Mobile Ad Revenue to Grow Tenfold to $24.1 Billion by 2015

Mobile advertising revenue will rise tenfold to about $24.1 billion by 2015, with much of that growth coming from China and India, according to Informa Telecoms & Media.

Informa “believes that the global mobile-advertising market was worth $2.3 billion in 2009,” Shailendra Pandey, a senior analyst with London-based consultant Informa, said in an report today. The Asia Pacific Developing region will account for the largest share by 2015, at 30.9 percent, driven by “strong growth” from China and India, Pandey said. The Asia Pacific Developed region, including Japan and South Korea, will fall to 21.7 percent from about 43.6 percent this year.

Google Inc. and Apple Inc. have both bought mobile advertising businesses in the past year to take advantage of consumers’ increasing use of mobile devices to buy goods and services. Google bought Admob in May for $750 million and Apple paid more than $200 million for Quattro Wireless in January.

“Successful companies that have unique and attractive technology for mobile advertising,” will become takeover targets for companies such as Google, Apple, Nokia Oyj and Yahoo! Inc, Pandey said. Apple’s iAd network, which was started in July, “will force its rivals to speed up their own mobile advertising strategies, particularly Google, which has completed its acquisition of AdMob,” he said.

North America will account for 18 percent of the market in 2015, with Latin America at 6.4 percent and Western Europe 8.6 percent, according to the report.

“The mobile advertising industry has now moved beyond the trial and experimental phase and many advertisers and brands are now spending significant sums on running mobile campaigns each month,” Pandey said.

Android ad impressions pull even with Apple’s iOS: Millennial Media

For the first time, Google’s Android tied with Apple’s iOS as the largest smartphone OS on Millennial Media’s mobile ad network, with an 8 percent increase month-over-month and 37 percent impression share overall.

According to Millennial’s October 2010 Mobile Mix report, Apple, the leading device manufacturer on its network for the last 13 months, also accounted for a 37 percent share of impressions. Those numbers are another indication of how quickly Android’s market share is growing.

“Month to month, we have continued to see the rapid growth of the Android platform,” said Mack McKelvey, senior vice president of marketing at Millennial Media, Baltimore. “For the first time in October, we actually saw Android smartphone impressions on our network tie iOS smartphone impressions at number one, each capturing 37 percent share.

“Our clients’ savvy cross-platform buys have enabled them to reach their target audiences at scale, regardless of device or OS type,” she said.

BMW Launches First User-Generated iAd

BMW of North America is running the first user-generated iAD promoting the launch of the BMW X3. The focus of the ad plays off of BMW's built-to-order program for the new car. Essentially viewers - like actual customers - imagine their dream car and then build it. While the next step in this process for paying customers is to have their customized BMW delivered to their driveway, viewers get a virtual road test of their custom designed car. Each “dream car” in the ad was selected from real submissions on the BMW USA Facebook page.

The 'shake' feature on iPhone and iPod touch lets users to browse the dreams - all riffs on how the car will change a life - as well as the X3 color options. Viewers then submit their own dream, which can then be shared with the BMW community through the iAd. They have the X3's 70 million unique configurations on the iAd to play with starting with colors and wheels that can be changed, the vehicle's angle, interior options, and even the environment, which can move from a cityscape to mountains. Viewers then drive their cars by browsing video content and downloading images from a gallery of hi-res wallpapers.

Once they have had their fun with the iAd, the viewer taps the close button and returns to the app they were using.

Rocky Start

The first several months of iAd’s launch has been characterized by some great media play, and then quiet, behind-the-scenes disgruntlement on the part of some advertisers. Of the 17 ad partners that launched with the iAd in June, only two - Unilever and Nissan - had iAd campaigns running for much of July. These reasons have included the tight control Apple is keeping over the creative process which has added weeks to the process. Then there is the expense - $1 million a package - that has no doubt deterred more advertisers from signing up, at least until the results of these early adopters become clear. Apple has also worried some companies with its insistence of keeping control of the customer relationship and its stinginess with analytics information.

Compelled

Marketers, though, are forging ahead with the iAd, with BMW being the latest example. One namely, is that the click through rates and other engagement metrics are much higher than compared to other online ad formats. A Nissan spokeswoman told the Wall Street Journal that its iAd "has driven exceptional results to date" with the rate of users tapping on the banner five times the click-through-rate of the online campaign.

Google's new phone software supports mobile payment

(Reuters) - Google Inc's next version of its Android smartphone software will support a technology that lets people use their handsets, instead of credit cards, to pay for goods at restaurants and stores.

