As with any new marketing-focused technology, the key question is always “what is the reach?”

A new release from beacon platform company inMarket shows that beacons seem to be reaching a critical mass of addressable consumers.

Beacons
Beacons are small, BLE (Bluetooth low energy) devices that are able to connect with specific, partnered mobile apps when the smartphone comes in proximity. The beacon and the app communicate even if the app is closed and the phone is in the user’s pocket.

When the app receives a beacon signal, the app then wakes up and can provide a location-based mobile experience. This might be, for example, a welcome message when entering a store, a coupon, or a targeted mobile ad such as the examples shown below.

Millennials
Millennials are rapidly becoming the prime marketing target for many companies in the US. Although there doesn’t seem to be any consistently defined age span for Millennials, in general the group is defined as those people born between 1982 and roughly 2000.

Millennials now represent the largest generation segment of the population, having recently passed the “Baby Boomer” group. There are approximately 83 million millennials in the US, of which 41 million are women.

This 15 to 32 year old demographic is very desirable for many marketers as they both have a lot of purchasing power in their own right (and it will be increasing), but they also tend to be the trendsetters which influence the other generational segments.

Millennial Moms and Beacons
Mothers tend to be one of the preferred segments of the millennial generation.

According to Todd Dipaola, CEO and founder of inMarket, “Millennial moms have become the most coveted part of the 18-34 demo due to their leadership role in family spending. Brands know they need to reach these mobile natives on the medium they use most intimately.”

The latest study from inMarket shows that 38% of millennial moms are currently using mobile apps and “are reachable via beacon proximity engagements in stores every month.”

For all the women in the millennial generation, the reach of beacon technology is about 20%, significantly less than for mothers.

38% is quite an impressive figure given the newness of beacons, and it may be a good predictor of future potential. However, there are still some open questions as reach does not necessarily guarantee that these millennial moms are actually buying more as a result. Some case studies have shown strong increases in factors such as purchase intent or brand awareness which are very encouraging, though we will keep watching for reports of effects on actual sales.

However, these same consumers have not yet become comfortable with storing their card data in mobile apps. Concern about security of the apps has greatly limited their uptake.

The survey contacted 2,000 adults in the UK, and found that only 14% of them are making mobile purchases using card data stored in their phone.

Almost one third of the respondents who don’t use apps to purchase stated that they are worried about the possibility that their personal details might be stolen.

Mobile and tablet based transactions are expected to exceed 70 billion this year. Consumers cite convenience and speed as major factors for using mobile. As concerns about security diminish, the industry is expecting mobile transactions to grow rapidly, with projections of almost 200 billion by 2019.

Spiros Theodossiou, VP product management at Skrill said, “Over time, consumers have become comfortable paying for goods online… However, they are still on a journey to accepting in-app purchasing as a regular channel for buying goods and services.”

“With significant developments including major wearable technology announcements, public transport going contactless and some major players coming into mobile payments, the way we pay is changing. For this to occur, businesses will need to demonstrate the ease of use these apps offer in order to reassure users that they offer a safe way to pay and guide them along this new payment trend as it grows in popularity.”

Now new research has shown that mobile has truly reached the “tipping point” for mobile commerce in the UK, with over 50% of traffic to retail sites coming from mobile devices.

And what’s more, over 1/3 of all online purchases are now made over mobile as well!

The study ran from May through July 2014, and was based upon information from some 40 retailers, including Addict, Airport Parking & Hotels, B&Q, Bank, Blacks, Brora, Cartridge People, Clarks, Crocus, Debenhams, Deckers, Dune, Dunelm Mill, Freeman Grattan Holdings (Freemans, Grattan, Look Again, Kaleidoscope, Curvissa, Swimear365, Witt International UK), Get The Label, Hobbs, Home & Cook, JD Sports, John Lewis, LK Bennett, M and M Direct, Marks & Spencer, Matalan, Millets, Moss Bros, New Look, Philip Kingsley, Schuh, Scott, Silentnight, Size, Sparkling Strawberry, Super GA, The Body Shop, The White Company & This is Pulp.

