P&G, Others Build Mobile-Marketing Budgets

Could Be Signal That Medium Is ‘Out of Trial Mode’

By Alice Z. Cuneo

Published: November 29, 2006

LOS ANGELES (AdAge.com) — Procter & Gamble, Microsoft Corp. and other major marketers have set aside a piece of their ad budgets — albeit a small piece — for mobile marketing, representing a “significant shift” for the emerging medium.

Major marketers are beginning to take third-screen media seriously as a potential advertising venue.

Mainstream now
Any money put toward mobile ad platforms last year came from marketers’ discretionary funds, but now mobile marketing is a dedicated line item in their budgets, Jay Emmit, president of the Americas, mBlox, a global mobile transaction firm, told some 400 attendees at the 2006 Mobile Marketing Forum.

“It’s a significant shift in the advertising world — [mobile marketing is] now mainstream; it’s out of trial mode,” he said.

The banking and financial sectors were responsible for some of the more innovative uses of the emerging medium in the past year, as when MasterCard used text messaging as part of its fraud-alert program. P&G, which won the Mobile Marketing Association’s first Overall Excellence award, has developed the Ad Lab, a program where key marketing executives on more than a dozen brands have been educated in mobile opportunities such as mobile video and text messaging. As a result, a flurry of new efforts and programs will be rolling out from P&G brands starting next year.

Lingering issues
Still, mobile marketing continues to have its hangups, Mr. Emmitt said. Mobile companies don’t have a foolproof method of ensuring that ads for sexually explicit material, gambling and other adult-aimed content will stay off cellphones in the hands of kids. Wireless carriers led by Sprint have begun to warm up to providing marketers with targeted mobile advertising opportunities, a move than may not find fans with privacy advocates.

Marketers and agencies are also demanding better measurement tools. “I want data,” said Eric Bader, senior VP-digital at MediaVest. There’s “not a lot of ‘M’ in the CPM,” meaning there’s not a lot of mobile included in ad rates determined by cost-per-thousand (CPM) consumers. Another stumbling block to mobile marketing’s success is the inability of marketers and media buyers to buy ads across carriers: In the current setup, ads with each wireless service provider need to be negotiated individually.

Kim Olson, marketing director, Sprint Mobile Media Network, said marketers need to present strong, compelling mobile offers, “not just put a logo up.” She declined to answer a question from the audience on the carrier’s share of ad revenue.

Not so fast
Not all attendees were convinced that mobile has turned the corner. Courtney Jane Acuff, associate director, Denuo, said many marketers have not made a commitment to an interactive budget, let alone a mobile-marketing budget. “There’s a big difference between a discretionary budget and an actual budgeted dollar,” she said. Ms. Acuff added that next year, when the 2008 broadcast TV “upfront” ad-selling period is conducted, she will watch to see if mobile is included as part of the offerings. That “will dictate whether mobile is happening or not,” she said. “It didn’t happen this year.”

A study this month from JupiterResearch found 22% of companies advertising online also are doing mobile marketing. Overall, the study predicted mobile ad spending to more than double from a predicted $1.4 billion this year to $2.9 billion in 2011.

A number of the conference’s attendees, particularly those representing the wireless carriers, noted the fragile nature of mobile marketing in light of the threat that comes from unscrupulous marketers, such as spammers. “Those in it for the short term: We will find you all and kick you out and never see you again,” said Christopher Black, director-mobile marketing and interactive media, Cingular Wireless.

And one conference speaker had some old-fashioned advice based on lessons learned from the internet’s growing pains. “Pop-ups — don’t do it,” cautioned Greg Stuart, president-CEO, Interactive Advertising Bureau. “Don’t let it happen.”

Handy Group set to form “deep links” with several national airlines both in the UK and US

The market is “slow to see mobile Internet as a serious channel” and there is
“lack of ’sexy’ content”. These forthright opinions were put forward by Michael
Lacy, chief executive officer, Handy Group (UK) Ltd during the last year’s
Travel Distribution Technology held in London in November last year

A year later, as EyeforTravel.com’s Ritesh Gupta again got in touch with Lacy
to check on how the situation has changed, he says, “Yes, 12 months ago we were
pushing on locked doors and getting the response ‘lets wait until mobile
develops as a serious channel’. Today, as Handy, we are being welcomed as the
leaders in the field and there’s no doubt that all the major players are
developing a mobile strategy and are more than keen to talk and learn from
us.”

