Mobile Commerce Outlook 2013

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Mobile Commerce Outlook 2013

  1. 1. Mobile Commerce Daily A CLASSIC GUIDE TM February 2013 $595THE NEWS LEADER IN MOBILE COMMERCE AND RETAILwww.MobileCommerceDaily.comMobile CommerceOutlook 2013
  2. 2. CONTENTSPAGE PAGE3 INTRODUCTION 21 LEGAL/PRIVACY Mobile commerce to make customers pickier Privacy a bigger concern as regulation grows By Mickey Alam Khan By Chantal Tode4 ADVERTISING 23 MULTICHANNEL RETAIL SUPPORT Mobile advertising is the linchpin that will drive purchases Mobile opportunities outweigh any negatives for merchants By Rimma Kats By Chantal Tode7 ANALYTICS 25 MARKETING As merchants build mobile chops, analytics become even Privacy, measurement to continue to challenge location- more imperative based marketing By Chantal Tode By Lauren Johnson9 APPLICATIONS 27 MUSIC App discoverability will still be an ongoing obstacle for Music industry split on subscription and library-based mobile marketers revenue streams By Rimma Kats By Lauren Johnson11 BANKING 29 RESEARCH Mobile popularity challenges banks to keep features fresh Loyalty integration crucial to mobile wallet success By Chantal Tode By Lauren Johnson13 CARRIER NETWORKS 31 SEARCH 2013 a pivotal year for wireless carriers, mobile commerce Mobile search will help grow purchase intent By Chantal Tode By Lauren Johnson15 CONTENT 34 SOFTWARE AND TECHNOLOGY Stronger mobile content experiences will be in demand QR codes, augmented reality will anchor mcommerce success in 2013 By Rimma Kats By Chantal Tode 36 WEB SITE AND DEVELOPMENT17 EMAIL Forget about cookie-cutter mobile sites in 2013 Mobile commerce emails to get a lift with loyalty By Rimma Kats By Lauren Johnson19 GAMING Rewards-based mobile advertising takes shape in 2013 Mickey Alam Khan Rimma Kats Jodie Solomon 401 Broadway, Suite 1408 Editor in Chief Associate Editor Director, Ad Sales New York, NY 10013 mickey@ rimma@ ads@ Tel: 212-334-6305 napean.com mobilemarketer.com mobilemarketer.com Fax: 212-334-6339 Email: news@mobilemarketer.com Web site: www.MobileMarketer.com For newsletter subscriptions: Chantal Tode Lauren Johnson Kristina Mayne http://www.mobilemarketer.com/ Associate Editor Associate Reporter Content Assistant newsletter.php chantal@ lauren@ kristina@ mobilemarketer.com mobilemarketer.com mobilemarketer.com For advertising: http://www.mobilemarketer.com/cms/ general/1.html For reprints: reprints@mobilemarketer.comMobile Commerce Daily covers news and analysis of mobile commerce and retail. The Napean franchise comprises Mobile Marketer, MobileMarketer.com, the Mobile Marketer Dai-ly newsletter, MobileMarketingDaily.com, MobileCommerceDaily.com, McommerceDaily.com, the Mobile Commerce Daily site and newsletter, MobileNewsLeader.com, Classic Guides,webinars, Mobile FirstLook, the Mobile Marketing Summit and the Mcommerce Summit and awards. ©2013 Napean LLC. All rights reserved. No part of this publication may be reproduced without permission.PAGE 2 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  3. 3. INTRODUCTIONMobile commerce to make customers pickierT he runaway hit for retail this year will be mobile com- merce. The best way to leave money on the table is notto have a commerce-enabled mobile site and application. dominance. And mobile is where most searches will soon migrate. But retailers’ biggest beef with Amazon is what threatensRetailers and financial institutions are undergoing the their stability and customer relationships – the growingbiggest business-model shifts in a generation. Technology phenomenon of showrooming where consumers comparehas changed the relationship between retailers and their product prices on Amazon’s mobile site and apps while incustomers, shifting the balance towards those who buy the competitor’s store.away from those who sell. Mobile is hastening this evolu-tion, or as it will be for some merchants, revolution. Amazon is training consumers to shop mainly by price and then for convenience, threatening retailers’ businessBasket case models that rely on customer relationships for repeatWhile it is hard to quantify, it is obvious that mobile is purchases and loyalty to brand over pricing. Amazon ishelping boost the basket size for smart retailers offering not going away anytime soon, nor is the behavior it isseamless shopping and checkout experiences on smart- ingraining in consumers.phones and tablets. Shop shop or chop chopWhether the sales are incremental or channel shift is That said, brand still does count for much in retail.up for debate, echoing some of the same discussionsover ecommerce and retail stores. Mobile is also driv- Those retailers investing in smart marketing, attractiveing traffic in-store, thus giving it its biggest edge of PC- pricing, convenient product delivery and a quick andbased ecommerce. seamless shopping experience on mobile will continue their growth momentum. Mobile brings the store closer toThe early advantage in mobile commerce goes to play- the