Internet research analyst Mary Meeker delivered a full plate of mobile and online advertising optimism Monday in the form of her 48-page Internet Trends presentation.

In the Morgan Stanley analyst’s presentation at the Conversational Marketing Summit in New York, Meeker said mobile Internet use is ramping up faster than desktop Internet use did, with Apple leading the trend with the release of the iPhone nearly three years ago.

In three years, Apple attracted 86 million users for its iPhone and iPod Touch. As a comparison, in their first three years, Netscape attracted 18 million users and AOL had 8 million users. The Japanese company NTT Docomo’s I-mode attracted 31 million users.

Mobile use will only continue to grow, Meeker predicted, with smartphone sales surpassing PC sales in 2012. And smartphone use will dominate – with mobile Internet users buying more smartphones (93 million) than basic-feature phones (90 million) by next year, she forecasted.

Full post from The Washinton Post – mobile Internet exploding

Mobile. Touch. Web

In the past 15 years technology has changed in ways that no one could have forseen. Now with the convergence of the mobile Web and touch screen technology we’re embarking on another journey into the unpredictable. However… 

A Collaborative vision

If we’re all heading in the same direction why not make use of the hive mind to prepare ourselves? We asked some leading industry thinkers what they thought. To make it easier to digest we’ve grouped these thoughts into common themes.

Take a look at what other people are thinking.

Greetings and welcome to the 219th Carnival of the Mobilists. This week created and hosted by AntoineRJWright.

Our Indigo 102 post on the iPhone was featured and received a best ‘nod’ from Antoine. For the full Carnival visit: 219th Carnival of the Mobilists

The excerpt:

“Indigo 102 diagnoses the “i Syndrome” that’s unfortunately too common in what passes for mobile strategies these days. In the same diagnosing vein, Tomi Ahonen writes a v-e-r-y long post detailing why he thinks Apple’s iPhone marketshare has peaked. And then there’s WIP Connector with another iPhone-centric piece which points to the question of whether developers for iPhone applications will sit in a now fragmented iPhone world, or port their applications and services to other platforms which offer more freedom for developer skills and tools.

Of these three, my one would have to be the post from Indigo 102. Besides being shorter than Tomi’s and a little more descriptive than WIP Connector’s, it diagnoses the reality that mobile is indeed bigger than any one device or service (except probably SMS).”

Two videos based on a great publication from Young and Rubicam – presented by Simon Silvester.

MOBILE

• Always on
• Always with you
• Always connected

The world is changing as the mobile becomes the computer.

Part 1:

Part 2:

Guest post published on mSearchGroove 

EDITOR’S NOTE: Mobile advertising is certain the hot topic at CTIA, where Mobile Web And Apps World Forum (Ajit Jaokar’s CTIA partner event) was standing room only. (Well done Ajit!) Players from across the ecosystem are anxious to explore new models to monetize inventory, apps and services. However, as I pointed out during my panel — moderated by well-known analyst and author Chetan Sharma – there’s still is a lot of mileage left in established models such as text and MMS approaches to advertising before we focus too much of our effort on the whiz-bang new ad units and creatives. In his guest contribution, Martin Wilson – MSG columnist and owner of Indigo 102, a strategic consultancy with a focus on media and mobility and a deep understanding of the local space— argues that traditional media owners also have a lot of untapped energy and assets.

***

Advertising based on location is set to be the most valuable and highly contested sectors as players including AdMob, AOL/ Third Screen Media, Jumptap, Millennial Media, and Quattro Wireless jockey for position. Who will be in the winners’ circle? So far, traditional media owners and directory publishers appear to be the laggards and not the leaders in this race – although they clearly have the capabilities mix to dominate this space. Why are they hell-bent on missing the boat? Martin Wilson argues traditional media owners and directory publishers can still be among the champions, not the casualties, provided they act fast.

Mobile advertising has come a long way in a short time. No need to ask ourselves when it finally be the “year of mobile advertising” because the recent flurry of activity tells us mobile advertising has arrived.

First, it was the milestone acquisitions – Google buying AdMob, Apple snapping up Quattro Wireless and Opera surprising us by purchasing AdMarvel. Then it was the funding – Millennial Media led by New Enterprise Associates and Glam Media led by Aeris Capital – that sealed it. Mobile advertising has been validated.