Last year, referring to user profile and trends, he stated that the data
retail market is dominated by male 15-19 year olds for tones, music,
videoclips, soft-porn etc. Also, handsets were patchy with more than 100 types,
and 3G is getting there.

“Those 15-19 years olds are now a year older for a start and looking at more
serious content. However these products still dominate the world of mobile
transactions but mature products are at last making headway. To a large extent
this is strengthened by the forward thinking approach of networks such as O2
with i-mode which has 50 million subscribers worldwide. HandyTraveller our
mobile travel portal is on i-mode in the UK and Ireland and will launch with
the other European i-mode operators from December,” he says.

The company is set to launch the second phase of its product line-up which
features ‘global’ product allowing it to partner with any mobile network in the
world and have relevant product to that market.

“We have both deep links and intermediary feeds with low cost airlines and
last-minute rate hotels servicing more than 50 countries with 600 points of
origin and destination. We are soon to announce partner status with one of the
worlds largest car rental suppliers and deep links with several national
airlines both in the UK and US,” he says.

The technology the company utilises to provide the HandyTraveller service both
as a web-based travel portal and as a mobile phone based portal is available to
business partners as a ‘white label’ product.

Lacy acknowledges that this service has been very well received, particularly
so in the last four months.
“We plan to launch five services on behalf of white-label clients in the first
half of ‘07 but am bound by contract not to say who. What we do is really
specialised, keeping up with all the latest handsets and software releases,
making complex browse and book services useable on a mobile phone and keeping
the transfer of data compressed to make it both fast and secure is not easy. It
makes much more sense for company to contract with Handy to build their service
- for one thing they know it’ll work because HandyTraveller proves it.”

PDAs are increasingly being thought of as computer platforms which can run
software applications, through which travel content can be sold.

On new platforms becoming a viable distribution channel, he says, “Only in the
same way a mobile can. To view a full size site on a PDA is still a terrible
user experience. We have a mobile xHTML site optimised for PDA’s that makes
really good use of Windows Mobile and Pocket PC. We strongly feel that Travel
like many other products are best sold over browser based services rather than
a user having to download a software application which is why we utilise WML,
xHTML and cHTML. We detect the level of the browser installed on any handset
accessing our service and supply the most appropriate site for the users phone
or PDA that will correctly render for the screen size and installed operating
system.”

“Handy Group is developing a hugely powerful CRM that handles all these added
features – with GIS and particularly the cross boundary GIS services to be made
available from the European Galileo system, we not only will know who is
accessing our services but where they are at the time and with the ability to
instantly push context sensitive deals back to them on a device from which they
can instantly buy,” says Lacy.

On future projections, he says, “There are many exciting things we can do with
the mobile device but ultimately it will come down to what the consumer wants to
do with it. Our job is to make sure it works, to innovate for the benefit of the
consumer and to ensure the customer interface and experience is exceptional. By
doing so, this will determine just how far we can go. Undoubtedly the very
least mobile will give us is the ability to buy internet products whenever and
wherever we may be, at the most our mobiles will become the single device we
use to manage our lives.”

Mobile technology gains momentum for travel

Interest in mobile technology is increasing as operators and airlines explore the potential of the medium for travel purchases.

O2 product manager for travel Nancy Lyndhurst said large travel players such as Cathay Pacific, Accor Hotels and KLM are already showing success with mobile technology.

She also drew on the experience of Japan where one major airline generates 5% of sales through mobile technology while a leading travel agent in the country sees one booking on mobile technology for every five bookings on the fixed internet.

Despite the growing interest in the medium Lyndhurst said mobile technology would not replace the internet.

“Mobile is content snacking. It’s there to give us the information when we are not near the internet.”

Lyndhurst also provided some statistics on UK usage with about 25 million people browsing on their mobiles.