consumer.ers already invested in the ecommerce space: eBay andAmazon. EBay’s PayPal unit last year closed $14 billion This Mobile Commerce Outlook outlines some of the op-in transactions via mobile devices – one-tenth of the on- portunities and challenges in the year ahead for mobileline total. This year, eBay expects to close $20 billion in commerce. Many thanks to Mobile Commerce Daily’stransactions on mobile and another $20 billion via Pay- Chantal Tode, Rimma Kats and Lauren Johnson for theirPal, clearly putting it in the lead for mobile payments reporting and analysis. Thanks also to Rimma for her artyet again. direction and to ad sales director Jodie Solomon and con- tent assistant Kristina Mayne for their support.Amazon, for its part, is the great disruptor. Online was itskiller weapon and now mobile serves the coup de grace. Please read this Outlook from cover to cover. Mobile willTake any retail category and Amazon is forcing its com- change the world of retail even more than ecommercepetitors into the uncomfortable position of defending did, redefining the relationship between shop and shoppertheir turf at the risk of losing loyal customers. Amazon to the extreme advantage of the latter.thrives on extreme loyalty from a customer base addictedto quick and easy shopping on PC and mobile. It also ben-efits from its 1-click ordering process that is a naturalfor mobile.As a disruptor, Amazon is dangerously close to becom-ing the search engine of choice for retail searches, thus Mickey Alam Khanupsetting Google’s plans for continued search world mickey@napean.comPAGE 3 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  4. 4. ADVERTISINGMobile advertising is the linchpin that will drive purchasesBy Rimma KatsW hile interactive mobile advertising is certainly Contextually additive functions such as location recog- not a new concept, few brands and their agen- nition for store location and click-to-call should be con- cies have taken the additional step of execut- sidered in every mobile ad execution.ing commerce integration as a central component inexecution strategy. That said, the outlook for mobile “Unfortunately, it is a fact that a considerable percent-commerce-enabled advertising in 2013 looks bright. age of brands still do not yet have a mobile- optimized site presence to direct user clicks,” Mr. Forshay said. “AMarketers such as Macy’s, J.C. Penney and Target have mobile-optimized site experience is table stakes for re-continually used mobile advertising to drive consum- tail brands, providing the primary foundational corner-ers to their mobile-optimized sites and applications and stone around which all mobile marketing efforts shouldbolster sales. Mobile commerce-enabled advertising is be constructed.becoming more than just click-throughs and providescompanies with ways to offer consumers relevant, tar-geted offers and incentives.“The mobile user experience is defined by immediacy,speed and efficiency,” said Scott Forshay, Austin, TX-based mobile and emerging technologies specialist atAcquity Group, Chicago.“Deep linking interactive mobile video ad units directlyto product detail pages on a mobile-optimized site buildsupon the momentum gained by the ad engagement tofacilitate a transaction almost instantaneously, irrespec-tive of time or space,” he said.Importance of testingThe most glaring issue with current mobile advertisingis an adherence to big browser display principles scaleddown to a smaller form factor.The ineffectiveness of banner display in big browser digi-tal advertising is well documented.Adhering to traditionally ineffective engagement meth-ods on such an intensely personal medium with displayreal estate constraints will only make the user experi-ence more frustrating, further alienating the audienceand the advertiser alike.Moreover, some would say that mobile advertising hasfailed, by and large, to deliver additive user experiencefunctionality unique to the capabilities of the medium.PAGE 4 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  5. 5. “Those brands with that foundation securely in place to include interactive video advertising with integratedhave significant opportunities to competitively differen- commerce capabilities as a point of differentiation andtiate in mobile advertising as Web traffic and content advantage, seeking to capitalize on the immediacy of theconsumption continue to migrate away from the big mobile experience to influence this new breed of con-browser to the pervasive screen,” he said. stantly connected consumer.As media consumption on device continues to increase “I recommend a heightened focus on targeting for ad-and time spent by consumers engaging with apps begins vertisers and publishers alike and an emphasis on beingto rival television, spend on mobile advertising will con- relevant and additive to the user experience,” Mr. For-tinue to increase significantly. shay said. “Traditional digital spray-and- pray ad models simply do not work in mobile.Also, as the competitive