Mobile Advertising Hits Inflection Point

Mobile advertising remains a small part of overall spending on online advertising or advertising in general. But it is noteworthy that the Interactive Advertising Bureau now has started to track and report mobile advertising sales volume.

That is an indicator that mobile advertising has reached an inflection point.

One might argue that mobile advertising is just about 10 years behind online advertising in its development.

Mobile Advertising Hits Inflection Point

Mobile advertising remains a small part of overall spending on online advertising or advertising in general. But it is noteworthy that the Interactive Advertising Bureau now has started to track and report mobile advertising sales volume.

That is an indicator that mobile advertising has reached an inflection point.

One might argue that mobile advertising is just about 10 years behind online advertising in its development.

What Has Changed in Media, Entertainment Since 1975?

Since 1975, there have really been only three immediately significant changes in U.S. end user "time spent with media," clearly evident in this chart from Veronis Suhler Stevenson.

Though it now seems "everybody" plays video games, consumers actually spend far less time playing video games than they did in 1975.

The big gainer, in terms of time, is cable, satellite and telco TV, which shows a steadily growing time commitment.

Radio listening has been significant since 1975, but now is in a decline. Aside from those three media, most of the others have trended within a relatively finite range since 1975.

All of that might suggest one clear implication: any media that makes dramatic gains in the coming years will probably do so by taking time away from multichannel television services, radio and video games. That doesn't mean the alternatives have to mimic the value of the displaced services, simply that the rising services will have to become more compelling, compared to radio, multichannel TV services and video games.

PayPal Now 39% of eBay Revenue

PayPal now represents 39 percent of eBay’s total revenue, and nearly made $1 billion in revenue for the company in the first quarter of 2011, up 23 percent from the same quarter in the previous year.

Marketplaces brought in $1.5 billion, up 12 percent from the same quarter in 2010.

That would explain why eBay is interested both in mobile payments and local (offline) commerce: that's where the growth might be.

Connecting The Dots On eBay’s Local Shopping Strategy

Dodd-Frank hurts mobile payments business model

Unintended consequences always occur when any major piece of national legislation gets passed by the U.S. Congress. If you choose to believe it was a major issue (some will suggest other plausible alternative explanations), AT&T says the Dodd-Frank financial reform law, with the Durbin Amendment," makes transaction fees for debit card transactions a much less attractive business model.

AT&T, Verizon Wireless and T-Mobile USA launched Isis in November 2010, with a transaction fees revenue model. John Stankey, AT&T's head of business solutions, says the Durbin Amendment, expected to cut annual debit processing fee revenues to about $10 billion from $23 billion. To be sure, a sudden reduction in addressable revenue opportunity of $13 billion is not trifling.

But Isis had all sorts of other reasons to change course, including the time it would take to create a new retail brand for payments, at a time when activity is moving faster across the entire mobile payments front.

Dodd-Frank hurt mobile payment system plans

DVD Revenues Plunge 44 Percent

Retail purchases of DVDs fell 44 percent in 2010, despite growth of movie box office sales, which might suggest the shift to video on demand and online streaming services such as Netflix is heating up. But the data also suggests that people simply are not buying DVDs to own as they once did a decade ago.

A contributing issue is that it appears people might not be renting as many DVDs, either, since the DVD rental services buy discs to support those rental efforts. It also is true the studios are focusing their efforts on Blu-ray and VOD, instead of DVD sales revenue.

Unfortunately for studios, revenue from VOD has not yet offset the resulting drop in DVD sale revenue, which was their top earner for more than a decade now.

DVD revenues fell from $7.97 billion to $4.47 billion in 2010. It sometimes is the case that lower DVD activity is the result of a poor year, in terms of popular blockbuster movie hits. Less popular theatrical releases virtually always translates into lower levels of follow on activity throughout the downstream portions of the market.

That does not appear to be the case in either 2009 or 2010, when the box office revenue hit records.

The average wholesale price was relatively flat when compared with 2009, but there were significantly fewer units shipped, down 44 percent.

