Search Revenue Underreported?

I attended the Forrester Marketing Forum in Orlando at the end of April. This year's Forum was vastly superior to last year's in that all topics were extremely relevant with specific case studies and highly actionable ideas.

One of the absolute best sessions was presented by Gian Fulgoni, Chairman of comScore, Inc. Based on a study they published in 2007, over 30% of Internet users delete their cookies one average 4 times a month. This is true for both 1st party cookies and 3rd party ad serving cookies. This concept becomes especially interesting in light of measuring ROI of Search Engine Marketing. According to the Search Engine Marketing Professional Organization, over the course of last year, a total of $13.5 billion dollars was spent on search marketing with nearly 90% of that total spent on paid search ads. Given the amount of money at stake, comScore's findings should be seriously considered.

ComScore partnered with Google in a 2006 study based on holiday-related purchases across 11 product categories for a period of 60 days post-search. The latter point means that they counted any purchase related to an online search that was completed within 60 days of the search. Their findings: 16% of the purchases were immediately completed online at time of search, 21% of purchases were made online within 60 days of the search (latent online purchase), and 63% of purchases were made offline within 60 days of the search (latent offline purchase).

Now if you're a pure online play like Hotwire, Amazon or Zappos, then the latent offline effect doesn't exist. It probably does, however, still hold true that the percentage of latent online purchases still exceeds that of direct online purchases.

So here's where your revenue from online search is being underreported:

(1) If you have an offline purchase channel, then the majority of your purchases directly from your customer's search are NOT being tracked nor being attributed to your search program's keywords.

(2) You are definitely not tracking the purchases of those people that delete their cookies on a regular basis therefore you're missing out on revenue from latent online purchases from these Cookie Deleters.

And speaking of cookies, not all mobile browsers support cookies. If they do, chances are high that they are not enabled to accept cookies or they are only set to accept 1st party cookies. Given that Search is the Numero-Uno mobile Internet activity, and that mobile on-line purchases are gaining traction, (a) it's a darned good safe bet that you are underreporting search revenue from your mobile channel, and (b) yes, you should be concerned about it.

What can you do about it? May I recommend that in your Search campaign ROI analysis, you include a new "pro-forma" metric which adjusts your purchases for missed latent online purchases (the deleted cookied effect), and for latent offline purchases. Since comScore's panel includes 2 million participating members, you can use their percentages in your pro-forma calculations since the sample size is large enough to statistically represent the entire population.

Making Money from Mobile TLAs

Many of you tracking the mobile marketing space are familiar with the 3-letter acronym LBS which stands for "location-based services". For those of you not fully familiar with this term, it basically boils down to the fact that your mobile device inherently knows where you are (or more accurately where it is) because that's all at the heart of the cellular communication system. Marketers and mobile app developers are feverishly capitalizing on this capability. Indeed, my most favorite iPhone widget is developed by UrbanSpoon. At the shake of my iPhone, I can get a nice suggestion of nearby places to eat.

There's a lot of great ideas around LBS and a lot of new companies springing up based on this concept. The only problem is that no one has figured out how to make much money on it. Social networking sites are the ones that have the best traction on LBS but again, none of these sites are profitable. Yes, they have lofty valuations, but unless you were asleep during the dot-com bust or still in grade school, the lesson learned is that valuations mean nothing except to the investment bankers taking their percentage cut and to the founders taking their pot of gold to the bank.


I'd like to mention another TLA (3-letter acronym)for your consideration: NFC which stands for Near Field Communication. I wrote a while back on this topic and why I believe that this technology is definitely the one to watch in the coming years. The only reason why I'm bringing it up again is that earlier this month, Visa launched the world’s first commercial mobile payments service for point-of-sale transactions using Near Field Communications technology. Citibank Singapore and Visa have announced the Citi M1 mobile Visa payWave payment pilot, the first program in Singapore where a mobile phone will double as a credit card.

The Citi Visa pilot, supported by mobile operator M1, will enable cardholders to pay for purchases using a Nokia 6212 Classic handset at more than 750 merchant locations across Singapore. Participating merchants include cafes, restaurants, book stores and retail and music shops.

Not to be outdone, MasterCard Worldwide partnering with Blaze Mobile have introduced the Blaze Mobile MasterCard PayPass, a mobile payment sticker that can be used at any of the 141,000 merchant locations that are currently equipped to accept PayPass contactless transactions. Though this program uses NFC technology, it's still "close-but-no-cigar" since its all about the sticker and not really the mobile device.