landscape evolves and competi-tion for on-device attention increases, brands will look “Additionally, calls to action in creative execution need to be more comprehensive in terms of taking into ac- count the potential variability of the user experience,” he said. “It is not simply enough to link an interactive video unit to a product page and be done with it. “If the consumer viewing the ad wants to find the near- est store to purchase the product or wants to call a sales associate to inquire about it further, those basic func- tions need to be available if the entirety of the mobile user experience is taken into consideration.” Building experiences A large challenge in mobile commerce is the small screen size and the consumer having to enter a plethora of fields with accuracy, per Sarah Hodkinson, head of sales strategy at PayPal Media Network. “Fortunately, with PayPal’s Mobile Express Check- out functionality we can help brands avert this chal- lenge and increase conversions in mobile commerce,” she said. “In 2013, you will also see the service help brands drive commerce in-stores, but also providing the flexibility to blend it with someone’s online purchasing experience to utilize relevant offers wherever you shop, whether online or in the store. “We will accomplish this through highly targeted of- fers that close the loop at point of sale through Pay- Pal’s acceptance offline, yielding full-funnel metrics that span from impression through to redemption and totalPAGE 5 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  6. 6. transaction size.” tised to, complete- ly enabling theThis year, it goes without saying that there will be an impulse-purchaseincrease in mobile advertising growth. ability, and result- ing in massive po-Mobile ads will need to be hyper-relevant to be effec- tential profits fortive and for closing the loop from a reporting standpoint, the companieswhich will enable brands to effectively measure the ROI employing this.”of offers delivered. What to expect“We anticipate increased growth and further advances In 2013, consum-in 2013 that will enable us to build on mobile strate- ers will see a lotgies that help close the loop between advertisers and more mobile ad content delivered to them at incrediblyconsumers, enabling them to establish more meaningful personal levels.relationships,” Ms. Hodkinson said. The data has been collected and the analytics and adver-“That will be the future, and both PayPal and the Pay- tising platforms are beginning to emerge.Pal Media Network will continue to be at the forefrontof the new technologies that make mobile commerce- Additionally, marketers will begin to fully understandenabled advertising better and more targeted,” she said. what consumers want, when they want it, and they willMarketers are beginning to recognize a need in the mar- give them the ability to buy products through mobileketplace and are finally beginning to pay the necessary advertising campaigns.attention to their mobile initiatives. As devices and network speeds improve, mobile com-This means that companies are beginning to develop merce will continue to accelerate and build momentumstandalone mobile assets, and in turn enabling stand- in 2013.alone commerce-enabled mobile advertising. “I predict that many retailers that started with quick and“The issues and challenges that companies will face are dirty transcoded sites will move to API-linked integrateddirectly linked to whether or not they have set up a mo- solutions that leverage and extend their ecommerce op-bile ecosystem capable of supporting standalone com- erations into the mobile space,” said Wilson Kerr, Bos-merce pages that are not directly linked to their PC as- ton-based vice president of business development atsets,” said Marci Troutman, CEO of SiteMinis, Atlanta. Unbound Commerce.“Only if companies are able to quickly create stand- “Even today, the majority of retailers still do not have aalone mobile content for ads will that content be able mobile-optimized site catered to the 50-plus percent ofto be tied to commerce pages and even be commerce- Americans who own smartphones,” he said. “This pastenabled,” she said. “However, the obvious problem that Cyber Monday, we saw a 410 percent increase in mobilethey will face is how to handle secure payments in an commerce transactions across our 360-plus retailer net-ad environment, and perhaps more importantly, how to work.make the consumer feel comfortable purchasing some-thing through an ad. “PayPal reported that mobile checkout transactions in- creased 96 percent year-to-year. Again, mobile com-“The opportunities are absolutely staggering though. This merce will continue to accelerate and gain traction inis a situation in which a consumer can make a purchase 2013, as more consumers find better and faster experi-decision at the exact same instant they are being adver- ences when shopping on their mobile devices.”PAGE 6 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  7. 