“There are about 60,000 users a day looking at train times on their telephones. Lastminute had someone book a £3,000 holiday through their telephone. The key point is that people are interested and they are looking at it. It’s so easy and you can be so targeted with it.”

She also commented that transaction rates were still low because of the perceived security issue and because mobile phone transactions have been the reserve of the younger generation up to now.

Internet Advertising Bureau chief executive Guy Phillipson added that navigation was also still a problem but that the medium is well set up for payments because of people purchasing ringtones.

02 runs runs the i-mode platform which includes travel customers such as lastminute.com and Handy Traveller.
Source: Travelmole.com

Mobile Users Like ESPN, Weather

Mobile users have a much greater propensity to access sports and weather websites like ESPN and AccuWeather than PC users, however, the results for search giants Google and Yahoo are exactly the opposite. The news is part of comScore and Telephia’s new “Mobile Web Metrix” which compares mobile and personal computer usage.

by Kristina Knight

According to a new report from JupiterResearch, “US Travel Forecast: 2006-2011,” online travel revenues will reach $128 billion in the US in 2011 – 38% of all travel revenue for that year.

“Online travel revenue will continue to grow strongly from $85 billion in 2006,” said Jupiter analyst Diane Clarkson. “Factors that will spur online spending are greater consumer wallet share, increasingly sophisticated products available online and improved online compliance in business travel.”

For comparison, eMarketer’s estimate of this year’s US online travel sales is somewhat more conservative at $77.7 million. comScore Networks put first-half 2006 online travel sales at $34.7 million, a year-over-year increase of 14.7%.

While the exact figures may not match, all the sources agree that online travel sales are continuing to fly higher.

Google’s ambitions going mobile

By Marguerite Reardon
http://news.com.com/Googles+ambitions+going+mobile/2008-1039_3-6138755.html

Google–the premier online company in the traditional Internet world–has for the past year been focusing its attention on the mobile market.

The company has steadily introduced new services designed specifically for the small screen. In January, it released the Google Personalized Home, which lets people access Gmail, news, RSS feeds and other information from their personalized Google home page on mobile phones and PDAs. The service is free in the U.S. and works with any phone that contains an XHTML-capable Web browser.

This summer it launched a downloadable Java application for Google Maps, enabling cell phone users to get information about local restaurants and movies theaters as well as live traffic information on the map.

And this month, it improved its mobile Gmail client to allow quicker access to the application. At the same time, Google has been busy developing partnerships with mobile operators, such as Sprint Nextel and Cingular Wireless. It’s also been testing new business models, like text-based mobile advertising, and more localized advertising.

With nearly 3 billion mobile phone subscribers in the world expected by the end of 2007, Google sees great potential for extending its presence throughout the world using the mobile platform, said Deep Nishar, director of product management for Google. CNET News.com recently chatted with Nishar by phone from his office in California to get the scoop on the company’s mobile strategy and to get some insight as to how the emerging mobile market might evolve in the next couple of years.

Q: Google has been making a lot of mobile announcements lately. What exactly is the company’s strategy when it comes to the mobile market?
Nishar: Our strategy is predicated on three things. The first is that mobile devices are very personal. People carry them wherever they go. And unlike the home PC, people don’t share their mobile phones. So it’s very important to make the service very personalized.

That’s why we’ve launched Google Personalized Home and mobile Gmail. So people can get this data on their mobile phones all in one place without going to a bunch of different sites.

The second big category we are focusing on is location-based services. People take their cell phones with them everywhere, and they generally are looking for information in the context of a location. When you’re on your mobile device and you type in the keyword “movie,” you’re likely searching for a movie theater because you want to go see a movie. But if you typed in “movie” on your desktop at home, you may be searching for more general information about movies. With Google Maps, we can show you the location of the nearest movie theater, the times of the shows, and even let you purchase tickets from your phone.
Given that our mission is to organize the world’s information, it’s important to make sure our applications work everywhere in the world.

But right now, users have to type in their location or a ZIP code, right?
Yes, but the next step is to interact with advanced cell phone technology, like Global Positioning Systems or GPS, so that the device knows where you are. We’re already doing that with Helio’s new phones. The whole point is to make the user’s life simpler.

