Benchmarks and Best Practices for Mobile Marketing in the U.S

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What You Need to Know About MobileMobile MarketingMarketing20112011 Benchmarks and best practices for mobile marketing in the U.S. 20110228-SUPP-WP2--0001,0002,0003,0004,0005,0006,0007,0008,0009,0010,0011,0012,0013,0014,0015,0016,0017,0018,0019,0020,0021,002

WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011

TABLE OF CONTENTS INTRODUCTION 2 Introduction

MOBILE TIPPING POINTS 5 UBIQUITY BEHAVIOR CHANGING DEVICES BY KATHRYN KOEGEL BREACH OF THE DIGITAL DIVIDE 8 FASTER AND FASTER GENERATION TEXT 9 PORTABILITY BECAUSE IT’S PERSONAL 11 CONVERGENCE ACTIVITIES AND ADVERTISING “MOBILIZED” it’s no mystery why “Mad Men” is so popular in the marketing community. The acclaimed AMC series looks back at a time when 12 MOBILE’S PLACE IN THE MARKETING MIX the process of creating advertising was undeniably sexy. TV and REACH print ruled because they enabled brands to tell simple but power- BRAND IMMERSION CONTEXT ful stories. Marketing wasn’t about complex algorithms, but pas- ACTIVATION 13 sion and gut instinct. The brave, new world of mobile devices as a PROMOTION marketing medium, however, is more akin to “Star Trek”—anoth- LOCAL IMPACT er beloved TV show from a time when those Mad Men were cre- - THE AGENCY PERSPECTIVE 14 ating their insightful, witty brand stories. Today, mobile is overrun with sci-fi-esque references (femtocells!), mysterious acronyms MOBILE MYTHS DEBUNKED 15 (NFC, OEMs, LTE) and toy-like devices (anything with a “touch” IT’S NOT AN ALL-APPLE WORLD and an “i” in it) that do really cool stuff. NOT ALL PEOPLE DO ALL THINGS ON ALL PHONES 16 While the sci-fi geeks may have invented mobile, it is the bal- SMARTPHONES: GAME CHANGING, BUT NOT THE WHOLE MARKET ance of us that is embracing those devices and having transforma- 17 IT’S NOT AS COMPLICATED AS IT SOUNDS tive, personal experiences with the new media-delivery tool. Mobile phones and now tablets have gone beyond simple communication WHO’S MOBILE? 18 WAP USAGE to encompass all forms of media usage (text, video, gaming, social TOP WAP ADVERTISERS networking, information gathering). Mobile devices are becoming TOP APPS personalized remote controls for consumers, enabling them to access information and entertainment content whenever and wher- HOW TO MARKET THROUGH MOBILE 21 ever they want it. The mobile-marketing moment has arrived. SMS MOBILE WEB AND IN-APP BANNERS BECAUSE ERIC, STEVE, MARY, AND MARK’S CTO SAY SO - APPY NEW YEAR? HARDLY 26 Why is now the mobile moment? In the midst of the economic RICH MEDIA, INCLUDING IADS 28 doldrums of 2009 and 2010, TV was flooded with advertising for BRANDED APPS all manner of mobile devices; accordingly, smartphone, tablet and MOBILE RADIO/AUDIO 29 e-reader sales took off. In the January 2011 issue of The Harvard MOBILE VIDEO MOBILE SEARCH 30 Business Review, Eric Schmidt, former CEO and now executive MOBILE ACTIVATION 31 chairman of Google, the house that search built, turned away from MOBILE COUPONING 32 the wired web of clicks to declare:“As I think about Google’s strate- LOCATION-BASED SERVICES gic initiatives in 2011, I realize they’re all about mobile.” When he MOBILE PHONES AS RETAIL TOOLS addressed the GSMA Mobile World Congress the previous MOBILE COMMERCE 33 February,he said “mobile advertising [will] generate more revenue - MOBILE AD NETWORKS 34 than advertising on today’s web.” Apple CEO Steve Jobs announced that the company’s long- CONCLUSION 35 rumored touchscreen tablet would be introduced as 2010’s spring awakening to the world. It wasn’t just a big iPhone, as some sug- GLOSSARY 36 gested but, as Jobs said, “our most advanced technology in a mag- ical and revolutionary device at an unbelievable price.” Less than This document and information contained therein are the copyrighted property of Crain Communications Inc. and Advertising Age (Copyright 2011) and are for one week after the iPad made its April debut, Jobs followed up with your personal, noncommercial use only. You may not reproduce, display on a the aptly named “iAd,” heralded as a solution to what he saw as website, distribute, sell or republish this document, or the information contained therein, without the prior written consent of Advertising Age. Copyright 2011 by “ads on mobile that suck.”The iAd was accompanied by the launch Crain Communications Inc. All rights reserved. of an exclusive ad network on which to sell those rich-media

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER

CHARTS ➜ DOWNLOAD 1: MOBILE VS. DESKTOP USER PROJECTION, Morgan Stanley 3 Key charts are available for 4 buyers of this white paper to 2: MOBILE AD SPENDING, eMarketer download as Power Point 3: MARKETERS PLAN TO SPEND $5.5B ON MOBILE IN 2011, MMA 4 slides. Use this link to access 4: PHONES TAKE ON THE PC, Insight Express 5 the slides: 5: U.S. HOUSEHOLD CELLULAR-ONLY PENETRATION, Nielsen 5 AdAge.com/whitepapers 6: 10 MOST POPULAR HANDSETS, comScore 6 7: MOBILE MEDIA USE SPIKES FOR SMARTPHONE USERS, Nielsen 7 8: MULTITOUCH/TOUCHSCREENS GROWING FASTEST, comScore 7 9: SMARTPHONES MAJORITY IN U.S. BY Q2 2012, Nielsen 7 CHART 1 10: THE IPAD DECEMBER HOCKEY STICK,The Weather Channel 8 11: MINORITY REPORT: LEADING IN MOBILE, Pew Research 9 12: 3G ACCESS NEARLY 50% OF U.S. MOBILE MARKET, comScore 9 GLOBAL MOBILE VS. DESKTOP INTERNET USER PROJECTION 13: TEENS AND TEXTING, Kaiser Family Foundation 10 Internet users in millions 14: MANY DEVICES DELIVER MEDIA VIA WIRELESS,Pew Research 10 15: 42.4% OF U.S. MOBILE OWNERS USE MOBILE MEDIA, comScore 12 2,000 16: TEXT MESSAGING SECOND MOST COMMON ACTIVITY, Nielsen 13 17: RIM LEADS FOR SMARTPHONE SHARE, comScore 15 18: SMARTPHONES ARE 27% OF ALL PHONES, comScore 16 19: ANDROID IS NOW A BRAND CONSUMERS DESIRE, ChangeWave 16 20: THE AVERAGE MOBILE-MEDIA USER IS 32, comScore MobiLens 17 21: MOBILE INTERNET (WAP) USERS GROW MONTHLY,Nielsen 18 22: SEARCH, E-MAIL, SOCIAL NETWORKING ARE TOPS, comScore 19 23: MOBILE CONTENT ALMOST HALF OF MOBILE WEB ADVERTISING, comScore 19 DESKTOP INTERNET USERS 24: LEADING MOBILE WEB AD CATEGORIES, comScore 19 20 0 MOBILE INTERNET USERS 25: WEATHER IS TOP APP CATEGORY FOR USAGE, comScore 26: TOP FREE APPS DOWNLOADED ON IPHONES IN 2010, Distimo 20 2007 2015 27: MOBILE WEB USED MOST BY MARKETERS, BUT WEALTH OF OPTIONS, Source: Morgan Stanley, April 2010 Association of National Advertisers 22 28: WOMEN WANT SMS ALERTS ABOUT GROCERIES, BEAUTY AND FASHION, MEN WANT ELECTRONICS, Placecast/Harris 23 29: APPS USED FREQUENTLY/VERY OFTEN,The Weather Channel 24 iAds—and the realization that Apple would now be in the business 30: MOBILE AD EFFECTIVENESS, Insight Express 24 of creating ads. 31: MOBILE VS. ONLINE BANNER AD DIFFERENTIAL, Dynamic Logic 25 Mary Meeker, then of Morgan Stanley and one of the few analysts who emerged unscathed from the dot-com bust, delivered 32: PRICES FOR PAID APPS SOFTENED IN 2010, Distimo 25 several speeches concerning the power of mobile computing— 33: APPS REACH JUST 24% OF U.S. POPULATION, Pew/Nielsen 25 including the Brobdingnagian, 659-slide Mobile Internet Report 34: APP DOWNLOADERS VARY BY PHONE TYPE AND BRAND, Nielsen 27 from December 2009, which actually offered many more than 659 35: EVEN ON THE IPAD, FREE AD-SUPPORTED APPS GROWING, Distimo 27 reasons why mobile’s moment is now. Reason No. 1: By midyear 36: MOBILE VIDEO WATCHED MORE THAN WIRED WEB, Nielsen 28 2013, mobile internet usage will surpass desktop usage (see chart 37: AUTO IS BIG ADVERTISER IN MOBILE VIDEO, Rhythm New Media 29 1). In April 2010, Meeker followed with an 87-page update featur- 38: MOBILE SEARCH: ONWARDS AND UPWARDS, Performics 30 ing still more reasons, including mobile-couponing potential. By 39: ANDROID USERS MOST LIKELY TO SCAN BARCODES, Compete 31 November,she addressed the Web 2.0 Summit with “10 Questions Internet Execs Should Ask and Answer.” Question No. 2: “Mobile 40: SMARTPHONE USED FOR RETAIL-RELATED ACTIVITIES, Compete 31 is ramping faster than any ‘new new thing’—is your business 41: BIG 3 MOBILE AD NETWORKS CONTROL MOST MOBILE DISPLAY, IDC 34 leading or lagging?” This was one of her last public appearances before leaving Morgan Stanley for Kleiner Perkins, the venture- Sources: 360i, AdMob, AKQA, The Association of National Advertisers, Apple, Bite Sized Candy, Catalina Marketing, Change Wave Research, Compete (Kantar Group), comScore, capital fund that backed mobile startups including Shopkick, Crisp Wireless, Distimo, Dynamic Logic, Flurry, Google, Ground Truth, The Hyper Factory, IDC, Insight Express, Kaiser Family Foundation, Mobile Marketing Association, Millennial Media, Booyah, Shazam and Zynga Mobile. Mobclix, Morgan Stanley, Moxie Interactive, The Nielsen Co., ORMMA, Pandora, Pew Research, Performics, PhoneValley (Publicis), Placecast, Rhythm New Media, The Weather Standing in for Time “Man of the Year” Mark Zuckerberg, Channel

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011

Facebook’s CTO Bret Taylor told an audience of developers at the CHART 2 Inside Social Apps conference on Jan. 25: “Mobile is our primary focus for our platform this year.” MOBILE AD SPENDING It’s full-steam-ahead mobile for three of the most highly capitalized media companies in the world. But it’s not only $1 billion this year; $2.5 billion by 2014, says eMarketer CEOs of major corporations who have woken up to the mobile moment: IT personnel of any company with a web presence 2009 have looked at their log files and noticed a consumer phenom- $416 enon: People increasingly are accessing content via the mobile 2010 web and applications. $743.10 On Feb. 1, Cisco issued a report analyzing its own data (it owns the routers and switches through which much of internet traffic 2011 flows), projecting that from 2010 through 2015, mobile traffic will $1,102.40 experience a 26-times annual increase. What does that mean in 2012 tangible terms? Computer World equated it to “19 billion DVDs, $1,501.30 or 536 quadrillion SMS texts, or 75 times all the Internet Protocol traffic created in the year 2000.” Mobile as a media channel can no 2013 longer be denied. $2,036.80 2014 HOW BIG IS THE U.S. MOBILE MARKETING AND ADVERTISING MARKET? $2,549.50 That’s probably anybody’s guess, but for those making more edu- cated estimates: ■ eMarketer predicted, in September 2010, $743 million for Source: eMarketer, September 2010 2010, growing to $2.037 billion by 2013 (including wireless- application protocol, display, search and SMS) (see chart 2). ■ Forrester projects $1 billion in 2011. ■ Thomas Weisel Partners projected $1.9 billion in mobile mar- CHART 3 keting and advertising revenue by 2014, with growth of more than 50% per year. MARKETERS THINK EVEN BIGGER FOR MOBILE ■ The Mobile Marketing Association this past June released estimates, based on a survey of 200 marketers provided by U.S. mobile-media spend to hit $5.5 billion this year, Chief Marketer Magazine and Advertising Database, pro- they predict jecting $2.3 billion in 2010 and $5.5 billion in 2011 (see chart 3). What’s likely more significant is that in this cli- 2010 Mobile media: mate of anemic growth for media spend, marketers expect $2.3 billion growth of 124% in 2010-11. Of the other media types noted, the only other form in the positive realm was digi- Total U.S. tal/online, up 8.7%. media spending: $129 billion* WHY IT’S NOT WEB 3.0 The aim of this white paper is not to promote mobile as a marketing medium, but to separate the hype from the reality and provide marketers with a base of understanding mobile as it is now, and is likely to be in the next five years. Mobile media: Mobile has the potential to be the most powerful marketing 2011 $5.5 billion tool outside TV due to consumer-penetration levels and the unique “with-you-anywhere” nature of the devices. But mobile is also overly complex because of the variety and number of devices, the varying marketing tactics possible, and the disparate modes of Total U.S. media consumption. media spending: $136 billion* In order for mobile to live up to its potential, marketers, developers and agencies can learn from the challenges of wired-internet-based marketing and find commonalities with other media and marketing types rather than allow the technology to over- *MMA projection. Source: MMA survey of 200 marketers, June 2010 whelm and impede planning and spending.

