Saturday, June 25, 2011

$4 Billion in U./S. Mobile Ad Spending in 2015

Total U.S. mobile ad spending will grow from $790 million in 2010 to $4 billion in 2015. During the same period, BIA/Kelsey projects the local portion of that total to increase from $404 million to $2.8 billion. This makes locally targeted mobile ads 51 percent of overall U.S. mobile ad spending, growing to 70 percent by 2015. See http://www.biakelsey.com/Company/Press-Releases/110623-U.S.-Mobile-Local-Ad-Revenues-to-Grow-From-$404-Million-in-2010-to-$2.8-Billion-in-2015.asp.

There's a very good reason why Google is interested in what mobile devices can enable, in terms of advertising and promotion. There is a big, and growing local advertising business that typically has been dominated by phone book ads, direct mail and local media advertising. But mobile devices are widely seen as providing a better channel, in part because they are sensors, able to interact with other devices and servers, and in part because they can be used to deliver highly targeted messages, with instant interaction, in real time, in a way that other existing media simply cannot.


New recession begins next year, Shilling says

“I’m predicting another recession next year,” says Gary Shilling, economist. It won't be a "double dip," a faltering of the current recovery, but a brand new recession. Many Americans won't find the quibbling reassuring. If this is a recovery, who needs it?

Shilling's forecast is based in part on current economic conditions, and partly on history. We’re already two years from the end of the last recession and three years from the business cycle’s previous peak, in December 2007.

Historically, economic expansions last about three years, especially in long down cycles of the kind he thinks we’ve been in since 2000.

So, he’s looking for a brand new cyclical recession beginning in 2012.

Lots of Moving Parts in Mobile Payment Ecosystem

LR-56342-EX01.jpgThe mobile payments ecosystem is quite complex. Even if you look only at the matter of security, people have a fairly good idea that there are "lots of moving parts."

Then there are the various segments, including retail payments, online payments, money transfers, mobile wallet services and integration of payment, wallet and location to create localized and personalized marketing services.

There are all sorts of opportunities for third-party or clearinghouse services as well, such as Neustar's "Intelligent Cloud" service, which exposes mobile customer location, or messaging services to application providers who might want to create "geo-fencing" and other features for personalized mobile marketing.

Offline Payments is the Big PayPal Opportunity

Offline, real-world payments are a much bigger opportunity than online payments, representing more than 90 percent of current transactions. That’s where PayPal is looking to shift.

PayPal’s mobile payments currently come in two varieties. PayPal offers person-to-person mobile payments, in which it doesn’t make money if users tap a PayPal balance or bank account or charges a percentage fee on transfers from a credit or debit account. It also makes money on mobile commerce payments, where it takes a percentage fee for goods purchased online on a mobile phone via PayPal.

Mobile Payments an Enabler

It is possible there are some potential entities that really see an opportunity to create a new transaction processing (settlements) system to challenge today's settlement networks. That's an ambitious and risky sort of thought, but a thought we suspect most innovators do not harbor. Instead, there are lots of other businesses that can build on mobile payments, without trying to displace existing networks.

Square already has succeeded in adding value on the terminal end of the ecosystem, essentially extending point of sale terminal capabilities to retailers that could not afford it before.

Google is aiming at the other obvious big target: advertising. The coming Google Wallet would allow Google to offer retailers more data about their customers and help them target ads and discount offers at mobile-device users near their stores.

Appending real-world purchase information to its treasure trove of online behavioral data would allow Google to drive significant transactional and advertising revenues.

Mobile money coming to Ethiopia

Irish firm M-Birr, in partnership with Mukuru.com and M-Birr parent firm NCL Technologies, will roll out mobile money services in Ethiopia soon, through M-Birr’s subsidiary in Ethiopia, M-Birr ICT Services Plc.

Different Paths to Mobile Payments

There are many different angles to take in the mobile payments, mobile wallet and mobile money transfer segments of the mobile banking market. They are, in fact, often functionally distinct businesses.

All of them share one thing: the use of mobile devices to exchange money. But that’s just about where the similarities end. Here are a couple different services seeking roles in distinct parts of the larger ecosystem. Square already has found a viable niche as a mobile terminal for retailers who want to take card payments, but either cannot afford, or cannot use, a traditional point of sale terminal. That's one of the "device-driven service businesses" we already have seen emerge.

Then there are the peer-to-peer money transfer services, which are quite distinct. Think a mobile version of Western Union's funds transfer system. M-Pesa is a good example of that.

Google is chasing the mobile credentials or mobile wallet segment of the market. But lots of other segments and roles will emerge over time. Think of what was thought possible when Netscape first launched around 1995. Then think of all the things people can do using browsers today. Something similar will happens with the mobile payments, banking, wallet platforms as well.

CBO Analysis Shows a Spending Problem

The Congressional Budget Office, recently released a review [here] of the budget estimate they issued in January 2001 and the factors that turned their $5.6 trillion surplus projection into $6.2 trillion in cummulative deficits by 2011.

The pie chart below breaks down the major components of the $11.8 trillion swing from surpluses to deficits over the ten year period 2002 to 2011. Higher spending turns out to be the largest factor erasing those surplus projections, comprising 44 percent of the ten-year swing.

Friday, June 24, 2011

Social Shopping Aggregates Buyers

Social couponing, or social shopping, sometimes called "deal of the day," is becoming a serious business, but it also is easy to dismiss. It's just coupons, right? Maybe not. The coupon is the tactic used to aggregate buyers. It is a rival channel to alternative coupon channels and other forms of local advertising and promotion.

