Part II: Company Profiles
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Leading in Local | From National to Local: Mobile Advertising Zeros In| Part II, Company Profiles Leading in Local From National to Local: Mobile Advertising Zeros In Part II: Company Profiles February 2013 © Copyright February 2013, All Rights Reserved, BIA/Kelsey Copyright © BIA/Kelsey 2013 i Leading in Local | From National to Local: Mobile Advertising Zeros In| Part II, Company Profiles Contents Summary .......................................................................................................................... 1 Duda Mobile ...................................................................................................................... 2 Facebook .......................................................................................................................... 3 Google .............................................................................................................................. 4 Marchex ............................................................................................................................ 5 Millennial Media ................................................................................................................. 6 Telenav ............................................................................................................................. 7 Telmetrics ......................................................................................................................... 8 Verve Mobile...................................................................................................................... 9 xAd .................................................................................................................................. 10 Yelp ................................................................................................................................. 11 YP Holdings ...................................................................................................................... 12 Copyright © BIA/Kelsey 2013 ii Leading in Local | From National to Local: Mobile Advertising Zeros In| Part II, Company Profiles Summary Last month, BIA/Kelsey released a research paper that examined the largest opportunities in mobile local advertising (the chart below is an example of the data shared in “From National to Local: Mobile Advertising Zeroes In”). The paper’s most prominent findings include the performance deltas that can be achieved by localizing mobile ad campaigns. This is leading to premium ad rates and demand levels that will counteract some of the deficiencies we’ve previously seen in the mobile advertising marketplace. Nowhere is this opportunity more apparent than for large brand advertisers to more effectively reach target audiences at the local level; and to drive measurable conversions and ROI. Among the many media companies, networks, and ad tech providers mentioned in the report, we’ve picked out a handful to be profiled in greater depth in the pages below. This report marks a new format for BIA/Kelsey in which we’ll periodically profile companies that best represent the trends, concepts and opportunities examined in our Insight papers. Local’s Share of the U.S. Mobile Ad Market (Source: “From National to Local: Mobile Advertising Zeroes In” Part I, 2013) Copyright © BIA/Kelsey 2013 1 Leading in Local | From National to Local: Mobile Advertising Zeros In| Part II, Company Profiles Duda Mobile more prominently than they might be on a desktop site, due to lower-funnel buying intent of mobile users. Its site management also offers the simplicity SMBs require. Duda’s mobile websites share the same back-end data of a Company Overview desktop site, which means content changes don’t need to be made in two places. Year Established: 2009 Listing Status: Private Headquarters: Palo Alto, CA Employees: 30+ The BIA/Kelsey Take Duda is one of the top Usage Data providers in a sector where BIA/Kelsey projects • 2 million+ mobile websites tremendous growth and opportunity. This is • Users creating more than 100,000 new mobile because of the moble search volume driving sites per month users to mobile websites of local businesses. Yet only 2 percent of these local businesses have websites that are created and optimized for Leadership Spotlight mobile, according to vSplash. This suggests a large opportunity to create, optimize and host Itai Sadan, Co-Founder & CEO mobile sites for SMBs. Winners will be those that Amir Glatt, Co-Founder & CTO can do this in a simple and partly automated way that preserves margin at the lower price Dennis Mink, Chief Marketing Officer points endemic to SMBs . Duda’s approach hits Alan Keller, CRO all these marks, and its technical chops have been validated by the endorsements of companies such as Google and Yahoo. Google Company Description has made Duda its vendor of choice in fulfilling the creation of mobile web sites for its SMB Duda Mobile offers a low-cost way for small advertisers. Duda continues to strike deals that businesses to establish a mobile web presence. provide additional distribution and market Duda offers a spectrum of options from highly penetration. OpenTable, for example, will offer automated to highly-customized mobile its restaurant customers the ability to create presence. A key element of Duda’s process mobile websites and bundle Duda’s service with involves scraping companies’ desktop websites its own. We’ll see many more such relationships; to populate mobile sites with content. However and Duda will be one of the leaders in this the layout is created in a way that is more fitting emerging mobile website creation space. to the mobile screen, and the type of information people seek while using a mobile device. For instance, business attributes like phone numbers are positioned Copyright © BIA/Kelsey 2013 2 Leading in Local | From National to Local: Mobile Advertising Zeros In| Part II, Company Profiles Facebook current initiatives include developing mobile advertising and reaching the SMB advertising sector. The latter effort has produced 12.8 million global SMBs with Facebook pages. Facebook will continue to improve the functionality of these pages, as well as ways for Company Overview advertisers to promote them, such as its Promoted Posts option. Facebook is also Year Established: 2004 expected to add functionality for lead generation Listing Status: Public (FB) that is specific to certain verticals (i.e., appointment scheduling). Headquarters: Menlo Park, CA Employees: 4,300+ Usage Data The BIA/Kelsey Take • 1.06 billion monthly active users Facebook’s biggest challenge • 81% of its users are international is to boost its stock price, • 680 million monthly active users on mobile which has fallen sharply since the May IPO, largely due to investor unease with the company’s monetization Revenue potential. Much of this stems from the fact that more than half of Facebook’s billion global users 2010 $2.0 billion access the service from mobile devices. That’s an issue, because mobile is a touch point that 2011 $3.7 billion isn’t monetized to the same degree as desktop. 2012 $5.1 billion Currently, 85 percent of Facebook’s revenue comes from banner advertising, which doesn’t easily translate to mobile interfaces -- thus Company Description Facebook’s focus on creating mobile-specific advertising products. This includes mobile ads Facebook is the world’s largest social network, such as Sponsored Stories, which better merge with more than a billion global users. The with the format of its central News Feed. These company went public in May, in part because of ads so far show promising results in terms of pressure to reward early backers and performance, due to their targeted and longstanding employees. It is now in the process organically generated delivery. Through this, of evolving into a public company, while trying Facebook has grown mobile to 23 percent of to maintain the long-term product development total revenue. A great deal of Facebook’s future focus that defined its early success. Facebook’s success hinges on this mobile advertising effort. Copyright © BIA/Kelsey 2013 3 Leading in Local | From National to Local: Mobile Advertising Zeros In| Part II, Company Profiles Google contextual ads on third party websites (AdSense). Mobile is a key initiative for Google as many of its global users have migrated to smartphones. Twenty percent of Google Company Overview searches now come from mobile devices (half of these are local). Google holds a 95 percent Year Established: 1998 share of mobile search query volume, compared to its 67 percent online search share. BIA/Kelsey Listings Status: Public (GOOG) estimates that Google also accounts for 50 Headquarters: Mountain View, CA percent to 60 percent of U.S. mobile ad Employees: 53,000+ revenues – from both mobile search and display ads. Leadership Spotlight Larry Page, CEO The BIA/Kelsey Take Eric E. Schmidt, Executive Chairman Sergey Brin, Co-founder Google has been an early Nikesh Arora, SVP & CBO adopter of mobile, investing heavily in the medium over Susan Wojcicki, SVP Advertising the past decade. This includes its Android Jeff Huber, SVP Geo and Commerce smartphone operating system, which helps Andy Rubin, SVP Mobile and Digital Content Google position its search products prominently in mobile device interfaces. Additionally, it has successfully made itself into a leading mobile Advertising Revenue brand, resulting in a 95 percent market share of mobile searches. This is partly due to its default 2010: $29.3 billion search