Almost overnight our attention has turned from fixed online advertising to mobile. Now mobile – a personal device that enables brands to market to an audience of one – is widely regarded as the Next Frontier companies must conquer. Little wonder that companies – including Apple, Facebook, Google, Millennial Media and Yahoo – are lining up to do just this.

The market is crowding and muddying our understanding of what matters most.

Predictably, we want to reuse our understanding of old media (online and TV, for example) to comprehend the role and importance of mobile, the new mass media. Thus, we are fixated on size and those players with high volume inventory. Unfortunately, mobile advertising is not just the same numbers game.

Take the narrow view communicated in a controversial report by U.S. research agency Interactive Data Corp (IDC). It estimated the total 2009 mobile advertising spend in the U.S. at around $290 million, a figure based on total page impressions. It calculated market share according to share of total spend and concluded Millennial Media leads the pack with 18 percent ($51 million), followed by AdMob with 14 percent ($40 million), Google with 10 percent ($28 million) and Quattro Wireless in sixth place with 7 percent ($21 million.).

It was also reported by IDC that Glam Media counts 160 million monthly visits to the sites they control or represent, resulting in some 2.5 billion page views. Does this make them a market leader?

Maybe on paper.

However, as I argue in this column, it’s not about page impressions. That is not where the battle will be fought (or won, for that matter).

RAISE YOUR GLOVES

The money is in local advertising, or more accurately advertising based on location. That’s not just my view. Google has been clear about its interest in local online mobile content – and its intention to own the space. In its fourth-quarter earnings call, Google described local mobile advertising as a “huge” opportunity and more recently at the 2010 Mobile World Congress (MWC) claimed to have made mobile its number one priority.

Interestingly, going local (delivering advertising based on location) brings with it a whole new challenge. For one, it is infinitely more difficult to deliver relevant advertising to people
(which is the way brands must deliver advertising on a personal device such as our mobile phones). The opportunity to target an individual based on location is hugely powerful, but the room for error in these brand messages is frightfully slim. Get it wrong and the advertising performance diminishes — significantly.

Put another way, local advertising can’t be a matter of hit-or-miss. Generic advertising is a “fail” and tactical, targeted advertising is – literally – spot-on.

But it sounds easier than it is. This approach – though essential – flies in the face of how we measure advertising success. Suddenly, our singular focus on numbers and quantity (high volume and market share) is irrelevant. Local means delivering quality advertising. It also requires a totally new skillset, a whole new understanding of what we mean by context and how we should deliver relevant advertising.

WHAT IS ‘LOCAL’

If you say ‘mobile’ and ‘local’ in the same sentence, two scenarios spring to mind: ‘where I am now’ and ‘where I am going to be’. But which one is it? It depends. A common mistake is to assume your current location is important, that your location at that point in time is key.

Often it is not.

Mobile is about being ‘mobile.’ It’s about roaming. Mobile location can be a related to a number of things, places nearby or places close to my final destination. Deciding what is relevant is core to the success of any service or proposition delivered via mobile. I’m amazed by the number of services that get it completely wrong.

Why? Because there is more to delivering a mobile location service (let alone location relevant mobile advertising) than knowing the location of the individual. Companies need a detailed knowledge of what is really nearby.

In the U.K. alone, there are over 30,000 recognised places or points of interest. And that’s before you take into account synonyms, postcodes and street names. Linking them together in a meaningful way is no simple task. What are the postcodes or streets in London’s West End or Soho? The taxonomy is complex. When expanding a location to deliver results the relationship between places is important to get right – otherwise the service will deliver meaningless results and fail in the consumers eyes.

With so much as stake, I wonder why companies are so willing to take risks. By adding location to the mix they think they are growing the size of their inventory. In reality they also increase their chances of failure.

Currently, mobile advertising companies work on serving relevant ads based on generic attributes such as country, mobile network, handset type, time of day or theme of the page content. Add location as an attribute and everything changes. Relevancy – potentially down to a micro level – has to be on the mark. Delivering advertising based on locations becomes a mammoth task with a very different set of management challenges.

FREEDOM OF CHOICE

Advertising is content and people will pay with their attention. The structure of the content is important, and keep in mind at all times that mobile is a ‘pull’ medium. Give the people what they want and need. Provide enough information to attract, influence and help inform the decision or action.

