unkasoft). What’s more a whopping 84 percent of youth surveyed has a positive attitude toward mobile advertising if incentivized. The bottom line: Acceptance of mobile advertising is right up there with TV and other more traditional media IF we can get our head around what incentives to offer and develop the mechanisms that put people in control.

No clue on the right incentives, but it’s not a given that companies need to offer cash to capture people’s attention. In the fireside chat I recorded with Rory Sutherland, Ogilvy UK Vice Chairman, we discuss the value of branded utilities and life-simplifying services. Will people accept advertising if the pay-off is less stress/more convenience? It sure looks that way!

Expert interviews:

So we know mobile advertising will be big. But what do we do in the interim, and where should we channel our investments/efforts so we can move fast when the market picks up?

No easy answers, but my interviews with companies up and down the emerging mobile advertising value chain speak volumes. Companies - in no special order - included: Orange, Vodafone, 3UK, Alcatel Lucent, Ogilvy, 4th Screen, InsideMobile, Adfortel, MMA, AdMob, IAB UK, RGA, Mobixell, Comverse, T-Mobile, 3, Sponge, Bango, and a slew of brands that wish to remain anonymous.

The bottom line: Text rules! There’s plenty of mileage left in simple SMS, and it represents a hassle-free way to start an ongoing conversation with people on their terms (remember from the findings above, people want to be in control of their advertising experiences).

There are also opportunities in location-based marketing (but not the Starbucks example, please!), mobile coupons, cross-media advertising plays with mobile at their core, and the avalanche of app stores coming online.

I can’t divulge all the results here, but I can share some thought-provoking quotes that highlight where the growth is (and isn’t), and identify the obstacles that stand in the way.

BRANDS

“If measurement was aligned with what we know from the Web or TV, it would help a lot to build confidence.”

Road ahead:

“Just between the two of us, our spend for search is by far not in the digits yet, so therefore it would be not realistic to say we would spend more on mobile advertising than for search.  That’s where we are with digital advertising, so it would totally unrealistic to say that in 2009 or 2010 we make it into the single digit share.  But it’s growing, clearly growing.”

OPERATORS

“I think there’s other opportunities such as advertising actually embedded within a widget. You could have some sort of utility widget, such as one providing weather forecasts, and there’s no reason why certain companies may not wish to have some advertising embedded within that.”

Road ahead:

“As a general principle, operators are in a particularly good position in that we can offer a variety of ways to reach the audience.  If brands want to reach a customer base, we can offer banners and messaging. We also have a fixed line web presence so we can offer traditional web advertising, in addition to magazines and billings (mailings) that we can offer. We are in a position to use mobile not only as a media property, but also as an enabler.”

AGENCIES

“I don’t think there are any real obstacles. I think it’s laziness on behalf of anyone that would suggest it’s difficult to buy. You have 5 buying points and you can hit 80 percent of the market. Call us, Yahoo, Microsoft, Orange, and AdMob. That’s it - and you’ve got the market covered. 80 percent of the inventory covered in five phone calls.”

Road ahead:

“There are a number of studies out there that show exposure to multi-channel advertising gives you exponential impact in terms of response rate and brands awareness. So the opportunity is in mobile, but also in the other channels that evolve with it.”

APPLICATIONS PROVIDERS

“The big opportunity in every country to make mobile advertising really work is to have media sales bureaus or agencies who sit in between the owners of the inventory and the advertisers. It’s in an early stage of development, and it’s also something we are going to focus on as we set up a dedicated mobile sales agency to connect the inventory to the advertising agencies.”

Road ahead:

“There are some great examples of interaction with your phone and a poster, or with your phone and TV, but that will always be a small piece of a bigger advertising picture. Core to mobile advertising is mobile messaging. Mobile is capable of delivering a message and allowing us to interact with the message. There is an interesting opportunity for advertisers to interact via messaging linked to a certain location or time, and that will develop.”

INFRASTRUCTURE COMPANIES

“Currently, we’ve got a plethora of people offering mobile advertising in the market. But when it starts to become mass-market and reaches volume, then many of those players [ad serving companies] now will not be able to translate into that volume. So, you’re going to start seeing those players just sort of die away because when mobile advertising is serious business, then you’re talking about millions of adverts and not just a few hundred thousand.”

Road ahead

“It only starts to become interesting for a carrier when the revenue they can envisage starts off at 2 percent over their overall revenue with an opportunity to grow to 10 percent. That’s the revenue that will make them sit up and listen and we’re not there yet.”

