Archive for February, 2010

Apple Sets Out to Reinvent Mobile Ads

In Wake of Quattro Deal, CEO Jobs Looks to Make Mobile Ads ‘Suck’ Less

NEW YORK ( — With the iPhone, Apple changed the face of mobile devices. Can it do the same for mobile advertising?

CEO Steve Jobs is reported to have said, “Mobile ads suck,” and in the wake of its purchase of mobile ad network Quattro, all signs point to Apple exerting its considerable clout on the mobile web to make the ads, well, better. “Static banners aren’t very Apple,” said Krishna Subramanian, co-founder of mobile ad exchange Mobclix.

But one question is reverberating around the industry: Will Apple use its dominance to squeeze out other so-called premium ad providers?

Taking control
Last week Apple showed it won’t be shy about setting new standards. In a blog post, the company warned developers that it will reject apps that serve users location-targeted ads. “If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user’s location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store,” the post said.

Location-based ads are often the most attractive for advertisers looking to drive foot traffic into stores. “If I’m looking at my phone, I want to see an ad for the restaurant around the corner, not for something without context,” said Michael Becker, Mobile Marketing Association’s managing director, North America. “Situational relevance for mobile users — and for marketers — is essential.”

Apple claims the controversial post was only intended to protect user experience. Regardless, to some, this move looks like a preview of what Apple has planned for its new ad network. It has been building out a global sales team, and Quattro CEO Andy Miller is Apple’s first VP-mobile advertising, reporting directly to Mr. Jobs. It’s the first time Apple has been in the ad business, and this move indicates how seriously the Cupertino, Calif.-based company takes it.

“Clearly, Apple is going to do everything it can to redefine mobile advertising,” said Eric Litman, chairman-CEO of ad network Medialets, who also said he sees merit in Apple’s defense of users in its location-based ad restriction. “Obviously they’re going to want to leverage unique capabilities of their device as an advantage to them and not their competitors.”

Restricting competition?
How would that happen? Since all applications must go through a stringent approval process before hitting the App Store, Apple could reject apps with non-Quattro ad network code. But restricting outside ad networks would also mean cutting into developers’ profits, because many already partner with multiple networks to monetize their apps.

It is also likely that Apple will integrate Quattro into its software development kit, giving developers a default ad network that’s built into the app toolbox. With an already embedded ad network, developers would have an automatic revenue stream on approved apps, and would then have to contract networks beyond, or instead of, Quattro.

The iPhone claims about 25% U.S. smartphone market share as of December, according to ComScore. An Apple spokeswoman declined to speak directly about plans for Quattro or Apple’s position on mobile advertising.

Apple has cast the deal as a way to make money for the developers whose apps have made the iPhone popular. Right now, Apple reaps 30% from music and paid app downloads and, like the existing mobile ad network model, could take a fee for passing ad sales on to developers.

Redefining mobile ads
Developers could also stand to benefit from Apple meddling in mobile ad formats — better ads could mean better results, happier clients and, eventually, more money. With Apple’s characteristic design and usability expertise, it could reinvigorate the ad category so mobile doesn’t get stuck in the same banner doldrums as its interactive predecessor, online advertising.

“There’s no doubt that Apple will add functionality around advertising,” said Mike Sanford, president-CEO FlipSide 5, a developer whose apps, including Touch Hockey, have been downloaded 26 million times.

Mr. Sanford said the current purchasing experience on iPhones is clunky. But with a mobile ad network backed up to the phone’s operating system and the almighty iTunes, Apple could work some of those kinks could out. Imagine ads that click-to-buy to iTunes, a purchase platform consumers already use and trust with their credit card information.

“People might be hesitant to tap credit card information into their phone,” said Mobclix co-founder Sunil Verma, citing the ESPN’s app. “But they’re already used to buying games on iTunes.”

By Kunur Patel

New Gmail Channel Pits Google Against Facebook

Google Inc. opened a new social hub in its e-mail service on Tuesday, leaving little doubt that the Internet search leader is girding for a face-off with Facebook.

The new Gmail channel, called Google Buzz, includes many of the features that have turned Facebook into the Web’s top spot for fraternizing with friends and family.

It comes less than a week after Facebook made changes of its own. Among other things, Facebook now shows a list of friends available for chatting on the left side of the page, similar to where Gmail now displays its chat feature.

The Google Buzz features won’t reach all of Gmail’s estimated 176 million users worldwide for several more days. A link to the service will appear on the top left of the page, in a prominent position just under Gmail’s inbox tab.