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER Mobile Tipping Points: Technology and Consumer Trends Demanding Mobile Marketing

it seems that at the beginning of each of the last five years, we CHART 4 heard one or more marketing guru declare that this was the year for mobile. Mobile’s promise as a full-fledged marketing channel MOBILE PHONES TAKE ON THE PC always seems to be right on the verge of breaking out. Here’s why 2010 did turn out to be a game changer: Among various demos, mobile phone penetration is equal to or greater than Internet penetration UBIQUITY: CONSUMER PENETRATION LEVELS THAT EXCEED THE INTERNET AND APPROACH TV MOBILE PHONE INTERNET The penetration rate of mobile phones in the U.S. is now at 85%, PENETRATION1 PENETRATION2 according to Pew Research (96% among consumers 18-29). In 85% 91% contrast, internet penetration stalled out at 77% in 2010, according Gen Y (18-24) to the International Telecommunications Union (with only 66% of Gen X (25-44) 85 85 households having broadband access—a figure so low that FCC 81 79 Chairman Julius Genachowski apologized for it last July when the Younger Boomers (45-54) FCC issued its annual report on the topic). Interestingly enough, Older Boomers (55-64) 76 72 mobile usage among older consumers is actually more common than internet usage (see chart 4). It is important to note that not all devices have full-media-access capabilities, nor do some con- Source: 1-Insight Express 4Q 2010 Digital Consumer Portrait. 2-Pew 2010 sumers want to use their phones for anything other than talking. But the rate of consumer adoption, coupled with the facts that mobile operators subsidize handsets and that usage plans typically turn on a 24-month cycle, mean growing numbers of the mobi- CHART 5 lized will be able to access more and more media on their phones. Another powerful indicator is the increasing number of con- U.S. HOUSEHOLD CELLULAR-ONLY PENETRATION sumers who have no landline at home.All told, 21% of U.S. households have cut the cord and are mobile-only as of December 2009, The CDC reported in May 2010 that the number was 24.5%, according to Nielsen (see chart 5). A July 2010 study from the with 40% of those 18-34 having no landline CDC indicated that 40% of those 18-34 live in a household with 2006 only a cell and not a landline. This group of consumers is undergo- 15% ing a paradigm shift away from the very concept of phones as a fixed entity. 2007 15% BEHAVIOR-CHANGING DEVICES: SMARTPHONES, TOUCHSCREENS, AND NOW TABLETS 2008 18% TiVo and the DVR changed the idea of how TV could be viewed. Such is the case with mobile, where devices have changed con- 2009 sumer behavior. It’s hard to believe it was only four years ago that 21% the iPhone was unleashed upon the world. It was hardly the best of economic times, yet here was a product costing more than any- 2010* one had ever paid for a phone—and one for which the public was 24.5% willing to wait in line overnight. Ownership was akin to member- ship in a club of cool: With your phone, you got access to the VIP Source: Nielsen; *For 2010, Centers for Disease Control and Prevention, May 2010 section, where Steve Jobs, the ultimate celebrity of the tech world,

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CHART 6 and Nielsen, and by year’s end, the top phone in the market was an Android device [see chart 6]. Of course, they didn’t have the 10 MOST WIDELY OWNED MOBILE HANDSETS “steady date,” AT&T-carrier challenge and the solo-manufacturer limitations of the iPhone. Google proved that if it could just think a The most popular mobile device among U.S. subscribers 13+ is little differently and open up its operating system to multiple carri- LG’s enV3 VX9200, an Android phone ers and developers, it could unleash a whole new realm of creativi- ty and sexy,cool features even Apple fanatics would envy—features LG - enV3 VX9200 that would ultimately show up on the Apple OS4 (among them, 1.3% video chatting and wireless-hotspot generation). To David RIM - BlackBerry Curve 8530 Berkowitz, senior director-emerging media and innovation at 360i, 1.3% Google’s Android and the innovations it brought to the market amounted to one of the defining trends of 2010.“They made smart- Samsung - Intensity 1.1% phones more accessible by offering choice and an alternative to the iPhone,” he said. “A lot of great phones came out, the software got Apple - iPhone 4 16GB 1.1% better, the battery life got better.” 2010 was the year of the phone wars, a classic capitalistic rivalry Motorola - Droid that got people into retail locations and engendered possibly unpar- 1.0% alleled levels of discussion around “Which phone do you have?” Apple - iPhone 3G S 32GB Even Captain Kirk and Mr. Spock never stood around comparing 1.0% communicators: “Mine has a kickstand, does yours?” “How’s the typing on it?” “Have you played Angry Birds yet?” “How many LG - enV Touch 1.0% times do you check the weather since you got that app?” If we had little to say about world affairs this year, then we sure could talk RIM - BlackBerry Curve 8330 plenty about our phones. 1.0% Data from comScore, Nielsen and Insight Express show that LG - Cosmos consumers with smartphones do everything other mobile users 0.9% do—just a whole lot more of it. Most importantly for marketers, users are more likely to use the device for all forms of media con- Apple - iPhone 3G 8GB 0.9% sumption (see chart 7). Another telling figure: Both the volume of mobile media con- Three-month average ending December 2010. Source: comScore MobiLens sumed by users of Android and the iPhone and those users’ propen- sity to click on ads are similar,with 1.4% click-through rates for ads placed in gaming-app ads on Apple devices versus 1.1% on Android, according to Mobclix. (Mobile ad networks like Chitika awaited you with open arms and an Appletini. and Smaato have released similar numbers.) What do the two types The first group of iPhone adopters were the ultimate, influen- of devices have in common? Touchscreens. tial-buzz cohorts. They used the phones in public, visibly and often; While click rates are just one measure of consumer interaction, displayed slide shows of their kids and dogs to anybody and every- they are a powerful one, and one used to track much of online body; and compared app downloads the way they had once bragged advertising (both search and display) from the beginning. about how many MP3s they had downloaded from iTunes.As sexy Smartphones with touchscreens make up eight of the top 10 smart- and fabulous as the iPhone interface is, it wasn’t the first game- phones in the market (see chart 6). By embracing the touchscreen, changing device in mobile—and it won’t be the last. consumers have signaled they prefer the technology to a trackball The BlackBerry, which first integrated the phone with e-mail or some mouse-like device; it furthers the personal connection the back in 2002, revolutionized how the business world communicat- user has to his or her phone, and for many consumers, it is simply ed. The BlackBerry Curve remained the No. 2 mobile device in the a more intuitive experience. As former Ansible Mobile CEO Larry U.S. as of December 2010, according to comScore (see chart 6). Harris pointed out: “Mobile commerce in the U.S. is driven almost Given that the corporate world is still primarily PC-based and not exclusively by touchscreen devices.” given to opening up to another operating system, the BlackBerry Touchscreens are not without their limitations, however (for will likely remain the preferred smartphone for a significant sector women with fingernails, they amount to a choice between destroy- of the population. ing your screen and a good manicure). And a new class of “have Android devices proved there was an appetite for app-focused your cake and eat it, too” phone has emerged: the multitouch smartphones that far exceeded that sparked by Apple. By May phone, which saw impressive growth in 2010, according to 2010, Android devices were outselling iPhones, according to NPD comScore (see chart 8). The BlackBerry Torch features a slide-out

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CHART 7 CHART 8

MOBILE-MEDIA USAGE SPIKES AMONG MOBILE DEVICES WITH MULTITOUCH CAPABILITIES, SMARTPHONE USERS TOUCHSCREENS CONTINUE TO GROW THE FASTEST U.S. usage of mobile media, Q3 2010 But phones with keyboards still represent the largest share of mobile phones Text Messaging/SMS 61% 35% TOUCHSCREEN 85% MULTITOUCH +37% KEYBOARD Internet 17% 75%

E-mail 15% +45% 75%

App DLs 9% 61% +63% Picture Messaging 0 33% 59% 2009 2010

Country: U.S., N=32,044. Three-month average ending September 2010. Location-based services-GPS Source: comScore MobiLens 7% 50%

Game DLs CHART 9 7% 37% SMARTPHONES WILL BE A MAJORITY IN THE U.S. BY Q2 2012 Video-Mobile TV 5% Projected smartphone penetration 27% projected

Ringtone DLs 61% 15% 90% 26%

Wallpaper-Screensaver DLs 50% 10% 25% FEATURE PHONE OWNERS 10% 39% Mobile Commerce 5% SMARTPHONE 22% OWNERS 2008 2009 2010 2011 2012

Source: Nielsen Based on survey data and projections. Source: NIelsen

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CHART 10

THE IPAD DECEMBER HOCKEY STICK: ONE APP’S STORY

The Weather Channel app experienced dramatic growth in downloads and usage in December, due to new devices and bad weather

iPad 2010 Growth 2.5 IPAD APP UV 50 2,363,150 IPAD APP DOWNLOADS IPAD APP PAGE VIEWS (PV) 2.0 IPAD DEVICE PV ON WEATHER.COM 37,812,868

1.5 1,626,876 30

1.0

10,327,580 PAGE VIEWS (MILLIONS)

UV & CUMULATIVE DOWNLOADS (MILLIONS) 0.5 10

0 0 April May June July August September October November December

Source: The Weather Channel

keyboard, as do several Android devices. Meanwhile, Apple has app developers reported unprecedented levels of traffic beginning refused to cave on the “touchscreens suck for typing” issue. on Dec. 26. The Weather Channel, boasting one of the most widely The smartphone wars have been a great event for the media downloaded and used iPad apps, experienced a perfect storm of new world. In a year of slight recovery in ad investment, spending by devices and usage that day with a massive blizzard on the East Coast telecommunications companies increased 4.7% by Q3 2010, accord- (see chart 10). Sites featuring professional video content also saw a ing to Kantar.AT&T spent $1.5B to Verizon’s $1.4B during the same post-Christmas spike because of the iPad. period. Telecommunications is now the second-largest ad sector behind only automotive—10 or 15 years ago, PCs would have held BREACH OF THE DIGITAL DIVIDE: A MEDIUM EVERYONE CAN EMBRACE that spot. Long a concern among Freedom of Information advocates is that cer- Nielsen projects that by the Q2 2012, smartphones will have tain segments of the U.S. population—in particular, minorities, those achieved 50% of the mobile market (see chart 9). That means that who are less affluent and those who live in rural areas—don’t have almost 150 million people in the U.S. will be walking around with access to high-speed internet and the wealth of information that comes phones that can go online, access text and video, write and receive with it. Due to cost and availability,the U.S. is behind countries includ- e-mail—and that have the potential to be the most ubiquitous ing Korea in broadband penetration. Mobile devices in the U.S. are media devices ever invented. operating much as they do in developing countries: as the primary Tablets first hit the scene in April 2010 with the introduction of means of internet access among consumers who do not have access to the iPad.While marketers are still trying to determine whether the the web at work or at home. Less-affluent urbanites, especially those tablet is a touchscreen netbook, a wireless device akin to a big who are younger and either African-American or Hispanic, tend to phone or a portable entertainment/e-reader (as a matter of fact, it use mobile phones as a key source of accessing media. Pre-paid usage can be all of these), iPads and the dozens of tablets seen at the plans help them manage spending (see chart 11). Marketers can easi- annual Consumer Electronics Show this past January are exciting ly reach these consumers through device, service and geo-targeting. in every way possible. Consumers couldn’t get enough of the first touchscreen tablet, FASTER AND FASTER: 3G ACCESS NOW UBIQUITOUS; 4G IS SPRINT’S BIG PUSH, AND NOW and by the end of 2010, Apple reported that iPads were outselling ALSO VERIZON’S; FEMTOCELL IMPLEMENTATION (IT’S NOT AS SCARY AS IT SOUNDS) the venerable Mac. All told, 15 million iPads flew off the shelves in When broadband became widely available in most parts of the U.S. 2010. All many consumers wanted for Christmas was an iPad, and and competition forced prices down, behavior online changed rad-

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ically. Content got more diverse, more visual and more interactive. CHART 11 Media consumption skyrocketed. We are now at the point where Hulu reaches more consumers than Time Warner Cable (38 mil- MINORITY REPORT: LEADING IN MOBILE lion versus 34 as far back as July 2009, according to comScore). With phones, the game changer for consumption was supposed African-Americans and Latinos lead non-Hispanic whites in to be 3G, which was touted as akin to mobile broadband. It is, and it use of mobile data applications, including early-adopter isn’t. 3G now has 48.4% mobile penetration, per comScore (see activities like purchasing via the phone chart 12), and it is closer to broadband. But with so much data traffic, usage can get pretty glitchy in areas with high smartphone pen- WHITE, BLACK HISPANIC etration. iPhones are so prominent in San Francisco and Silicon ALL NON- NON- (ENGLISH- Valley that at various times of the day, the “mobirati” experience ADULTS HISPANIC HISPANIC SPEAKING) poor mobile access, known as “traffic jams.” Own a cell phone 82% 80% 87% 87% Carriers are working to upgrade connection speed, and finding Send/receive text that speed and reliability of coverage—rather than pricing alone— messages 72 68 79 83* constitute a key value proposition among users (hence all those ads 38 33 46 51* with comparative 3G-connection maps). But 4G access will be the Access the internet true game changer. There are two types of 4G: WiMax and LTE. Use a social- Those who have experienced either have expressed nirvana-like networking site 23 19 33 36* excitement over the speed of content delivery. LTE (or Long Term Purchase a product 11 10 13 18 Evolution) is being rolled out by Verizon and will be available in 38 cities and 62 airports by the end of 2011, in markets including New * Statically significant difference. Source: Pew Research York, Boston, Washington, Chicago, major Florida metros and parts of California. The long-awaited Verizon iPhone will not launch with 4G access, reports The New York Times, with Apple saving the 4G power for Droid devices with which it has had much more experience. CHART 12 We may soon get to the point where wireless access outpaces wired access. And that could be a boon to businesses and consumers 3G ACCESS IS NOW AT NEARLY 50% PENETRATION OF who would then be able to make a reliable choice between a broad- THE U.S. MOBILE MARKET band or mobile network.AT&T’s efforts in 2010 focused on improv- ing its 3G network; it currently speaks of being in the midst of a 4G Smartphone ownership rose to nearly 30% during the year. “evolution.”The company is setting up microwave and satellite sys- The most important enabler, unlimited data plan subscribers tems so they can be used together to enhance speed. Sprint is rolling also grew. These are all very positive signs for the future out a WiMax network and was the first carrier to actually have 4G growth of the market. availability (beginning in 2008). But of course, there really weren’t any phones ready at that point to take advantage of it. In January of 60% 3G SUBSCRIBERS this year, Sprint announced 4G was available in 71 U.S. markets SMARTPHONE SUBSCRIBERS 48.4% (among them, New York, Los Angeles, Boston, Atlanta and Miami) UNLIMITED DATA PLAN while claiming that the HTC Evo 4G was the fastest phone du jour. Aside from 4G, another technology is poised to expand mobile’s reach even further. For those not likely to be attending conferences like the CTIA, the term “femtocell” may seem like something found 28% in a petri dish; what it is, however, is a short-range wireless network that stands to transform places where wireless could never go. If New York’s Metropolitan Transit Authority implements femtocell, residents might soon have to endure subway cars packed with straphangers yakking on their mobiles. A less-intrusive scenario has commuters reading The New York Times,The Wall Street Journal or 25.1% Ad Age while speeding through a tunnel under the East River.In the case of femtocell, New York is not a trendsetter, as the Boston and Washington, D.C., transit systems are already wired for service. 0

GENERATION TEXT 2009 2010 As marketers, we survey consumers, look for influentials and early adopters, and employ trendspotters to find the next big thing. And Three-month average ending December 2009 to 2010. Source: comScore MobiLens there is, most likely, no better focus group for revealing behavioral

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CHART 13 CHART 14

TEENS AND TEXTING A LOT OF DEVICES CAN DELIVER MEDIA THROUGH WIRELESS Kids 8-18 spend more than two hours per day on average talking and texting; behavior is most pronounced among Expect tablets to increase in penetration rapidly, and minority groups connected TVs to make the list soon TALKING TEXTING :33 1:35 Cell phone Among All 85% a Age (8-10) :10 - b a Desktop computer (11-14) :36 1:13 59% :43b 1:53b (15-18) Laptop computer a a Gender Boy :28 1:14 52% b b Girl :38 1:58 mp3 player Race/Ethnicity 47% a a White :25 1:22 Game console b b Black :46 2:03 42% a ab Hispanic :37 1:42 e-book reader 5% Statistical significance should be read across rows, by section. 1-Among those in 7th to 12th grades only. a,b,c: Differences between demographic groups and changes over time have been tested for statistical significance, taking into account sample weighting and design effect. They are reported only if the difference Tablet computer is significant, at least at the p<.05 level. a,b,c superscripts are used to denote whether data points differ 4% reliably. Items that do not have a superscript or share a common superscript do not differ significantly. Source: Kaiser Family Foundation, January 2010 Source: Pew, Americans and their Gadgets, September 2010

changes than the 12-to-24-year-olds who comprise the On-Demand When it comes to time spent with media on an average day, Generation. For those not living with teenagers, it’s hard to grasp just consumers aged 8 to 18 spend 20% of their media-usage time on how essential mobile devices have become to this group. It is true mobile phones, compared to 25% on computers and 32% on TV, that teens’ love affair with telecommunications precedes the cell according to the study. Just think how mobile usage will soar as phone. In the ’70s, teenage girls used their pink princess phones to teens upgrade to smartphones. dial friends. A separate phone line for the teenager of the house was the ultimate parental indulgence until the ’90s, when teens discov- Do You Know What Your Teen is Texting? ered AOL chat rooms and instant messaging. But in the ’00s, having ■ 29% of 18-to-24-year-olds have used a text message to ask a cell phone became as important (or more so) than having a com- someone out on a date (Insight Express, January 2010). puter.Texting would become so ubiquitous that carriers would begin ■ 62% have sent a text message to someone in the same room or offering unlimited SMS as part of their service packages.And texting area as them (Insight Express, January 2010). is the perfect mode of communication for teens: They can do it sur- ■ 15% have received a “sext,” a naked or sexually suggestive reptitiously in homeroom, it defies all accepted rules of grammar, photo of someone they know (Pew, Fall 2009). and they won’t be reprimanded by a parent or teacher for what they communicate as they might if speaking. Seventy-five percent of 12- While Generation Text will surely have less time for this sort of to-17-year-olds use cell phones, according to Pew,and texting is their communication by the time they reach their twenties, the behavior most common activity on the devices—with 88% of mobile teens they display now will impact what they do as they get their first jobs texting.The topic of teens and mobile is so huge that Pew’s report on and apartments. This is the group that fully embraced social media, the subject, in April 2010, weighed in at 144 pages (most of its reports first through MySpace, then Facebook.That activity is directly trans- come in at a relatively terse 10 pages). latable to smartphones, as social networks have spawned mobile apps So how much time do teens spend texting? A Kaiser Family that let the user update his or her status wherever he or she happens Foundation study released in January 2010 stated that 8-to-18- to be. Twentysomething smartphone owners are checking out serv- year-olds spend an average of one hour and 35 minutes per day tex- ices such as Google Latitude, Facebook Places and Foursquare, ting, while they spend 33 minutes per day talking on their mobile whereby users can broadcast their whereabouts to friends. Privacy phones (see chart 13). Pew reports that one-third of teens send over advocates decry location-based marketing as the ultimate infringe- 3,000 text messages a month. (Woe to the parent who forgot to sign ment—but for younger consumers, as long as the service delivers up for the unlimited text plan.) information they deem valuable (where their friends are hanging