On average, films shipped 545,000 units and made $10.8 million in wholesale revenue, off 52 percent from the $22.6 million average in 2009. Over the past five years, average wholesale revenue posted a negative 13.7 percent compound annual growth rate.

read more here

Apple In-App Purchase Policy Has Business Model Implications

On one hand, Apple's policy on in-app purchasing gives developers a new way to create revenue, by selling things inside the app. On the other hand, Apple's 30-percent share of the revenue will be high enough to discourage some sales altogether.

The policy does create the ability to sell subscriptions, and in some cases will make it easier for developers to create sales opportunities inside their apps. But the policy is not "all upside" for all participants in the ecosystem. Some developers might find the 30-percent revenue share for in-app purchases greater than the entire profit margin for some products.

Apple obviously wants to keep in-app sales channeled through its own payment processes. App suppliers sometimes will benefit, sometimes will be hurt. But the policies are consequential.

Apple In-App Purchase Policy Has Consequences

Importance of Mobile Payments: It Blurs the Line Between Online, Offline

With the arrival of mobile payments, the mobile ecosystem becomes more than just content and apps in a digital world. "By integrating offline purchase data into this ecosystem, the line between digital behaviors and purchases in the physical world begins to blur, especially when core smartphone services such as location are integrated with purchase data," says Ryan Garner, GfK associate director.

In a broad sense, it is "a quick response code on steroids."

http://www.gfknop.com/imperia/md/content/gfk_nop/newsandpressinformation/global_mobile_payments_report_110511_final.pdf

Tigo Rwanda launches mobile money payment service

Tigo Rwanda, a telecom brand owned by Millicom Cellular International, has launched mobile money services in Rwanda, targeted at subscribers with limited or no access to banking services. Tigo has similar services in Ghana and Tanzania.

Tigo Rwanda is the second mobile company to launch such a service after South Africa-based MTN's local unit launched its mobile money product in February 2010, acquiring about 260,000 subscribers by March this year.

Rwanda's rural areas have limited access to financial services, with the central bank saying only 1.7 million deposit accounts had been registered by December 2010 out of a population of 9 million.

With about 3.3 million mobile subscribers shared between MTN and Tigo as of January this year, Rwandan mobile users can utilise the technology to deposit and withdraw money and can pay electricity bills and school fees via text messages.

Tigo Rwanda launches mobile money payment service | Reuters

More NFC Options, Still Much Confusion

Visa's recent investment in mobile payments enabler Square, coupled with the recent Isis decision to back off creating a brand-new retail payments infrastructure, suggests the market is moving faster now, so much faster than Isis cannot afford to spend years, and lots of money, to create a new mass market payments brand.

Square also suggests the ways much mobile payments innovation will happen: extending payments functionality into retail segments where it has been difficult and expensive to take the existing approaches.

Charge Anywhere has taking a similar tack, supporting payments using iPhone, BlackBerry and Android devices to process credit card payments with their phones and a dedicated reader to swipe the cards.

But the latest version to the software can turn a near field communications device into a full mobile payment terminal without the use of an external dongle. The solution requires an existing merchant payment account.

The new capability allows NFC-equipped credit or debit cards to communicate directly with the Charge Anywhere-equipped mobile device without any need to "swipe" a card.

The larger issue, though, is whether the NFC payments infrastructure can grow fast enough to take market share before other communication methods get traction. Square seems to be doing just fine using the old "swipe" method.

App turns Google Nexus phone into payment tool | Android Atlas - CNET Reviews

Family of Amazon Android Devices?

Amazon is preparing an “entire family” of Android devices that will launch this holiday shopping season, according to Taylor Wemberly at Android and Me. A smartphone might be among the devices, expected to feature tablet devices of various form factors.

Amazon already has gotten into the Android applications market space and online video rentals, so the move is not far fetched. Amazon has been really good at providing excellent customer service and a well-designed recommendation engine, so you can imagine the possibilities, over time, as those skills are applied to the mobile location feature and the shopping experience.