The group-buying industry is expected to grow 138 percent to $2.66 billion in 2011. The business is highly fragmented at the moment, with some estimating there are about 439 daily deal email programs serving the U.S. market in the first quarter of 2011.

Nor is social shopping just a nice or interesting stand-alone business. Many believe it will increasingly be integrated with mobile payments, mobile loyalty mechanisms and other targeted forms of advertising and promotion.



Secrets of Social Media: It's High School

"Everything you know about social media you probably learned in high school," argues Bill Murtha, President and CEO of Roberts Communications. "In high school, I spanned a bunch of cliques, groups, even a few lame gangs."

"We had juicers, druggies, motor heads, hippies (yes I’m that old,) rockers, heavy metal rockers, jocks and nerds."
Each clique had its own coda, jargon, ethics, special interests, badges of honor (or dishonor) and tests of loyalty.

Products always are some part of how cliques identify themselves. That's the "hook" a brand hopes to put out there when using Facebook or other social networks as a marketing channel. But there are lots of obvious caveats. The products are not the groups. It is the people who are the social network, the products are props.

So most brands will not be authentic members of the social group, but the provider of key props. And not every product has high emotional value, or works as a key prop. Most social groups that have a product as an identifier or prop only have a few such props, just as most consumers have a handful of relevant brands with high emotional ties. Starbucks, Apple, Whole Foods or Lexis might be some of those types of "high involvement" products.

But it simply doesn't make sense that most products people use and buy actually have much chance of achieving either high emotional involvement or therefore effectiveness on Facebook or other networks. It's just like the notion of "followers" on Twitter. Only a handful of human beings actually have "millions" of followers, and nearly all are celebrities.

Something similar happens when brands use Facebook, and most businesses try to use Facebook these days. In most cases, most brands are not going to be among the handful of names that any single human being actually does want to interact with.

Also, it is the other people any person wants to have the involvement with, even when the brand is relevant. The point is to be realistic about what Facebook can provide. Groups are about "people like me," even when the badge happens to be a product or brand. The badge isn't necessarily part of the group.

Sometimes Technology Has to Catch Up Before an App Can Take Off

Jack Dorsey tried a "Twitter" approach 11 years ago, broadcasting his notes and thoughts to friends and family using email and a Blackberry. It didn't really work very well. Twitter was launched six years later.

That happens quite frequently in the technology business: people have ideas but the infrastructure won't support the apps.

Ditch "Sense" on an HTC?

The big advantage of Android's open approach is innovation. The big danger is operating system fragmentation. You can see the tension in recent developments related to HTC implementations of the "Gingerbread" version of Android.

HTC initially said its new "Desire" device wouldn't be getting an official Gingerbread update due to memory constraints, saying there wasn't enough space on the phone for Gingerbread and HTC Sense.

Then, 24 hours later the manufacturer responded to feedback from Desire owners and changed its mind, committing to delivering Gingerbread alongside a trimmed-down Sense UI. Gingerbread on the Desire

Now Australian carrier Telstra has indicated it's willing to go even further to get Gingerbread onto its Desire handsets. "Sense" makes the Android user interface "different." But if you have used Sense, you know why users say they want it.

I happen to think HTC does really nice hardware, and I really enjoy "Sense." What I'd do if an HTC device did not have Sense, and I was shopping for a new device, isn't clear. It would be an issue, but it's hard to say if it is a deal breaker. It would be a major negative, though.

Software Will Win Over Hardware Approaches to Mobile Payments, card.io Says

"Pay with a credit card by taking a picture of it" is at the heart of card.io's mobile commerce platform. When it's time to make a payment in your app, card.io activates your phone's camera and pulls up a green frame on the screen. Put your credit card within the green frame, snap a photo, and card.io's proprietary technology will scan the card for whatever information is necessary to make a transaction.

The actual transactions are processed by third-party payment processors used by the merchant. Finally, your credit card information is immediately deleted from your phone.

Co-founder Mike Mettler, a former developer at AdMob, said the company was betting that in the long-run, software approaches will win over hardware approaches.


Danish Operators Join Forces on Mobile Wallet

TDC, Telenor, TeliaSonera and Three are cooperating on the launch of a digital wallet service based on near field communications in Denmark. Note the emphasis on "wallet," or credentials management, rather than "payment."

The roll-out will start in the fall of 2011, but it will take a few years before the technology reaches widespread adoption, the companies say.

Consumers will be able to use their mobiles to pay for goods, services and travel, at a discount if digital coupons are available, and also open doors at hotels or borrow a book at the library.

How Mobile Is Changing Social Media | Social Media Examiner

With all the change going on the social software and mobility spaces, it's easy to mistake what the potential importance might be. Consider the matter of "location," which some associate with the "check in" feature. That is important to some users, but lots of people would say it doesn't provide much value at the moment, and that is a reasonable assessment.

But location-based services at some point will more clearly be seen as changing the way businesses use social media and software, some would say. "Where I am right now" is a bit of information that changes the context of social networking when correlated with "where are my friends, associates and relatives, right now?" The difference is that location awareness potentially leads to different kinds of sharing and messaging. And many of the changes relate to potential commerce activities.

"Location" also is changing the way brands are going to do "advertising" and "promotion."

One often hears it said that social networking (different than social software in a larger sense) is becoming a substantially "mobile-focused" experience. There are location implications there as well.

Can a Good End be Produced by a Bad Means?

The U.S. Supreme Court has ruled, in a 6-3 decision, that Louisiana’s new congressional map, which includes districts based on race, is unco...