Like Facebook, Google Buzz will let Gmail users post updates about what they are doing or thinking and share those with the rest of the world or with only a select group of people. Gmail users also will be able to track other people’s updates and instantly comment on them for everyone else in the social circle to see.

And, just like Facebook, Google Buzz can serve as a showcase for video, photos and Web links to interesting stories.

Google Buzz also shows similarities with Twitter, an online communications tool that broadcasts messages of up to 140 characters. A mobile phone application of Google Buzz is particularly Twitter-like: It allows people to see the public updates of other people in the same vicinity.

Some of Google Buzz’s features mirror social tools already available in instant-messaging services and other Web-based e-mail, including Yahoo Inc.‘s. Google Chat, which is incorporated into Gmail, already has limited ability to display status updates.

Google launched a social network called Orkut six years ago, just a few weeks before Facebook began in a Harvard dorm room, but Orkut has gained little traction outside of Brazil. Meanwhile, Facebook has emerged as a cultural phenomenon with more than 400 million users worldwide.

Google co-founder Sergey Brin seemed confident that Google Buzz will enjoy broader success.

“Every couple years something new and revolutionary emerges and thanks to the Internet it can really emerge very quickly and affect many people in a short period of time,” Brin said. “I certainly hope that trend will continue and I hope we will make our own contribution with this set of capabilities.”

Without mentioning Facebook specifically, other Google executives predicted the new service will do a better job of sifting through the clutter of personal updates to pull up the ones most likely to pique each individual user’s interest.

Although Google remains far more powerful, Facebook poses a threat because much of the personal information shared on the site remains boxed in a “walled garden” that can’t be indexed by search engines.

And Facebook has become a more alluring marketing magnet as more people spend more time there. That status threatens to siphon revenue from Google, which makes virtually all of its money from advertising.

Facebook had little to say about Google Buzz on Tuesday. “Generally, we’re supportive of technologies that help make the Web more social and the world more open and are interested to see how Google Buzz progresses over time,” the company said in a statement.

Facebook also declined Tuesday to comment on a report by the blog TechCrunch that Facebook is developing a new e-mail service, which would encroach on Gmail and other Web-based e-mail services.

The rivalry between Facebook and Google has been heating up since Facebook sold a 1.6 percent stake to Microsoft Corp. in 2007. Facebook stirred things up further by luring a Google advertising executive, Sheryl Sandberg, to become its chief operating officer.

By The Associated Press

Is Twitter the Next Second Life?

If you’re a marketer who has steered clear of Twitter, your (non)strategy may be paying off! It’s possible that this Twitter thing may just take care of itself.

In the middle of last year, Twitter’s growth slowed from 7.8 million new users a month to 6.2 million, according to a recent study from RJ Metrics. That report also found that only 17 percent of Twitter users updated their accounts in December — an all-time low. An earlier study by the Nielsen Co. revealed 60 percent of Twitter users do not return from one month to the next. Taking that into account, it’s tempting to conclude that Twitter is following in the footsteps of another social-media ghost town, Second Life.

In fairness, the raw data may be deceptive. Twitter’s proponents argue that its numbers appear low because so many people access Twitter via ways other than its Web site. But some marketers are ready to write the microblogging service off. “I’m not a big fan of Twitter,” says Joel Ewanick, group vp of marketing for Hyundai. “My Twitter meter has gone down.” Ewanick says he finds Facebook, which has copied most of Twitter’s best features, to be a superior platform. “[Twitter has] become the butt of a joke. You start seeing in popular culture people making fun of Twitter.” Geoff Cottrill, CMO for Converse, seconded that.

“Twitter is a little bit overrated,” he says. “There will be a new media toy that will replace it in a year or two.” Meanwhile, according to VentureBlog, Procter & Gamble execs recently told venture capitalists that they didn’t think Twitter was “particularly relevant to what they’re doing on the brand-building and advertising side” and that “they do not believe that Twitter will ever approach what they get out of a Google or Facebook.” (A P&G rep declined comment on the report.)

Like Second Life, Twitter has become a wasteland for brands. Verizon, a company that spent more than $1 billion on advertising in 2009, has around 5,000 followers — about 0.3 percent the amount that Perez Hilton has. Coca-Cola has 15,000. Apple’s not even on Twitter. And some corporate Twitter accounts suffer from prolonged neglect. Delta Airlines’ Twitter page went from June 17 to Dec. 22 last year without a single update. Delta reps could not be reached for comment.