Rory Sutherland audio interview

A highlight for both me and the audience was the entertaining and educational fireside chat with Rory, whose interest in -well - us and the finer points of behavioral psychology brought much-needed balance and big-picture vision to the discussion. As he points out in this recent opinion column in New Media Age: The job at hand is to use ideas to turn human understanding into business advantage. During our interview he made it clear that mobile is a medium perfectly suited to achieve just this goal. (Listen to the audio interview here. It’s 28:40 - but time flies when you’re having fun - and this sheer genius! Unfortunately, my site isn’t up to scratch, so I had to host it on a site that belongs to Stuart Willett, MSG Biz Dev Director - so don’t let that confuse you!)

A few excerpts that made us think:

YES WE CAN!: Mobile can change people’s behavior - primarily because it takes the heavy-lifting out of doing things we might not do otherwise. Case in point: Charity. A moment of “epiphany” for Rory was the huge response to SMS campaigns asking for donations, although we have assumed that youth is not a demographic to give so generously. As he put it: “If this technology can change behavior that significantly, then who cares how good it is at advertising. Advertising is about changing opinions as a half-way house to changing their behavior.” The bottom line: If you can change people’s behavior from the get-go with mobile, then it deserves a top-notch spot in our campaigns.

LIFE-SIMPLYING: Rory’s message: Don’t dismiss branded utility because it’s unglamorous. Being brandedly useful is key. (And here is an example from Rory’s Twitter feed that illustrates this approach. The IBM Scout is a branded app that helps people get the most out of the Wimbledon 2009 Championships, providing live coverage of just about everything.

COUCH POTATOES: Let’s face it - many of us are. Rory figured this out when he was watching a line of cars at a drive-in ordering fast-food. Not one got out of the car to order at the counter - even though it was empty. Connect the dots, and it’s clear we are all a bit lazy. Apply this observation on basic human behavior to mobile and you have a powerful combination indeed! We will likely reach to the medium at hand (the personal device we have with us at all times) because it’s more convenient. “Channel preference almost trumps brand preference.” Some people may prefer Pizza Hut, but if they can order from Dominos by text, then they will likely switch for this reason. The bottom line: “Modality and modal preferences seem in a weird way to trump other things.”

WHAT’S THE POINT?: We have lost sight of what mobile can do. (A point that also came out in the research I conducted.) We’re hung up on old models and enamored of new technology, and we are missing some big opportunities. Imagine using text campaigns to encourage impulse savings instead of impulse buying. Or how about a brand that simply harnesses mobile to improve listening? As Rory pointed out: “Advertising is talking and listening. That’s a perfectly reasonable form of marketing, and mobile brilliant and you can do it in real-time.”

METRICS: We have become prisoners of our own metrics. To show us how ridiculous our obsession has become, Rory compares media buyers to alcoholics. “Alcoholics buy booze on a single metric: How much alcohol do I get per pound (GBP), and this is how media buyers buy media.”

MOBILE MATTERS:  “Mobile has been the medium of first resort and dangerous to neglect it which is probably why Google has been scared. Search has been the first place you go on the Web and mobile preempts this in some respects.”

I’ll explore mobile search in a post tomorrow, which will recount some highlights of the event, let you in on the results of a new MSG white paper,  and detail my own Mobile Search Masterclass on June 30^th in London.

By way of background, Rory’s bio:

Born in Usk, Monmouthshire in 1965, Rory read Classics at Christ’s College, Cambridge, before joining Ogilvy as a Graduate Trainee in 1988. After 18 months spent as the world’s worst account handler (as a desperate remedial measure he was once booked onto a time management course, but got the date wrong) Rory became a copywriter in June 1990. He has worked on Amex, BT, Compaq, Microsoft, IBM, BUPA, easyJet, Unilever, winning a few awards along the way. He was appointed Creative Director of OgilvyOne in 1997 and ECD in 1998. In 2005 he was appointed Vice Chairman on the Ogilvy Group in the UK in recognition of his improved timekeeping.

By an amazing stroke of luck (his brother is an academic) Rory first used the Internet in 1987. Hence he had the advantage in 1994 of knowing what it was and what it might do a few years ahead of many colleagues. Most people would have combined this knowledge of marketing and technology to make a fortune; not Rory. Instead he became the first Briton to have his credit card details stolen online, thereby losing £22.45.

