Tuesday, March 29, 2011

Google Updates "Google Commerce" for Retailers

Google Commerce is an application designed for retailers, and has been upgraded to feature "Search as You Type," provides instant gratification to shoppers, returning product results with every keystroke, right from the search bar.

"Local Product Availability" helps retailers bridge online and offline sales by showing shoppers when a product is also available in a store nearby, in-line with the search results.

"Enhanced Merchandising" tools allow retailers to create product promotions that display in banners alongside related search queries, and to easily set query-based landing pages (for example, when a visitor types [shoes], they’re directed to a “shoe” page).

"Product Recommendations"  helps shoppers make purchase decisions by showing them what others viewed and ultimately bought.

Netflix Adjusts Video Quality

Netflix Canada now has adjusted video image quality so that less bandwidth is consumed, allowing users to watch more video while remaining under their usage caps, Netflix says. Users can manually reset image quality to higher levels, consuming more bandwidth, from their dashboards ("Your Account," then "Manage Video Quality").

Where watching 30 hours of video, especially in high definition, would consume as much as 70 GBytes, and about 30 Gbytes in standard definition, now Canadians can watch 30 hours of streaming from Netflix in a month that will consume only 9 GBytes of data, well below most data caps.

Smart Phone Sales to Grow 49% in 2011

The worldwide smart phone market is expected to grow 49 percent in 2011 as more consumers and enterprise users turn in their feature phones for smartphones with more advanced features, according to International Data Corporation.

Smart phone vendors will ship more than 450 million smartphones in 2011 compared to the 303.4 million units shipped in 2010, IDC predicts, growing four times faster than the overall mobile phone market. None of those predictions will come as a surprise.

Operating System

2011 Market Share

2015 Market Share

2011-2015 CAGR

Android

39.5%

45.4%

23.8%



BlackBerry

14.9%

13.7%

17.1%



iOS

15.7%

15.3%

18.8%



Symbian

20.9%

0.2%

-65.0%



Windows Phone 7/Windows Mobile

5.5%

20.9%

67.1%



Others

3.5%

4.6%

28.0%



Total

100.0%

100.0%

19.6%

















Millennials Much More Responsive, but Overall There is Low Response to Text Message Advertising

Millennials with mobile phones look at texted ads and respond to ads sent by text far more than do other cell phone owners, followed by GenXers, according to the latest data from GfK MRI. Baby Boomers, have yet to warm significantly to text ads.

But the more important finding is that few adults actually have gotten, or looked at, a text ad of any sort. Approximately six percent of adults with mobile phones looked at an ad sent with a text message in the last 30 days (some 12.5 million people), while 2.7 percent of adults with mobile phones used text messaging to respond to an ad or to make a purchase in the last 30 days (some 5.3 million people).

Millennials (born 1977 to 1994) are 57 percent more likely than the average cell phone owner to have looked at a texted ad. Moreover, they are 93 percent more likely to have used text to respond to an ad or to make a purchase.

GenXers (born 1965 to 1976), on the other hand, are only 19 percent more likely than the average cell phone owner to have looked at a texted ad, and they are just six percent more likely to have responded to an ad or to have made a purchase by text messaging. Baby Boomers (born 1946 to 1964) are 40 percent less likely to have looked at a texted ad than the average mobile phone owner and 55 percent less likely to have responded to an ad or to have made a purchase by text.

But it would be fair to note that virtually every type of digital activity, even when much more heavily engaged in by younger users, has also been adopted by older users. That suggests responsiveness to text ads will grow, in the older demographics. But that is likely a secondary consideration. At the moment, few users of any age actually receive, or look at, text message advertising.

Mobile Payments: Tough Business Case for Credit Card Issuers

Bank of America, Citigroup and U.S. Bank executives do not see a compelling business case, for them, in mobile payments, in large part because mobile payments simply represent a way to defend their existing business.

"There’s just not a business case right now," says Dodd Roberts, Merchant Advisory Group CEO. That perspective is not limited to credit and debit card issuers. Telcos found there was no business case for digital subscriber line, allowing competitors to gain a market foothold. Telcos found there was no business case for widespread deployment of consumer VoIP. Cable companies, on the other hand, easily could justify VoIP as their way to attack the consumer and small business voice business.