As quoted in the Mobile Marketer earlier this week, Pam Zuercher, head of product innovation for Visa, Foster City, CA says, "With 4 billion mobile devices worldwide and 80 percent of the world's population living within range of a cellular network, Visa has a significant opportunity to offer its products and services to geographies where they don't exist today, and enhance the consumer payment experience."

Having financial heavyweights such as Visa and MasterCard rolling out their pilot programs is a huge step in the right direction. What this really translates to is an acceleration of the development of the worldwide infrastructure required to support touchless commerce transactions using the mobile device as the medium of the transaction.

While smart people continue to struggle with how to monetize Location Based Services, monetizing Near Field Communication is an absolute no-brainer. How? By taking a cut off each transaction - a practice that is already happening. And it's not just banks making a bundle off skimming off the top of each transaction. Payment escrow services like Paypal (which made a whopping $2.4 billion in revenue last year) take a cut off each commerce transaction also.

California-based Vivotech is one major force leading the way in many of the NFC payment pilot programs. Their web site says that they are looking to 2010 when full commercial rollout will begin. Certainly a topic and a company to keep your eye on!

"Mr. Carrier, Tear Down That Wall!"

Jumping from the world of politics to the world of economics, I believe that wireless carriers' artificial inflation of the rates they charge for SMS messaging are causing a big drag on mobile marketing in the United States. Indeed, others share my same concern among those in the industry and those in the hallowed halls of Congress. The dirty (and very rich) little secret is that wireless carriers are double dipping on all commercial text messages. One, they are charging you, the marketer, for every text message that you send to your subscribers. Two, they are charging your subscribers for every text message that they receive from you.

If you are running an interactive messaging campaign, then the carriers are actually quadruple dipping. One: they are charging the subscriber to text a keyword to your short code. Two: they are charging you to receive the keyword. Three: they are charging you to send the response message. Four: they are charging the subscriber to receive the response. Were you also aware that carriers charge marketers one rate for inbound messages and another rate for outbound messages?

In spite of the Kool-Aid that the carriers want you to drink, remember that a whopping 45% of mobile subscribers do not have all-you-can-eat text messaging plans. If you are an iPhone owner as I am, you pay a per-month charge for unlimited text messaging on top of the per-month charge for unlimited data. AT&T ain't dumb. They know that you love text messaging! You want text messaging! You need text messaging! You can't live without text messaging! And so they can charge you anything they want because they know they can.

If you're a marketer wanting to jump into to the mobile arena, be forewarned that you are going to pay a lot! If you want your own common short code, then you'll be renting one to the tune of $50 to $100 per month. Uh, by the way....how much are you paying to rent a domain name? $30 for three years should be about right. So what justifies a common short code costing up to 120 times the cost of a domain name? One could argue that you can have unlimited domain names, but there are only 100,000 possible common short codes (assuming five digits) hence the higher cost. Sure, but I mean really...120 times the cost?

Let's talk CPM rates now. When its all said and done, you'll be paying five to ten times more CPM for text messaging than you'll be paying for email messaging. Why? An SMS message is only 160 characters long - 140 characters long for some carriers. So why costing so much? SMS messages are delivered to the hand set too. They aren't stored on the carrier's network like emails are stored on the ISP's servers. So why costing so much?

Bottom line: SMS marketing is expensive and carriers are making obscene profits off the billions of text messages being sent worldwide. Dan Butcher from the Mobile Marketer estimates that a small SMS-based campaign can run for less than $10,000, but that you'll be spending in the range of $50,000 to $100,000 for an effective two-month opt-in SMS campaign.

But it doesn't have to be so expensive. And that's my point. The technology for SMS messaging is so simple. The only reason why SMS marketing is so expensive is that carriers set non-competitive prices. I'm not a socialist so I don't believe in government price control as the solution. I believe in the free market and that ultimately the market will set the prices. How long that will take is unknown, but hope springs eternal.

I'm going to keep speaking to all mobile marketers whether they want to hear it or not: don't button-hole yourself into SMS messaging as the ONLY channel for mobile marketing. It isn't. It is one channel and a highly effective one, but it's an expensive channel. Expand your mind and remember that email marketing is also a very effective mobile marketing channel. Mobile email is a heck of a lot cheaper and it's a heck of a lot more widely adopted that you might think.