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out, for example), privacy would seem to be of little concern. advertising. It’s the ultimate value exchange: The service provides what the consumer is most interested in, and the advertiser delivers PORTABILITY more relevant and, thus, more efficient and effective messaging. Try to name another media device that travels with the consumer into retail locations. Name a device capable of entertaining and CONVERGENCE: FORGET TV + INTERNET: informing in the most tedious of locations and situations: waiting in IT’S MOBILE + SOCIAL + GAMING + VIDEO + SEARCH line at the market, riding in a car,using public transportation. Mobile Those who work in the fields of TV and internet have long talked devices go anywhere with consumers, and with enhanced capabilities about the convergence of those two worlds. But when you think of such as GPS tied to search, they have enormous marketing implica- mobile devices and the growing speed of delivery,you take things up tions, most profoundly for retail. With their mobiles, users can com- a notch. Recent trends in media consumption—the growth of casu- parison shop in stores. They can look up information about a rival al gaming, social media and short-form video—are enhanced by the retailer—inside a store or on the go. They can check the availability uniqueness of the mobile device. Mobile devices are also changing of a product—wherever they happen to be at the moment. the way we consume media in that most sacred of all places for the If the internet proved to be the biggest game changer for print typical American: the car. The most recent CES and New York since Guttenberg invented the printing press, mobile will be the International Auto Show each saw attendees excited about mobile game changer for entertainment-based content. It’s important to devices, tablets and cars, especially when integrated. Who needs ter- remember that mobile is not limited to phone-based devices (see restrial radio or a separate GPS device when your mobile device can chart 14). The latest versions of portable gaming devices like the hook into your car—a device that plays your favorite music, deliv- Sony PSP and Nintendo DS are wireless, as are all new gaming con- ers your e-mail, dials your phone, looks up retail outlets, maps your soles. These devices are now being marketed to women as media trip and, in the case of a mobile app like Waze, makes suggestions on players for internet-based video. New auto models are equipped with where to stop and what to buy along the way? wireless, voice-operated technology like Ford’s Sync system. Sales of the Amazon Kindle and the Barnes & Noble Nook took ACTIVITIES AND ADVERTISING “MOBILIZED” off when a $139 price war started up in Q4 2010. Amazon reported Mobile devices are like the Swiss Army knife of media: It seems there in its earnings that quarter that the Kindle was the “most gifted” is always another function being added. Many media activities via product ever on its site. In its own Q4 report, Apple astonished Wall other devices have seamlessly made the transition to mobile—among Street by revealing that just eight months after launch, revenue them, e-mail, music and video consumption. Internet radio has had from the iPad was closing in on that of the company’s signature fits and starts and seems to have found its pace with services like Last product, the Mac, after having shipped 7.3 million of the new devices FM and Pandora, consistently one of the top apps downloaded on (versus 4.1 million Macs). Say hello to the wireless computing and smartphones. True personalization, where anyone can be his or her entertainment revolution. own DJ, takes radio to a whole new level. We all have seen how consumers love short-form video—and BECAUSE IT IS PERSONAL once 4G is more widespread and 3G is improved upon, more A mobile phone is different from any other media device in that it video will be played across even more phones. The internet is is personal and pretty much one to a customer.The personal nature generally blamed for newspapers’ slow death, but might mobile of the device was long cited as a reason why mobile marketing be their salvation? One of the top mobile activities is reading would never happen. Consumers clearly voted against landline- news. With larger screens and apps that optimize the experience based marketing with the implementation of the National Do Not of reading, mobile devices may yet prove a panacea for “serious” Call Registry. But this is not just a phone we’re talking about—it’s information consumption. a multimedia device. The more consumers use the machine for all The New York City transit system is a microcosm of the chang- manner of activities, the more marketing via the devices will be ing relationship between consumers and media. Too many times, I accepted. With rare exceptions, consumers do not want to pay for have attempted “the gentleman’s fold” of The New York Times on a content; ad-supported content on mobile will grow accordingly. crowded F train from Brooklyn to Manhattan. Nowadays, I glance at The personal nature of a mobile device means it is likely to be the the Kindles and Nooks (which are more common than printed news- ultimate permission-based medium. Unsolicited texts and calls will papers) and also see those beautiful iPads—and imagine someone be the ultimate turnoff. But for consumers who have given their per- tripping and dropping one on the tracks, horrors! Reports from riders mission, marketing and communication through the devices are a on suburban commuter trains into the city confirm most business- win-win. Placecast, which enables location-triggered SMS from people appear to be reading newspapers and e-mail via the retailers, has found that 45% of consumers are very open to the BlackBerry, iPhone or Droid. And lest we forget, Google and search notion of texts from retailers they have given permission to, and diminished the impact of yellow pages and directories—but mobile location-based services are generally thought of as relevant and use- puts the spotlight back on true local listings. Any GPS app can locate ful. In order to get the most pertinent info on a mobile device (per- an address and how to get there. But now, I can click to call, and by sonalized music, movie times and locations, weather reports), con- doing so check the availability of a product or make a reservation. I sumers readily grant permission to use their information to direct can even use a comparison-shopping app to help me decide which that content to them, which can then also be used to serve relevant retailer has the better deal.

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 Mobile’s Place in the Marketing Mix

given that these trends are inescapably pushing mobile into the FOR REACH marketing mix, it warrants asking:Where, exactly,does mobile fit? Where does it excel? Where does it come up short? For marketers looking for reach in the broadest sense, the challenge In the marketing world, until the advent of the internet, it was is that just over 42% of those with mobile phones actually con- pretty simple to develop a media plan.You’d start with TV for reach, sume media on them, according to comScore (see chart 15). Data add magazines for context and demography, then newspapers and from Nielsen reveals the various types of media activities and the radio for local promotions and retail. The internet introduced an potential size of the audience for each (see chart 16). entirely different accountability structure, heavily focused on direct Text-message (SMS) marketing and banners that appear on the response, endless tech vendors and unlimited inventory in which to mobile web are simple for executing reach plays. place ads. Mobile media, like online, suffers from complexity—but has FOR BRAND IMMERSION distinct enough capabilities and exponential growth in usage that it The internet revolutionized brand marketing in that brands were must be added to any plan, with the following objectives: expected to have some kind of consumer-facing presence online. Mobile can push that consumer connection to a higher and more localized level. One way is through an app. Apps can be used to CHART 15 highlight a brand in a functional, creative, sometimes humorous way. In December 2010, Ad Age highlighted 10 branded apps that 42.4% OF U.S. MOBILE PHONE OWNERS USE THEIR made a whole lot of marketing sense, among them: PHONES FOR MOBILE MEDIA ■ Weber’s On the Grill iPad App: Don’t burn the steak and how to make an Adobo sauce The number of people who use voice only has declined ■ Starbucks Card Mobile App: A simple m-commerce payment 17.2% year on year, while mobile-media usage rose 23% system (pre-paid like a gift card) that’s available on all major smartphone platforms ■ Tiffany Engagement Ring Finder iPhone App: It’s all about cut, carats and quality For others,see:Ad Age’s Book of Tens: Best Marketer Apps.

FOR CONTEXTUAL ENVIRONMENTS Just Voice SMS (and not As with magazines and online, people do all kinds of things on 28.5% Mobile Media) 29.1% phones and consume all kinds of information that has direct relevance to products. Here are a few of the contextual areas where mobile excels: ■ Entertainment: Local listings can lead consumers to buy tickets to movies and other events that are time-sensitive.TV Mobile Media listings are presented in pleasing ways,and apps like TV 42.4% Guide’s can even program your DVR remotely. ■ Automotive: When consumers are in the market for a new car, they stop to check models and availability at various dealers. Just as automakers were early to recognize the potential of the internet as a comparison-shopping medium,mobile is an Mobile Media = connected media (except SMS) in MobiLens, defined as used phone browser, application, unsurpassed dealer locator that even maps the trip there. or downloaded content. Three-month average ending September 2010. Country: U.S. N=32,044. Source: comScore MobiLens ■ Financial: Financial content and apps are a popular form of information on smartphones.Considering the speed at which

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markets move,the ability to get information and make CHART 16 trading decisions on the go is essential.Customers can also make simple transfers between accounts AFTER TALKING, TEXT MESSAGING IS THE ■ Travel: People who travel on business rely on their MOST COMMON ACTIVITY ON MOBILE PHONES smartphones,and myriad apps are now available to make that process easier—from flight check-ins to finding a hotel room. U.S. mobile-media usage, Q3 2010 Many airlines now enable consumers to zap via their phones electronic boarding passes with either bar codes or QR codes ALL SUBSCRIBERS over scanners for mobile check-ins. FEATURE PHONE OWNERS ■ Retail: What is it? Where is it? What does it cost? How do I SMARTPHONE OWNERS get there? Mobile devices can answer these vital questions for the shopper and, if the consumer chooses, even make the purchase. Text Messaging/SMS 66% Geoffrey Handley of The Hyperfactory encourages marketers 61% 150.1 M to see context on phones for its three-dimensional capabilities: “It’s 85% about time, place and physical movement”—a whole lot to grasp for planners looking for easy answers, but encapsulating the potential for mobile. Internet 32% FOR ACTIVATION 17% 72.1 M Click-to-call blows away 800 numbers for response simplicity, and 75% entry forms as a response mechanism. All phones have the ability to text, and marketers are getting used to asking for consumer interaction through shortcodes. Consumers with Android phones App DLs or the proper app on an iPhone can scan QR codes in outdoor 22% advertising and on packaging to be taken to the web, a custom 9% 49.6 M interactive experience, or to activate a video or get a coupon. 61% FOR PROMOTION Due to its portability,location-based targeting, e-mail access and text Picture Messaging 38% access, mobile could be the greatest promotional medium yet expe- 33% rienced by marketers. If the ’00s were the decade of e-mail for retail 87.7 M 59% marketers, think of this activity transitioning to devices that actually travel into the retail location. When one thinks of promotional activity, one often thinks in-store efforts and freestanding inserts. Eighty-six percent of promotional coupons go into FSIs, according to Location-based services-GPS 18% a study by NCH, a unit of Valassis that tracks coupon usage. That 40 M means distribution of coupons still relies primarily on the Sunday 7% 50% newspaper, a medium with considerable challenges. (The topic of m- couponing is such an expansive one—and one that has Facebook, Google and upstarts like Groupon engaged in an all-out war—that Ad Age will publish a report dedicated to the topic in May.) Text Alerts 21% FOR LOCAL IMPACT 16% 48.3M 39% In the past, local dollars were primarily devoted to radio, newspaper or yellow pages. Online and Google took a big chunk out of that business, but the value proposition of local advertising on mobile search is that much more appealing due to all the geo- Mobile Video 10% mapping capabilities. The consumer searches on a mapping pro- 5% gram and a local retailer pops out of a map, along with information 22.9 M 27% on where to find it. With the proper app, a smooth operator can even talk the customer through the driving directions. Source: Nielsen

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THE AGENCY PERSPECTIVE TO BUILD OR NOT TO BUILD AN APP: IS IT MEDIA? WHERE DOES IT FIT? For agencies, 2010 was a watershed year in mobile

According to various executives interviewed for this report, the are CHOs (“chief household officers”)—and demos in which media past two years were spent just getting clients on board and doing has reached 60% penetration as primed for mobile. lots of education. Some got their feet “mobilized” through Mobile is going through its own growing pains within larger branded apps; for some, it was optimizing websites for mobile or agencies as they struggle to determine where it all fits into their testing an SMS campaign. For Alexandre Mars, CEO of structures. Is it digital? Is it its own beast? Does it fall under CRM PhoneValley, a Publicis company, the last 12 to 18 months have or below the line/promotions? The reality is that mobile can be all been the inflection point. As Mars says: “Our clients are realizing of these things. Most agencies now are working with dedicated that mobile is strategic, and not just tactical. They now know that mobile budgets, but as Geoffrey Handley of The Hyperfactory if they do not get mobile now, they will be in bad shape. In the U.S. notes: “We’re siloing mobile off just like we do traditional and market, companies are now demanding that they have a mobile online. The mobile specialist is typically a media person”—which agency of record. Two to three years ago, they had $50,000 to for Handley has its disadvantages. “Mobile is disruptive and very spend; now, they are putting in more money, more people, and contextual and you have to understand the technology,” he said. creating dedicated teams. They now understand that mobile, like “A lot of the media, including iAds, are just ads squished down to a digital, is broader and not just a matter of banners, search and smaller screen.” click-through rates.” The tablet phenomenon has unleashed another set of agency David Berkowitz, senior director-emerging media and questions about where all this mobile stuff goes within the innovation at 360i, part of Dentsu, agrees that from an agency agency structure. Michael Hirshoren, senior VP-sales at Rhythm, perspective, “making a case for mobile now seems silly,” though a mobile ad network that focuses on video content, noted that in education about how exactly to do mobile is still needed. This past some agencies, tablet budgets (if they exist) can come out of September, 360i issued a Mobile Marketing Playbook (see: print-buying groups. Robin Steinberg, senior VP-director of http://www.360i.com/pdf/360i-Mobile-Marketing- publishing investment and activation at MediaVest, sees the Playbook.pdf?v1.1). tablet as “MoPo”—a somewhat sandwich-sounding term derived For every client who is thinking strategically, agency execs from the combination of mobile and portable. MediaVest went interviewed for this report admitted, “app fever” had overtaken through a process where it broke down silos and developed many of their clients—and the agencies were happy to oblige, groups based on clients. The reality of tablets, however, is that just as long as that meant more of them were actually getting much of the content is coming from traditional publishers, and into mobile. “they’re not used to selling in CPMs and unique users, though For some clients, an iPhone app did make sense, said Daniel we’ve moved to that model,” said Steinberg. “Most people with Rosen, CEO of AKQA Mobile. As he related: “When VW of America iPad apps didn’t initially know how to price them and charged a launched the GTi in 2010, they took the brave decision of flat fee with no inventory attached.” A real metrics issue in launching it solely by iPhone and became the first manufacturer respect to apps, including those on the iPad, is also a concern. As to do so ... The GTi Real Racing App returned a 97% lower cost per an example, Steinberg cited Google’s AdMob selling ad inventory sale than a traditional car launch, achieving over six million into the popular app Angry Birds, but with no way of knowing how downloads and, most importantly, over 200 car sales could be long the phenomenon would last or who its audience really is. directly attributed to users of the app. Clearly, this would not have Scott Symonds, general manager of AKQA Media, feels like been right for all brands or car models, but VW recognized a he’s seen it all before. “Ten years ago, we had the same naysayers unique overlap in the GTi consumer and the iPhone user in 2010.” [in respect to display ads], and yet we know in mobile that they 360i’s Berkowitz acknowledged the early Apple app obsession work,” he said. Symonds sees many trends in mobile that parallel and noted that though SMS, search and display are not especially what’s gone on in online advertising. “We said we wanted rich- sexy to clients, those clients do understand reach. Joel Lunenfeld, media standardization, but we still have Motif, Eyeblaster, CEO of Moxie Interactive, also wants his clients to see mobile as a Pointroll,” he said. “We said we wanted standardized ad sizes, reach vehicle and the “connective tissue in campaigns.” He cites a then we said those weren’t good enough.” program it developed with Verizon that included an integration in One area where mobile media has glaring discrepancies in the movie “Inception,” where QR codes were used as an respect to digital: metrics. Symonds is frustrated with the lack of activation mechanism for consumers to get more information persistent cookies and the current reporting available from ad about a very complex movie. Berkowitz believes campaigns servers. (In December of this year, Ad Age Insights will devote the looking to reach select demos—men or women 18-34, moms who fourth edition of this series to the topic of metrics.)

