Small apples could mean big change
Numbers aren’t the defining standard for excellence. Performance is. Apple’s new 3G iPhone’s opening weekend reports 1 million units sold and 10,000 downloads from the new App Store. That sounds impressive, but 1 million isn't much in the mobile device world.
With less than 1 percent of the mobile device market the iPhone should essentially be a non-blip on the mobile device radar. But it’s not. Nokia sells 10 million phones a week. That’s about what the iPhone has sold to date. What’s the difference?
The iPhone’s new features, lowered price tag, and easy availability of mobile applications have shaken up the mobile search market and raised the bar higher than any other provider.
The App Store creates a developer-friendly distribution venue. Open standards ensures good applications reach the market and aren’t choked by carrier control.
What iTunes did for music the App Store will do for mobile search. More than a cell phone, the iPhone is a social phenomenon and a new medium. Expect the iPhone to -- drive mobile application downloads like the iPod drives music downloads.
Mobile phone searches have been stuck in the early adopter phase for years, This may be just the impetus to drive both mobile search volume and advertiser interest. That will of course bring along all the things that follow - more pervasive ad networks and mobile marketing firms will develop. It’s already started. Outrider, a search marketing firm, just spun out a dedicated mobile marketing group and others are expected to follow.
Traffic growth from iPhone searches is up and comScore reports that 88 percent of iPhone owners use the mobile browser regularly, compared with 14 percent for the rest of the market.
What’s it mean?
Besides the increase in mobile and local search another element has come into play – social media and networking. Not only is the consumer looking for things to do and buy locally – they want to do it while interacting with friends (Loopt, Yelp, TWITTER etc). Look for that strong connection between mobile and local to spur application around local search.
Of course these early-stage apps will work to build an audience before moving into the monetization phases, but once they’re on the scene they’ll involve a variety of opportunities for small and large businesses to target mobile users more effectively.
Google’s mobile adjunct to AdWords online could work with mobile marketing by relying heavily on local directional advertising similar to the ads that work online.
Advertisers could target mobile users based on location, and serve text ads or mobile coupons .
Google's pattern of bundling local ad mediums such as newspapers, radio, and television with search functions works to their advantage and the iPhone could do the same. Google Co-founder Sergey Brin offered his opinion on the possibilities during the company's recent Q2 earnings call.
"I think it will be a more fluid experience for advertisers in terms of [saying] 'please run on mobile too,' or 'don't,' rather than trying to have completely separate worlds," he said. It won’t be smooth sailing. Even if rumors of a Symbian/Android merger pan out there will be some complexity in serving ads across multiple mobile platforms.
The yellow pages is also expected to make a move on the cross-channel bundling opportunities. With valuable local sales forces, directory publishers are positioned to add mobile to the evolving local marketing bundle. With print, IYP, search and video they’re a prime business to join the mobile revolution.
What’s coming
Look for more experimentation around ad tracking and reporting. Since mobile phones are after all, phones more call tracking and pay-per-call ad models are likely. Remember the focus is on social media. That’s where some yellow pages companies have an advantage with the systems they already have in place for call tracking and reporting. Ingenio, an AT&T acquisition, allows it to sell business leads to advertisers across various media. This should soon include mobile searches performed on its YPMobile, a popular application right out of the gate.
Since a mobile device is often present at a local point of purchase, we could see CPA-based promotions and trackable coupons served with mobile search results. It’s possible the mobile device could become the missing link to bridge the online/offline gap.
The industry isn’t there yet. Mobile devices have well known inventory constraints and limited screen real estate, which makes ad insertion difficult. Search volume isn't yet substantial enough to attract many local or national advertisers.
Can the iPhone and Google’s Android change this? Possibly. But it will take a couple of years or more to really get it moving.