Credit card issuers, in other words, might find that mobile payment systems actually represent new cost, but little, if any, incremental revenue. Attackers will find mobile payments a business platform for taking market share away from established players. In fact, a likely early approach for many credit card issuers is simply to tolerate some loss of market share, until a defensive response becomes absolutely necessary.

The reason is simple revenue economics. If one assumes that new mobile payments systems promise retailers lower transaction costs, then a major shift to mobile payments by credit card and debit card issuers will simply lower profit margins across the board. As telcos early found out, revenue is higher if established players simply allow competitors to take some amount of market share, while maintaining higher gross revenue and profit margins as the remaining business that does not shift.

There are limits to the strategy, though. At some point, so much business is lost that a competitive response, even at the cost of lower gross revenue and profit margin, is necessary.





How Important are Social Product Recommendations?

People still get most of their information about products and services from friends and other people in face-to-face conversations. Email and voice conversations also are frequently used by more than half of respondents to a Colloquy survey.

Communication Methods Used to Discuss Products/Services According to US Young Adults vs. General Population, Dec 2010 (% of respondents in each group)Company sites, shopping sites, blogs and Twitter and other micro-blogging sites are much less frequently the source of such information. But that is likely to change as the lead edge of younger users become more nearly representative of the "general" or "typical" user.

Some might argue that socially-influenced product recommendations are not as influential as often is thought. But 56 percent of respondents 18 to 25 already say they share such information on social networking sites.


96% of Marketers Increasing Social Spend

Fully 96 percent of World Federation of Advertisers members polled recently are spending more time and money on social media. However, half of them admitted to being unsure of the likely return on that investment and nine percent believe the outcome will be "poor."

The attraction of social media often seems to be that it can be done without spending much money. But nearly always, organizations find that it takes far more time than originally anticipated. Just nine percent found their social activities took less time and cost less than expected.

Some 27 percent of those who have increased their social media efforts have found running fan pages takes more time and money than they had anticipated. The payoff is additional insight and increased loyalty (85 percent agreed), and the opportunity to increase advocacy (80 percent).

read more here

Online Cannibalizes Print, Not TV

US Major Media Ad Spending, by Media, 2009-2015 (billions)Television retains the greatest share of US major media ad spending, at 39.1 percent in 2011. Increases in online ad spending—set to grow from 15.4 percent of the total in 2009 to 25.6 percent by 2015, will not come at the expense of television, but of other traditional media like print and directories, eMarketer says.

In fact, eMarketer does not believe television advertising share will decline at all, between now and 2015. That doesn't mean changes are inconceivable. It is possible the actual venues and channels within the television segment will shift, from linear to online, for example.

Social and Mobile Are Changing "Shopping"

One way to look at marketing is to say that channels today are highly fragmented, and becoming more fragmented. (Click on image for a larger view)

The other way to look at marketing is to day that products are more customized and personalized, and there are buying influences broadly scattered across a range of digital channels, including social shopping influences.

In other words, people have more input available from other shoppers, and shoppers use that information when buying themselves.

Some people think social commerce or social shopping is basically just social networking. That's likely too narrow a view. Social processes (people sharing and collaborating) are bigger than simple "social networking," and affect both the ways consumers find information and make choices, as well as the ways marketers have to plan on reaching potential buyers.

Simply Tap: Mobile Payments Aimed at Mobille Shopping

A new mobile payments service, Simply Tap, will launch in the United Kingdom at the end of the summer, allowing consumers to buy any product on any mobile phone by sending a text message bearing a numerical code displayed on a billboard, for example.

The service works independently of any mobile network or handset brand. Once they have registered their name, address, preferred delivery address and debit or credit card details, consumers can buy products by entering the retailer's product code, and having the product delivered directly to the user's home.

Simply Tap: to launch an app and SMS service later this year

The service will be run by the Mobile Money Network, a company owned by Carphone Warehouse,Best Buy and Monitise.

The venture is another example of the different potential business models mobile payments represents, beyond the actual payment transaction. Google sees an advertising angle, Simply Tap is an e-commerce play. Others see in-store promotion as a key way to monetize the platform.