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER Mobile Myths Debunked

mobile is a confusing marketing space, and we are in the midst CHART 17 of a hype cycle perhaps equaled only by the dot-com frenzy of years past. Following are four points every marketer should keep in mind about mobile as a marketing medium: RIM LEADS IN SMARTPHONE SHARE, SAMSUNG IN ALL MOBILE DEVICES IT’S NOT AN ALL-APPLE WORLD…AND IT NEVER WILL BE Apple may dominate the headlines, but as of September There seems to be an app for just about everything at this point 2010, the iPhone accounted for just 6% of all mobile (with more than 350,000 available as of January 22 of this year, phones and 24% of smartphone share according to Apple). And while Apple had an early lock on the app market, in fact it represents just 6.8% of the U.S. mobile phone market as of December 2010, according to comScore (see chart 17). The iPhone was the game-changing device, however,as its interface is the Sony Ericsson one that managed to alter consumer behavior irrevocably. As a 1.4% result, it has enjoyed the greatest interest from developers. Sanyo 1.7% The iPhone audience is a distinctive one. It is youngish (but not Palm 1.1% too young; consumers under the age of 24 are not likely to be able Kyocera 2.3% UTStarcom to afford an iPhone, or want to be locked into a long-term contract). 0.5% And, it is made up of early adopters, those who influence the pur- Apple chases of others and who are a marketer’s dream. Since Apple’s 6.8% exclusive contract with AT&T has ended and a Verizon version is Nokia Samsung now on the market, there is no telling how much Apple’s penetra- 7.0% 24.8% tion will spike. But one of the top business stories of 2010 was the phone wars: a drama in several acts (see charts 7, 18). Other 8.2% Research in Motion’s BlackBerry is a significant presence in the market and will continue to be, especially in the business world.The RIM LG BlackBerry is supported by most Windows-based concerns. For 8.5% 20.9% marketers looking to reach the business audience, high-net-worth Motorola individuals and a slightly older demo than the iPhone, targeting 16.7% through the BlackBerry is a smart (nay, essential) move. The BlackBerry challenge has been that with the mass of devices having a trackball rather than a touchscreen, it’s simply not as interactive an interface and can make it difficult to even locate apps. Note: Android is not device-specific and Motorola, HTC, LG and Samsung, among others, make devices with BlackBerry’s touchscreen hope for the future, the Torch, was intro- this operating system. Three-month average ending December 2010. Source: comScore MobiLens duced this past summer. Consumers love Google, and Android phones, according to reports as early as May 2010 (NPD), when they were already starting to outsell iPhones. Research on future purchases from operating system was different from anything else on the market, ChangeWave indicates that Android and the multiple manufactur- featuring customizable tiles billed as an easier way to get at the most ers selling the device with its operating system have done a remark- used functionality. Ads in support of the device made fun of the able job quickly building brand presence and demand (see chart 19). whole obsession with smartphones, showing users experiencing all Microsoft ceded its early dominance in the smartphone market kinds of mishaps as they walked distractedly through their lives, to RIM and BlackBerry but proved it was still alive and kicking eyes glued to a phone. The ads must have found an audience: 1.5 when it introduced the Windows Phone 7 in November 2010. The million devices were sold in the first six weeks, reported Microsoft.

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CHART 18 CHART 19

SMARTPHONES ARE 27% OF ALL PHONES IN MARKET ANDROID IS NOW A BRAND CONSUMERS DESIRE

U.S. smartphone penetration and marketshare Mobile operating system preferences of future smartphone buyers, June 2010 vs. September 2010 Microsoft 8.4% JUNE 2010 SEPTEMBER 2010 RIM 31.6% iPhone OS 50% Google/ 38% Android Apple 31.6% 25% Google Android Palm 30% 3.7% 37%

BlackBerry RIM OS Smartphone 5% 27% 6%

Windows Mobile 2% 1%

Palm os/Web OS Non-smartphone 73% 0% 0%

Three-month average ending December 2010. Source: comScore MobiLens Source: 2010 Changewave Research

“People need to stop looking at mobile consumer activity der.The younger a consumer is, the more likely he or she is to per- across modalities—browsing, apps, and SMS/MMS—and think sonalize his or her phone, or to purchase a ringtone or wacky that one form will dominate while others go away. More screensaver. The older, more business-oriented consumer is more importantly, marketers need to stop wishing for this to happen. likely to have an unlimited data plan and, thus, to use the phone While it might be easier to exist in a world where mobile for web access (see chart 20). consumers only used apps, the reality is that SMS and browser- based activity will continue to reach audiences that apps SMARTPHONES: THEY’RE NOT THE WHOLE MARKET, AND THEY NEVER WILL BE cannot and, in the case of SMS, be a more effective medium to Just as there are people out there with analog TVs with those drive response.” funky converter boxes, some people just want to use their phones -EVAN NEUFELD, VP-MARKETING, GROUNDTRUTH, MOBILE ANALYTICS COMPANY to talk and will never agree to pay fees for data. Some consumers simply do not want e-mail and media whenever, wherever. Due to NOT ALL PEOPLE DO ALL THINGS ON ALL PHONES: MARKET ACCORDINGLY behavior displayed by younger consumers, the group described At this point in the evolution of mobile as a marketing medium, here may safely be concentrated among older demographic the number of users who perform activities such as downloading groups.We also should not forget that in more rural areas, any cell apps or looking at the mobile web or WAP (wireless access proto- service can be problematic. Smartphone adoption may be some- col) is relatively low; comScore estimates that 42.4% of those what analogous to the digital video recorder.While the TV indus- with cell phones consume some sort of mobile media (WAP or try worried that DVRs would achieve much larger penetration in Apps), 29.1% use SMS (but do not consume any media via the a short period, in truth, DVR usage stalled out at around 40% of phone) and 28.5% use phones only for making calls (see chart TV households by the end of 2010, according to Nielsen. Not 15). This is changing rapidly, however, along with the adoption of everyone wants to pay for the service and not everyone, clearly, smartphones—that voice-only group declined 17.2% year over desires that much control over their media. Carriers will be smart year.What people do on their phones is predictive by age and gen- to offer tiered data plans to smartphone newbies. They may not

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER

work for consumers wanting to watch videos on their phones, but there. For some content providers and retailers, it may be optimiz- for those wanting an internet browser, a few apps and e-mail, $10 ing their sites for mobile (a surprising number of companies have and $20 limited monthly data plans will push smartphone pene- not yet done this). For retailers with successful e-mail programs, tration—along with cheaper smartphone devices. it may be developing an SMS program to appeal to the legions of “textirati” who prefer SMS to e-mail. For any marketer using IT’S NOT AS COMPLICATED AS IT SOUNDS print,TV or outdoor,activation programs can extend the effective- Not all types of mobile marketing apply to all companies, and the ness of their campaigns by helping generate opt-in lists or hand- “crawl, walk, run” principle should be employed with mobile. Pick raising customers. Whatever you do, don’t just develop a one- the discipline that most relates to your product category and start platform app and assume that you’ve got mobile covered.

CHART 20

THE AVERAGE MOBILE MEDIA USER IS 32; YOUNGER USERS LIKE RINGTONES, MUSIC Younger users listen to music, buy ringtones and create their own ringtones, while mobile-internet services such as browsing, apps and e-mail skew 60%-65% male

Demographics of Mobile Media Activities

60%

Higher on chart = more female Purchased Further to right = older ringtone Size of bubbles = # of users 55

Made own Social ringtone networking Ringback Unlimited 50 Mobile media data plan App % FEMALE

Played Purchased games 45 game Browser Listened to music E-mail

40 25 27 29 31 33 35 MEDIAN AGE

Three-month average ending September 2010 Country: U.S., N=32,044 Source: comScore MobiLens

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 Who’s Mobile?

according to nielsen, the U.S. was home to 288 million mobile CHART 21 subscribers by the end of 2010. So just what are all those consumers doing on all those cell phones? How many are really IT’S NOT ONLY ABOUT APPS: MOBILE INTERNET (WAP) accessing the mobile web? And which advertisers are already USERS GROW MONTHLY there? Here’s a breakdown of what we currently know about mobile behavior and advertiser spending. Unique mobile-internet users, in millions MOBILE WEB USAGE 90 Over 86 million people in the U.S. with mobile phones can access 86.6 M the mobile web, according to Nielsen (see chart 21). Analysts at research companies including comScore make a compelling argument that much of this usage is “info snacking.” As devices are used on the go, the consumer’s attention span tends to be even shorter than when online. Consumers are accessing news and weather reports and doing all manner of activity that relates to either location or combating boredom. The untethered web is an amazingly useful place to spend (or figure out where to spend) one’s leisure time—hence, the penchant of consumers to search for 61.6 M entertainment options via their mobile devices. It’s also a popular source for travel information (see chart 22). 60 TOP MOBILE WEB ADVERTISERS BY CATEGORY 2010 In this early stage of online as a marketing medium, the trends are still coming into focus. Nielsen issues a monthly report on top advertisers, as does comScore. Ability to capture this kind of data is Source: Nielsen, November 2010 even more challenging in mobile than online due to the complexity of the devices. However, a bit of clarity is emerging. ”Dot- mobs,” or ads related to mobile content like apps and cell phone personalization, make up 47% of all ads, per comScore (see chart tend to have a short half-life. (Doodle Jump was the phenomenon 23).Among brand marketers, automotive and entertainment com- of the summer but seemed so passe by the time Angry Birds made panies have a relatively large presence, followed by education and the top app lists in the fourth quarter.) Which kind of apps do users travel (see chart 24). remain loyal to? According to comScore, weather and mapping are perennial favorites and even more popular than social net- TOP APPS working among users (see chart 25). To see what’s hot and App usage varies somewhat from mobile web usage, as apps what’s not in terms of downloads on a mobile-platform basis, heighten the experience visually and offer so many sexy capabili- check out the monthly Distimo app report, which includes ties. Keep two important numbers in mind: downloads and actual information on which types of app content people will pay for usage.App developers typically like to release the number of copies (see chart 26). Not surprisingly, book apps are tops on the iPad, that have been downloaded. That number does not, however, while the most popular iPhone apps were games and Android equate to regular usage. As Flurry, a company that offers app ana- and BlackBerry lists have utilities strewn amongst the games. lytics, reported in July 2010, 75% of apps downloaded get deleted Presumably, users of phones newer to the app experience are within 90 days of download. For marketers looking to advertise in catching up to popular ones such as Pandora, Weather, Facebook apps, they would do well to look at monthly usage rates. Games and Google Maps.

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER

CHART 23

MOBILE CONTENT STILL MAKES UP ALMOST HALF OF ADVERTISING ON THE MOBILE WEB Share of mobile display web-based advertising

Information technology

Health care 1% Telecommunication services Financial CHART 22 6% 3% Consumer 4% THE MOBILE WEB (WAP): SEARCH, E-MAIL, staples 5% SOCIAL NETWORKING MOST POPULAR 47% Top genres for mobile browsing 34% Search 48.7% Consumer Mobile content Personal email discretionary 44.3% Mobile content = Ads for apps and other downloads . Social Networking Source: comScore Ad Metrix Mobile, November 2010 43% Weather 35.8% CHART 24 News 34% FOR BRAND MARKETERS, TV/ENTERTAINMENT, Sports information 29.2% SPECIALIZED CONSUMER SERVICES AND AUTO LEAD Entertainment news MOBILE WEB AD CATEGORIES 27.6% Consumer discretionary mobile web advertising by IM category 27.6% Photo or video sharing service Other Broadcasting & cable TV 22.5%

Work email Restaurants Specialized 21.1% 18% 18% and consumer Automotive services Maps retail 20.7% 3% 3% 14% Tech news Advertising 4% 19.5% 5% 7% 11% Stock quotes or financial news Hotels, resorts Automobile 18.9% 8% 8% NEWS AND WEATHER & cruise lines manufacturers Movie information GENRES 18.6% Consumer COMMUNICATING Education services electronics Bank accounts AND SHARING 17.6% OTHER Movies & entertainment

Three-month average ending October 2010. Country: U.S.; N=32,397. Source: comScore MobiLens Source: comScore Ad Metrix Mobile, November 2010

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011

CHART 25

WEATHER IS TOP APP CATEGORY FOR USAGE, FOLLOWED BY MAPS

Location-aware services like weather, maps, restaurant information, movie information and traffic reports are all in the top 10

Weather 25.8% Maps 23.8% Social Networking 20% Personal e-mail 17.1% Search 13.8% News 12.2% Sports information 10.1% Work e-mail 9.2% Restaurant information 8.9% Movie information 8.5% Traffic reports 8.2% Entertainment news 8.1% Bank accounts 8.1% Photo or video sharing service 8.1% Stock quotes or financial news 7.1% Tech news 5.6% Business directories 5.6% Gaming information 4.9% LOCATION-BASED SERVICES General reference 4.7% E-MAIL Television guides 4.7% OTHER

Three-month average ending September 2010 ; Country: U.S.; N=32,044 Source: comScore MobiLens

CHART 26

SOCIAL NETWORKING, UTILITIES AND GAMES ARE THE TOP FREE APPS DOWNLOADED ON IPHONES IN 2010

Highest ranked free applications in Apple’s app store for iPhone (aggregated across all countries)

RANK APPLICATION CATEGORY PRICE 1 Facebook by Facebook Social Networking Free 2 Skype by Skype Software S.a.r.l Social Networking Free 3 Talking Tom Cat by Outfit7 Entertainment, Games-Kids Free 4 iBooks by Apple Inc. Books Free 5 Windows Live Messenger by Microsoft Corp. Social Networking Free 6 Angry Birds Lite by Clickgamer.com Games-Family, Games-Puzzle Free 7 Google Mobile App by Google Reference Free 8 Twitterby Twitter Social Networking $0.00-$4.38 9 Paper Tops by Backflip Studios Games-Action, Games-Simulation Free 10 Solitaire by MobilityWare Games-Card, Games-Casino, Games-Strategy Free