Overall, 52% of the traffic to retail sites came from a mobile device, either a smartphone or a tablet. Tina Spooner, chief information officer at IMRG commented “considering that as recently as 2010 mobile visits to e-retail sites accounted for less than 3 per cent of traffic, this latest milestone represents staggering growth of 2,000 per cent over the past four years.”

In addition, the study found that over 1/3 (36%) of online purchases were made over mobile. For retailers in clothing and apparel, the figure was over 40%.

With the total UK online sales reaching just over £24 billion (about US$40 billion) for the months May, June, and July, sales using smartphones and tablets was over £8 billion.

One of the most interesting findings was that about 80% of the mobile sales were using tablets, and only 20% were with smartphones, indicating that customers still value larger screens.

Mark Lewis, Online Director at John Lewis, said: “Today, over half of the traffic to johnlewis.com comes from mobile and tablet devices and we’ve also seen an increase in the conversion rate of traffic to sales… customers want to be able to shop seamlessly across all channels and mobile is now the go-to choice alongside visiting our shops.”

Gareth Jones, group retail and strategy director at Shop Direct, said: “As a device, the smartphone is the fastest growing sales channel for us, highlighting our customers’ growing confidence in transacting on their phones.”

It’s no secret that Facebook is a digital advertising behemoth. eMarketer predicts Facebook will serve over 21% of all mobile ads this year, which earns Facebook the number two spot in all digital ad sales, second only to Google.

That being said, Facebook “buy now” ads simply won’t work. Here’s why.
Industry Opinion by David Rekuc, Ripen eCommerce

For most eCommerce sites, a great ad is made up of three key components:
1. The product(s) sold in the ad appeals to its target audience.
2. The audience has the means to buy the item.
3. The ad is shown at a time when the audience is ready to buy.

Advertising on Facebook Marketplace falls short here because retailers cannot target users based on a signal of their intent to buy. In recent years, advertising has improved with Facebook Ad Exchange (FBX), where retailers can target users who have already been to their site but did not complete a purchase. Unfortunately, there is no indication that the “buy now” button will be offered through FBX.

On the other hand, Google’s ads are inherently more valuable to eCommerce sites because searching for a product indicates a consumer is ready (or almost ready) to purchase an item. Google ads pass all three of the criteria above – and they don’t require a third party ad unit to support the transaction.

Unless Facebook plans to integrate the new button into its Ad Exchange, the “buy now” feature will not reach potential customers when they are ready to shop. This means the “buy now” button will only ever be useful for impulse products, which only make up a small fraction of the eCommerce industry. Without retargeting capabilities, the efficacy of the “buy now” button will always lag behind eCommerce ads on Google and FBX.

For what it’s worth, Twitter’s plan to incorporate eCommerce advertising also fails to target consumers when they are ready to buy. However, Twitter ads are new and exciting; they don’t suffer the same negative perception as ads on Facebook. Consumers may be more willing to give them a shot and retailers more willing to wait for a reasonable ROI.

David Rekuc (@DaveRekuc) is the marketing director at Ripen eCommerce, a full-service agency that specializes in building custom solutions for online retailers. For more information, visit www.ripenecommerce.com.

Now a new trend has been identified – “Web-rooming”. This is the exact opposite of show-rooming, and in fact appears to be more popular.

This infographic explains the phenomenon, and suggests the best ways for retailers to take advantage of this situation.

According to AdWeek, “Showrooming describes consumers who price shop online after visiting physical stores. Webrooming refers to the process of researching products online and then visiting a store to make a purchase.”

A recent study from Merchant Warehouse, in the 18 to 36 year-old demographic, 50 percent of smartphone owners have actively show-roomed. However, a much larger percentage, 69%, have web-roomed.

This can have serious implications for retailers. For example, price matching is a growing service offered by retailers, and over 1/3 of smartphone owners report that they have requested this. In addition, easy returns and the ability to touch and try the product are other strengths that saavy retailers can capitalize on.

Brick-and-mortar retailers can capitalize on this growing trend by focusing on what motivates consumers to choose webrooming in the first place. When shoppers were asked why they would search for items online prior to making a store purchase, the responses varied. Approximately 47 percent wanted to avoid shipping costs, 23 percent didn’t want to wait for delivery of the items, and 42 percent wanted to check product availability.