7. ANALYTICSAs merchants build mobile chops, analytics become even more imperativeBy Chantal TodeA s the early days of mobile gives way to bigger, that have been elusive. However, now that merchants more thoughtful strategies, merchants are begin- are gaining a better understanding of how mobile works, ning to realize they have unlocked a treasure trove they are ready to tackle how to optimize their efforts viaof meaningful customer data, keenly focused on figuring better analytics.out the most effective way to leverage this information. “The mobile space has been a bit of a wild frontier, withNo one denies the importance of analytics, but mobile everyone chasing shiny pennies,” said Ken Madden,has presented some challenges on this front, namely the executive vice president and head of digital for Northcomplexity of the platform and the closed-loop metrics America and analytics – global at OgilvyAction. “But now we are starting to see a quickening pace, moving to- wards true test and learn scenarios. “On top of that, merchants are looking to make more direct connections between mobile users and in-store shoppers and purchases,” he said. “So, in 2013 we will see more merchants connecting the dots from mobile usage to actual purchase transactions through loyalty cards and email addresses.” Analytics a core focus The biggest difference in 2013 will be that mobile ana- lytics will become a core focus for many merchants. This is because merchants increasingly recognize that mobile provides an opportunity to connect personally and deeply with their customers. Mobile also adds a layer of context that is deeper than in any other channel. “Mobile gives us user, place and time in addition to the transaction/interaction data which provide a tremen- dous amount of data around how a consumer interacts with brands and retailers,” Mr. Madden said. “The best thing merchants can do is not waste that op- portunity to learn more about their customers,” he said. “Build a measurement plan that helps us understand the effectiveness of your marketing activities, while also helping us better understand the customers’ needs.” Eliminating silos One of the biggest challenges that most merchants facePAGE 7 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  8. 8. solutions that are capable of tracking a given consumer across any channel they happen to be present in,” said Michael Ricci, vice president of digital and product mar- keting at Webtrends. Several trends are also driving the need for better mobile analytics, including a move toward hybrid HTML5 apps, the effect of tablets on the mobile shopping experience and growing interest in responsive design. “We’re also witnessing a huge move towards hybrid apps that in turn drives a need for solid measurement approaches – SDK or otherwise – where metrics can be accurately tracked,” Mr. Ricci said. “The vast majority of solutions in the marketplace struggle very badly to mea- sure hybrid apps and that’s why we created our hybrid SDK to make this process simple for app developers. “We’re seeing more and more of our mcommerce cus- tomers appreciate just how vital the tablet is to the mobile shopping experience and develop apps that are tailored towards this form factor,” he said “We expect to see much more of this in 2013 and also the beginning of a move towards responsive design.” Now that many merchants have a little history behind them when it comes to creating mobile campaigns, they are recognizing that they need to be able to optimize their efforts more effectively going forward if they want to create the kind of relevant experiences that drive higher repeat visits and fuel sales.when it comes to mobile analytics is that mobile has “Measurement and analytics are squarely in focus forcreated many data silos, which makes the process of un- 2013 for any player in the mobile commerce space,” Mr.derstanding a given customer that much harder. Ricci said.Today, most marketers’ mobile data is broken into silos “We’ve witnessed a large trend taking place where thesefor mobile Web, applications, SMS, QR codes, location- marketers are getting very serious about making mobilebased programs and display advertising. analytics one of their top strategic priorities,” he said.However, as merchants start to embrace multichannel “Marketers are coming to understand that solid mea-analytics solutions, they will be able to get a better view surement is critically important to forging coherentof customers. strategies, evolving user experience, optimizing sites“We’ve witnessed most successful mcommerce provid- and apps, driving higher conversions and ultimatelyers move aggressively towards multichannel analytics increasing ROI.”PAGE 8 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  9. 