Category Archives: Droid

Why does Facebook avoid mobile ads? It wants to be your wallet.


Here’s a blindingly obvious puzzle: Facebook doesn’t run ads on mobile. Digiday’s Mike Shields asked why last week, noting that with 250 million Facebook users logging in from iPhones and other smart handsets, it seems curious that Facebook would skip potential millions in advertising revenue.

Why, oh, why, is Facebook missing ads on mobile? We believe it has a bigger move in mind — to become your digital wallet. Cell phones, you see, are about to undergo their hottest revolution since they got hooked into the Internet, and there are billions of dollars for the players who can be first to train consumers in the “digital wallet” marketplace. Here’s the scoop:

1. Both the next-generation Apple iPhone 4S and Droid phones will likely support NFC, the “near-field communication” short-range signal that allows consumers to wave a phone in front of a cash register to transfer payments. (Google has told its developers that it will launch dozens of NFC Android phones by the end of 2011; we can’t imagine Apple will be left behind.) Soon, instead of supporting communication, cell phones will also hold the money that supports your livelihood.

2. NFC phones will revolutionize payments. Consumers will dig them, just as you now love your iPhone camera and video instead of lugging around an SLR, and merchants upset with high credit-card percentage takes from each transaction will be open to a new, handier, lower-cost way to get paid. (Ever have a retailer turn down American Express due to its fee structure? You’ve seen the market opportunity.)

3. Yes, there will be tons of competition for the new smart-phone-wallet space. American Express launched Serve in March to tap consumer funds from banks across multiple devices; AT&T, T-Mobile and Verizon formed a joint partnership called Isis to support mobile NFC transactions; expect Apple and its iTunes payment system to leap into the space, too.

So, why could Facebook beat them all? Because of its user base. PayPal makes nearly $4 billion in revenue a year from only 94 million active users buying stuff online; imagine what Facebook could do with 250 million social-networking addicts glued to their handsets. We outlined in Bloomberg Businessweek in March that Facebook has all of the pieces in place to support financial transactions, including Facebook Credits (a virtual currency) and Facebook Payments (a payment system incorporated to support “all lawful business”).

All Facebook needs is the mobile hardware, and that’s coming by Christmas. Facebook has a choice: It could clutter up its tiny mobile interface with ads, potentially turning off mobile users, or it could include a new beneficial service that helps users make payments with cell phones, while charging an invisible, small slice to merchants. Hmm. Which would you Like?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Image: jirotrom

The Droid’s dude problem


Here’s a secret about new technology: Women are less likely to use it.

Repeated studies show that early adopters of devices such as tablet computers or smart phones skew male. 65% of iPad users are men, according to Nielsen. 73% of Android phone users are male, says AdMob. Even the iPhone and iPod Touch, devices that have been around for years, still have 54%-58% male users vs. female. The trend holds abroad; London-based Rabbit agency’s Dirk Singer notes only 5% of women told a UK study they would consider a Droid phone as their next mobile purchase vs. 11.4% of men.

Why is this important? Women direct about 85% of all product purchases in the United States, including 65% of new car sales, 80% of healthcare decisions, and a whopping 91% of new home sales. Their buying power is expected to increase in the next decade as Boomers age and men, with their weaker life spans, die off sooner; Fleishman-Hillard estimates women will soon control two-thirds of wealth in the United States.

Marketers enamored with the newest technology might pause and rethink their media strategies. Creative director Stephanie Holland has suggested that the majority of women “feel misunderstood” by healthcare, automotive, investment and other marketers. Are your channels in sync with the female consumers likely driving your sales?

Image: Pranav Singh

Why Apple hates Flash and the Droid has a search key


Apple and Google have something in common: They are both furiously trying to protect their content ecosystems. Apple launched the iPad yesterday with no Flash support — meaning the majority of video on the web won’t work on the tablet device, including clips from Hulu.com. (Word is the New York Times demo had a frozen pane for video in the iPad launch presentation, not a pretty sight.) This is not a design oversight; Apple obviously wants you to watch video by downloading it (and paying for it) from iTunes. Apple is telling Adobe, which controls Flash and thus the majority of online video, it’s game on.