Chris Wuhrer, SVP of strategic initiatives and product marketing at Merchant Warehouse, believes that more stores will take the lead of Best Buy and Sears in creating apps that will allow shoppers to price compare in stores, and then beat any prices that are better than their own. On the other hand, “some consumers are less price sensitive and they’ll pay more when they can return [merchandise locally], particularly high-priced items and apparel.”

[original source: Merchant Warehouse]

Payment is often seen as a difficult step in commerce, so in recent years a lot of effort has been going into finding new and better ways to allow customers to pay.

Now PayPal and Starbucks are piloting a new payment scheme that may be the easiest ever, and it is based around the new Gear 2 smartwatch from Samsung.

The transaction is very simple from the customer’s perspective, and consists of the following steps:

Notice that this transaction did not require a wallet, a card, any cash, or even the need to remove a mobile phone from your pocket. And there is added security because the barista sees an image of the person that is authorized to use that specific device for payment.

The pilot is taking place within the Starbucks store on the PayPal campus in San Jose, California, so clearly it is a very pilot-friendly location. However, it is good to see companies trying out new approaches to payments.

PayPal has not indicated any time frame when this might be rolled out to the world in general, but PayPal senior PR manager Kathy Chui has said that “overall, PayPal employees that have used Beacon and/or Samsung Gear 2 smartwatch have loved their experience and are excited for the larger rollout.”

One company that is doing just this is Monitise, a company that began in mobile banking, but now has grown to support mobile payments and mobile commerce. And soon, Monitise intends to turn banks in a “media channel”.

Starting with Mobile banking

Monitise’s core business has been in working with banks to implement mobile banking. Mobile banking is essentially using a mobile device to access a normal bank account, and execute normal banking transactions.

The most popular of these services is usually checking an account balance, but most banks will also offer many other services such as transferring money between accounts, notifications if a charge is made to a credit card, help finding the nearest ATM or branch, etc.

Mobile banking is seen as critical to many banks as a way to appeal to a younger demographic, and also to reduce certain operating costs in the branches. The graphic shows the strong age related penetration of mobile banking in the US.

Monitise has never been a consumer brand, they are a “B2B2C” company, providing the infrastructure and services that banks launch under their own name. Over the past several years many, many banks have begun offering mobile banking services, and this has been a key driver for Monitise’s growth. Currently they work with over 350 banks, there are over 28 million customers that use their services, and something over $70 billion is transacted each year.

Although overall the uptake has been very good, according the Richard there are still a number of “vanity projects” in the market, where the mobile app was designed to look pretty, but not enough focus was given to customer functionality and marketing. So while these banks can now say that they provide mobile banking, their usage has not been great.

On the other hand, banks who have taken it seriously have seen great results. “The ones that have done it right are able to close branches, are tapping new customers, and are building much deeper relations with existing customers”, commented Richard.

In fact, certain banks have now reached a key threshold, where more transactions are happening over mobile than over the standard online banking channel. This despite the fact that internet banking has been offered for much longer and usually has a higher the penetration in the customer base. The reason is that the level of mobile interaction is so high – often 30, 40, or 50 times per month – and so the volumes are huge.

From Mobile banking to payments and commerce

As the industry developed, Monitise realized that they were in a good position to offer additional, related services to the market. So they expanded from mobile banking to supporting mobile payments, and then mobile commerce. Now their corporate slogan is “Bank Anywhere; Pay Anyone; Buy Anything”.

Looking more closely at their products, Richard explained that there are in fact 2 fundamental things that the company provides to clients.

First is a cloud-based software platform. This provides the business logic for all the various types of transactions, which include not only banking transactions, but also customer card registration, location-based offers, P2P payments, NFC payments, QR codes, client management, etc.

The second main part of the offer is the connectivity to a wide range of financial institutions and other key players in the eco-system. These might be for example card clearing networks, ACH gateways, mobile airtime top-up aggregators, cinema ticket providers, etc.

This approach allows the company to remain agnostic about the particular payment method or technology selected by a bank for a service – for example ACH vs. Visa, or QR code vs. NFC. It also means that a client can add new features relatively easily – for example adding air time top-up to a banking app can be done with minimal new development.