In his spare time, Rory collects self-aggrandizing job titles. He was President of the Direct Jury at Cannes in 2007, and was elected President of the Institute of Practitioners in Advertising in 2009. He is also the Technology Correspondent of the Spectator, the world’s oldest English language magazine. At quiet moments in the proceedings over the next few days you may like to pay a furtive visit to his blog at http://snipr.com/da9bq

Rory is married with twin daughters of 7 (Hetty and Millie) and lives in the former home of Napoleon III in Brasted in Kent. Unfortunately in the attic.

41 PERCENT  OF CONSUMERS WILL MAKE SMARTPHONES their next device, according to Yankee Group research. The report also reveals that trends within the smartphone ecosystem are shifting the balance of power between equipment manufacturers (OEMs) and operators.

Yankee further suggests smartphones are the most competitive battleground in wireless today, and predicts U.S. penetration will reach 38 percent by 2013.  More competitive device entrants, tighter budgets, and increased consumer expectations are factors that will force OEMs and operators to collaborate in order to grow. Source

The bottom line: The proliferation of full-featured handsets and the advance of payment mechanisms (other than the ones operators offer) have created some tension, making this an interesting space to watch.   It’s also worth pointing out that, while 41 percent will choose smartphones, the majority (59 percent) of consumers are not going for smartphones as their next device, nor may they even care to upgrade.

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IDLE SCREEN TECHNOLOGY ENGAGES 82 PERCENT IN TRIAL by Celltick’s LiveScreen Media platform. The Telefonica mobile operators group announced the launch of an innovative idle screen marketing solution, Livescreen Media, which broadcasts news, sports, business, entertainment and lifestyle teasers - as well as advertising messages directly to the mobile idle-screens.

Movistar, the Mobile Phone Company from the Telefonica Group, tested the service as part of a six-month trial in Mar del Plata, Argentina, involving around 5,000 customers, and results showed 82 percent of users engaged with the new communication channel on the idle screen.  The platform is also able to segment users based on location, handset type and areas of interest which are generated from tracking user response to idle screen messages. Revenue is generated from content downloads, subscription services and advertising fees.  Source

The bottom line: As I posted on my own blog, the Idle Screen presents an enormous opportunity to drive increased data traffic and service engagement, if issues of bandwidth and battery life can be overcome.  82 percent engagement is a massive proportion of users, albeit in a local and rather limited trial. In my book it begs the question: Is further proof of concept really required?

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PURCHASES ON MOBILE CONSIDERED SAFE BY 71 PERCENT consumers, says an eMarketer summary of recent mobile commerce statistics. The round up reveals the kind of products people want to buy from their phones, which include pizza, movie tickets, hotel rooms, and fast food the most popular.  Internet Retailer, a ranking of America’s 500 largest e-retailers, provides us more proof that mobile commerce is gaining some traction in the U.S. It reports that 5 percent of the top 500 online retailers offer m-commerce sites or iPhone apps. It estimates the U.S. m-commerce market will total $1.6 billion in 2009. Source

The bottom line: This report suggests that the U.S. is ahead of the game in m-commerce. Peggy adds: It also lends credence to the view that mobile advertising (communicating the brand message via mobile) could be just a side-show. The real excitement is building around selling stuff via mobile, a scenario that could put mobile operators (with their trusted payment mechanisms) back on center stage.

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EUROPE TO HAVE 130 MILLION MOBILE LBS USERS BY 2014. A Berg Insight report predicts that the number of European users of mobile location-based services will grow significantly from 20 million users in 2008, propelled by local search, navigation, and social networking services.

Among the drivers: On-device application stores will provide greater access to mobile services for a broader audience, flat-rate data plans will make pricing transparent and more operators are opening their location platforms up to third parties.  More than 20 percent of mobile handsets shipped in 2009 will feature GPS, and the installed base in Europe will surpass 50 percent of total handsets in 2013.  Source

The bottom line: Berg adds more fuel to the location fire with this report. Technological penetration, consumer education, and basic marketing remain key to the success of location services. And we shouldn’t forget that there’s a big difference between having the technology and using it on a regular basis.

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NOKIA ANNOUNCES OVI STORE VISITS FROM CONSUMERS IN 152 COUNTRIES.  Two weeks after the initial Ovi launch, Nokia has revealed a range of statistics about the service. It says that the Ovi Store is accessible from over 75 Nokia devices in five languages and taps into mobile billing from 27 operators. When it comes to free downloads, the Applications category tops the list. Games is the top catgory in premium content.  Many of the most popular applications involve messaging, such as Twitter, Facebook and SMS applications. Source

The bottom line: All-systems go for Ovi. After what I described as a difficult launch, these statistics illustrate that the Ovi Store is now bedding in and beginning to enjoy use with a broad reach.  With improved user experience (which will come when the store becomes pre-installed on devices) will come increased, carrier independent use with a significant global footprint.