Source: Distimo Report, full-year 2010

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER How to Market Through Mobile

mobile offers a variety of ways to market to consumers, includ- Delivery mechanisms: To get started, marketers need to solicit ing text messages, banner ads (mobile display), rich media and ads the cell numbers of consumers, which can be accomplished through in apps. It’s a media smorgasbord, as indicated by a late-2010 traditional media channels or online by publishing a short code for Association of National Advertisers/Mobile Marketing Association response and asking consumers to opt in through web or e-mail. survey of marketers who currently use mobile (see chart 27). Some e-mail list-management companies like Lyris and Following are the benefits and limitations of each approach, and Mobilstorm now also specialize in managing SMS programs. some current best practices: 4INFO is an SMS ad network that provides free, ad-supported text alerts and information in the U.S. via a preference center where con- SMS sumers select topics in which they have interest. SMS marketing is the mobile equivalent of e-mail, and like e-mail, Limitations: While SMS has the ease of text, it also has the limit is a permission-based activity. Marketers need to develop a list of itations: no sight, sound or motion. One is also limited to 160 char- opt-in cell numbers and pay attention to issues like relevance and acters. And like e-mail, it is not clear at this point how many mar- frequency.SMS has the potential to reach the largest portion of the keters consumers want to have this sort of relationship with. mobile audience of any marketing tactic and is not device-specific. Benchmarks are not yet available to tell us the average lifespan of a Do consumers really want to get texts from marketers on their customer in such programs. phones? The answer likely depends upon the age of the user, the How to measure: Marketers typically assess using methods sim- value proposition of the text and the relationship the consumer has ilar to e-mail campaigns, based on delivery and response. If promo with the sender. Much of SMS marketing is an extension of CRM codes are to be used for redemption, it is simple for a retailer to tie programs with some notable exceptions: O2, a U.K. carrier, has into a customer-relationship-management system. Marketers developed an acquisition type program with Placecast, a location- should be measuring the length of time a customer is in a program triggered, SMS-marketing platform, and began a U.S. national and continually test for frequency tolerance and interest types. program with AT&T that launched Feb. 27. Setting up preference centers so consumers can choose offer types Benefits: While SMS is limited to those who opt in, once con- and frequency is a best practice. sumers agree to get your messages, they are more likely to pay attention to them. Unlike e-mail, text has no crowded inbox to act BANNER ADS ON THE MOBILE WEB OR IN APPS as a distraction. Text messages are received and most often opened Mobile banner campaigns are simple to buy and execute. Agency right away. According to a study of retail SMS users conducted by buying and planning groups will find the experience similar to that Placecast, a location-triggered SMS marketing platform, 60% of of online display: You set your budget, determine what your audi- consumers opened messages immediately upon receipt. ence does on the mobile web or through mobile apps, choose media That high level of interest varies by age and gender, however. accordingly, and develop creative that runs through ad servers. Ad Another survey by Placecast, conducted via a Harris poll of U.S. campaigns are typically optimized based on response. So much consumers released in July 2010, found that 42% of 18-to-34-year- inventory is available through mobile WAP and apps that buys are olds were interested in mobile alerts, while 30% of 35-to-44-year- often made with blended CPMs: CPC deals wrapped into CPM- olds were. Men 18-34 showed the highest interest (44%), while based buys to deliver efficient reach plus volume of clicks. Since so 40% of women 18-34 were interested. The products consumers many mobile advertisers are trying to deliver app downloads, click- were most interested in receiving text alerts about included gro- based buying makes sense. ceries, restaurant and entertainment promotions (see chart 28). Men were much more interested in bars, electronics and sporting Why do mobile WAP ads perform better than online display? goods, while women, predictably, favored groceries and beauty. “We believe that it’s the simplicity (single-frame, single- Another advantage of SMS is the ease of transferring of tactics messaging creatives) and uniformity (simple ad formats, and knowledge from e-mail management. Many best practices automatic optimization to screen size) of the mobile display from e-mail marketing are directly applicable to SMS, with one advertising landscape that allows for higher user tolerance and, exception: time of day and location play a much larger role. therefore, higher impact.” — ALI RANA, VP-EMERGING PLATFORMS, DYNAMIC LOGIC

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011

CHART 27 Benefits: WAP and app media offer less clutter than online display (typically only one ad per page) and seemingly high levels of THE MOBILE WEB IS MOST COMMONLY USED BY personal attentiveness proven by brand-impact studies. WAP- MARKETERS, AND THEY HAVE A WEALTH OF OPTIONS optimized pages tend to simplify the reading experience, a clear benefit for advertisers. Mobile marketing elements currently using: Ad formats: Four standard sizes are available, which were established by the Mobile Marketing Association: ■ 300 x 50 pixels ■ 216 x 36 pixels Mobile websites ■ ■ 5% 43% 15% 168 x 28 pixels 120 x 20 pixels However, there is no one standard for the programming behind the creative. All phones will run static ads or sequential Mobile apps GIFs, but not “rich media”—the sort of animated, interactive ads 3% 29% 28% created in Adobe’s Flash program that have taken online creative into new dimensions. Mobile messaging/SMS How to buy: Buying WAP or app media is similar to buying 7% 27% 23% online display, and comScore and Nielsen report mobile data in ad- planner-friendly formats for planning purposes. Context is king and Mobile display ads (CPM or CPC) has the greatest value, just as with web ads; context implies demog- 6% 26% 24% raphy and provides appropriate environments. A great example of mobile providing tons of context for a brand was noted by Geoffrey Mobile search Handley of The Hyperfactory, which creates mobile-banner cam- 2% 24% 24% paigns for Trojan.In addition to the prophylactic products most asso- ciated with the brand, Trojan has also sold products including vibra- Mobile rich media apps tors and lubricants via mobile banners placed very efficiently on all 2% 17% 20% the dating content available through mobile networks: a form of “booty call advertising” unlikely to pass FCC scrutiny on television. Reach can be achieved through the usual means: portal home Mobile video 2% 15% 19% pages and top properties used on mobile phones (see charts 22 and 25). In the mobile universe, content such as weather, sports, news and maps are more frequently used than social networking (see 2D “smart” barcodes chart 29). 2% 7% 16% Device targeting is one of the most common ways to target WAP ads. With so many devices (plus data from Nielsen and Mobile coupons comScore to tell you who uses them), you can safely assume that if 1% 14% 9% you are trying to reach teens, text-heavy phones are a good bet. It’s fascinating to look at how dramatic a skew various devices have. Location-based services While many marketers rush to buy inventory on iPhones due to 3% 5% 9% the appeal of the device and the creative ad options, that’s actually not the best way to reach the under-24 crowd. An iPhone is too Interactive voice response pricey for that group, so try for an LG enV Touch or another Apple 3% 9% 3% product, the iPod Touch. MORE THAN THREE YEARS Counterintuitively, the BlackBerry Curve in cool colors is a hot phone among teenage girls, as Blackberry-packing parents can get Mobile gaming 1-3 YEARS 1% 6% 8% LESS THAN 1 YEAR them for their kids at a lower price. Another standout targeting option is pre-paid services like Boost Mobile. Those options tend to reach younger, urban consumers who cannot or refuse to be locked Proximity - Bluetooth, RFID 2% 1% 8% into monthly plans. What are the rates: Someone at an agency that buys for one of the top carriers noted, not for attribution, that standard banner Near ﬁeld communications payments CPMs were running around $8, with CPCs about 25 cents. Krishna 1% 5% 2% Subramanian, co-founder of Mobclix, a mobile ad exchange through which as many as 10 billion mobile ad impressions per month flow, substantiates those rates. As of February 2011, he is Source: Association of National Advertisers, 2010 seeing 5-to-25-cent CPCs and premium content or audience-targeted inventory running at $6-to-$20 CPMs. He sees the business

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER

now breaking down 60/40 DR to branding in terms of campaign CHART 28 objectives. Brand advertisers often are buying on a performance basis as they are in acquisition mode (especially in the case of telcos) WOMEN ARE MORE INTERESTED IN SMS ALERTS ABOUT or trying to drive downloads of their branded apps. GROCERIES, BEAUTY, FASHION, MEN IN ELECTRONICS How to measure: Mobile-web banner and in-app banner performance are measured just like online display,and since an ad serv- Almost equal interest in restaurants, fast food, travel er is used, publishers and advertisers get web-based access to report- and health ing that includes impressions delivered and click-through perform- Grocery coupons and promotions ance by site, content channel placed, ad model, carrier and creative 56% type used. While a movement to discount clicks as the basic meas- 80% ure of online display has finally gotten broad traction, mobile seems National restaurant chain promotions and offers headed down that path, simply because it is an easy one. One chal- 61% lenge of mobile measurement is a lack of persistent cookies, so there 67% really aren’t reliable “unique user” metrics. (The ad networks say Entertainment products and availability they have mapped certain percentages of their inventory to approx- 54% 62% imate these numbers). That also means no “view through” (expo- sure to an ad and measurement of some kind of response over time Fast food menu items and promotions 48% without a click) due to this persistent cookie challenge. 51% The focus on click rates isn’t yet a huge issue, as the broadest base of mobile advertisers is still comprised of dot-mobs: compa- Beauty and fashion 14% nies selling cell-related content (click to download an app, etc.). 51% Additionally, many advertisers not typically known for direct- response initiatives are now using mobile to drive some kind of Coffee and beverage promotions 33% action, and clicks in that context are good. Package goods compa- 40% nies are offering click-to-recipe or click-to-coupon ads, while auto Electronics product offers and promotions marketers are using click-to-dealer locators. Entertainment mar- 49% keters introduced clicks to theater locators and showtime informa- 35% tion. E-commerce marketers often use click-to-purchase. Travel services, special rates and amenities Compared to online (where DoubleClick most recently pegged 36% an average click-through rate of .1%), mobile display click- 35% throughs have been reported to be some 20 times greater than Health-related offers including gym services those of the tethered web. Mobile advertisers report click-through 24% rates of anywhere from five to more than 10 times the average of 25% online. But in looking at any such stats, proceed with caution. Convenience store products Individual results may vary. Click-rate variables are similar to 19% 23% those online and include creative intent, placement, age of audience (younger people are more likely to click), device type (people using Home furnishings MALE 12% FEMALE touchscreens are more click happy), and the relative volume of ads 20% a user encounters (the fewer ads, the greater the likelihood to click). Infant and child-related products/services/events Just as brand impact can be measured online with control ver- 13% sus exposed methodology recall surveys, Dynamic Logic and 18% Insight Express provide the same service for the mobile web. The Bar or nightclub offers and promotions most interesting thing about the data is that they show much 24% higher levels of ad recall and purchase intent than online display, 17% even if one factors out novelty (see charts 30 and 31). Sporting goods and equipment How can this be, with units that are so limited in size and often 30% static in execution? It’s likely due to the focused experience on the 16% phone and the lack of clutter. “It’s a combination of factors, start- Other ing with the device itself. Mobile phones by their nature are 5% engaging,” said Joy Liuzzo, director of research at Insight Express, 4% which conducts brand-impact studies for mobile campaigns. None “Couple an engaging device with the specific environment offered 3% 4% by the mobile screen—where each relatively uncluttered page contains, on average, just one ad, which is proportionally larger Source: Placecast The Alert Shopper II, conducted by Harris, July 2010 Base: those interested in SMS alerts than online ads on the screen—and consumers will notice.”

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011

CHART 29 CHART 30

APPS USED FREQUENTLY/VERY OFTEN MOBILE AD EFFECTIVENESS: MORE THAN DOUBLE THAT OF ONLINE Weather, search and maps are even more frequently used than social networking among app users Campaign effectiveness brand metric deltas, mobile vs. online, November 2007-December 2010 Weather 63% Unaided 8% 3% Search 56% awareness 8% Maps 52% Aided awareness 4% 23% News 46% Ad awareness 8% Social networking 38% Message 14% association 4% Games 34% Brand 8% MOBILE 3% NORMS Entertainment 33% favorability 11% ONLINE Sports 29% Purchase intent 3% NORMS

The study used norms developed in online ad testing as a benchmark to draw conclusions around the Banking 19% performance of advertising on mobile devices. InsightExpress compared the two using InsightNorms, the company’s normative database containing more than 1,000 online ad-effectiveness campaigns and more than 100 mobile ad effectiveness campaigns. Mobile InsightNorms are based on InsightExpress’ flagship mobile brand effectiveness solution, Mobile AdInsights, which employs a test/control design to measure the Source: The Weather Channel App Attitudes and Usage Survey, November 2010, N=894 users brand impact of mobile advertising campaigns. Source: Insight Express

Mobile web and in-app banner creative best practices: Online which achieved 1.5 million downloads from its launch on Dec. 29, continually gets derided for its lack of emotion—and given the 2010, through Jan. 17, 2011, according to Venture Beat. space constraints, a mobile banner is not likely to make anyone Unfortunately, they didn’t charge and all those downloads could laugh or cry anytime soon. The key to mobile banners is that they have helped pay for college. are in the right place at the right time. Insight Express did an analy- How big is the app market? Gartner projected that it went from sis of its pool of creatives testing brand impact and came up with the $4.2 billion worldwide in 2009 to $6.8 billion by the end of 2010 due following guidelines: to the proliferation of smartphones. Of that total, only $600 million ■ Keep it simple. Keep copy limited and direct. was expected to come from in-app advertising, with the bulk ■ Make the logo very apparent. derived from transactions. Gartner also forecast that worldwide ■ As with online display,“reveal ads,” or ads that cleverly try to downloads in mobile app stores would surpass 21.6 billion by 2013. engage the user with multiple panels, have the least impact. Free downloads accounted for 82% of all downloads in 2010 and ■ As all ads are clickable, you should create a WAP-optimized were expected to grow to 87% of downloads in 2013—a decisive landing page for each campaign so that the ad’s desired out- vote in favor of ad-supported content. Distimo also notes a soften- come is achieved. ing in pricing that probably relates to the glut of apps on the mar- Insight Express’ Liuzzo advised: “Based on our Mobile ket, both free and paid (see chart 32). InsightNorms data, we’ve found it’s important to keep the environ- Ad benefit: For marketers who create them, the app is most ment and size of the device top of mind...The fewer the words, the often a branding play designed to enhance brand loyalty—and due better: a maximum of 16 on the largest units, and around five on to the novelty factor and the evangelizing force of iPhone app the smallest.Try to incite a desire or make a connection using words fanatics, a buzz builder. When measured on a reach basis, apps like ‘get’ or ‘you’ (i.e., ‘Get clarity on investments’). We’ve also come up short, however, as the audience is fairly defined. Just 24% found that among successful ads, the logo or brand name takes up of the U.S. population used apps by last September, according to about a third of the ad unit and is on the left side. Use eye-catching Pew (see chart 33). It should be noted that app penetration num- graphics rather than just plain copy.You don’t want to make people bers vary widely, especially where recall surveys are concerned. work to understand or register what you are trying to tell them. Simple games downloaded from carriers are apps, as are more Make it easy and they’ll get it.” sophisticated apps purchased or downloaded from app stores. Consumers may not be considering both when answering surveys. APPS There’s no way to tie the number of app downloads to return on Apps were the blockbuster success story of 2009, and by late investment, and app developers may not like some of the data 2010, you could be 14, build an app and see it become a top seller in they’ve been getting from research firm Flurry indicating repeat Apple’s app store. True story: an eighth-grader built “Bubble Ball,” rather than novelty usage. There are some apps that consumers