Mobile handset manufacturers get it. The latest smartphones unveiled to oohs and aaahs at the CTIA Wireless conference last week were all "messaging-enabled" phones. The HTC Snap takes messaging-enabled one step further with special email features built into the device.

SMS Messaging rates will eventually come down. They have to. But until then, don't limit yourself. Think about mobile email campaigns. They have proven ROI ten years running and the cost is within your reach.

Mobile Email: Fast Food vs. Full-in Dining

Last week, a colleague of mine shared with me an intriguing research report from QuickPlay Media about projected growth trends in mobile TV and video. The online survey of approximately 1000 U.S.-based mobile subscribers between the ages of 18 and 35 reveals some compelling new insights into the evolving viewing habits and preferences of today’s consumer. For example, according to the report, "Consumers also continue to show a preference for snacking on content instead of setting aside dedicated viewing times," with "25 percent respondents view content in between daily activities, 16 percent while in transit (i.e. on the bus, etc.) and 11 percent while waiting in line."

I really liked the term "snacking" because it clearly defines the user experience in terms from our daily lives that we understand. People "snack" on TV and video using their mobile devices while they would use their traditional media devices (i.e. TV or desktop computer) for the "full-in dining" experience.

Using the mobile device to "snack" isn't just about mobile TV, though. It's about the entire mobile Internet experience. Fast food is all about anytime and anywhere; it's about instant and convenient gratification. What do we use the mobile Internet for? Quick and instant information - in as real-time as possible. When we want the full dining experience, then we'll turn to restaurants, not to fast food. Similarly, when we want a fuller and richer Internet experience, we'll turn to our desktop computers.

The concept of fast food vs. full-in dining also can be applied to the world of email marketing in the sense that fast food is mobile-friendly email and full-in dining is desktop-friendly email. Fast food and full-in dining are two entirely different experiences each with their unique purpose and benefit that when properly done are complementary. My belief is that you would never get a full seven course gourmet meal from a drive-thru. Therefore you should never take a desktop-friendly email and simply re-purpose its content to be mobile-friendly. Fast food is all about convenience; it's purpose is to catch you right when you're in the mood. Likewise your mobile email campaigns should be designed to catch your subscribers when they're in the mood - when they are out and about - with quick and easy to fulfill calls to action. Full-in dining is all about the experience; it's purpose is to fully engage your senses on a more leisurely pace. Likewise your desktop-friendly emails should provide the richer experience for your subscribers. Here's where all your graphic and content sensibilities come to bear.

So what types of emails would you consider fast-food versus full-in dining? Leave me your comments!

Tracking Mobile Responders

I work for an interactive marketing service provider. We provide both software-as-a-service as well as strategic marketing and creative services. Not too long ago, the email marketing manager from one of our clients, a well-known retail brand, asked me about optimizing mobile emails for Blackberries. "Why Blackberries," I asked her. Apparently the corporate bosses thought it would be cool to see the emails they are sending to their subscribers within their own mobile devices.

Recently we began tracking the responses from our clients' email subscribers in a new way. Using open source information that we subsequently improved upon, we are able to identify the email clients that subscribers use at the time of opening an HTML-formatted email or when clicking a link within the email. Knowing the email client with a certain degree of confidence gives us insight into the percentage of email responders that are doing so from their mobile devices. We also know the manufacturer of these mobile devices.

In my recent data analysis, out of a total of 67 million individuals, about 1% of the subscribers are viewing their emails on a mobile device. Out of the 60 known mobile device manufacturers that we currently know about, more than 80% of the mobile responders use either an iPhone(43%), Blackberry(25%), or SonyEricsson(15%).

Mobile responders being only 1% of our population of email recipients may seem like the bottom news story of the day. But over half a million people should not be ignored - both in terms of their actions and their type of mobile device.

So, to finish up the story that I began this blog with, I advised our client that though the corporate bosses were using their corporate mobile devices, their subscribers were not. In fact, subscribers viewing this brand's emails on iPhones outnumbered the Blackberry viewers by a margin of more than two to one. My recommendation: optimize mobile emails for the device that the majority of their mobile responders were using - in this case, the iPhone.