9. APPLICATIONSApp discoverability will still be an ongoing obstacle for mobile marketersBy Rimma KatsD iscoverability will continue to become increasingly merchandise their store, they need to build their digi- important as more mobile applications are added tal properties with the customer, design and usability in to app stores daily. Standing out from the crowd- mind,” she said.ed app stores will become an even bigger challenge forbrands in 2013. “A one-size solution wouldn’t fly when building a new store, so I can’t help but wonder why it continues to beWith so many apps available, it is very hard for market- seen as OK when building a digital storefront?”ers to be noticed. The problem is even greater for brandsthat are encouraging consumers to download their mo- App revolutionbile apps to make purchases from them. There is more traction and metrics, as well as case studies available for brands to make decisions about“In 2013, users will be more selective about which appsthey chose to download, screens have gotten clut-tered and users are becoming more picky with whichapps make the cut,” said Kunal Gupta, CEO of PolarMobile, Toronto.“I would recommend that more time be spent on themarketing of apps to drive downloads as well as in-creased engagement,” he said. “For mobile commerceapps especially, brands want users to return again andagain to their apps.“Integration into larger marketing campaigns – like tele-vision ads and social media campaigns – is a way thiscan be managed.”Key strategyMobile apps continue to gain traction as more usersturn to them for everything from ordering dinner to theirholiday shopping.Industry experts believe that customer demand will drivebrands and companies to create more innovative, us-able and dynamic apps that can make these experiencesmore simplified.“I suspect that many brands will continue to use cookie-cutter platform solutions that fall short on user experi-ence,” said Melody Adhami, president and chief operat-ing officer of Plastic Mobile, Toronto.“Brands need to understand that in the same way theyPAGE 9 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  10. 10. mobile apps. And without doubt, 2013 will bring about a Ratio Interactive. “The biggest challenge we see for 2013lot more players into the space. is for consumers to trust mobile commerce the way they do ecommerce today. The good news is it’s a step, not aTo achieve success, marketers must look at their custom- leap, for this to happen.ers and see if they are asking for mobile. If the answeris yes, companies need to look towards building a digi- “We believe in the shift from using mobile to inform andtal commerce strategy that includes mobile. From there, search to transactions in 2013 in a big way,” he said.marketers must build an engaging mobile app that in- “There will be broader usage, increased capabilities andcentivizes their customers to shop. cross-platform support.“We see continued growth in both volume of apps, as “It is important to support all relevant platforms for yourwell as the quality of the user experiences available in market, increase testing to ensure quality and providethe market,” said Russ Whitman, chief strategy officer of users excellent support to build trust.”PAGE 10 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  11. 11. BANKINGMobile’s popularity challenges banks to keep features freshBy Chantal TodeC onsumers will continue to embrace mobile bank- “Mobile banking will continue to grow as a mission- ing this year because of its ease, putting pres- critical application on every mobile phone,” said Drew sure on banks to stay ahead of the curve with the Sievers, CEO of mFoundry, San Francisco. “The need to belatest features. connected to your money is universal and mobile bank- ing is a bank’s best channel.Most of the larger banks and many mid- and small-sizedones now offer customers at least some basic mobile “Mobile banking will continue to evolve rapidly, addingbanking features. However, banks will need to start look- new money movement and payment features all yearing at upgrading their mobile services with features such long,” he said.as remote deposit capture, bill pay and integration withexisting loyalty programs if they are to stay relevant to “Consumers are getting used to seeing robust new fea-consumers’ increasingly sophisticated use of mobile. tures that help them save money so we fully expect the trend to continue in 2013. Banks that can deliver these valuable features will retain their customer base and drive new revenue as well.” Mobile payments groundwork Remote deposit capture capabilities were introduced by many of the larger banks in 2012 and there is likely to be a big expansion of this service in the coming year as more banks join in. The service enables users to snap a photo of a check with a smartphone to deposit it into an account. “In the next 12 months, remote deposit capture will be included in the applications provided by some of the big- ger regional banks, and customer use of RDC will increase as awareness spreads,” said Dave Kaminsky, emerging technologies analyst at Mercator Advisory Group, May- nard, MA. Coupled with the growing availability of remote bill pay features and person-to-person payments, banks will be- gin to lay the groundwork for mobile payments by getting consumers comfortable with using their smartphones as a payment device. While a few banks have already introduced mobile pay- ments offerings, in 2013 most are likely to begin to eval- uate a proprietary or third-party wallet in the near term as a means to enable point-of-sale payments.PAGE 11 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  12. 