And since Amazon lives and dies by the ease of "buying something," it might not be too hard to suggest that Amazon is thinking about ways to integrate payments into the mix as well.

PayPal "Most Trusted" Mobile Payments Brand

PayPal was the brand most likely to be trusted with personal financial data by consumers in nine major markets around the world, in a survey by GfK.


(click image for a larger view)


Credit-card brands Visa and MasterCard were the next most likely global brands to be trusted, followed by Apple, Nokia and Samsung.

In a poll of 8603 people in nine countries, GfK found that financial services firms have the highest levels of trust, consideration and preference among consumers, with a score of 48 percent, when it comes to mobile payments, says Ryan Garner, GfK analyst. Within this category, banks come out on top.

Mobile and telecommunication brands receive significantly lower levels of trust when it comes to controlling financial transactions. Just 10 percent of respondents expressed high confidence and trust in mobile service providers, compared to some other ecosystem participants.

"Trust is the biggest driver of service preference and is most important at driving adoption of mobile payments," says Garner.

Overall, 62 percent of respondents find mobile payments appealing. This is higher among certain key groups, including: younger consumers aged 16-24 (75 percent), innovators (74 percent), and current smartphone owners (72 percent). Developing markets in China (82 percent) and Brazil (73 percent) find mobile payment services the most appealing. Consumers in the United States and Europe seem less interested, at about 50 percent.

Read more here

Enterprises Diversifying Mobile Choices

There was a time, not so long ago, when Research in Motion's BlackBerry simply dominated enterprise smart phone choices. That is changing, according to Intermedia, which says it is the world's largest Microsoft Exchange hosting provider. By definition, Intermedia operates outside the RIM ecosystem, so its data does not necessarily indicate the extent to which preferences are shifting between RIM and other devices.

It is clear that Android and iOS devices are getting traction, though. Intermedia, which manages 320,000 hosted Exchange email accounts, says recent activations show that 61 percent were iPhones and 17 percent were Android devices

Looking at the installed base of activeSync-based smart phones, 61 percent are iPhone, while 22 percent on 'Other' platforms, primarily Windows, followed by Symbian and Palm. About 17 percent are Android devices.

Intermedia Finds Business Professionals Choosing iPhone Over Android:

Google, Others Hope to Tap Hyperlocal News

Hyper-local news sites, which some say are information sources covering a single city, part of a town or just a neighborhood, have not been the foundation for an entire business, or much of a business, so far. To the extent that an advertising and promotion market exists, it has been lead by direct mail, outdoor media and other ad channels such as flyers delivered by hand to homes. But most of the business has been too expensive for a truly neighborhood-based business to use.

Some ad channels work for local, and by extension for very-local businesses. Retailers and other very-local businesses have used the Yellow Pages, of course, but even where zoned editions are available, there is "wastage," from the standpoint of a neighborhood business.

But Google's new move to allow users to create zipcode-sized mobile news areas could be a breakthrough, allowing advertisers to reach a mobile and fixed access audience that is self-selected down to the level of a zip code.

Can Anyone Actually Tap the $100 Billion Potential of Hyperlocal News? | Fast Company

Cisco, Microsoft CEOs Get Slammed, Is History Repeating?

It might be coincidence that stories about how both Microsoft and Cisco leadership have "failed" for the last decade appeared on nearly the same day.

CEO John Chambers is one of the most revered executives in the history of the technology industry, and Steve Ballmer's badge number at Microsoft is "30." Both have lead their firms for a long enough period of time for analysts and investors to make qualified judgments.

Since talking over as CEO of Cisco in 1995, Chambers has grown the company's revenue from $1 billion to more than $40 billion. For 15 years, he has been a soothing, straightforward presence in the industry, free of the bombast and arrogance that so often characterizes big-league CEOs.

But nobody who follows computing technology can be unaware that no company that has lead in one era of technology also has emerged as a leader in the following wave. That's literally "no company."

And it is possible that despite that recognition, both executives are simply finding that they cannot fight history.

Read more here and here.