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MOBILE REVENUE GROWTH SLOWS TO 3 PERCENT in Q1 2009, according to a Strategy Analytics report. Down from 8 percent a year earlier, the report, “Wireless Operator Performance Benchmarking, Q1 2009,” says nearly 40 percent of all mobile operators saw revenues fall in Q1 2009, compared to just 16 percent in the same forecast period in Q1 2008. The research, which tracks the operational and financial performance of over 175 mobile operators who account for 80 percent of global subscribers, found that a quarter of the operators in emerging markets also saw service revenues fall in Q1 2009. Source

The bottom line: Bleak reading from Strategy Analytics illustrates that the economic downturn has made a global impact on operators, and very few are immune.

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U.S. FLIRTING ADDICTION SEES AN AVERAGE OF FIVE DAILY LOG-INS AND 26 SENT MESSAGES.  Statistics from Flirtomatic, a U.K.-based mobile and online flirting service that recently launched in America, reveals mobile flirting behavior using their service is remarkably similar on both sides of the Atlantic.  This has allowed Flirtomatic to reach critical mass in the U.S. - much earlier than expected.

By way of background, Flirtomatic, with 1.3 million U.K. users and a frequent listing in the top 5 mobile websites, stands out as one of the mobile Internet’s social networking success stories. It also offers an effective platform for advertisers, and reports an impressive 10 percent CTR.  A witty and effective campaign for Storngbow cider in the U.K. resulted in users sending (gifting) their buddies a whopping 340,000 drinks (delivered as drink tokens to their mobile phones) in just two weeks. Source

The bottom line: Given the previous gloomy story, I thought it reasonable to conclude Data Points on a lighter note this week.  Flirtomatic’s story illustrates what can be achieved if the platform, offering and audience are all in synch and the effort is made to benefit consumers, carriers, advertisers, and partner brands.

Editor’s note: I am proud to announce that Jim Levey, formerly Director of Product Marketing for Search and Digital Advertising at Amdocs, officially joins the roster of authors and influencers contributing news, analysis and thought leadership to MSG. In this post, Jim, who attended last week’s Mobile Marketing Forum in New York City, the flagship event of the Mobile Marketing Forum series organized by the Mobile Marketing Association (MMA) and Informa, summarizes key points, important statistics and asks the question: What’s next?

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Is the global downturn for real? It may have impacted the mobile industry at all levels at the start of the year, but the message at the Mobile Marketing Forum was that mobile is bucking the trend.

Between panels and during networking breaks I learned that more brands are taking mobile more seriously. Specifically, those brands that have successfully experimented with mobile in the past are now including mobile as a key component within their marketing mix. The top-notch spot of mobile in the advertising mix - and the mix of brand success stories we heard during the sessions - are sure signs that brands are coming on board. But don’t just take my word for it. Mike Wehrs, MMA President/CEO, reported that marketers are becoming more comfortable integrating mobile within traditional campaigns. As he put it: “Mobile is moving from experimental to essential.”

Indeed, mobile advertising in North America, Europe and APAC has experienced sustained growth. While you can argue that actual growth is still marginal, the development is nonetheless a positive if we consider that budgets earmarked for traditional media have been slashed.  What do the numbers tell us? Peter Johnson, VP Market Intelligence and Strategy at MMA, reckons mobile advertising revenues will increase from $1.36 billion in 2008 to $1.7 billion by end-2009, and rise again to $2.16 billion in 2010.  Peter concluded that, based on his recent research, more consumers are accepting mobile marketing as a relevant and valuable part of their digital lifestyles.

Brands and agencies are understanding the value of mobile advertising, and becoming more adept at using mobile in innovative ways. Highlights included exciting new campaigns from Coca Cola Zero, Sunglass Hut, Kodak and Johnson & Johnson’s Baby Center, and MGM Hotel. Whether the format was text, MMS, display, rich media inside gaming, or couponing - or a combination - the point is: Mobile delivers results and a positive ROI.

A cross-media approach that stood out in my book was Coke’s campaign. The company teamed up with Nokia to emblazon Coke’s distinctive red on Nokia handsets and rounded out the offer with an assortment of Coke ringtones and wallpaper for free download.