12. channels, such as with POS payments and ATM access via mobile. “We foresee three primary challenges for providers: sup- porting the overall business case for mobile given the near-term expenses and lack of direct revenue oppor- tunities, managing the diverse mobile platform require- ments, and keeping up the feature and functionality arms race,” Mr. Crawford said. Another trend likely to gain steam this year is the avail- ability of personal financial management tools in mobile applications. Banks should also keep security a primary focus, as the mobile platform is developing at a rapid pace, resulting in new opportunities for hackers and fraudsters. “Mercator expects some financial institutions to intro- duce certain elements of personal financial management in their mobile applications, likely first focusing on spend tracking as opposed to budgeting tools,” Mercator’s Mr. Kaminsky said. “The expectation is that while this intro- duction will take place in 2013, significant uptake will not take place until 2014 or ‘15.” “It’s important for banks to utilize multifactor authenti- cation, encryption, transaction limits and any other rea- sonable security functions that are possible,” he said.As they continue down the mobile commerce/paymentspath, banks are also likely to enable existing loyalty andrewards programs via mobile to begin to establish a mo-bile commerce value proposition for customers.Additionally, they will evaluate the potential for a broad-er mobile-offers program to compete with non-paymentsplayers that are offering wallets, payments and otherbanking products via mobile, per Jeff Crawford, seniorconsultant at First Annapolis Consulting, Linthicum, MD.Omni-channel approachBanks are also likely to shift to a more omni-channel ap-proach so they can maintain a consistent look and feelacross channels. With this goal in mind, many will beginexploring opportunities to integrate mobile and physicalPAGE 12 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  13. 13. CARRIER NETWORKS2013 a pivotal year for wireless carriers, mobile commerceBy Chantal TodeW hile mcommerce and mobile payments are taking off, wireless carriers are treading care- fully as they look for ways to insert themselvesinto the equation. And as growth and competition accel-erate, 2013 could be a pivotal year in determining howbig a role carriers will ultimately play.Last year, Isis launched a mobile wallet – a joint ventureof AT&T, Verizon Wireless and T-Mobile USA – and it wasone of the first big moves by carriers in the United Statesin mobile commerce.However, with their access to existing relationships withtens of millions of mobile subscribers and their access toreal-time usage data, there is significant growth poten-tial for carriers in the mobile commerce space.“I think operators are going to play a bigger role in mo-bile commerce in 2013,” said Lara Albert, vice presidentof global marketing for Globys, Seattle. “By leveragingtheir existing relationships with millions of subscribersand unique access to real-time usage data, carriers willnot only support commerce via their networks and de-vices, but proactively drive mobile commerce adoption.“The key will be in their ability to identify and monitorindividual customer behavior in ways that allow them toact in the right context to encourage more transactingvia mobile,” she said.“With the promise of mobile commerce comes the ex-pectation of a faster, easier and better transaction ex-perience – and a big factor in delivering against theseexpectations is expediting the discovery of the enhanced pable of layering on security and prioritization capabili-experience. By continually monitoring behaviors to en- ties that can allow a more efficient, secure transaction.able a relevant experience at the right time, carriers willleverage new forms of customer engagement to acceler- Already, carriers are leveraging their capabilities aroundate mobile transacting.” behavioral analysis and real-time decisions to influence specific behavior, whether it is stimulating usage, en-Leveraging control couraging higher spend or migrating customers to high-There is an opportunity for wireless carriers to have a er-value service plans.defining role in the way mobile commerce develops be-cause they run the actual networks and therefore are ca- Additionally, late last year, AT&T and Verizon also jumpedPAGE 13 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  14. 