Google Chief Executive Eric Schmidt showed off a yet-to-be-released phone on Monday with a special chip that allows consumers to quickly pay for items by tapping the phone against a special terminal.

Schmidt said support for the technology, dubbed Near Field Communications, will be integrated into the next version of its Android software, "Gingerbread", which he said will be introduced in a few weeks.

"One way to think about it is, this could replace your credit card," Schmidt said, speaking at the Web 2.0 conference in San Francisco.

Google had no immediate plans to develop any of its own mobile applications to take advantage of such payment capabilities, but Schmidt expected other companies to do so.

"My guess is that there are going to be 500 new startups in the mobile payment space as these platforms emerge," Schmidt said. He added that Google would partner with traditional credit card industry players, like payment processors, rather than compete with them.

While NFC technology has been available for years, interoperability with Google's Android software should make the technology more widespread. Google's Android was the second most popular smartphone operating system in the third quarter, according to industry research firm Gartner, behind Nokia's Symbian and ahead of Apple Inc's iOS software, which is used on the iPhone.

In a roundtable briefing with reporters, Schmidt said Google's ability to marry its smartphone software with Internet-based services enabled features like turn-by-turn driving directions and real-time foreign language translation, which distinguished it from rivals' offerings.

"We would argue that our platform is better for applications that are network-resident and that need that kind of power," Schmidt said.

Google, which controls roughly two-thirds of the Internet search market, is increasingly competing with Apple and with social networking giant Facebook.

Earlier on Monday, Facebook unveiled a revamped version of its messaging system that could make it increasingly competitive with Web-based email systems like Google's Gmail and Yahoo Inc's mail service.

Asked about Facebook's potential effect on Gmail, Schmidt said that additional competition would be beneficial, and chided the press for focusing too much on the competition between Google and other technology companies.

"You all are focused on the competition, as opposed to the fact that the market's getting larger," Schmidt said. "And there's no question that more entrants into communications technologies, mobile technologies and so forth, bring more people in."

Comcast rolls out TV app for iPad

CHICAGO (MarketWatch) — Comcast Corp. said Monday that it will unveil an application for Apple Inc.’s iPad that allows Comcast digital subscribers to watch movies and TV shows on the tablet device, starting next month.

The first version of the Xfinity TV app will be available on Apple’s iTunes Store this week.

Users will be able to use Xfinity TV to program their digital video recorders, browse content by keyword or title, create a watchlist of favorite shows, and share viewing choices with others via social networks.

Comcast's announcement comes at a time of slowing subscriber growth for cable, satellite and phone companies that provide video services.

Last week, The Diffusion Group, a research firm, issued a survey stating that broadband users who own or are likely to purchase an iPad in the next few months are “significantly more likely” than other broadband customers to cancel or downgrade their service over the next six months.

Xfinity TV is also an extension of the “TV Everywhere” strategy, championed by Time Warner Inc. and Comcast, which seeks to tie online viewership of shows to a paid subscription. There has been concern that people will cancel their cable subscriptions and use free video services such as Hulu to satisfy much of their entertainment needs.

Apple’s iAd: First European Brands To Be Named This Week

Six months after launch, some more international expansion for Apple’s iAd advertising platform. This week, Apple is reportedly set to announce its first European partners for iAd. The news follows on the heels of last week’s deal to take iAds to Japan, in partnership with Japanese agency Dentsu.

The European launch of iAd has not come without hiccups. The report notes that Apple had “twice delayed” the iAd launch in recent weeks. And it has been willing to bend on its $1 million minimum campaign spend rule in order to attract top brands to the platform. Two or three campaigns are likely to run in early December, but most will not go live until early next year, it says.

According to analysts at mobileSQUARED, the ‘big five’ European mobile markets of France, Germany, Italy, Spain and the UK will together generate a combined €88 million ($120 million) in revenues from mobile advertising in 2010. That’s a league behind Japan, which is expected to have some $1 billion in mobile advertising revenues; and the U.S. market, which it says is around one-third the size of Japan’s (analysts at Smaato put the U.S. figure somewhat higher, at nearly $800 million).

Still, signing on some European brands would still be a significant move for Apple, not least to demonstrate that the iAd platform is continuing to gain momentum.

iAd, which went live nearly six months ago, has been the relative slow burner in Apple’s wireless business. After Apple boasted it had already booked some $60 million in iAd advertising at launch, it then went a little quiet, giving iAd only a passing mention in its last quarterly presentation.

That stands in contrast to the blazing success of Apple’s devices. Apple says the iPhone sold “well over three million” devices in its first three weeks of launch this past summer.