Other campaigns illustrated how mobile can connect real world experiences with real results. Using mobile to trigger interactivity and brand interest at the point of purchase (POP) Sunglass Hut encouraged its young customers to be glamorous fashion models and capture their image with their cameraphones and upload it to the Sunglass Hut website to enter a contest to win a free trip valued at $10,000. But the real appeal of the campaign was how the brand connected with young people, thus demonstrating how mobile can be an emotional branding mechanism. Put simply, it’s an innovative and emotive way to convey the essence of the brand. It’s also a magical moment when a brand can inspire this excitement at the all-important point of purchase.

The example of a campaign run by MGM Hotel in Las Vegas showed how mobile marketing can be harnessed for effective direct marketing and sales promotion. In this scenario, the brand used a mix of mobile messaging and highway billboards to connect with consumers and allow them to book a room from the road by sending the request to a shortcode.

In addition to streamlining the reservation process and delivering a confirmation directly to the consumer’s mobile phone, the campaign also continued the one-to-one conversation with consumers when they arrived at the hotel. The result: A continuous conversation that drives continued sales. Consumers stay on the hotel premises and are invited to enjoy perks such as discounted snacks and treats, free dinners and a range of incentives around the casino. The brand’s objective was to reward customers and keep them on the premises, and the ongoing conversation via mobile text achieved this.

What do these varied success stories have in common? All these campaigns were simple, innovative and effective. A clear message to brands that they don’t need whiz-bang technology or high-cost production to drive positive results. Peggy adds: Another confirmation of the key message of my recent mobile advertising white paper: The innovation is not in advertising formats, but how we use them.

But it’s not just brands that are waking up to the pivotal role of mobile in the advertising mix. As Charles Johnson, General Manager, Microsoft Mobile, put it:  “There is growing realization that mobile is the only medium that can complete the entire marketing cycle from awareness and activation to engagement and sales.” Microsoft is walking the talk, taking the wraps off  Bing, an online search portal designed from the ground up to give consumers more relevant search results. Microsoft intends to elevate the mobile search and advertising experience in a similar fashion. In fact, the company’s search and advertising platform, which is media agnostic, is geared to serve adverts that are highly targeted and contextually relevant.

Another factor that contributes to the sustained growth of mobile advertising, and the increased interest of big-name brands, is the proliferation of smartphones. The phenomenal popularity of these devices - specifically the Apple iPhone - has triggered an astounding shift in user behavior. In fact, Paul Palmieri, CEO, Millennial Media, counts 59 million uniques (that means 59 million advertising opportunities).

The MMF showcased the progress made by brands, but it also reminded us of the work ahead to define and refine the metrics that will help marketers measure success as well as failure. Fortunately, Markus Munkler, Senior Manager, Industry Initiatives, Vodafone, could update us on some significant progress. He pointed out that there are cross-industry efforts underway in the U.S., bringing together the MMA, the Interactive Advertising Bureau (IAB) and the U.S. Media Rating Council, to standardize ad measurement and reporting.  The initiative - which is similar to the one spearheaded by the GSMA aimed at generating cross-operator mobile advertising metrics based on usage data submitted by all five U.K. operators - is a vital step in creating a framework for global media planning.

Connect the dots, and there is a groundswell of interest and enthusiasm around mobile advertising across the ecosystem. As Paul from Millennial Media, pointed out: Following the post 9/11 downturn, online advertising enjoyed “hockey stick” growth between 2002 and 2005. Mobile advertising is likewise close to a tipping point, an impressive growth trajectory we will likely see as the global recession recedes and markets recover.

My takeaway: Kudos to the MMA for once again assembling industry leaders from all corners of the ecosystem. Communication, education, and understanding how companies up and down the value chain view the opportunities and obstacles are imperative to get the industry on track. Signs of progress are abundant and inspiring: These folks are serious about success and determined to develop standards and metrics to create a level playing field and foster global trade. Where are the brands? For the most part, brands are content to stick their toes in the water. What will move them to take the plunge? The industry must provide brands reach, standard formats across channels, standard metrics and reporting, and the ability to tap into mobile operator’s vast stockpile of subscriber intelligence for better targeting and relevancy. That’s the brief, and we shouldn’t believe that a single entity can fulfill the vision of mobile. Cooperation and collaboration are essential, and there is no market to fight over until we create it - together. Only then will the mobile advertising industry realize its full potential, and deliver an effective and engaging brand message that will revolutionize they way we communicate, respond to marketing and consume content.