What Used to be Called Point-of-Purchase is Now Called Mobile Advertising.

It’s the ad served while you are reading the news in the morning on an e-reader that knows you’re at home and three blocks from a Starbucks.

It’s a loyalty program on your phone that, through a hotel-room sensor, sets the lights and thermostat and turns the TV to CNN when you walk in the door. It’s finding a restaurant in a strange city on a Tuesday night, discovering that a store nearby stocks the TV you’re looking for, or that a certain grocery on the way home has the cut of meat you need.

Forget Foursquare or Gowalla: Soon every website and service will be able to tell where you are, opening up the floodgates for location-based marketing and blurring the budget lines for advertisers.

“What used to be called point-of-purchase is now called mobile advertising,” said Kip Cassino, VP-research at Borrell Associates. “Mobile can be an extension of a retailer’s storefront.”

The potential of knowing when and where a consumer is — within privacy constraints, whenever those get hammered out — means thinking outside the interactive-advertising budget and dipping into other marketing disciplines’ coffers. “We’re talking about the buckets that were so nicely separated between advertising and promotions starting to fade,” Mr. Cassino said.

Some of the money will be sourced from localized print media budgets (such as the Yellow Pages), newspaper classifieds and direct mail, as location helps people find businesses and coupons; some of it will come from interactive budgets as location will tie into the ways we access the internet in the future.

New formats coming

Paul Feng, Google’s mobile-ads group product manager, said about one-third of mobile searches have local intent. To re-imagine search for phones, Google is evolving ad formats from just text and display; it recently let advertisers add phone numbers to mobile ads so consumers can click to call. Mr. Feng said to expect more new ad formats in the coming months that could potentially incorporate new types of interaction, such as navigation.

“We think of location as a hugely important signal,” said Mr. Feng. “Foursquare is really innovating for small businesses and that’s fantastic. But ultimately that’s just one piece of the opportunity.” (Microsoft’s Bing is also building out its mapping tools and expanding its local listing databases.)

Borrell, in fact, projects in its upcoming mobile report that location-based mobile spending will hit $4 billion in 2015, up from $34 million in 2009. Including ad spending with promotions, events and research, Borrell estimates mobile as a whole will dominate U.S. interactive marketing spending as soon as 2014 with 70% share, or $56 billion. While it’s difficult to imagine mobile advertising beating existing commitments to web development, banners and search, those commitments won’t be dedicated to PC browsers but increasingly to smartphones, Kindles, iPads, portable gaming devices and even cars.

“The demand for stationary computers is going to dry up on a consumer level,” Mr. Cassino said.

Outside of apps, there’s the mobile web, e-mail, text messaging and Bluetooth. Companies such as Placecast “geo-fence” retail locations and, once you opt in, blast FYIs or offers texts when you’re within a determined radius, blurring the lines between signage, couponing and mobile. In a four-month study with the American Eagle retail and Sonic restaurant chains, Placecast reported 79% of participating consumers said geo-fencing programs increased their likelihood to visit stores, and 65% made purchases during the program.

Right now, of course, given the hype machine at South by Southwest, the buzz is all about Foursquare and similar services, such as Gowalla. Its social appeal has not yet been emulated, though social giants such as Facebook and
Twitter represent a threat.

Today, one-quarter of Facebook’s 400 million users access the site through mobile devices; this set is twice as active than non-mobile users. Facebook is also expected to reveal a location-based feature in April, and Twitter released geo-tagging to developers late last year, which ties location to tweets. Facebook is an especially big contender in the mobile-location rush, with its existing scale and user base.

“From a consumer perspective, the decision is going to be made on where their friends are,” said Jeremy Lockhorn, director-emerging media, Razorfish. “The fun of being on Foursquare or Gowalla is that our friends are there. If that’s Facebook for other consumers, that’s where they’re going to go. You’re going to need some level of scale to attract dollars.”

Little Love for the Mobile Web in App-Adoring World

The love affair between marketers and mobile apps is in full bloom, but the obsession with apps and the niche market they represent is coming at the expense of the mobile web, which is exponentially bigger and starving for brand dollars.
Nearly 20% of U.S. mobile subscribers used a downloaded app in January, according to ComScore, but that audience is spread across myriad devices; no one app can reach that entire population unless it is reformatted a number of times. Yet marketers are throwing their relatively tiny mobile budgets behind iPhone apps rather than mobile websites that have the potential to get in front of more consumers.

Consider the largest app category, iPhone apps, at best only reaches 25% of smartphone users or about 11 million– a fast-growing segment that represented 42.7 million Americans in January, according to ComScore.

Compare that to nearly 200 million mobile subscribers that used a phone’s web browser on any device accessing the internet, from iPhones and BlackBerrys to Android phones. What’s more, phones will overtake PCs as the most common device to access the internet worldwide by 2013, according to a study from information-technology research company Gartner.

So why are mobile sites taking a backseat to iPhone apps? Blame the Apple aura.
Better experience

“Developers are bullish on the mobile web,” said Kyle Outlaw, experience lead at Razorfish. “But it’s hard to convince clients.” The iPhone app won its preeminence with marketers the same way it did with consumers: by presenting a user experience never before seen in mobile.

After the iPhone came along, “It wasn’t about mobile anymore; it was about the iPhone,” he said.

The case isn’t helped by the fact that mobile websites look low-rent compared to apps. Apps also win on rich media and usability vs. mobile websites. Most m-dot sites are a “low-fi” version of their wired-web counterparts, though agency folks are looking forward to the expected updates that will result in better-looking, higher-functioning mobile sites.