14. focused on support and protection,” he said. “If they can offer custom- ers a safe, trusted way to pay through their network, they will be successful as the mo- bile commerce trend takes over. “This need for protection and support will likely bring companies like Visa into the space which will lead to more com- petition or the potential for partnerships.” While there is no doubt that mobile commerce and mobile payments areinto the daily deals space with mobile-offers services taking off, the carrier role in this market is not guaran-that leverage their customer data to deliver more per- teed. However, with growth accelerating quickly in thissonalized deals. space, carriers will need to act fast if they are to carve out a place for themselves.“Mobile payments are real-time transactions wherethere’s a need to be quick and received correctly,” said “We’ve seen a lot of proprietary solutions that are gain-Andrew Till, senior vice president of smartphones and ing tractions with delivering the right experience andconsumer electronics at Symphony Teleca. making sure they are a trusted brand,” Mr. Till said. “It remains to be seen what carriers will do to stay relevant“Carriers have so much control, they will find a way to and monetize on this trend.”monetize that in 2013,” he said.Building trustHowever, wireless carriers will need to work togetherto standardize their efforts if they are to gain enoughadoption of their mobile commerce solution to play ameaningful role.Carriers also need to work on building trust withtheir customers.“People trust Apple,” Mr. Till said. “They’re willing to givethem their credit card details on their iPhone or iPad atany given time.“To build this sort of trust, carriers will need to be laser-PAGE 14 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  15. 15. CONTENTStronger mobile content experiences will be in demand in 2013By Chantal TodeA s merchants seek to push mobile commerce to businesses will need to leverage augmented reality, rich the next level in 2013, content strategies will media advertising and other content strategies to keep have to become more sophisticated to be able to up with consumers.tell the rich product stories that drive sales. “Similar to merchants in a brick-and-mortar environ-Bricks-and-mortar, as well as online retailers, recognize ment, telling a story on the phone or tablet will increas-the need for strong content strategies so that custom- ingly play an important role in selling goods,” said Harryers can experience a product and discover an emotion- Kargman, founder/CEO of Kargo, New York.al need for it. So far, merchants’ initial stabs at mobilecontent have varied in quality, but going forward, these “I believe the best retail experiences on the phone will involve some type of rich media advertising or content creation or video to immerse the user around the story of the product,” he said. “It makes sense that content will be a key driver in the mobile commerce experience and it is only a matter of time before retailers get the plumbing working around the transaction and then want to create a content expe- rience around their products.” Embracing new technologies In 2013, it will no longer be enough to have simple prod- uct images and information available for mobile users or to have a text-messaging program in place. As consumers become comfortable using their smart- phones and tablets, merchants are going to become more sophisticated in their use of mobile. Merchants will need to leverage the whole array of mo- bile channels available to them, such as video and aug- mented reality, to create the best user experience. Staying up to date with the latest advancements in the technology will also be important. For example, making sure mobile content is compatible with Apple’s Passbook has quickly become a priority for many. “A merchant using augmented reality or interactive video can better display the angles or perspectives of a product or outfit, and consumers are going to demand this type of experience from all of their merchants in 2013,” saidPAGE 15 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  16. 16. “Retailers should ask, ‘How does my mobile content fit into the overall experience, including in-store kiosks, at the point-of-sale as well as the Web experience?’” Mr. Hildahl said. “Looking back at 2012, it’s clear that orga- nizations are realizing that mobile can drive this mul- tichannel, multi-platform experience for the consumer. “It’s worth mentioning that merchants will also have to figure out how to integrate mobile within their employee base in 2013,” he said. “For example, merchants could arm sales floor employees with mobile applications that make the customer experience better.” Some retailers will need to overcome a variety of issues before they can up their game in mobile content. These may include acquiring the technical know-how to sup- port rich media and custom ad campaigns on both the advertising and mobile Web fronts. However, the stakes are high and dealing with these is- sues will become imperative in 2013. “Many chief digital officers set the high level strate- gies and roll out Web sites with mobile style sheets only to find that key features and day-to-day mainte- nance and capabilities don’t exactly align,” Kargo’s Mr. Kargman said. “This will continue to be a growing problem until retail- ers and content providers realize that mobile-focused adBjorn Hidahl, vice president of product management at serving and content creation is very important to suc-Kony, Orlando, FL. cess,” he said.