You also need to remember that ‘local’ at a micro level is all about offering rich content – which can be challenging to deliver and scale. At the other end of the spectrum, ‘local’ at a macro level is all about providing comprehensive content – which can be challenging to deliver with added-value and competitive differentiation. A rule that applies to both types of ‘local’ content: Content gives a service credibility, interest and value if there is a valid reason (that consumers can understand) why a particular content is shown to them at a specific point in time.

Poorly targeted content is more than a potential annoyance. For many consumers, being exposed to irrelevant content (this includes advertising) on their mobile phones represents a ‘fail’ that interrupts what they are doing and – depending on data plan – costs bandwidth and money. Get it wrong and deliver the wrong content and the consequences can be severe and instant.

Content also needs to be inclusive not exclusive. If a user wants a pizza place nearby, they mean it (!) The service should deliver them details on the restaurant nearby and not the one 15 miles away simply because that business owner paid a premium for it.

Put another way, a location-based social network service should offer people loads of places people can check-in to, and not just the ones a handful of ‘power users’ know, mark and promote. Likewise, a local guide service must have all the places of interest for a town or city, not just the well—known ones in the surrounding area.

Why do local services need to be all-inclusive?

Because the consumer is empowered. They are spoilt by choice and demand the content they want. The Long Tail taught us all that one-size-fits-all doesn’t work in entertainment content. And there is mounting evidence that the same focus on the mainstream will no longer be tolerated in location-based services.

Relevance, as I have shown, is critical in content services.

The consumer’s perception of relevancy is enhanced when:

• They are offered greater choice
• They are empowered to select from a range of options
• They are ultimately responsible for the due diligence and decision

Of course, offering a broad choice of content (in this case, location related information and location relevant advertising) requires the service provider has a stockpile of content to start.

WHAT REALLY COUNTS

Above all, a location-based service has to pass the toughest road test there is. It has to show the consumer what they know is there. Put simply, consumers judge the true accuracy and relevancy of a local service by its ability to offer breadth, choice and insight into the places and businesses they know are nearby.

If the service can pass the test, it earns consumer trust.

Thus, a shopping guide needs to list the shops nearby and not the ones across town. It needs to drill down to the hyperlocal level and present up shops in the area – even better if lists the shop they can see in the distance. Then they can feel secure knowing the service is up-to-date and mirrors the real world around them. (And isn’t that what we all expect of a service that professes to offer local information?)

The same goes for mobile advertising. A guide to city nightlife should be chock-full of bars and clubs and their promotions.

How do service providers get their hands on all this content and advertising?

They partner with companies that have it as their stock in trade.

Take the directory publisher Yell in the U.K. It boasts over 2.3 million business listings –that satisfies the requirement for basic core and structured content. Yell also has over 200,000 searchable online advertisers – that fulfils the demand for depth of differentiating content.

Surely tapping into this content (listings and advertising) is the first – and essential – step to building a strong foundation of content linked to location. What’s more, it’s shortcut to offering the wealth and breadth of content – including familiar content – that consumers have come to demand.

It seems self-evident. But some companies fail to grasp it. In the last weeks I have seen a number of services – TopTable, Grub.it, Center’d to name just a few – come to market with neither basic core and structured content nor in-depth and diffentiating content. Predictably, they were instantly knocked by consumers.

IT TAKES TWO [OR MORE]

As I have shown, the success of a service linked to location depends on the breadth and depth of content (listings and advertising) it offers. It’s content that has long been the lifeblood of directory publishers, but nowhere is it written that these giants will beat the nimble newcomers moving on their turf.

Granted, it will take time for these newcomers to learn the ropes and collect and index the location linked information core to competitive edge. However, there is little reason for more traditional media players, who sit on a stockpile of location linked content, to assume that time is on their side.

Take the case of uLocate Communications, a location services company, headquartered in the U.S.

Sensing a business opportunity it moved fact to fill the gap in the current mobile advertising environment and recently launched Where Ads, a hyperlocal and holistic ad network that pulls together local ad providers that work in other mediums, including directory services, coupons, events and other aggregation services.

Partnerships will be increasingly important. Even for the traditional players it is unlikely that they will excel alone. The recent pairing of directory publisher DexOne and Yelp in the U.S. is a testament that neither company has the critical mass and/or appeal to succeed in isolation.