What’s the third piece of the strategy?
In mobile, a one-size-fits-all solution won’t work. Given that our mission is to organize the world’s information, it’s important to make sure our applications work everywhere in the world. But you can’t assume that products popular in one region will be popular everywhere.

SMS is a good example. It’s very popular in Europe and is gaining popularity in the U.S. But people in Japan don’t use SMS; they use mobile e-mail. So it wouldn’t make sense to launch an SMS-based search application there because people won’t use it. So we need to make sure our services can be accessed globally, but the product execution is local.

So how does Google expect to make money from the new mobile applications it’s developing?
We are already testing text-based mobile advertising in Japan and several other countries. And so far the testing is going quite well. So that’s one avenue for us to make money. But I think that mobile is still a new medium. The number of people accessing data applications on phones is still relatively low. As usage increases, I am certain there will be other business models that emerge.

Eric Schmidt, Google’s CEO, said earlier this month that he believes mobile advertising could make cell phones free for consumers. How would that work exactly?
What Eric was alluding to is that it’s in the best interest of mobile operators, content developers and application providers like us, to make sure that everyone who wants a mobile device has one. Unlike the traditional Internet, the mobile market is based on a well-defined ecosystem. Mobile operators set pricing on content and provide access. Device makers select operating systems. And then you have service providers like Google that offer applications.

So the entire ecosystem will have to figure out different ways to get mobile devices into users’ hands. It won’t be just mobile advertising. But the market is still nascent, so we don’t know what it will be yet.

Google’s success in mobile relies on the consumer’s willingness to adopt and use the mobile Internet. So far, relatively few people are surfing the Net on their phones. Why do you think the mobile Internet has been slow to catch on?
Growth of the mobile Internet has been different in different parts of the world. And I think we can look at the differences in business models to understand why it’s popular in some places and not in others.

For example, in Japan, data usage is very high compared to other places like the U.S. If you dig deeper, you find that the business models aren’t as open in the U.S. as in Japan. Phones in the U.S. are still primarily used for voice calls. But I haven’t seen voice minutes priced any higher here. I think the mobile operators understand this, and they are looking for new ways to encourage use.

What do the mobile operators and others in the mobile “ecosystem” need to do to spur adoption?
We need to define the real value of what we’re offering consumers. Data services aren’t just about getting the latest ring tone. That’s entertainment and doesn’t become a core part of a user’s life. When I show friends and family the things you can do with Google Maps, like live traffic updates, they are like, “Wow.” We need to make sure more people have these “aha” moments.

Do you think that pricing is affecting adoption of these services?
Price is something that always lingers in consumers’ minds. There have been studies that show when data is offered for free as part of a trial that 50 percent to 80 percent of users stop using the service once they have to pay for it. But I think that users pay for what they value.
Data services aren’t just about getting the latest ring tone. That’s entertainment and doesn’t become a core part of a user’s life.

For instance, I don’t think you can get people in Western societies to pay for news headlines. On average, most people are within 30 to 40 minutes from some kind of technology that delivers the news for free. So you’re going to be hard-pressed to get people to pay for it.

So I think that service providers need to be smart about how they price content and services. You can’t charge for every bit of content. But you can charge for things that provide a real value to consumers.

I agree with you on that point. But one of the reasons I’m not a big mobile Internet user is because I don’t really understand the carrier’s pricing method. And I’m nervous I’m goi
ng to be charged an arm and leg for just experimenting and trying new services. Do you think that’s also pretty common?
Yes, I do. There are two hurdles operators must overcome. First they have to make consumers understand the value of the service, so they’re willing to pay a fee for using it. And then they also have to provide transparency in pricing. This is a distinction that not many people understand.

Most consumers understand they are being charged for the use of a data service. But they don’t really know how much. Mobile operators are starting to recognize this, and they are coming up with more simplified pricing structures.
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Google has announced partnerships with several carriers. But all of Google’s mobile applications can also be accessed directly from the mobile Internet. Has that created tension between Google and mobile operators, who are reluctant to give up control over what applications their subscribers are using?
In general, I think whenever a new service comes onto the market and a new way of doing business emerges, mobile operators question how it will play out. We’ve experienced a lot of good will among mobile operators that we’ve worked with. But I admit that some of the discussions were difficult at first. But at the end of the day, the operators are smart people. And they know which way the market is going. They have to look at us as a partner to enable these new services and a wave of new innovation.