Apple's iAd Helping Rivals

Apple Inc.'s iAd interactive mobile ad service is having an unintended impact on rivals: It's largely helping their businesses by generating broader advertiser interest in mobile phones and gadgets.

Apple Chief Executive Steve Jobs unveiled plans for the iAd service during a product event in April.

When Apple launched iAd last July, some industry executives worried that they would lose mobile advertising business to the Cupertino, Calif., company. Competitive concerns were sparked after the July rollout of iAd included commitments from top brands such as Unilever PLC and Nissan Co. to pay $1 million or more to have interactive ads placed inside iPhone and IPod touch apps.

But instead of losing business, ad executives say Apple's entry into the market is giving them a boost. That's because iAds has gotten big marketers to pay attention to mobile advertising in the first place

Apple has "brought sexiness to mobile ads," said Carnet Williams, chief executive of San Francisco-based Sprout Inc., which helps create and deliver interactive ads. Mr. Williams said it has gotten roughly four times as many calls from publishers and agencies since Apple turned the spotlight on iAds.

Until recently, the mobile advertising market was a small fraction of the $25.1 billion U.S. online advertising market, according to researcher eMarketer. Now that's changing as Apple has joined pre-existing providers of interactive mobile ads, such as Google Inc.'s AdMob unit, in offering ads that let consumers play a mini-game or interact with the ad without having to leave or the close the app they were using. Google said during its third quarter earnings call that mobile advertising is adding $1 billion annually in revenue.

Some ad executives say Apple's foray into mobile advertising particularly spurred marketers to boost their spending in the broader category. And not all those dollars are being allocated from digital budgets, with some coming from more traditional ad spending like TV or direct response, said Phuc Truong, managing director at Mobext, a mobile ad agency owned by French ad company Havas SA. Its clients include Sears Holdings Corp., regional McDonald's Corp. co-ops, and Exxon Mobil Corp.

Alexandre Mars, head of mobile for Publicis Groupe SA, adds Apple's cachet with big brands has helped legitimize the entire market. "The mobile marketing business is different now," said Mr. Mars, noting that none of the other mobile advertising companies could have attracted the interest that Apple has gotten from top brands.

Yet many ad agencies and brands find Apple's rates too high, giving competitors like Google, Medialets Inc., Crisp Wireless Inc. and 4INFO Inc. an opening to grow their businesses by offering cheaper rates to do similar things. People familiar with the matter have said Apple requires a minimum $1 million iAd commitment, but rival agencies said they can put together an ad campaign for as little as tens of thousands of dollars.

"A seven-figure mobile media spend historically has been few and far between, so if we're able to create a beautiful unit similar to the iAd but without the spending commitment, that's always a good alternative," said Mr. Truong.

Facebook Goes Mobile on Apple iPhone

Facebook is launching a mobile version that works on the Apple iPhone. The new mobile edition of the social-networking site will allow users to access and update profiles, track friends, and find maps and driving directions for events scheduled on Facebook.

Red Herring has published a more detailed story here.

iPhone Users Gain Access to YouTube

CUPERTINO, June 21: Users of Apple’s soon-to-be-launched iPhone will be able to access YouTube content directly on their handsets.

Set to be released June 29, the iPhone will feature YouTube content wirelessly streamed to the device, which features a 3.5-inch display. Over 10,000 videos will be available on June 29, and YouTube will be adding more each week until its full catalog of videos is available this fall.

In addition, Apple announced that YouTube is now live on Apple TV, which streams content directly from a computer’s iTunes library to a widescreen TV.

“iPhone delivers the best YouTube mobile experience by far,” said Steve Jobs, Apple’s CEO. “Now users can enjoy YouTube wherever they are—on their iPhone, on their Mac or on a widescreen TV in their living room with Apple TV.”

iPhone Likely to be Delayed Again

In a statement last week, Apple said that it has moved some of its personnel away from its newest version of Mac OS X, Leopard, to the team working on the June launch of the iPhone, reports Business Week.

Various iPhone suppliers have been told that the iPhone may not be available until the end of June, and Apple is stated as saying the iPhone "contains the most sophisticated software ever shipped on a mobile device," which hints at problems stemming from the complexity of the device.

Apple hopes customers will use iPhone for online purchases, so Apple must be sure the phone is not prone to hacker attacks. "They don't want it to be a version 1.0 of the iPhone, but version 4.9," Richard Doherty of Envisioneering Group said. "Apple wants to get it right the first time."

Another issue may come from the battery life. The phone will tout two batteries: one for the phone and the other for the music player. The phone battery would have to power a huge screen, Wi-Fi network connections, and many other power-hungry features.