The new network underlines the importance of getting the right players to the table. Strategic partnering brings a new dimension to the service offer and delivers value to the consumer. But it’s knowing whom to partner with that will decide if a service flies or fails. Picking the right partner requires knowledge and focus. It also helps if the partners we choose have a track record in local and a proven ability to generate revenue.

While the newcomers may have the ambitious mobile strategies, it’s the traditional media owners and directory publishers from the online space that have mastered the capabilities necessary to convert consumer activity (a need/desire to know what’s really nearby) into revenue.

Case in point: Pages Jaunes, the French directory publisher. In 2009 the company counted 885 million visits and online revenues of €461 million. That’s equivalent to €0.52 per visit – a staggering conversion to value. Imagine a scenario where consumers conduct the same number of searches using Google – it’s nowhere near the same conversion rate (or revenues for the advertiser, I might add).

Make no mistake: No other organisation can even potentially come close to the conversion rates and value delivered by traditional media owners and directory publishers. Their ability to create value is inextricably linked to their superior capabilities. They have infrastructure, sales teams and existing customers to target.

In the online space traditional media owners and directory publishers lost their edge to search giants such as Google and Yahoo and have been struggling to catch-up ever since. Mobile is a new game with new possibilities. It’s also a space where location linked content – and lots of it – combined with the capabilities to deliver this content when/where consumers need and appreciate it most can mean the difference between success and failure. These market conditions play in favour of traditional media players and directory publishers. Now it’s up to these companies to recognise their advantage and work with the right people/companies to evolve their businesses, embrace mobile and deliver what users demand.

THE TAKEAWAY

Context, relevance, critical mass and content quality are all key components to a successful and sustainable service in the local mobile space. Who will own this space? Hard to say. But don’t be too quick to write off the traditional media owners and directory publishers that lost the plot in online. They could make a collective and explosive comeback in mobile. Success will be achieved by the companies that see the opportunity, accelerate their efforts, focus on their core strengths and bring the people and partners on board who have mobile expertise.

Get this right and you’re more than fit for the fight ahead. 

Editor’s note: Martin’s next column will focus on how companies should evolve a digital strategy that harnesses mobile to complement existing digital services and thus generate more value. As he shows us: in digital, the outcome can be worth more than the sum of the parts.

Martin Wilson has been involved in digital media for over 14 years, during which time he gained a wealth of experience in the fixed line and mobile Internet. In January 2008, Martin established Indigo 102, an independent consultancy, to assist organisations (including digital advertising agencies, directory publishers, media owners and online service providers) take their brands – and value propositions – mobile. In this role Martin has supported the development and launch of mass market mobile services across three continents. You can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102).

Retention of users and usage frequency will become far more important for mobile services and should be central to mobile strategy for many organisations as they start to attempt to deliver real value from mobile.  

Last week I posted about the shocking reality of the retention levels of Apple and Android Applications. Analytics company Flurry recently reporting that some 70% of users do not return to a service after just 60 days. Despite the poor retention level, those that do continue to use services average a very respectable frequency of 6.7 uses per week -  showing loyalty does pay.

The retention figure indicates applications have in effect degraded into a series of “one-off offers”. If this continues, for many organisations the numbers will simply not add up to a sustainable business model. And to re-engage a consumer for a second time is infinitely harder and far more costly.

Why is this happening? I believe this is due to the continued attention around platforms - iPhone, Android, Bada, Microsoft etc. – is distracting many organisations. To the extent that delivering an Application has seemingly become more important than the actual offer. The result is many services fail to deliver to consumer expectation and their interest is rapidly lost.

This poses the question - If only service providers could increase retention levels and maintain frequency of usage?

This is achievable but requires a slightly different thought process.

The reason consumers return to a service is because it offers something that is useful. Typically a consumer when mobile wants something, usually now – patience and tolerance is reduced. The outcome of the service interaction is so important – the consumer action is more than likely why they came in the first place. Recognise ‘what’ a consumer wants to do? This is one of the most important components to deliver against.   

A second area – determine ’why’ the offer is relevant to ensure the service delivers. Often more is less, just because elements flourish in a fixed online environment does not mean they will in mobile. The offering should be defined strategically and designed to evolve, this will support ongoing engagement and retention.  