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER

hang onto (news, weather, sports), while entertainment and CHART 31 gaming apps have a relatively short half-life. Additionally, app usage is strongly dependent upon which type of phone the con- THE MOBILE VS. ONLINE BANNER AD DIFFERENTIAL: sumer has, with Apple remaining the most app-centric device MOBILE SHOWS GREATER LIFT IN BRAND METRICS (see chart 34). When do apps become an absolute must for marketers? Average brand metric deltas for mobile and online campaigns Retailers find them essential, especially for e-commerce efforts, while financial-services companies also are seeing tangible bene- ONLINE MOBILE fits from apps. U.S. banks and brokerages are finding that apps Aided Brand Awareness 2.1 6.3 designed to make it easy for consumers to monitor their person- Ad Awareness 4.3 22.5 al finances are not just a loyalty builder,but essential for connect- 2.4 14.1 ing with younger consumers, influentials and early adopters. Message Association Bank of America and Chase have fully embraced app culture and Brand Favorability 1.4 4.3 are lowering costs and retaining best customers through their Purchase Intent 1.3 5.7 apps, according to Alexandre Mars of Phone Valley. Popular retailers are fighting against price sensitivity and comparison- Source: Dynamic Logic MarketNorms for Online, last three years through Q3/2010, N=2,461 campaigns, N=3,713,053 respondents; AdIndex for Mobile Norms through Q3/2010, N=110 campaigns, N=92,547 shopping with app storefronts and gift guides. respondents. Delta (Δ)=Exposed-Control App challenges: But with 350,000 apps in Apple’s store alone, plus BlackBerry,Android and Windows commanding a significant enough market share to demand app development, the market is undergoing a transformation. Marketers can’t just build an app CHART 32 and assume consumers will come.Ad networks now have ad packages designed to promote app titles through WAP and in-app ban- PRICES FOR PAID APPS SOFTENED IN 2010 ners, hoping to push them to the top-downloads lists. A major brand can flag its app’s availability through a traditional media Change in average price (January-December 2010, all campaign, but with such crowded stores, discovery is an issue. For countries) a rational approach to app marketing and effectiveness measurement (see sidebar “Appy New Year,” P. 26.) iPhone BlackBerry Android Ovi 1% App development has gotten cheaper, but it remains a separate function for each store. Agencies and developers contacted for this article noted that thanks to outsourcing to other countries, apps can now be built for as little as $25,000, while apps -9% with highly developed functionality and graphics go for well -12% -19% over $100,000. Agencies represented in this report create mobile -24% -24% phone apps and now are seeing a new boom in iPad apps. Many WHOLE STORE -29% report increasing pricing pressures. Geoffrey Handley of The TOP 100 APPLICATIONS Hyperfactory—which built Kraft’s iFood assistant for mobile -61% phones as well as Big Fork, Little Fork for the iPad—points to Source: Distimo Report, full-year 2010 dozens of three-person shops in Silicon Alley building apps for about one-tenth the price of those built by a full-service agency. Where those efforts come up short is in building a marketing plan around the apps and integrating the apps into a larger strat- CHART 33 egy so that consumers actually find and use them. Parie Markowitz, founder of Bite Sized Candy, which has APPS REACH JUST 24% OF THE U.S. POPULATION, created apps for the magazines Maxim and Outside, is in the thick of figuring out what works for tablets.Tablets, after all, are ACCORDING TO PEW AND NIELSEN not just big phones—tablets encourage both the content pro- All adults ducers and the advertisers to tell stories differently. “We’re in the midst of finding ways to keep the apps engaging, especially 82% use cell phones by pulling in social media,” she said, singling out iPad apps from O, The Oprah Magazine (which “uses animations in a 35% have apps good way”) and The Knot (especially effective at increasing 24% use apps engagement by integrating comment boards). And while many of the ads are just repurposed from print, they look great on Source: Pew/Nielsen, The Rise of Apps Culture, September 2010 that crystal, high-def display.

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BEST PRACTICES:

‘APPY NEW YEAR’? HARDLY

I attended and spoke at more mobile events than I care to think about during 2010, conducted dozens of interviews with mobile leaders on behalf of Ad Age, and reviewed dozens of top campaigns submitted for a prestigious global mobile marketing awards program. Here’s what I think we in the U.S. need to understand in order to move forward:

■ Don’t build a branded app and believe them at 28% of the total mobile market, note to those trying to get mass adoption you’ve got mobile covered. If you are you’re leaving a whole lot of mobile users of various types of services on mobile going to launch an app, it had better have out. There are over 233 million people in phones. The “if we build it, they will come a reason for being, relate to the brand, the U.S. with mobile devices (that’s and they will share” argument isn’t and actually do something consumers penetration higher than the internet), yet enough. In researching myriad location- want and want to do repeatedly. And at most marketers are talking to the 60 based services launched over the past the same time you are developing, think million or so who are on smartphones and two years for an Ad Age report, almost all about marketing the app as a product. who use their phones as media. SMS believe people will naturally find them. I’ve gotten too many calls from marketing programs are relatively easy to The largest of the services has only been companies that plead “we spent set up and will maximize your reach. downloaded by five million people. A little $100,000 building this beautiful, cool advertising with that VC funding might be app, and after the first week, we got no ■ Don’t assume that everyone on a in order. Hey, advertising worked downloads.” It’s also not enough to think mobile device uses it for media. This is a brilliantly for Apple. It might for you, too. that throwing money at a PR firm is going myth perpetrated by those who want to to do much. Sure, you could get some on believe it. And yes, at some point it may ■ If you’re going to market mobile, some “we like this app” lists, but... The top come true. Be wary of stats like please use the mobile medium. In way to get people to download your app eMarketer’s recent one that claimed judging an international competition for is through the medium itself, where it is a people spend more time per day with mobile campaigns, I found a shocking one-click process. Ads for app downloads mobile media than with newspapers—50 number of them relying solely on print work. Use them. minutes per day as compared to 30 and television. They are making the same minutes. That stat includes all usage on mistake internet companies did in the ■ Understand who uses which devices. mobile phones, including their primary dot-com era: they created something that One of my favorite mobile geek-outs is to function: talking. I don’t really consider the CEO could understand and that was look at the monthly comScore OEM talking to be media consumption, and it’s pretty but that didn’t reach the most (original equipment manufacturer) kind of unfair to poor old newspapers. likely target. A big shout-out to the OEMs report. It’s an ongoing drama of adoption, Besides, if I talk out loud to The New York for actually using their own medium, and one-hit wonders and evolving usage Times, will Paul Krugman talk back? for targeting competitive devices to make among major mobile devices and tells people aware of new handset models. marketers a lot about which platforms to ■ Make sure functionality fits the develop apps for and how to target brand, not the inverse. If there is one ■ Recognize that the U.S. and Western advertising by device to reach specific functionality I would kill from apps, it Europe may have smartphones—but audiences. Who knew that the BlackBerry would be the accelerometer. It all started we’re way behind what people in other Curve and Pearl are hot phones among with a shakable Dockers ad. I’ve also seen countries, especially developing ones, teen girls? Kind of counterintuitive, until executions for a multinational jeans do with their phones. Looking at you realize their parents are BlackBerry company. Not sure why anyone would marketing campaigns in places like Brazil, users, giving them a sweet deal to add on shake their pants other than to see if they Sri Lanka, Nigeria and even Afghanistan, to their own plans (and those girls do like left their keys in there, but what is the it’s all about reach, not apps. These are to text on buttons). value of that shake? Does it relate to the economies in which mobile commerce brand? Does it sell pants? Or as Wallace and payments are happening now and ■ Don’t overestimate smartphone and Gromit would say, is that mobile advertising is used to get people to do penetration, or limit your mobile strategy a “case of the wrong trousers?” everything possible with every type of marketing to smartphones. phone. In a global competition I judged, Smartphone users are a brilliant audience ■ Social is not a marketing strategy in the international entries were also the for marketers, but when comScore pegs mobile—it’s but one tactic. This is more a only ones that actually used integrated

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CHART 34

APP DOWNLOADERS: VARIES BY PHONE TYPE AND BRAND; APPLE IS APP-NATICAL Average number of applications on the phone by operating system

Smartphone 27

plans: TV, print, outdoor, mobile SMS, loyalty Feature phone marketing. They all fit together beautifully, and 12 they have the results to prove it. Apple iPhone ■ Stop talking downloads and come up with a 40 real measurement strategy. A mass-market Android OS pasta brand says that 10,000 people downloaded 25 its iPhone app. Basta! A download is an expression of interest from a consumer but tells absolutely Other nothing about continuous usage, about who 22 exactly downloaded it, and whether it had any impact on connection to a brand or an actual sale. Microsoft Windows Mobile 17 Mobile is measurable, but to date too few are taking the time to tag their apps appropriately, Blackberry buy syndicated research or come up with any kind 14 of benchmarks for performance of marketing campaigns. Palm 13

■ Embrace the KISS principle with mobile and Source: Nielsen, Q3 2010, August 2010 Nielsen App Playbook support efforts at standardization. In May, I posted a column on Ad Age’s DigitalNext that took Apple to task for creating a closed system for mobile advertising with the iAd (the Apple CHART 35 fanboys hated me for that!). Eight months later, I would like to thank Apple for raising awareness EVEN ON THE IPAD, THE TREND IS TOWARD FREE, that marketers should take mobile seriously and also tip my hat to them for most recently opening AD-SUPPORTED APPS up the development of those proprietary ads. But, Revenue share by monetization type (U.S.) I still do not favor any ad format that is proprietary to one type of device. Imagine if in the REVENUE SHARE early days of television, NBC said it would only PAID APPLICATIONS accept 45-second spots and CBS said it would PAID APPLICATIONS WITH IN-APP PURCHASES only accept 90-second ones. Now, add on the FREE APPLICATIONS WITH IN-APP PURCHASES following demands: different coding, certain technologies working only on certain devices, different ad sizes, etc. If mobile is to be June 2010 88% 5% 7% considered a viable ad medium, a marketer has to be able to create one ad, and content producers have to be able to accept it regardless of platform. One positive December 2010 71% 14% 15% development in this direction is industry players like Crisp, Weather and Pointroll banding together to create industry standards for rich media. The effort is called ORMMA. Check it out. Source: Distimo Report, full-year 2010

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CHART 36

PEOPLE WHO WATCH VIDEO ON MOBILE PHONES WATCH MORE THAN THOSE WHO DO SO ON THE WIRED WEB

Nielsen Three Screen Report breaks down time spent (hours:minutes) with video by device

HOUR: MINUTE % DIFFERENCE DIFFERENCE Q1 2010 Q4 2009 Q1 2009 YEAR TO YEAR YEAR TO YEAR Watching TV in the home* 158:25 153:47 156:24 +1.3% +2:01 Watching Timeshifted TV* 9:36 9:13 8:22 +14.7% +1:14 Using the internet on a PC** 25:36 26:32 29:15 -13.1% -3:49 Watching video in the internet** 3:10 3:22 3:00 +5.9% +0.11 Mobile subscribers watching video on a mobile phone^ 3:37 3:37 3:37 0:00

Based on total users of each medium. Editor’s Note: TV-viewing patterns in the U.S. tend to be seasonal, with TV usage higher in the winter months, sometimes leading to a decline in usage quarter to quarter. Source: Nielsen Three Screen Report, Q1 2010

RICH MEDIA APP AD FORMATS: APPLE IS NOW IN THE ADVERTISING BUSINESS THE IAD UPS THE STAKES FOR ALL OF MOBILE ADVERTISING Apps themselves can be ads or branding plays, but they also can The biggest news in the mobile ad market in 2010 was Apple’s carry other ads. Part of the excitement in the early days of apps launch of the iAd in April, the week after it rolled out the iPad. was that consumers were willing to pay for them. But with the (However,the iAd only started working on the iPad on Dec. 14, with glut of apps has come a softening in pricing, according to the launch of a campaign to promote the Disney film “Tron.”) iAds global app-analytics firm Distimo. The majority of apps are free, are rich-media ads that run exclusively on iPhones with OS4 and according to Distimo (see chart 35)—which translates to “bring above. When the iAd was introduced, Apple also unveiled its rev- on the ads.” enue-sharing model for developers: a 60/40 split in favor of Apple, Ads within apps offer rich media that will not work on the with Apple handling all sales and inventory through its iAd mobile web. Both the iPhone and Android platforms make Network, which was a rebranding of Quattro, a wireless ad network microsites, interstitials and short video ads a possibility, and it bought at the end of 2009. Another quirk of the pricing is that on many publishers offer advertiser exclusivity or takeovers of top of the CPM, advertisers also paid a CPC (cost-per-click). One apps. Premium ads such as these command some of the highest agency exec was not bothered by the “double dipping,” as it encour- prices on the web. According to Mobclix’s Subramanian, video aged the creative to be built for interaction. ads go for CPMs of $10 and up, while units that take develop- Apple getting into the business of creating ads was a controver- ment on the part of third-party rich-media vendors like sial move, especially among agencies. But the audacity of Steve Jobs PointRoll, Greystripe, Crisp Wireless and Medialets. saying that Apple would make mobile ads “not suck” and a seven- For specs and more information, see the Mobile Marketing figure pricing floor did push mobile into vying for the attention of Association U.S. guide, published in March 2010. marketers. (Some agency people interviewed for this report said they Rich media on mobile is not without its challenges. Only wished they had more clients with $1 million-plus mobile budgets. certain phones accept Adobe Flash (iPhones and iPads notably But now, Apple’s blinked on the pricing. As of Feb. 23, All Thing D do not and must have ads programmed in HTML5). What reported the price is now at $500,000.) Those who bought in got PR does this mean? If you want an ad to run on more than one with the package—and generated a lot of it. platform, you’ll need to create multiple versions using differ- (For a gallery of uniformly beautiful iAd executions, see Apple’s ent programming language (Java for BlackBerry, Flash for own examples.) Android, HTML5 for Apple). This is one giant mess for the AT&T, Campbell’s, Dove, Nissan, J.C. Penney and BMW are mobile industry, and one that is now being addressed through among those featured.Another benefit, as noted by David Berkowitz a standardization initiative spearheaded by Crisp Wireless, of 360i, is that “consumers trust the little icon that goes on the ads.” TringApps, The Weather Channel and others which banded He thinks the Apple branding encourages interaction and has creat- together to create Open Rich Media Mobile Advertising, or ed a level of respect for the consumer he hopes others learn from. ORMMA. The Mobile Marketing Association has joined How to buy/target: Most of ad networks now sell rich media, forces in what is sure to be a challenge given Apple’s decision albeit through the third-party vendors mentioned above. Most ads to remain a walled garden of ad creation. are contextually placed (what better place for a movie ad than in the

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CHART 37

AUTO IS THE BIG ADVERTISER IN MOBILE VIDEO

Amount of revenue on Rhythm’s network

Automotive 28% Mobile and telecom 17% CPG 14% Travel and hospitality 14% Entertainment 10% Retailers 7% Consumer electronics 7% Financial services and insurance 2% Government and education 1% Beer, wine and spirits 1% Source: Rhythm New Media, based on internal data, Q4 2010