Monday, March 28, 2011

Australia's National Broadband Network Becomes Law

Australia's parliament has passed legislation establishing the new National Broadband Network. The legislation passed in both the House of Representatives and the Senate. The new law sets out a regulatory framework to provide that NBN Co. will operate on a wholesale-only, open and equivalent-access basis for all retail providers that wish to use the facilities. See Australia's National Broadband Network Law Passes Parliament - WSJ.com.

The NBN also effectively structurally separates Telstra operations into retail and wholesale operations, as Telstar will be required to sell facilities to the NBN. In principle, you would think such structural separation would not allow vertical integration. But some observers say that might happen, to a certain extent. Nor does the existence of the NBN deal with the issue of "monopoly" or "full competition" in all respects.

There are, for example 120 points of network interconnection. But that also means NBN can refuse to connect to any retail provider except at those 120 points.

Similarly, NBN Co is going to offer a bundle of voice and data services as a uniform product across its fiber, wireless and satellite networks. Apparently to protect the government’s promise of uniform national pricing of NBN services, NBN will have the ability to deny supply to any service provider that doesn’t want to take the bundle.

That commitment to uniform national pricing at the wholesale level necessitates a system of cross-subsidies. Urban customer bases will subsidize higher-cost rural and regional customers.

NBN also is going to be allowed to "discriminate" in its pricing, providing volume discounts as well as possible special pricing for enterprise, educational institutions, government and local government agencies. None of that is unusual for wholesale carriers. But such issues show that structural separation might not solve all the problems "monopoly" is thought to cause. See

Millenials Value Lots of Things in a Brand, Not Just "Coolness"


Affluent Gen Y: Media Survey | Robert Mertz from L2 Think Tank on Vimeo.
Authenticity, for example, is quite important.

Handet Leadership Changes Over 10 Years

In an industry that is changing so rapidly, you'd expect changes of leadership in just about all phases of the business. Consider handsets. A decade ago, European brands such as Nokia, Siemens and the Swedish-Japanese JV Sony-Ericsson lead, in terms of sales and market share.

Over time, Asian manufacturers and computer makers like Apple replaced them.

American Express Launches "Serve" Mobile Payments Service

American Express is launching a new mobile payment system called "Serve." Serve will allow consumers to make purchases and person-to-person payments online (serve.com), using mobile phones and at millions of merchants who accept American Express cards as well. Serve unifies multiple payment options into a single account that can be funded from a bank account, debit, credit or charge card, or by receiving money from another Serve account.

Serve aims to provide an alternative to cash, check and debit card payments. Serve accounts can be used on Apple iOS and Android applications, at Serve.com and through Facebook.

“A cornerstone of the long-term vision for Serve is developing partnerships with commerce, gaming, entertainment, and social networking organizations,” American Express says, suggesting Serve will be pitched as a standard payment method for applications and games.

Google Teams with MasterCard, Citi for Mobile Payments

Google is teaming up with MasterCard and Citigroup to add mobile payments functionality to Android mobile devices. The deal is an example of Google's different take on mobile payments. Where Isis, the mobile payments venture supported by AT&T, Verizon Wireless and T-Mobile USA aims to generate revenue through transaction fees, Google is more interested in the advantages for its advertising business.

The planned payment system would allow Google to offer retailers more data about their customers and help them target ads and discount offers to mobile-device users near their stores.

Freemium Model for Mahala Mobile Banking

Mahala, a new mobile banking service, will launch in South Africa in May 2011, using a "freemium" model. Peer-to-peer money transfer, money deposits or withdrawals and retail payments are offered without charge. Mahala expects to make money by selling additional services to users. See more information about Mahala here: http://www.mahala.co/

Mahala is likely to disrupt existing mobile banking providers in South Africa, as those providers now charge for transactions, generally based on the gross amount of each transaction or a flat fee per transaction.