Apps can also use other hardware features on a phone, like its camera or compass, while mobile sites can only really tell where a user is located. Plus, with slow-load speeds, categories popular in apps, such as gaming, are not feasible on the web. Because an app runs offline, users don’t have to worry about a slow or spotty network connection.

It remains to be seen how long the iPhone app addiction will last, but the mobile web or what I call “device-agnostic” since it works on any operating system will eventually break through when the iPhone buzz dies down and the consumer can get equally rich app experiences on non-Apple operating systems. Or, if the new access to mobile web takes off…starStar abbreviated dialing codes.

App development is not easily scalable. It’s expensive and time-intensive to get apps on different phones. Not only that, more and more smartphones are coming on market and iPhone’s slice of the pie will shrink as more feature-phone users sign up for their first smart device. That fragmentation of the market will coincide with advertisers amping up their mobile presence … and marketers will have to look beyond the app to get at growing audiences on a growing number of devices.

Right now we’re in the Age of the App, but as browsers become more sophisticated, mobile websites will be on the rise and users will barely be able to tell the difference between the app experience and the browser.

Coke Is the Official Sponsor, but Pepsi Scores First on Web

Coke may be the official sponsor of the FIFA World Cup in South Africa, but Pepsi’s 2.5-minute “Oh Africa” is the first World Cup ad to make the viral chart, and portends well for Pepsi’s revamped social-media strategy.

Pepsi took a pass on the Super Bowl for the first time in 23 years in 2010, and CEO Indra Nooyi has said the company is shifting as much as a third of its marketing budget to social media. But “social” doesn’t necessarily mean “cheap.” Pepsi’s video effort is big-budget with visual effects and stars the biggest names in the game, including Lionel Messi, Thierry Henry, Frank Lampard and Didier Drogba.

Will online video help Pepsi find a way to own the World Cup without actually being in the World Cup?

First Look: How Penguin Will Reinvent Books With iPad

As the race to be be ebook format of choice hots up, Penguin is making some bold, experimental bets. These first-look demos of forthcoming books from iPad’s iBook Store, presented by Penguin Books’ CEO John Makinson in London last month, give an idea how publishers might approach Apple’s tablet…

Many of Penguin’s iPad books seem hardly to resemble “books” at all, but rather very interactive learning experiences, from its Dorling Kindersley and kids imprints – the Vampire Academy “book” is “an online community for vampire lovers” with live chat between readers, and the Paris travel guide switches to street map view when placed on a table.
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“The iPad represents the first real opportunity to create a paid distribution model that will be attractive to consumers,” an excited Makinson told FT’s Digital Media & Broadcasting Conference;The psychology of payment on tablets is different to the psychology on a PC.”

But Penguin’s thinking bigger than just the one device. Makinson said he sees ebooks hitting 10 percent of book sales next year (it’s currently four percent in the U.S. and Penguin’s ebook sales)…

“We will be embedding audio, video and streaming in to everything we do. The .epub format, which is the standard for ebooks at the present, is designed to support traditional narrative text, but not this cool stuff that we’re now talking about.

“So for the time being at least we’ll be creating a lot of our content as applications, for sale on app stores and HTML, rather than in ebooks. The definition of the book itself is up for grabs.

“We don’t know whether a video introduction will be valuable to a consumer. We will only find answers to these questions by trial and error.”
Asked if he wasn’t about to give away 30 percent of Penguin sales to Apple (as is the split with apps), Makinson told reporters, this is better than the equivalent print agency model, in which publishers let retailers keep 50 percent.
Record labels are now lamenting having given Apple so much control of their industry, but Penguin appears to be relishing trying out all these new ebook formats, seeing “the opportunity to test pricing and access to consumer data”.

Not that Makinson wouldn’t take more from Apple. “There is an argument for saying Apple needs the content, that they should be paying us for our content,” he said. But that argument hasn’t worked.

A copy of Pride And Prejucide might conceivably come with videos of Keira Knightly and Colin Firth (the movie adaptation’s cast), he said, but: “We need to understand how much the consumer will pay for that, we need to engage in dynamic pricing.

Snoop on Mobile

Rap mogul Snoop Dogg is using the mobile channel to drive sales of his CDs, DVDs and ringtones, giving away free mobile video content and wallpapers and running a sweepstakes.

The rapper’s agency Cashmere has partnered with mobile entertainment content provider Myxer to promote the upcoming release of Snoop Dogg’s CD and DVD combination More Malice, the follow-up to the Malice N Wonderland album. As part of the promotion, Snoop will use Myxer’s MobileStage product to deliver exclusive, behind-the-scenes branded mobile video content.
“Snoop Dogg was looking for an innovative way to use mobile marketing technology as well as work with a company that has a huge mobile audience,” said Steve Spiro, vice president of marketing at Myxer, Deerfield Beach, FL. “With Myxer, he was able to find both.

“Plus, for Myxer it was great to have such a prominent artist rally behind our recently introduced MobileStage, which is great for indie artists as well as artists from our other partners like EMI, Warner Music and The Orchard, to name a few,” he said.

“Snoop Dogg wanted to try something interesting and new for his upcoming release of the CD + DVD combo More Malice, so his great marketing agency, Cashmere, came up with the idea for a mobile contest whereby words were delivered along with the video, and when deciphered, it leads to an opportunity to attend the premiere screening.”

Founded in 2005, Myxer is a consumer destination for mobile entertainment and content personalization, with a catalog of ringtones, wallpapers, videos, applications and games.