Sienna Farris, director of social media marketing strategy for New York agency Strawberry Frog, says that Twitter isn’t for everyone. Farris, like other experts contacted for this article, says that all marketers should be mining the real-time mentions of their brands on Twitter, but otherwise, there are just a few areas where Twitter makes sense for marketers — customer relations management, the hawking of deals and as a vehicle for promotions. (Twitter also seems to be a great venue for smaller, lesser-known brands.)

When it comes to Twitter’s success among large brands, Dell is the exception that proves the rule. The PC maker not only has a large following on the platform, but also has some ROI to show as well. The brand claimed $6.5 million in Twitter revenues in 2009. About half of that came from @DellOutlet, a Twitter account dedicated to announcing deals at the company’s factory outlet (the rest of the revenues come from international Twitter accounts). Richard Binhammer, senior manager of corporate affairs better known by his Twitter name “RichardatDELL,” says that with its permission-based, real-time nature, Twitter makes sense for that brand. “At Dell Outlet, we don’t know what our inventory’s going to be from day one to day two,” says Binhammer. “It’s pretty unpredictable. It’s an outlet store, so it’s open-box specials.” @DellOutlet, at this writing, has close to 1.6 million followers.

@DellOutlet is actually one of dozens of Dell Twitter accounts. Some of those are dedicated to customer service, which raises the question: Is this CRM or PR? Binhammer says that’s irrelevant. The real goal, he maintains, is reaching consumers: “It’s not about us launching a customer support channel, and that channel happens to be Twitter. What happens is, we go wherever our customers are on the Web. Some of our customers happen to be on Twitter. Where they are is where we need to go.”

Dell’s success didn’t go unnoticed. Comcast, which suffered the same kind of blog-based complaints over customer service as Dell has, now operates a successful Twitter CRM program. In July, Best Buy also launched Twelpforce, a Twitter-based customer-relations management plan that was meant to blur the lines between customer service and marketing, according to company CMO Barry Judge. “Clearly, Twelpforce has the potential to be a resource for our customers in helping them do the things they aspire to with technology,” Judge wrote on his blog. “Secondly, I think Twelpforce can be a catalyst to think very differently across our company about customer service. No longer do we need to passively wait in our channels for people to come to us. With Twelpforce specifically and social media in general, we can actively seek out the conversations that increasingly are happening outside our channels.” Despite Best Buy’s commitment, though, to date the company’s Twitter page has only about 19,000 followers.

Looking at the astronomical follow rates of celebrities like Ashton Kutcher or Oprah Winfrey, it’s tempting to conclude that unless you’re peddling deals like Dell Outlet, the best strategy is to hitch your brand to a personality. That’s what Ford did with Scott Monty, a former advertising exec-turned-Twitter gadfly who is now the head of social media for Ford Motor. As a sort of living representative of Ford, Monty, who has about 37,000 followers, has appeared on the Adam Carolla Podcast and at BlogWorld Expo. “We’re getting a ton of listeners or attendees who wouldn’t think about Ford or a Ford product,” Monty says. Jim Tobin, president of Ignite Social Media, a Web 2.0 marketing consultancy, says Ford benefits greatly by the association with Monty. “He’s a Ford employee,” explains Tobin, who believes Monty has more credibility than a celebrity endorser. “Everyone knows that Tiger [Woods] is getting paid to promote whatever he’s promoting.”

But Monty appears to be an anomaly. Other brands that have tried to launch a persona on Twitter have failed to win many fans. Adam Denison, Monty’s counterpoint at Chevrolet, has 2,300 followers. Denison says the company decided in December to switch its Twitter focus to its Chevrolet account — which had about 1,600 followers at last check.

Chevrolet is having more luck on Facebook, where its official site has more than 62,000 fans. David Berkowitz, senior director of emerging media and innovation for interactive shop 360i, says anemic Twitter accounts and robust presences on Facebook will be the norm. “For some brands, just maintaining their turf [on Twitter] with the occasional update might be enough,” he says. “A bigger danger is to go in and make it clear they’re going to get involved [in Twitter] and then ignore it.” Not too many brands are doing the former these days.

For Smaller, Independent Brands, How Tweet It Is

At first blush, a greeting-card company like Hallmark would seem to have it all over an outfit like Someecards. The 99-year-old Hallmark has its own corporate campus in Kansas City, Mo., and employs 14,000 people — 700 of whom are full-time writers and artists. By contrast, Someecards has been in business less than two years. Its full-time staff numbers five — and the company president doubles as the chief writer.