Google, as the above ad demonstrates, takes another tact. Mobile phones are filled with handy apps that allow you to get online with a single tap — and oh yes, by the way, pass Google. Who needs to search on mobile with a search engine when a restaurant, news, sports or map icon gets you to web-based information instantly? If anything, the emergence of new tablet devices could make app onramps to the Internet even more popular. So Google has invested in a phone OS and hardware design which notably has a hot key that launches a Google search browser. Then, to educate the public, Google is running full-page ads in Wired magazine trying to convince you that searching via Google on a cell phone is just as important as doing so on a PC screen.

Apple wants you to buy its videos. Google wants you to use its search engine. And you’re learning entirely new devices — smart phones and tablets and soon other task-specific Internet-wired gadgets — that may lead you in entirely new directions. It’s fun to see the current big players in technology so worried as consumers shift their media habits once again. Wonder if old habits will stick.

Google hunts Big Business (while mobile throws the spear)


An editor we know noticed today that Google is running banner ads at the top of BusinessWeek.com, enticing a corporate audience to click through and learn how Google apps can run their enterprise better. The “Go Google” campaign has been out since mid-summer, so it’s time to wonder: What in the world is Google thinking, chasing big organizations?

Los Angeles, for one. The entire city government announced Tuesday it has approved a $7.2 million deal to run Google applications via contractor Computer Sciences Corp. That’s right. Police officer and firefighter email and related web apps will now float off local desktops into the cloud.

Google, whassup?

Google makes the vast majority of its moola from advertising associated with consumer web searches. Even if it were successful in making a dent in Corporate America, selling apps to seats for small fees, it might get a minor uptick in revenues. So why chase the enterprise software market? We see five reasons:

1. Search is going down. Consumer search usage is slipping. Google constantly releases data showing paid clicks are up, but much of that comes from overseas growth. Click over to Google Trends and type in any common products or services, and you’ll see aggregate search volumes in the United States and globally are sliding in most categories. (Try it here: Punch in “flowers,” “diamonds,” “auto repair,” and watch the demand curve fall.) This is driven by consumer adoption of social media and online networking as a new, real-time, more-trusted way to find things. Search still works … but like three broadcast TV channels suddenly surrounded by thousands of new cable options, the triad of Google, Yahoo and Bing face stiff competition from your college buddy making recommendations on Facebook.

2. Businesses are market levers. To fight search slippage, Google needs a one-to-many sale. Business organizations are the easiest point of entry to get thousands of users re-enamored with Google free apps … and search.

3. Redmond will get mad. The “Go Google” campaign also hurts Microsoft. You know, that bad boy that just launched the oh-so-sexy Bing. Google can’t be happy to see Redmond finally out with a hot search product, backed by a $100 million ad campaign launch. So Google is slapping Microsoft back where it hurts, in the business software arena.

4. Business users love cell phones. Google is getting buzz. And who is out with a hot new cell phone operating system? Why, Google Android, popping the lid off the smoking-hot Droid phone. Buzz on one side (apps) supports buzz on the other (mobile).

5. And Google needs cell phones to survive. This is the final, most telling point: mobile advertising. Google’s biggest threat is from mobile, where smart phones now come with do-anything apps that provide hundreds of points of entry into the internet … all bypassing the traditional Google search engine. Log on to an app for weather or traffic or sports scores and you’ve likely just skipped over Google.com. In addition, mobile screens are tiny compared to PC screens, so even if you do use Google as your internet on-ramp, there’s less ad space to sell. So Google needs to own the mobile space, and fast.

Four billion proof points

This is no idle threat. There are now more than 4 billion mobile phone subscribers in the world, compared to about 1 billion computers. Wall Street tech guru Mary Meeker just noted that by 2010 we’ll have 10 billion total gadgets with screens in the world … and most won’t have an interface that houses Google search windows on web browsers. Markets with the greatest growth potential, such as China and India, are leaping right over computers to cell phones which are more affordable, just as powerful, and fit into a peripatetic lifestyle. Human interactivity is moving past your old-fashioned computer, and Google’s core business — search with lots of text ads — works best on those soon-to-be-outdated wide screens.

So Google wants office workers to notice that Google is the place to go for apps, and mobile phones, and yes, search. Put apps and mobile together, and you’ve got a survival strategy. Go, Google.