Once the ‘what’ and ‘why’  are defined the ‘how’ to deliver  becomes important - an enabler that brings a service to life. The ability to deliver services to your audience; the format of those services, the platforms they operate, the priority and scheduling of development, the investment required, then become part of the mobile strategy jigsaw.

Reversing the process in this way – what, why and then how – ensures a focus on the consumer, rather than become embroiled in the ‘cool’ factor trap of mobile that we see many fall in to today. Get this right and improved retention levels and usage will result. This will in turn support the delivery of real value.

Morgan Stanley has released  two reports about the mobile internet: ‘The Mobile Internet Report,’ a 424 page report which explores 8 major themes; and ‘The Mobile Internet Report Key Themes,’ a 659-slide presentation that drills down on thoughts covered in the report. We have embedded both documents below, along with the Report set-up document.

Perhaps the most remarkable statement in the report is that the Mobile Internet market will be “at least 2x size of Desktop Internet,” which Morgan Stanley bases on comparing Internet Users with Mobile Subscribers.

Accepting  a US bias, I have to say that some of the content I really don’t agree with. Unfortunately the size of the reports mean that it will be too challenging to provide effective summaries and then add comment. For any personal views on the content feel free to get in touch.

The reports:

1) “The Mobile Internet Report Setup” – a 92-slide presentation that excerpts highlights of the key themes from the report.

2) “The Mobile Internet Report Key Themes” – a 659-slide presentation that drills down on thoughts covered in “The Mobile Internet Report.”

3) “The Mobile Internet Report” – a 424 page report which explores 8 major themes in depth and includes the two aforementioned slide presentations + related overview text.

There were more than 450 million mobile Internet users worldwide in 2009, a number that is expected to more than double by the end of 2013. Driven by the popularity and affordability of mobile phones, smartphones, and other wireless devices, IDC’s Worldwide Digital Marketplace Model and Forecast (an IDC Database service) expects the number of mobile devices accessing the Internet to surpass the one billion mark over the next four years.

“The number of mobile devices with Internet access has simply exploded over the last several years,” said John Gantz, chief research officer at IDC. “With a wealth of information and services available from almost anywhere, Internet-connected mobile devices are reshaping the way we go about our personal and professional lives. With an explosion in applications for mobile devices underway, the next several years will witness another sea change in the way users interact with the Internet and further blur the lines between personal and professional.”

The most popular online activities of mobile Internet users are similar to those of other Internet users: using search engines, reading news and sports information, downloading music and videos, and sending/receiving email and instant messages. Over the next four years, IDC expects some of the fastest growing applications for mobile Internet users will be making online purchases, participating in online communities, and creating blogs. Accessing online business applications and corporate email systems will also grow rapidly as businesses move to empower their mobile workforce.

Highlights from IDC’s Worldwide Digital Marketplace Model and Forecast (an IDC Database service) include the following:

• More than 1.6 billion people – a little over a quarter of the world’s population – used the Internet in 2009. By 2013, over 2.2 billion people – more than one third of the world’s population – is expected to be using the Internet.

• More than 1.6 billion devices worldwide were used to access the Internet in 2009, including PCs, mobile phones, and online videogame consoles. By 2013, the total number of devices accessing the Internet will increase to more than 2.7 billion.

• China continues to have more Internet users than any other country, with 359 million in 2009. This number is expected to grow to 566 million by 2013. The United States had 261 million Internet users in 2009, a figure that will reach 280 million in 2013. India will have one of the fastest growing Internet populations, growing almost two-fold between 2009 and 2013.

• Presently, the United States has far more total devices connected to the Internet than any other country. China, however, is the leader in in the number of mobile online devices with almost 85 million mobile devices connected to the Internet in 2009. The number of Internet devices in India, both mobile and fixed, is expected to grow commensurate with the number of Internet users.

• Worldwide, more than 624 million Internet users will make online purchases in 2009, totaling nearly $8 trillion (both business to business and business to consumer). By 2013, worldwide eCommerce transactions will be worth more than $16 trillion.

• Worldwide spending on Internet advertising will total nearly $61 billion in 2009, which is slightly more than 10% of all ad spending across all media. This share is expected to reach almost 15%% by 2013 as Internet ad spending grows surpasses $100 billion worldwide.

Press release