Fandango app?) or placed according to demos of those apps as sup- Mobile data from Pandora shows that mobile usage versus work plied by comScore or Nielsen. Scott Symonds of AKQA said plan- usage of radio is different. Half of mobile usage of radio happens out- ners have to be especially careful with apps and must think of their side traditional work hours. Perhaps the “drive time” of terrestrial half-life.Today’s Angry Birds may well go the way of Pac-Man, but radio is translating to mobile radio. there’s no way to predict when. Ad units and ad benefit: Mobile radio stations use typical banner- How to measure: Rich-media ads are measured much as they are ad formats available on mobile apps, but the challenge is whether the on the web.An ad server provides reports on the number of impres- consumer is actually looking at his or her screen or has the device in sions served, interaction and click-through rates. Depending on the his or her pocket. To deal with this issue, audio ads are now available unit type, you can also look at expansion panel interactions/interac- on mobile. In 2010, Pandora introduced audio ads on smartphones. tion rates, video-play-completion rates, and the great mobile direct- TargetSpot, a CBS-backed internet radio ad network, and Slacker, a response metric: click-to-call. Brand-impact studies can show recall personalized music service, now offer audio as well. As with most of creative and impact on purchase intent. things mobile, shorter is better (:15s are recommended). Creative best practices: Since apps offer such a superior creative But hasn’t music proven to be the one type of content con- experience, developers have much more leeway. But marketers cre- sumers will pay for? Back in 2007, Arbitron, the powerhouse of ating apps still need to keep in mind the size of the screen and the radio research, questioned 2,000 radio listeners and found that more simplicity of the message. than three-quarters preferred ad-supported music on mobile devices to any kind of subscription model. MOBILE RADIO/AUDIO Are audio ads on mobile radio any more effective than those on The iPod, introduced in 2002, was the must-have consumer- terrestrial radio? No research is available as of yet, but it would electronics product—until the introduction of the iPhone, that is. By seem that the qualitative listening experience is different. People April 2007, Apple had sold 110 million iPod units. The fascinating typically listen to internet radio with headphones, and services like thing about the iPhone and the iPod Touch is that essentially,Apple Pandora offer a level of personalization that would likely lead to is slowly eating into its own market by integrating music into the higher engagement.Ad load is another point of difference.“Pandora devices. Now, all smartphones have the capability of downloading caps the ads at three per hour,” said Aimee Higgins, Pandora’s VP- and playing mp3 files, and next to SMS, e-mail and voice, listening strategy and planning. to music is the most popular function on mobile phones, according to Pew, with 33% of the U.S. population doing so. MOBILE VIDEO Internet radio has been in hypergrowth mode thanks to wide- Mobile video is no different from online video—except that with spread usage in the workplace. (Headphones anyone?) It makes mobile video, download speeds can be glacial, impacting the user sense that the radio stations people listen to online are also ones they experience. Mobile video should, in fact, come with a disclaimer want to listen to on their phones. Aimee Higgins, VP-strategy and along the lines of: “Don’t bother unless you are on 3G or connect- planning, reports that over 50% of Pandora’s monthly usage now ed to a Wi-Fi network.” Mobile-video usage is small compared to comes from mobile devices. wired-video usage, but growing quickly due to the growth of Wi-

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CHART 38

MOBILE SEARCH: ONWARD AND UPWARD

Clicks, 2010 year-to-date

6 MOBILE DEVICES WITH FULL BROWSERS % OF CLICKS FROM MOBILE 9.2% 10% 5.5 5 8%

4 4.3 6% 3 3.0% 3.0 4% 2 2.1 2.2 1.8 1.5 2% 1 1.3 1.3 1.0 1.0 1.2 0 0% January February March April May June July August September October November December

Source: Perfomics, full-year 2010

Fi hotspots, 4G devices, and now the iPad, with its crystal screen the app. Ads also offer simple, one-click return. Who’s buying? and more “lean-back” nature. The Nielsen Three Screen Report Rhythm’s internal data shows that auto advertisers are especially from Q1 2010 found that people who do watch video on mobile keen on mobile video inventory (see chart 37). devices spend slightly more time doing so than watching video How to buy: Mobile video can be bought from a range of offline online (see chart 36). This data is pre-tablet so does not reflect one and online video producers dealing in mobile. Big media companies sector of a rapidly changing dynamic. that have a lot of mobile video inventory include ESPN and MTV Ad benefits: Mobile video has sight, sound and motion, the qual- Networks. Ad Networks provide scale—and as with the wired web, ities marketers value in TV ads but in a more personalized, attentive they are multiplying. Vdopia has an iPhone-centric video-ad net- form. Ujjal Kohli, CEO of Rhythm NewMedia, a mobile-video ad work and offers high-definition video ads for the iPad. Transpera is network that represents the mobile apps of AMC, Discovery,Fox and another player, along with the aforementioned Rhythm. The CW, said mobile video has addressed many of the issues challenging television.“In TV,there is no frequency control. Part of your MOBILE SEARCH audience sees an ad once or twice, and one group may see it eight to In introducing iAd, Jobs made a thinly veiled jab at Google when he 10 times,” he said. “That’s pretty inefficient, and ineffective. There is asserted that mobile was “not about search” the way that the wired no clutter in mobile: one ad, and then content. There is no ad skip- web is. Well, it is and it isn’t. Search functionality is indeed a com- ping. Mobile appeals to younger groups who tend to not be heavy monly used mobile feature. But as with so many things mobile, it TV watchers.” depends on the device and whether you are talking about apps or For mobile video, tablets may be the game changer due to high- the mobile web. speed connectivity and larger screen size. As Kohli notes: “Seventy Search is the No. 1 activity on a mobile browser, but on apps it percent of our video usage is on Wi-Fi, which is likely to be indoors ranks fifth, behind weather, maps, social networking and e-mail, and sitting down: people are in cafes or their homes. That lean-back according to comScore (see charts 21 and 24).What do people do on experience tends to be a better mode for marketers.” He’s also start- mobile search that is fundamentally different? Daina Middleton, ing to get more queries from buyers of TV time: “The bulk of our CEO of Performics, an SEO and SEM company formerly owned by buyers used to be digital, but we’ve seen growing interest from tra- Google (Google got it in the DoubleClick acquisition and had to ditional buyers, and they want brands they know,like Discovery and divest due to conflict of interest), notes that search strings are short- Food Network content.” er, plus the Instant functionality Google introduced in 2010 (where- Ad formats: Mobile video typically offers :15 or :30 pre-roll, usu- by search options appear as the user types in the search bar) does not ally repurposed from TV. Rhythm NewMedia developed clickable work on mobile, and click-through rates are higher. It is seeing a rise pre-roll ads that can launch full-screen video or rich media and click in clients buying mobile search through Google AdWords. Why the through to an advertiser’s website or e-commerce site that overlays uptick other than an explosion in usage (see chart 38)? “Clients now

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have something to drive to,” said Middleton. Many of its clients got CHART 39 up to speed with sites optimized for mobile in 2010. How to Buy and Best Practices: Buying mobile search is not PEOPLE WITH ANDROID PHONES ARE MOST LIKELY TO that different from buying wired-web search, with the exception SCAN BARCODES that consumer behavior is dictated more by location. The biggest difference is the mobile device has the ability to morph into a Have you ever used a barcode scanning application? walking yellow pages. Google and Bing have simple interfaces Android (n=263) through which to buy. 48% YES NO 48% Response comes in three options: ■ (The usual) Click-through to the advertiser site ■ A click that sends the user to a Google- or Bing-supplied Business Page (local advertisers need not bother with setting up BlackBerry owners (n=244) 14% 86% their own sites) ■ A click that instantaneously places a voice call to the advertiser’s phone number (click-to-call) In terms of creative, it’s best to be brief—like on WAP banner ads. iPhone owners (n=199) 39% 61% Thirty-six characters (18 for the headline, plus 18 for the description) is ideal. Keyword buys also should follow the keep-it-short principle. People are unlikely to type long-tail terms into the search box. Focus on one- or two-keyword phrases. Palm owners (n=37) Anybody who’s ever wondered how many of those yellow pages 2% 98% forever getting dumped on our doorsteps end up going straight in the recycling bin also has to ask how long those directories can possibly last. Perhaps acknowledging the inevitable, YellowPages.com Windows owners (n=128) was rebranded to YP in 2010 (it is now represented by a nice little 9% 91% yellow icon that sits on a phone screen). Local listings through mobile search are made even more compelling through voice command. Newer iPhones and all Androids offer voice-activated search Source: Kantar Compete Q3 Smartphone Owner Survey, January 2011 functionality, while Microsoft developed the Sync application being offered with various Ford models. Sync is totally hands-free: talk to your mobile device—or even your car— and it can give you a retail location and CHART 40 even map it through the GPS. SMARTPHONES ARE BEING USED FOR A VARIETY OF MOBILE ACTIVATION: JUST CLICK AND SCAN RETAIL-RELATED ACTIVITIES Those oddly compelling geometric boxes with the three boxes in the corner are QR Percentage of smartphone owners who have ever used codes (Ad Age featured one on the cover of the device to: last year’s digital issue). The QR code was originally used for tracking parts in vehicle Research store info 66% manufacturing but it is now the most likely way for mobile devices to activate response. Remember when you had to put a URL into every print or TV ad? We’re starting to see QR codes in print and on Product look-up/reviews (see graphic) public-transportation kiosks more often . 50% Not all phones will read the codes, but if a camera phone is equipped with the correct reader, it can scan the image of the QR code and redirect the phone’s browser to the programmed URL. Of Price comparison in store course, this doesn’t always work as planned. Do a Google search on 33% QR codes and there are countless tips from consumers about the best way to get the camera on your smartphone to focus properly and register the appropriate code. Purchased via the phone The most common use of mobile barcodes is requesting informa- 28% tion, a service or content from a website. It can include promotions or discounts via SMS or MMS, download content like ringtones, Source: Compete Smartphone Survey, Q3 2009 music or games, and even facilitate the purchase of, say, a concert

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ticket. The advertiser pays the set-up costs as well as its gain in incremental store visits and spending at participating retail- operator/partner on a per-click, download, view, redeemed-coupon, ers. It has also carried out tests integrating Foursquare check-in data ticket-sale or call basis, depending on the campaign. to add a layer of behavioral activity onto purchase data. The QR code is the latest evolution of product codes that started with the bar code (which is actually known as a 1-D code). LBS: THE WEIGHTY (AND POWERFUL) DYNAMICS OF LOCATION-BASED SERVICES Marketers tried to pack so much data into barcodes that they Using the location of a device and its user for marketing is potential- exceeded the capacity. The QR codes, which are 2-D, can encode ly mobile’s killer app—and in 2010, a whole lot of venture capitalists thousands of alphanumeric and other characters in virtually any and journalists thought so, as Foursquare, Gowalla and Facebook language. (Those producing rivals to the QR code are out there, but Places generated so much buzz. David Berkowitz of 360i found that QR remains the most commonly used and boasts the greatest pen- some of his clients took notice and didn’t mind the lack of scale of etration in terms of activation.) QR codes are also in the public these programs.“They got a few thousand people involved, but they domain, so there is no payment of a fee or royalty. One of the rea- did get a lot of press and were happy,” he says. He also thinks that sons mobile activation caught on so quickly in Japan is that the some of the best LBS campaigns are being done by “clients who country is home to a dominant operator, NTT DoCoMo, which don’t own locations but want to be a part of it.” He cites a campaign endorsed QR codes and imbedded all new handsets with QR-code his company created for Bravo to promote the series “Top Chef: Just software. In the U.S., one has to download an app to use QR codes Desserts” that had consumers in major metros using Twitter, on the iPhone, while Android devices have a reader included. In Facebook and the app Food Spotting to win a free cupcake. January, Kantar’s Compete released data showed data showing how (Ad Age Insights produced its own report on the topic—see having the scanner in the phone impacts usage (see chart 39). “Mobile Marketing: What Marketers Need to Know About Location-Based Services,” Feb. 28, 2011—and found that the entire MOBILE COUPONING: RIGHT PLACE, RIGHT TIME notion of location as it relates to marketing is being redefined, and it Couponing is as ripe for revolution as the yellow pages. According doesn’t require a “check-in.”) to NCH Marketing Services, 86% of all CPG promotional dollars A few LBS companies of note: go into freestanding newspaper inserts—and yet, Sunday newspa- ■ Foursquare: The Big Papa of LBS: check me in, find my friends, pers now reach less than half of the U.S. adult population, per the give me a deal, make me mayor. Newspaper Association of America. Consumers have already ■ Latitude: Launched by Google in February 2009, it has a simi- embraced coupons online, but mobile devices—the only media lar friend-finding functionality to Foursquare’s. In true Google fash- device taken into the retail location—make more sense as both a ion, no explicit marketing push accompanied the launch—thus, it delivery and activation medium for promotions. Here are a few of was greeted with little buzz. The service does not yet have a market- the big new couponing ventures out there with mobile components: ing or promotional function. ■ Groupon This local “Offer of the Day” service, wherein the ■ Booyah’s MyTown: Gaming-focused location sharing that deal is unlocked by social-networking activity, had the audacity to includes people and product check-ins. turn down Google’s $4 billion buyout offer,and then turned around ■ Facebook Places: Add-on to Facebook, launched in August and raised $950 million. Watch as Google builds out its own daily- 2010, that enables location sharing more utilitarian than Foursquare. deal service this year. Deal elements being added gradually.Potential reach: Facebook’s 200 ■ Cellfire This producer of mobile coupons is used by leading million-plus mobile users worldwide. supermarket chains like Safeway. Consumers must sign up online. ■ Gowalla: Focuses on discovering aspects of places and sharing The coupon connects to the user’s store-loyalty card for ease of information with friends. redemption. ■ Loopt: Share locations and get involved with creative promo- ■ Google The search giant is clearly eager to expand throughout tions. Virgin Atlantic and 20th Century Fox used it for buzz- the mobile universe, and since the Groupon blow-off, it is building generating programs. a daily-deal service to compete. Currently anyone using its local- ■ PlacePop: Virtual loyalty card program; check into places to search ad platform can integrate mobile coupons. earn rewards. ■ MobiQpon This service gets consumers to sign up and then ■ SCVGR: More game-focused; execute challenges and interact sends them coupons for stores, restaurants and services based on within various retail locations. their location. ■ Placecast A platform for delivering ShopAlerts, a location- MOBILE PHONES AS RETAIL TOOLS: THE DANGERS AND TRIUMPHS OF triggered mobile SMS marketing tool. It’s done programs with COMPARISON SHOPPING Sonic, REI, The North Face and American Eagle and boasts a one Never before has so much power been put into one small device. million-plus-consumer, multibrand program with major U.K. Aside from the location functionality of smartphones, their ability to mobile carrier O2, and an AT&T U.S. program launched in late be used as a comparison-shopping tool is a feat unmatched even by February. the web. In a quarterly survey of smartphone owners, Compete, a ■ Catalina This company, which operates machines that print division of Kantar Research, uncovered the ever-popular practice of out coupons at the point of sale in supermarkets, has pilot-tested shopping around on mobile devices. Consumers using smartphones mobile activation via SMS with ShopRite, achieving a double-digit are not only likely to research products on their phones, but 33%