But when it comes to Twitter, the profile reverses itself. Hallmark has 2,017 followers. And Someecards? Try 1.7 million. “And we’ve only been using Twitter a little over a year now,” adds CEO Duncan Mitchell.

Witness a curious dichotomy of social media: While most brands are now tweeting as a way to reach consumers, the biggest ones with the most resources are often left in the dust by the indie brands with a fraction of their market share.

There are several theories behind this twist. To be effective, marketers say, tweets don’t just have to be brief, but cool and snarky as well — two traits that seldom come easy to a buttoned-up, publicly traded corporation. Another reason is that upstart brands are more readily associated with entrepreneurial personalities, who can in turn use Twitter to convey the mood and swagger of their brands better than a large PR department. Whatever the reasons, it’s the up-and-coming brands that seem to have squeezed the most marketing juice out of Twitter.

“It gives my brand a greater reach. It helps to extend the bounds of a small business,” says Javier Alfonzo, CEO of OddFit, a custom T-shirt company based in Providence, R.I. Like many brands, OddFit tweets various special offers and new products, but Alfonzo — who has some 4,800 followers at present — takes it a step further.

“I like to use Twitter to express my creative personality,” he says. Some of his tweets feature snippets of wisdom, the likes of which OddFit will put on a T-shirt (e.g., “Until you make peace with who you are, you’ll never be content with what you have”). Others have nothing to do with T-shirts — at least literally — such as the link Alfonzo recently tweeted for an online tutorial on breast enhancement using Photoshop. Accompanying it was the line: “Here’s how they do it, girls!” (It’s tough to imagine getting a tweet like that from, say, Procter & Gamble.)

Duncan Mitchell of Someecards also sees value in sardonic content for his tweets, and the medium seems ready-made for his company. “We believe in short-form communication,” Mitchell says. “Our cards match our tweets in size.” Plus, since his business partner Brook Lundy is already writing new cards daily, “faster than we can produce a card, we can produce a tweet. It’s not a lot of extra effort to write short, snarky one-liners.”

Someecards uses shortlinking service Bitley to tweet linkbacks to the company site where visitors can see its latest cards, but the reason for its huge following is doubtless its content, which ranges from reliably funny to uniquely outrageous. (Case in point, a Jan. 21 tweet: “Reminder! Order Valentine’s Day cards and gifts by Feb. 1 for on-time delivery and a better chance of oral sex.”) This stripe of humor is possible because Twitter is an opt-in medium, so only “interested parties,” as Mitchell terms them, are going to receive his quirky one-liners.

Meanwhile, some small brands don’t boast massive followings, but nonetheless say that Twitter is a marketing lifeline — quick, targeted and (best of all) free. Russell Whitmore runs a small vintage jewelry shop in Brooklyn, N.Y., called Erie Basin. He uses Twitter to notify his 640 followers (if that number seems small, consider that diamond-giant Zales has only 471 followers) about the new estate pieces he gets in.

“I tend to tweet things that I personally like or find interesting,” Whitmore says. The feeling that a ring or brooch has been personally selected or chosen adds to the appeal of the tweet. Whitmore’s linkbacks bring followers to his blog, where they’ll find item photos that he puts a great deal of effort into. “If you post a link to a picture of something pretty, it’s likely that people will retweet the image,” Whitmore says. “So you end up getting a following from other people’s followers.”

But does any of this really generate hard revenue for a brand? Some say yes; others not quite. “We definitely have sales directly from Twitter,” Whitmore says. “Several times, Twitter users have messaged me asking to buy a specific item.” Ditto for Someecards — which generates revenues from advertising, not the sale of cards. “I am 100 percent convinced that we have won pitches for ad business that we wouldn’t have gotten without our Twitter following,” Mitchell says.

Then there’s Root, a small-batch, craft liqueur made by Philadelphia-based Art in the Age of Mechanical Reproduction. Root has only 400 Twitter followers, but they’re all “fans of the brand,” according to Web strategist Michael Feldman. “We don’t approach [tweeting] from a marketing or advertising perspective,” he says. “It’s not necessarily a numbers game for us. It’s more important to have a small, active following than a large, passive one.”

By: Todd Wasserman (Is Twitter the Next Second Life) and Robert Klara (For Smaller, Independent Brands, How Tweet It Is)