Mobile Diary: successful online ads and other imaginary creatures

If you’re looking for an enjoyable read, I recommend The Ad Contrarian, a blog about all things advertising from ad industry veteran Bob Hoffman. This is a great place to read contrarian opinions about online and mobile advertising, and the tendency of advertisers and other marketing types to focus on “youth” markets instead of other demographics (who may have more money to spend).

Here’s a recent post about the lack of real data about any aspect of online advertising. I thought about this after checking out a new feature in Facebook that claims to allow you to opt out of some targeted ads on that service. FB links you to a service (still in beta) that lets you see which companies use behavioral techniques to target ads to you, and opt out of those services.

The fun part for me, especially in the context of the above article (and the related Slate piece it quotes) was visiting the web sites of a bunch of behavioral advertising companies, and seeing how they spin their services and technologies. There seem to be an awful lot of smart (or at least well-educated) people out there applying all sorts of sophisticated computer models to delivering the right ad to you at the right time, all in hopes of increasing click-through rates from negligible to almost-negligible (as I remember, one company trumpeted its success in increasing CTR to 0.42%).

I suppose that as an advertiser, you have to spend your budget on something, but it’s amazing to see how little benefit seems to come from all that analysis.

Mobile Diary: Who’s failing whom?

The word from the ad biz: Facebook is not your friend. Forrester reports that “Facebook is still failing marketers“, referring to a piece on Digiday that interviews disgruntled ad agency execs about the “failure” of Facebook to give them the reach and results they want.

One quote seemed odd, from James Del, head of Gawker’s content studio:

“Facebook may be pulling off one of the most lucrative grifts of all time; first, they convinced brands they needed to purchase all their fans and likes — even though everyone knows you can’t buy love; then, Facebook continues to charge those same brands money to speak to the fans they just bought.”

Hold on: if “everyone knows” you can’t buy love, why did a bunch of brands buy fans and likes in the first place? Sure, Facebook wanted them to do that, but why would experienced marketing and advertising professionals believe a bunch of kids from northern California?

Dear Facebook: show me the money!

The cover story in the latest Technology Review, “What Facebook Knows,” provides a glimpse into the work of Facebook’s “Data Science Team,” a crack group of software and social science experts who are mining the enormous pool of data that the service has collected, in search of “insights that they hope will advance Facebook’s business and social science at large.” Even though the article focuses on the science side of Facebook, it can’t escape the business side, returning at the end to the challenge the company faces to generate “new sources of income to meet investors’ expectations.”

If current analyses are correct, Facebook won’t be able to generate the profits it needs from advertising alone. The ad business is constrained by members using Facebook from mobile devices. They have less patience to be interrupted by ads and less space on which to see them. The business may also be constrained by regulators (and members) who see Facebook’s need for more personal data as an invasion of privacy.

The Tech Review article, however, hints at another business model that could offer a way around these constraints:

[Greylock Partners scientist DJ] Patil points out that Facebook could become a data source in its own right, selling access to information compiled from the actions of its users. Such information, he says, could be the basis for almost any kind of business, such as online dating or charts of popular music. Assuming Facebook can take this step without upsetting users and regulators, it could be lucrative.

Traditional consumer surveys are expensive, and as the Pew Research Center found, becoming more difficult to conduct, leading to even more expense and less accurate results. It makes perfect sense for Facebook to offer their data as a better (and cheaper?) alternative to telephone polls and other traditional methods.

But what to do about the users and regulators? Here’s a suggestion: if you want to sell my data, give me a piece of the action. Facebook already treats its members as “the product being sold,” so why not take the next logical step and include us in the value chain? Facebook annoys members and regulators, I think, because of its secrecy and unclear policies, and not the data collection and sharing itself. Here’s a chance for Facebook to come clean, and present a clear commercial proposition to members: you give us permission to sell your info, and we’ll give you cash.

This idea is not really new. Consumer research companies already pay people in the US and other industrialized countries to participate in focus groups and other studies. Jana recruits thousands of consumers with mobile phones in developing countries to participate in surveys and marketing campaigns, in exchange for mobile minutes and coupons. Why should Facebook be any different?

What do you think? Would you agree to share more on Facebook and get paid for it? Or could this turn you off to the service completely?

Can’t resist writing about Facebook: Mobile is as mobile does

Alongside all of the media excitement about today’s Facebook IPO, there is plenty of concern about the company’s ability to deliver profits that will justify its new valuation, especially as more of its eyeballs are coming from mobile devices instead of desktop computers. Facebook itself identified this risk in its SEC filing, noting that its mobile software currently generates no “meaningful revenue.”