Their business model is primarily recurring, volume-driven license fees and revenue share. Richard points out that Monitise is not built around disintermediating companies in the financial eco-system. Rather, he says, “we are all about lubricating the existing infrastructure, securely, into the mobile world”.

Banks as a media channel

Monitise believes that the popularity of mobile banking has now reached the point where banks could in fact become effective media channels. And there are some reasons to think this might be right.

In most countries, according to Richard, mobile banking apps rate consistently among the “Top 10” most popular apps. Mobile banking customers typically use their app every day, and often up to twice a day. In addition, banks have collected a lot of data about the users.

So combining the popularity of the apps, the high level of customer engagement with the app, and the presence of lots of personalized data, it seems a reasonable conclusion that that banks could monitise this situation by acting as a media channel and including additional offers to their customers.

Richard is quick to point out that the offers would have to be very relevant to the ongoing bank activity. “You wouldn’t want to check your bank balance, then do a funds transfer, and then see an advertisement for socks,” he says. But carefully selected offers, aligned with the customers interests might do quite well, and eventually the banking app would evolve into a trusted place for commerce.

And Monitise has some research to back up this supposition. They recently published a white paper titled M-Commerce: Building the Revenue Opportunity for Banks. Data from the study showed that customers are much more confident if m-commerce is provide by their bank, as shown below.

In addition, consumers said they would be willing to make higher value purchases if they were brought by the bank. [note: to get the full study, see the download link at the bottom of this article.]

To help encourage this evolution, Richard explained that Monitise is pursuing two complimentary strategies.

First, they are helping their banking, telco, and retail partners to generate more even more eyeballs through creating high engagement applications. To this end, last year Monitise acquired mobile agency Grapple, which has now been branded Monitise Create. And earlier this year they acquired Istanbul-based Pozitron, a leading developer of mobile banking apps.

These firms are charged not only with building apps for clients, but also with developing “best practices” that lead to improved customer engagement, through innovations in design, user interface, and the overall customer journey.

The second part of the strategy relates to the commercial offers. Richard explains that, “We are actively working with our clients to help them bring relevant commercial content to their users. We believe this is a great way to help nudge the proposition along.”

The future of payments

Monitise believes that mobile payments will continue to be an area of great innovation and competitive growth. “Ten years ago, payments was usually viewed simply as an operational function of a company. Now, people are viewing payments as a real competitive weapon. These days we are seeing a full-on battle for how mobile commerce is going to develop.”

In terms of what consumers should expect, Richard believes that payments will become more ‘invisible’, and the market will need to coalesce around just a couple of mobile payment options.

“Commerce is moving to mobile at lightening speed, but it is still very fragmented. In the long term, you don’t want consumers walking into a shop thinking ‘In this store do I tap my phone? Or will my phone vibrate? Or do I scan something? Or do I need to log in to an app?’ That’s not a good situation, and things will have to become more standardized for consumers.”

The industry itself will also continue to change and grow at a rapid rate, but the opportunities are very big. “We know that disruptive companies will continue to bring out disruptive new services – the question is whether the incumbents can react quickly enough to keep their place at the table. We expect that the next major company to emerge in the internet space (i.e. like a Google or a Facebook) will be a company that finds the right way to combine payments, with some m-commerce, with CRM, with big data, plus social consumer engagement.”

]]> http://www.mobiadnews.com/?p=6492 Mon, 07 Apr 2014 18:34:40 +0000 http://www.mobiadnews.com/?p=6492 One of the top objectives of advertisers has always been to increase the relevance of a particular ad to the specific consumer who is receiving the ad.

Zample is a new start-up that is helping brands increase the relevance of their advertising by listening to – and automatically recognizing – the media which surrounds a consumer. This information can have great value for mobile app publishers, and may spawn some interesting new marketing services.

How it works

For over a year now, Zample’s servers have been “listening” to many many TV shows, movies, songs, etc in order to build up their media database. Here’s how their system would work from the viewpoint of an app developer:

At a macro level, a publisher could learn a lot about their user base, for example the “Top 5” TV shows that have been watched by their users, or the “Top 5” TV networks, or the “Top 5” ads that have been seen. In other words, it’s a bit like having a private Nielsen system monitoring the media habits of the app’s userbase.