So what’s next for Google in the mobile market?
I can’t share specific details with you about products we haven’t announced. But I think if you look at our strategy, several obvious things fall out. For example, I think you’ll see us do more with location-based services, like developing more locally flavored products.

Will 2007 be the year of mobile for Google?
I think that 2006 has already been year of mobile. We really started investing in mobile in the latter part of 2005. And we’re already seeing the fruits of some of that labor. In 2007, we really hope to keep innovation chugging along and provide some great new products.

Copyright ©1995-2006 CNET Networks, Inc. All rights reserved.

Serious consumer distrust of e-mail
November 28, 2006

E-commerce sales have experienced consistent revenue increases. However, recent security breaches (online and offline) are having a significant impact on buying patterns of U.S. adults. Due to consumer’s concerns about the security of the Internet, nearly $2 billion in U.S. e-commerce sales will be lost in 2006, according to a survey by Gartner, Inc.

According to the Gartner survey of 5,000 online U.S. adults in August 2006, approximately $913 million in 2006 e-commerce sales is lost because of security concerns among online shoppers. Another $1 billion is lost because of shoppers who refuse to shop online because of security concerns.

Nearly half of online U.S. adults, or 46% of more than 155 million people, say that concerns about theft of information, data breaches or Internet-based attacks have affected their purchasing payment, online transaction or e-mail behavior. Of all the behaviors affected, online commerce (including online banking, online payments and online shopping) is suffering the highest toll.

Gartner estimates that these security concerns have kept approximately 33 million U.S. adults from banking online. According to the survey, nearly 9 million U.S. adults have stopped online banking altogether, while another estimated 23.7 million won’t start because of their security concerns.

Perhaps the biggest impact is a newfound and serious consumer distrust of e-mail. Nearly 70% of online consumers whose behavior has been affected by recent security incidents say that their concerns have affected their trust in e-mail from companies or individuals they don’t know personally. Of these, more than 85% delete suspect mail without opening it.

Firms give texting a thumbs-up

Want info on real estate, news or the local scene? Companies are gobbling up text-message codes to cash in on the craze.

By Andy Vuong
Denver Post Staff Writer

Clarion Ventures is working on a service to let cellphone users receive information by text message about a house for sale. (US Capital)

Cellphone users are going text crazy, and companies are rushing to secure short codes that underlie the text-messaging industry.

The trend is drawing comparisons to the Internet domain-name blitz during the dot-com boom.

Here’s how it works: Companies register five- or six-digit codes – which often form a word using the letters on each number – with the Common Short Code Administration, an organization run by the wireless industry’s trade group.

For example, to receive sports alerts from ESPN, cellphone users send a text message to the code 4ESPN (43776).

The cost to register a code ranges from $500 to $1,000 a month, which makes it cost-prohibitive for speculators to tie up a bunch of codes with hopes of reselling them for a profit – a tactic that was widely used during the scramble for domain names.

Early adopters have tied the short codes to a commercial or television show, allowing viewers to send a text message to a code to cast a vote, buy a ringtone or receive news alerts.

“It’s kind of the ultimate in direct- response marketing,” said local entrepreneur Brian Levin, who helped kick-start the trend through his work with the TV show “American Idol.”

Levin’s previous company, Mobliss, which he sold in 2004 for $15 million, enabled “American Idol” to receive votes from viewers via text messages.

Text messaging has surged since 2003, when messages were first able to travel between the various wireless carriers, such as T-Mobile and Cingular. Before the change, messages sent from a carrier like T-Mobile were restricted to T-Mobile customers. Boulder-based Mobile Marketing Association led the “cross-carrier” push.

In June, cellphone users sent 12.5 billion text messages, up 71 percent from 7.3 billion in June 2005, according to industry trade group Cellular Telecommunications Industry Association, or CTIA.