The challenge of mobile devices to the Facebook revenue model is clear. At the simplest level, mobile device screens are just smaller than desktop screens, which means it’s harder to show ads to users on a web site without blocking their view of their friends’ updates. In addition, the Facebook mobile app for iPhone, according to Bloomberg’s Tech Blog, doesn’t show any ads at all, meaning even less money for Mr. Zuckerberg and his new eager shareholders.

I don’t think this is a case of Facebook not “getting” mobile, as Nick Bilton from the New York Times recently concluded. Facebook clearly “gets” mobile technology, and has famously developed a flexible and efficient strategy for delivering the Facebook experience on the web to almost every mobile device on the planet. What they (and many other companies) haven’t “got” yet is how to make money from mobile technology.

As we learned in the last tech bubble, it’s surprisingly hard to turn eyeballs into cash. For example, there’s this suggestion from ReadWriteMobile, for “location-aware push notification based on your interest graph”:

For instance, I like sports, I am passing a sports bar that is offering happy-hour specials, I get a push notification. Facebook makes money, the location makes money, I get beer. Everyone is happy. 

Of course (as someone close to me has observed), the sports bar could just put a sign in the window advertising the happy hour. Much simpler (and probably cheaper).

Whatever the logic of this sort of solution, I expect to see lots of experiments like this from Zuckerberg & co. in the weeks and months to come. Should be interesting…

Mobile in the mall

I was at a mall in metro Boston recently, and was amazed by the amount of mobile and social outreach from the mall developers.

In addition to offering you a chance to make friends with your mall on Facebook, this mall has also engaged with the Shopkick app to offer even more fun and diversion while you browse the stores. I couldn’t resist, and downloaded Shopkick to see what the poster promised.

Shopkick looks to be another application of “gamification,” a terrible-sounding word which means using game-like techniques and concepts in a non-game context. In the Shopkick case, you earn points and badges for walking around the mall and into stores, which presumably increase your incentive to do more of that. From a technical perspective, Shopkick is interesting because they came up with a way to use audio signals, instead of GPS, to enable local positioning inside a building.

Back to the app. I started it up, and discovered that I had earned a “badge” for just walking into the mall:

OK, I know I’m probably the wrong demographic for this app, but really? Do shoppers really need this simplistic level of reinforcement to encourage them to go to the mall?  I thought shopping was supposed to be enjoyable on its own, and enough of a draw to get customers to the mall, without having to add additional layers of liking, following, friending, and badging.

Of course, there’s much more to gamification than this example, and many sources of more serious discussion of the subject.

I’m curious to hear from people in the mobile marketing biz about this. Am I missing some important value here?

Mobile Monday DC: post-game wrapup

We had another informative Mobile Monday DC meeting on Feb. 6, this time a session titled “Touchscreens and Touchdowns,” covering the intersection of sports and mobile technology and marketing. Thanks to our sponsors, IMRE Sports and the Georgetown U department of Sports Industry Management, we were able to use a beautiful room at Georgetown, and welcomed a good-sized crowd of GU students studying sports business.

For me, the key insight of the night was the panel’s take on the convergence of mobile, PC, and TV. I’ve always thought of convergence primarily as the availability of the same services on any screen: TV on your phone, email on your TV, etc. As panel moderator Marty Conway from IMRE described it, however, the real meaning of convergence in practice is people using multiple devices at the same time. He quoted data showing that 70% of Americans watch TV and browse the Internet at the same time (I’m certainly in that group). In the sports context, IMRE calls this converged consumer a “spectweeter,”  a fan watching the game while sharing the experience on her phone or tablet.

Joe Dupriest from the Washington Capitals described how the “spectweeter” is coming to live sports events as well, as major teams roll out WiFi networks in their arena and deliver new apps and services to fans’ mobile devices when they’re at the game.

From a mobile strategy and mobile marketing perspective, I think this presents yet another challenge to developers and marketeers when designing mobile apps and services. Not only do you need to design for limited screen space, but also for limited attention spans. That suggests a need for simpler, faster interfaces, even on devices like tablets where screen size is less of an issue.

For advertisers and those who want to monetize through advertising, “spectweeters” seem to be a very challenging customer base, who may not want to take the time to click through your ad or other attraction to see your message.

Following on what we learned this week, this is yet another thing for Mr. Zuckerberg and his pals to think about as they figure out Facebook’s mobile revenue strategy.

[Note: I’m working on a more in-depth analysis of the impact of screen size and attention time on mobile solution design. Watch this space for more info.]

photo by Monica’s Dad from flickr