This sort of information can be very beneficial for publishers, as it lets them provide better audience profile data to prospective advertisers, and therefore can increase the value of their ad inventory.

Images too

The Zample system has also been designed to work with images, and there is a separate image SDK available to app and web developers.

This lets them analyze the images contained in any app that features an image feed, for example Twitter.

More to come…

The Zample service is still very young, and one can see there are a number of additional ways they might exploit this technology.

In the simplest case, the same system with a somewhat more sophisticated backend could allow for more individual targeting as well. For example, a brand could request: “display this ad only to the subset of users that usually watch Monday Night Football.”

Another option would be to support actual time-synchronizing of advertising with consumer activities. This would enable an advertiser to request, for example: “display this ad, but only at the moment when the consumer is actually watching Monday Night Football.” There are certainly some potential consumer privacy concerns that may have to be addressed with this, but the company is aware of them and seems to be working to avoid any of these issues.

Zample might also be incorporated with some app primarily for “content discovery”, where the user them self wants to know the identity of a particular show or song, perhaps linked to an m-commerce site to purchase it.

Finally, if Zample becomes widely adopted, there would be the possibility of providing information back to the brands. They would be able to provide information about the profile of the people who hear their ads, for example what media they consume, what apps they use, what other ads they are exposed to, etc.

Additional monitization options such as these will certainly take some work and undoubtably there will be hurdles to overcome. However, given a fundamental media recognition technology such as this plus a detailed knowledge of the advertising ecosystem, and combined with an open, developer-friendly approach to productization and monitization, I’m sure over the next couple of years we’ll see some interesting new services coming from Zample.

For more information about Zample, or to download the SDK, visit zample.com.

A recent study has shown that, compared with older generations, the buying habits of Millennials are significantly more influenced by their friends’ social media activities.

According to a poll conducted by Harris Interactive for the Webby Awards 68% of 18 to 34 years old social media users surveyed were at least somewhat more likely to purchase an item after seeing a friend’s post about the item.

Not surprisingly, on the opposite side of the scale were the users over 65 years old. 78% of this group answered that they were not at all likely to make a purchase based on post made by friends on their social media accounts.

Income level did not seem to have a strong correlation to the effect of social media, although those people whose household income was between $75,000 to $100,000 were more likely to be influenced by friends posts.

A somewhat more surprising result is that people in households with children said they were much more likely to be effected by social media.

Another key breakdown relates to gender.

The study found that women are much more likely to share their thoughts and feelings about a product or service. And this is consistently true for all age groups.

For example the youngest group, 18 to 34 years old, just over 50% of the women indicated they would share their thoughts at least sometimes. For men of the same age, 61% said they rarely or never would share information.

In the older groups, the percentage of “sharers” went down for both genders, but women were still more likely to share. For example, in the 55 to 64 year old group, only 30% of women would share at least sometimes, but 91% of the men said they rarely or never shared their views.

A recent study by Yesmail interactive has shown that the percentage of consumers interacting with email exclusively on mobile devices is now over half (52%), and the growth rate of mobile generated orders is triple that for desktop PC’s.

The study, which analyzed 6.4 billion e-mails sent during Q4 2013 across several different industries, also found that the number of mobile orders went up by 58%. This compares with desktop order growth of 29%, clearly showing that mobile orders are rapidly gaining in importance.

Within the mobile orders, tablets dominated. According to the study, almost 60% of the mobile orders were in fact coming from consumers using tablet devices.

“In quarters past, marketers have been embracing mobile as a variable in the consumer journey. Now, mobile should be marketers’ primary focus,” said Michael Fisher, president of Yes Lifecycle Marketing. “The increase in mobile sales indicates that consumers are not only more comfortable with mobile, but more comfortable with immediately acting on emails opened on a mobile device.”

One interesting sidelight is that “hybrid” viewing of emails is dropping rapidly. This is the scenario, for example, where an email is opened once on a mobile device, and then again later on a desktop PC. The number of hybrid email viewers dropped by almost 40% from the previous quarter, and is now very small.