Social Networking On the Go

It appears that social networking is now the #1 mobile web destination according to a recent research report. The data collected and published by Openwave indicate that Facebook and MySpace are the two top mobile search terms on both Google and Yahoo. The latest study from Nielsen shows that member communities and email are a close 4th and 5th place of global Internet activity (66.8% and 65.1% respectively). However, the same report shows that member community and email showed the two highest growth in 2008 (5.4% and 2.7% respectively). These two studies indicate a high convergence between the mobile and the social networking worlds.

I totally get this convergence because mobile and social are two worlds where people are choosing to spend a lot of their time now. For many people in the world, their mobile devices are the only ways that they are accessing the Internet. No wonder also that Facebook is extending their Connect API to the iPhone.

Will social networking replace email, as one headline asks? Look. Just because there are more sheep than journalists doesn't mean that sheep will be replacing journalists any time soon. Social networking and email are two different communication channels meant for different types of communication. Social Networking is all about airing your laundry in public. Email is a point-to-point communication technology therefore you would naturally chose one over the other depending upon what you want to say - and to whom you want to say it. That having been said, they are highly complementary as well. It is quite common now to receive an email whose content is so good that you'd want to share it with your friends by posting it to your social page - just like you'd share an article from a news web site.

The mobile device is growing in worldwide popularity as the launch platform of choice to the Internet. A surprisingly high percentage of Facebook and MySpace members access these sites from their mobile devices. Next to search, email is the #2 Internet activity on mobile devices. It's high time for marketers to step up and facilitate the bridging of the gap between these two mobile activities. For starters, interactive marketers - this includes email marketers and social media marketers - need to develop mobile-friendly email content that can be easily read on a mobile device and then shared (from said mobile device) to a social site. A lot of people use their mobile devices to triage their email inbox for later reading from a desktop computer. I've seen many a man sitting in the Husband's Chair at Macy's culling his inbox while waiting for the Missus to try on her forty-seven different outfits. (I know 'cause I'm there in the Husband's Chair too.) Give him meaningful and mobile-friendly content that he can immediately recognize the value of so that he can then share it with his Facebook friends. A simple and easy way to extend your brand.

If you want to know more about great social networking strategies, go visit my colleague's blog on Blogspot.

Do you have a favorite social site that isn't Facebook? Let me know what it is and what you like about it.

Mobile Marketing in a Recession

For those of you who've just recently returned from the "Lost" island, we are in a global economic cool-down. An interesting shift in consumer behavior has started and analysis of this change is starting to make its rounds in the press. According to a recent article in USA Today, online searches that include value words such as "coupons" rose 161% in December versus 2007. Google says that ad spending on value-related words such as coupons rose 30% in the fourth quarter over the same period a year earlier.

Comscore (cited in the USA Today article) also notes that online coupon sites are the number two most important online sites (next to search engines, of course) to consumers when shopping in the past 3 months. Slightly over 50% of consumers say they are using coupons more often due to the hardened economic times.

Maybe it's because of the way I was raised, maybe it's because it's in my DNA, or maybe it's both: I use coupons. I have no problems using coupons for items that I would normally buy. I also have been known to buy because of a coupon. To me, not using a coupon is like leaving money on the table. A dollar off a roll of toilet paper not meaningful to you? Let's put it a different way. Suppose you saw a dollar bill laying on the floor of the toilet paper aisle in the store. Would you leave it there or would you nonchalantly pick it up? The only problem with coupons is that they are required at the point of redemption. So if I forget to bring my coupon along, no joy.

Just as digital cameras and cell phones formed an alliance that changed the world, it appears that coupons and cell phones are forming an alliance that will have similar behavior-changing effects. For example, Domino's Pizza recently announced that they have selected Air2Web to be their sole provider for their new mobile coupon campaigns. This partnership totally makes sense to me. According to the Food Marketing Institute, paper coupon usage has declined 40% in the last few years due to lack of immediacy and the manual effort of clipping. But due to the benefits of mobile devices that we all know about, coupons have a brand new life.

The advantage of mobile couponing is multi-fold. First, mobile devices are highly personal so this means highly personalized and highly relevant coupons. Second, we all take our mobile devices with us wherever we go - so you're never without your coupons. And third, both SMS and mobile-friendly email present a highly interactive medium from which marketers can analyze the performance of their discount campaigns.

So...are you a Coupon Clipper like me? Come forth, Brother! Come on down, Sister and testify. Give me your feedback. I'd like to hear from you.