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researched products while inside the retailer (see chart 40). The riers have to embed the chips and some want to see banks step up implications of this are huge. Let’s say a consumer was in an elec- and pay for them. Stores also have to upgrade to contactless ter- tronics store searching for a flat-panel TV: he or she could easily minals. Mastercard has the lead in the U.S. in contactless termi- check the price at a competitor through either the mobile web or one nals, according to Cellular News. These were designed to be acti- of the many comparison-shopping apps now available. If there’s a vated by credit card strips but can be triggered by NFC chips in better price down the street, the consumer could very well walk. phones (see graphic). Here are a few apps and mobile services that impact retail: Most significantly for the U.S. market, Apple wants to get in the ■ PointInside This firm maps shopping malls and sends mobile game, and Apple fan sites abound with rumors that OS5 will messages complete with directions retail outlets. It features a self- include some sort of NFC capability. In April 2010, Apple filed a service interface for retailers. patent application for “peer-to-peer, financial-transaction devices ■ NearbyNow Consumers can use to search for products on and methods.” It describes an iPhone app and service that will allow mobile devices and verify availability of the item within area stores. users to store information including credit-card and bank-account It also created one-click shopping gift guides (currently only avail- numbers on the device, then make a quick transaction with just a able on the Apple platform). few taps. A payment can be made by linking to an NFC-enabled ■ Shopick Major retailers including Macy’s, Crate & Barrel and iPhone or using the device’s camera and image-recognition feature. Target and package goods companies such as Kraft jumped on board But mobile commerce cannot wait for a new generation of chips in the 2010 holiday season. Consumers who download the Shopkick to be installed in phones. It is here now for a few, powerful brands app were rewarded with cross-retail “kickbucks” for entering a that are “gateway apps” to mobile commerce: retailer or scanning a product that was part of the program. ■ eBay Through its Selling and eBay Classifieds iPhone apps, consumers can photograph and list an item in 60 seconds or less. MOBILE COMMERCE: ON A PHONE NEAR YOU Additionally, users can now list for free in eBay’s auction format, Are consumers willing to buy literally anything using their reaching 90 million active users around the world, according to the phones? It helps to remember that as recently as 1998, because of company. EBay Mobile is one of the larger m-commerce entities, consumers’ fear of data theft, e-commerce was thought to be years generating $2 billion in 2010, according to the company. away. If you’ve ever seen photos of con- ■ eBay’s PayPal Its iPhone 2.0 app sumers in Japan pointing their phones at was reportedly downloaded one mil- vending machines that sell everything lion times in less than three weeks from condoms to pantyhose (and yes, after launching March 15. PayPal some snacks too), you may have wondered mobile transactions jumped from $25 whether that will ever happen in the U.S. million in 2008 to $141 million in The behavior is enabled by an encryption 2009, as reported by Forbes. Its mobile- technology called NFC, or Near Field payment volume tripled between Nov. NFC IN ACTION Communication, which is embedded in a 15, 2010, and Dec. 15, 2010, compared Consumer in special chip in phones. The chip can do with the same period the previous San Francisco taps his everything from making mobile payments year,according to the company.Its cur- phone to pay to acting as a hotel-room key, activating a rent app also employs a cool “bump” mobile website to transmitting coupons. feature, whereby two iPhones can be STARBUCKS In Japan, consumers can already use “tapped” together to make transactions Coffee chain has NFC- their NFC-enabled smartphones to authorize bank transfers and between two PayPal accounts. enabled payment terminals pay for train tickets, meals and vending-machine purchases. In ■ Starbucks Starbucks Card Mobile nationally Africa, NFC-enabled smartphones are used to transfer cash functions like a gift card whereby con- between people in locations too remote for traditional banks; sumers load money onto the app Kenya’s M-Pesa service boasts more than six million users. This through a credit card. They zap the app against a reader to pay.The looks to be an important year for NFC, as a report from SJB program is now national. Research called “NFC: The Road to Commercial Deployment” ■ Amazon Its Kindle app is the No. 1 book-reading app for the attests. SJB reports that banks and mobile networks are joining iPhone, according to TopAppCharts. For any registered Amazon forces on NFC-enabled electronic wallets, first in the U.K., France, user who has signed up for one-click purchasing (which stores the United Arab Emirates, Singapore, Taiwan and Korea, followed by customer’s payment information), a single click can have a prod- the U.S., Canada and Spain. uct delivered to his or her doorstep the next day. But drama at U.K. telco Everything Everywhere (a partnership between deadline: Apple has now declared that it will enforce its rule about T-Mobile and Orange) and Barclaycard, the credit card unit of the not allowing apps to purchase content via means other than the bank Barclays, plan by early summer to launch what is expected to app store. Now that Apple is selling e-books, what does this mean? be the first rollout of an NFC-based mobile-payment service in the Too soon to tell. (M-commerce is such an expansive, rapidly U.K. and one of the first anywhere, as reported by Cellular News. evolving area that Ad Age Insights will devote a report to the topic Implementing NFC in the U.S. will not be an easy task, as car- this September.)

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011

SIDEBAR MOBILE AD NETWORKS

Ad networks are an even more powerful force in mobile than in online advertising. Why is that? The same reasons networks have worked online: ease of doing business coupled with outstanding reach. Those factors are even more pronounced in mobile, and you have the added challenge of needing to do a lot of creative and technical manipulation to get the ads to work on multiple device types. Publishers with exploding WAP CHART 41 MOBILE ROADBLOCK inventory may not have the internal Buick’s network takeover of all Millennial resources to sell it. It’s also tough to THE BIG 3 MOBILE AD NETWORKS inventory on the Verizon iPhone, across all figure out who exactly within the CONTROL MOST OF MOBILE DISPLAY mobile web and in-app inventory agency ecosystem is buying it. Estimated U.S. mobile display ad Of course, this could lead to some of revenue share by vendor, 2010 Mobclix co-founder Krishna the same mistakes made in the early Subramanian looks with envy upon all days of the web, when traditional sales the data modeling going on online that forces at print and TV concerns had no Microsoft Other isn’t possible yet with mobile. They have, JumpTap and direct idea what a unique was and watched as however, made it possible for advertisers online revenue ballooned and network Yahoo 7.8% to buy inventory by PRIZM clusters, a fees ate into a bigger and bigger chunk 8.4% 20.9% way of targeting by location familiar to of their sales. advertisers in television and print. In mobile, the bulk of the media 10.1% What has changed over the past dollars are concentrated in a handful of Google eight months? Marcus Startzel, senior networks (see chart 41). Nielsen does Millennial Admob VP-sales at Millennial, says its clients Media Apple 19.0% a custom run to project the reach of 15.4% have gone cross-platform (meaning mobile networks given lists of mobile iAds cross-device, not cross-media) and are 18.4% sites each represents. Because there is looking to mobile for reach. Millennial no exclusivity among ad networks offers a mobile roadblock of inventory (they often represent some of the Source: IDC to reach 85% of the U.S. mobile web, same properties) and because there is according to Nielsen’s custom mobile no way one could actually buy out all ad network projections. It can also do a that inventory, those numbers are not InMobi (move that inventory by clicks) takeover per device. “Buick took over meant for true rankings, Nielsen warns. and more brand-focused networks our full network [Verizon Wireless Like the web, the mobile space has such as Millennial. The hot trend of the iPhone inventory] for the first five networks that specialize in rich media: online display world: fully automated weeks the Verizon iPhone was in among them, Greystripe, Crisp ad exchanges that enable both buying market,” according to senior VP- Wireless, Medialets and Apple’s iAd and selling are also available in mobile. marketing Mack McKelvey. network, which represents sales of Mobclix is a self-service exchange for iAds that appear in apps on iPhones mobile ads in apps (publishers and with the latest operating system, not other networks designate inventory, on the iPad. which they can blind, or sell Also as in online, there are anonymously, and advertisers can buy performance-focused networks like it directly through the system).

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER Conclusion

CAPTAIN KIRK HAS TRANSPONDED AND IS LIVING IN KOREA, ing to inform business travelers about a phone’s capability. You JAPAN, TURKEY AND SOUTH AFRICA could advertise on the rival network whose phones do not work in the early days of the internet, bleary dot-comers would speak internationally and maybe use content that businesspeople access, of internet time as if it were measured in dog years (one internet including targeting those who access foreign weather information year = seven years for any other business). Mobile marketing has from the U.S. How brilliantly simple is that? been a topic for more than a decade, yet it never moved as fast as Campaigns from developing countries, meanwhile, had auda- projected early on. But since Apple and Google unleashed mobile cious goals to the tune of “Let’s change behavior in an entire coun- warfare, mobile marketing has entered warp speed.The first edition try.” Such was the case of a campaign from Brazil in which the of this paper was published in May 2010, and since that time, smart- country’s four mobile carriers banded together (imagine that in the phone penetration has grown by double digits, Android has over- U.S.!) to do a cross-media campaign using web SMS and IVR to taken Apple in sales, and the CE world has gone tablet mad. More educate the population about text messaging, which had relatively mobile ad networks have been established, people do watch even low usage rates. The promotion focused on mobile—and from long-form video on phones, and a whole new raft of major mar- Ipanema to the Amazon, Brazil now boasts a population of texters. keters have jumped on board—not only to build branded apps, but The winning entry was executed on feature phones and used to be where so many of their customers are and will continue to be. social networking, text capabilities, location and interactive outdoor. In order to understand where mobile is going, it is important to It generated national media and stopped traffic in what is the equiv- acknowledge that this is one area where the U.S. has not been a nat- alent of Times Square in Turkey.Anyone in that location could use ural leader.The U.S. is home to the creators of much of the technol- any phone to interact with a game on the side of a skyscraper. If ogy, but because its telecommunications infrastructure is so devel- they won, they got a Cornetto ice cream. It was fun, engaging, had oped, the country is so vast and it is a free market with many carri- tangible rewards for the consumer, and made a whole lot of people ers, mobile has taken a relatively long time to fully engage. who were not there wish they had been, as it reached the target of Among industrialized parts of the world, Japan and Korea are the young and mobile ice cream consumer. For a look at how the among the trendsetters when it comes to mobile. Japan has a single, campaign worked, see this YouTube video. dominant carrier,making implementing a mobile marketing plan so Despite our love of mobile devices in the U.S., we seem to have much simpler. Consumers use NFC chips in their phones to scan forgotten the fundamental principles of marketing and of the QR codes and buy all sorts of products. Meanwhile, developing phones themselves. Even Captain Kirk knew that his phone was countries are adopting the mobile web and mobile payments faster fundamentally a “communicator” and not a toy or mere game—he than most developing ones. Why are places like Kenya, South would never have confused it with his phaser or his transponder. Africa, Turkey and India taking the lead? Low broadband penetra- Marketing that works engenders a conversation between compa- tion and the lack of credit cards.The mobile device is their first gate- nies, products and people and has scalability. It can be novel, but way to the internet. when it veers into novelty, it ceases to have impact. This mobile divide was evident looking at entries for the recent GSMA Global Mobile Awards, for which I was a judge. Most of the ➜ Western entries were device-specific and involved apps on smart- Kathryn Koegel is a media and marketing consultant who has worked in online, phones. Success was measured by number of downloads, which print, TV and mobile. She wrote the Ad Age Insights white paper “Building Brands Online” (published October 2010) and currently is working on quarterly even for mass consumer brands were in the low tens of thousands. trend reports on mobile couponing, mobile commerce and mobile metrics. There were a few cross-media campaigns, but they focused on TV Koegel was the director-research and industry development at DoubleClick and print and rarely included mobile media itself. As an example, and created the company’s first industry-trend reports. In her consultancy, AT&T produced a beautiful campaign for its global roaming capa- Primary Impact, she works with media and interactive-marketing companies to bilities (hands painted as animals from the different countries turn their data into industry insights. Her primary research work has been where the phones work) targeted to business travelers but without accepted and published by the ARF and ESOMAR. She can be reached at a single mobile-media impression. Let’s see: you’re a marketer try- [email protected].

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WHITE PAPER WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 Glossary

3G and creating animated web competes with Google’s AdMob mobile ad Compared to 2G and 2.5G services, 3G ads and video. Flash can be service. iAds can be produced with many allows simultaneous use of speech and displayed on several types commonly used rich-media formats, data services and faster access to web- of computer systems and including expandable ads, ads that initiate based content on mobile devices. It is the devices, using Adobe Flash Player, which is video or audio, floating ads and ads that mobile equivalent of broadband internet available free for most common web click through to purchase—all without access. browsers. Android phones display Flash- leaving the app in which they are placed. based content, but Apple has announced There is now a software development kit 4G that HTML5 will be the standard available so agencies can create the ads 4G refers to the fourth generation of programming language of ads on its themselves. cellular wireless standards and will enable devices. IP telephony, super-high-speed internet LBS access and streamed multimedia. There GIF Location-based services: mobile apps or are varying 4G standards, including GIF, short for Graphics Interchange Format, SMS that use the geo-location of the phone including LTE and WiMAX. is a file format for storing graphic images to provide relevant content or promotions, of up to 256 colors. It is a common format assuming the mobile user has given APP used for images in mobile display ads. permission. A software application that runs on a mobile phone. See smartphone. HTML5 LTE The latest major revision of HTML LTE (Long Term Evolution) is the CARRIER (HyperText Markup Language), the core trademarked project name of a high- A company that provides wireless markup language of the web. It aims to performance network for mobile telephony. telecommunications services. AT&T, Sprint, reduce the need for proprietary, plug-in- LTE is one of the standard forms of 4G T-Mobile and Verizon are the leading based, rich internet application access that will become available in the U.S. carriers in the US. technologies such as Adobe Flash, Microsoft Silverlight and and Sun JavaFX. MMS FEATURE PHONE HTML5 video is intended by its creators to Multimedia Messaging Service, or MMS, is a Any mobile phone that is not a become the new standard for online video standard way to send messages with smartphone or PDA phone. and is the authoring format sanctioned by multimedia content to and from mobile Apple for ads on devices including the phones. The most popular activity is FEMTOCELL iPhone, iPod Touch and iPad. sending photos from camera-equipped A cellular base station that allows service handsets, though it also is popular for providers to extend cellular coverage iAD delivering news and entertainment indoors, especially where access would The iAd is a rich-media mobile ad platform content, including videos, pictures, text otherwise be limited or unavailable. developed by Apple for the pages and ringtones. Femtocells are being used to provide iPhone, iPod Touch and coverage on various transit systems. iPad, allowing third-party MOBILE WEB developers to directly The mobile web refers to using a mobile FLASH embed ads into their apps. phone handset device incorporating a web Adobe Flash (formerly Macromedia Flash) iAd is part of Apple’s iPhone browser to access the web. is a multimedia platform popular for adding OS 4.0. Hosted and sold by Apple through animation and interactivity to web pages its own ad network, the iAd platform

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WHAT YOU NEED TO KNOW ABOUT MOBILE MARKETING 2011 WHITE PAPER

NFC QR CODES TEXTING Near Field Communication A QR code is a matrix code See SMS. is a short-range, high- (or two-dimensional frequency wireless- barcode). QR codes that WAP communication technology which enables initiate addresses and URLs are beginning to Wireless Access Protocol (WAP) is an open the exchange of data between devices over appear in magazines, on signs, buses and international standard for communication a distance of about 10 centimeters (around business cards, or on just about any object on wireless phones. Most use of WAP 4 inches). Products such as cell phones that users might need information from. The involves accessing the internet from a with built-in NFC will simplify the way technique of using QR codes to transmit mobile phone or PDA. A WAP browser consumer devices interact with one more information from an ad is typically provides all the basic services of a another and enable consumers to receive referred to as “activation.” Users with a computer-based web browser but is and share information between devices camera phone equipped with the correct simplified to operate on phones, with their and make fast, secure payments. reader app can scan the image of the QR smaller screens. Users can connect to WAP code, causing the phone’s browser to launch sites: websites written in or dynamically OEM and redirect to the programmed URL. converted to WML (Wireless Markup Original equipment manufacturer. In Language) and accessed via the WAP telecommunications, the manufacturer of RICH MEDIA browser. handsets sold under a company’s brand Ad formats that employ some sort of name (i.e., RIM, Apple, HTC, Nokia). animation, level of interactivity or WIFI streaming media such as video. Rich media WiFi (pronounced OFF DECK is currently available only on ads within “WHY-fie”) stands for Content and advertising not controlled by apps from major platforms like the iPhone wireless fidelity and is the carrier. Off-deck content is accessed by and Android-based phones. a wireless-networking the consumer outside the “walled garden” technology. It allows a wireless connection of the carrier, typically by using the mobile SMARTPHONE to the internet via wireless router. browser on the phone or downloading A handheld device that integrates mobile- content from an app store. phone capabilities with features of a handheld computer or PDA. Smartphones ON DECK allow users to e-mail, install programs Content (such as downloads) and (called apps) and access the internet, as advertising controlled by the carrier. well as use voice services. Carriers have “walled gardens” of content suppled by third parties, much the same as SMS the early days of AOL. Short Messaging Service (SMS). Also called text messaging, SMS allows users to send OS and receive personal text messages Operating System. A Mobile OS, or mobile between mobile phones. Each message platform, is the operating system that can be up to 160 characters and can be controls a mobile device—much like Linux or sent between users of different operator Windows for PCs. In the U.S., the leading networks. All mobile phones support SMS. operating systems for mobile devices include iPhone, RIM, Android and Windows Mobile.

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