Text messaging generates billions of dollars in revenue annually for wireless carriers, which typically charge users a flat monthly fee or 10 cents per message.

Some third-party companies – such as ringtone provider Jamster – make money by charging users a premium fee on top of the carrier’s fee.

Text HOUSE for info

Locally, several companies are joining the fray.

Denver-based Clarion Ventures has registered the short codes HOUSE (46873), 4SALE (47253) and TICKET (842538).

The company hopes to launch its first service in January with the HOUSE code targeted at homebuyers.

People who send a text to HOUSE with the address of a home that is for sale in the body of the text message will receive a response that includes information about the house.

The information will include an estimated value, square footage, the number of bedrooms and bathrooms and the year it was built.

“We’re going to provide the ability for individuals to get the key information on a house anywhere in the United States,” said Craig Harrison, a partner with Denver-based US Capital, the lead investor in Clarion.

The service will be free for users. But they’ll have to opt-in, thereby allowing Clarion and its real-estate partners to contact them after they’ve made an inquiry.

“We’re going to be deriving our revenue primarily through lead generation and advertising,” Harrison said.

The company also hopes to allow users to buy tickets to events with its TICKET code.

Denver-based Connectme360 is targeting the hotel industry with its code 5STRZ (57879).

Essentially, the company’s service will allow hotel customers to receive information about the city they are visiting, such as the nearest sushi restaurant, by sending a message to 5STRZ. The company hopes to launch the service in the coming weeks, said chief executive Brian Hayashi.

Levin, the founder of Mobliss, has launched a new company called Useful Networks that is developing a service that would allow companies to send news, coupons and other information to users based on their location. Users would also have to opt-in for that service.

James Eberhard, who founded Denver-based ringtone company 9 Squared, said short codes will eventually be paired with Internet Web addresses on billboards and other marketing materials.

“The next generation is you’ll see ‘Go to this website or text this to this,’ said Eberhard, now chairman of Denver-based Mobile Accord, which provides the back-end services for companies like Clarion.

Newspapers join fray

Mobile Accord is working with the United Way to allow users to send a text message to make a donation, which will be charged to their cellphone bill.

Mobile Accord is also working on a text-messaging initiative with the Denver Newspaper Agency, which handles the business operations for The Denver Post and Rocky Mountain News.

The DNA has secured the code DENVER (336837) and plans to launch a mobile-coupon service in January, said Sara Pacheco, senior interactive producer with the DNA. The company also has plans to use the code for voting polls and breaking- news alerts from The Post and News.

While the text-messaging boom is generating plenty of revenue for the carriers, some analysts question whether third- party companies will be able to get a bigger piece of the pie in the future.

“How much elasticity is there among consumers to spend for these kinds of things?” said Charles Golvin, an analyst with Forrester Research. “There are lots of instances where consumers definitely will pay. But there are not going to be that many players who hit the jackpot with a big service that has really wide adoption across consumers.”

Text Messaging Record Falls Again

Nonstop Growth for Online Travel

According to a new report from JupiterResearch, “US Travel Forecast: 2006-2011,” online travel revenues will reach $128 billion in the US in 2011 — 38% of all travel revenue for that year.

“Online travel revenue will continue to grow strongly from $85 billion in 2006,” said Jupiter analyst Diane Clarkson. “Factors that will spur online spending are greater consumer wallet share, increasingly sophisticated products available online and improved online compliance in business travel.”

For comparison, eMarketer’s estimate of this year’s US online travel sales is somewhat more conservative at $77.7 million.

comScore Networks put first-half 2006 online travel sales at $34.7 million, a year-over-year increase of 14.7%.

While the exact figures may not match, all the sources agree that online travel sales are continuing to fly higher.

Speaking of flying, looking at airline travel sales alone, Jupiter asserts that higher fares and an increase in the number of people flying are driving total air revenues to $138 billion in 2006, with $49 billion spent online, and forecasts that that figure will grow to $72 billion in 2011.

Hotels are also seeing — and will continue to see — a shift to online sales as more travelers migrate from making reservations by phone to online, particularly the hotels’ own Web sites.