South Africa is by far the country where mobile banking is most widely used on the continent. Still, about half of South Africa citizens don’t have bank accounts. Nearly 40 percent are either unemployed or work informal jobs paid in cash. Bank charges are high and banking regulations are so strict – such as proof of regular income – that they prevent many poor people form having formal bank accounts. Moreover, most South Africans live in rural or semi-urban areas where access to a bank is very limited or non-existent.

First National Bank of South Africa has over two million customers and attracts about 90,000 on a monthly basis. In 2009, FNB mobile banking customers made 56 million transactions worth the value of ZAR7.2 billion. Customers can send money to anyone in South Africa, whether they have an account with FNB or not.

South Africans often paid couriers the equivalent of USD 30 to USD 50 per transaction to deliver cash to relatives. Now they can do it for only USD 0.50 through Wizzit mobile bank networks.

Flash Mobile Cash by Eezi gives home shop owners the tools to be the bank for communities where formal banking infrastructure does not exist. The home shops, equipped with shared-phone ATMs, enable communities to withdraw, deposit or borrow small amounts of cash from their local township residence. The shopkeeper, as the banker, transacts using a GSM enabled device supplied by Shared-phone. “

read more here

Sunday, March 27, 2011

Mobile Payment Models Show Why Mobile Service Providers and App Providers Are in the Business

Some would argue there are just three primary ways for U.S. consumers to make retail payments, and the methods show why mobile service providers, application providers and banks are getting into the business.

The three primary methods, some would say, include direct billing by a mobile service provider, paying by credit card or debit card and using an "online wallet" such as PayPal or Google Checkout.

Direct operator billing has been possible for many years, but relatively few retailers have embraced it, in many cases because the transaction charges are higher than when using a credit card or debit card. That has been a problem especially for the sort of small-retail-value transactions many believe will drive use of mobile payments.

Credit cards and debit cards are routinely used by consumers for online commerce as well as retail purchases, and mobile payments simply represent a move by credit and debit card issuers to hang on to market share and revenues they already are getting.

Online wallet services such as PayPal, Amazon Payments, and Google Checkout mostly have been used for online payments and money transfers, typically by use of applications that combine log-ins, passwords, shipping addresses, and credit card details in one central place, linking credit card accounts with the other payment process features.

In all three cases, mobile payments represents a move from an existing offline or online payment mode into a mobile mode, where the phone displaces the credit or debit card.

So the interest in mobile payments is rather obvious. Banks that issue credit cards and debit cards want to hang on to the business they've got, while mobile service providers and payment application vendors want to conquer new markets that represent net revenue growth.

30 Million U.S. Mobile Users Access Financial Accounts Using Mobiles

A new comScore report found that 39 million U.S. mobile users accessed financial services accounts (bank, credit card, or brokerage) using their mobile device in the fourth quarter of 2010, an increase of 54 percent from the fourth quarter of 2009.

Mobile Financial Service Audience (Accessed Bank, Credit Card or Brokerage Account)
3 Month Avg. Ending Dec-2010 vs. 3 Month Avg. Ending Dec-2009
Total U.S. Mobile Subscribers Ages 13+
Source: comScore MobiLens
Total Unique Audience (MM)
Q4 2009Q4 2010Percent Change
Accessed Mobile Financial Services*19.329.854%
Accessed via Mobile Browser11.818.658%
Accessed via Application4.910.8120%
Accessed via SMS6.08.135%

Swiss Mobile Banking App

iPhone Screenshot 2The "iBank CH Mobile Banking" app sold by Recon IT Services GmbH provides an example of mobile banking as it appears on an Apple iPhone. Some apps primarily are "information" apps that allow users to track balances or make transfers between accounts.

Other apps are designed more specifically to support retail purchases.

read more here

In 4G, Verizon Wireless Emphasizes Quality

If bandwidth is a measure of fourth-generation network quality, Verizon Wireless stands out from all the other carriers, according to a test by RootMetrics at some locations in Seattle, Wash. With the caveat that results will vary from location to location, across networks as well as on any single network, as well as the obvious observation that a lightly-loaded, brand-new network will not have much congestion because it has few customers, the test shows a wide disparity in experienced speeds.

read more here


Solving AI Model Marginal Cost Issues

Profit margins arguably are the key business issue for frontier artificial intelligence model providers. Where software businesses have tend...