“Merchants should put together a strategy to embracethese new technologies now, making sure they can meetconsumer demand while also taking into account newhardware requirements and operating system updates ata total cost of ownership that makes sense for the com-pany,” he said.Driving multichannel experiencesOne of the issues that merchants will increasingly face ishow to integrate mobile into their multichannel strate-gies, including making content relevant across channels.Merchants should also consider how mobile can be usedto supply employees with relevant content.PAGE 16 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  17. 17. EMAILMobile commerce emails to get a lift with loyaltyBy Lauren JohnsonW ith the growth in mobile commerce programs allow the recipient to store it in his Passbook and then be in the past year, expect to see mobile loyalty automatically reminded to redeem it when he is within play a particularly strong role in email. the vicinity of the store.”The launch of mobile commerce loyalty programs such as Mobile loyaltyApple’s Passbook in 2012 gave marketers a way to com- Mobile is increasingly taking up a bigger piece of onlinebine loyalty into all of their mobile channels. In 2013, revenue for retailers and brands.marketers will increasingly apply the technology to mul-tichannel campaigns. Thereby, including loyalty initiatives that combine mo- bile and email, brands can incentivize users to shop from“Apple’s Passbook and Passbook-like features on Android their mobile devices.smartphones are the next logical progression of mobileemail,” said Manny Ju, director of product management More often than not, mobile users are looking to instant-at BlueHornet Networks, San Diego. ly take an action as they read an email.“Email marketing has a long and rich tradition for loy- In the case of Apple’s Passbook, being able to store andalty programs, coupons and offers,” he said. “Passbook geo-target an offer is a great way to make email cam-enables email marketers to continue this tradition with paigns more interactive.a modern twist. Additionally, Mr. Ju expects more brands to use respon-“They can send a coupon attached to a loyalty email and sive design in email layouts. Location will also play a key role in how marketers can seg- ment an email list into tailored campaigns. Similarly, marketers will also break apart smart- phone and tablet email campaigns. Calls-to-ac- tion on these campaigns will also be differenti- ated — for example, a tablet-specific email might focus on online commerce more than a campaign designed to drive in-store traffic via a smartphone. “I believe email market-PAGE 17 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  18. 18. ing is an integral component of the overall shopping ex- marketing strategy.perience,” Mr. Ju said. First, marketers need to look at their data to understand“As mobile-enabled commerce continues its meteoric which devices consumers are using most often to checkgrowth rate, so will mobile-friendly email,” he said. their email.“Most importantly, remember that email is only one in- Once a company understands which devices their cus-tegral component of commerce. Do not just stop with tomers open email on most frequently, testing keywords,mobile email. The mobile experience that starts with the send times and content is crucial.email must absolutely be carried through to the landingpage, the Web site, the shopping cart and finally to the “After seeing the return on investment, advanced mar-payment page.” keters will integrate advertising, SMS, social applica- tions and Web sites, abandoning disparate marketingCross-channel emails programs for fully integrated cross-channel programs,”With consumers increasingly turning to their mobile de- Mr. Talyor said.vices to open email, savvy retailers and brands will de-velop tailored, flexible email campaigns in 2013 to grabconsumers’ attentions while on the go.In fact, some marketers are seeing more than 30 percentof their email campaigns opened on mobile devices, ac-cording to ExactTarget.Moreover, marketers will load these campaigns with ac-tion-driven features that let users take an action directly.“Our research has found more than half of consumersuse their smartphones to check email several times perday, while 29 percent of consumers report they checkemail constantly throughout the day,” said R.J. Taly-or, vice president of mobile products at ExactTarget,Indianapolis, IN.“With the continued growth of mobile devices, market-ers must respect the variety of experiences and deliverconsistent experiences across platforms,” he said.“2012 marked the first time smartphone sales outpacedPC sales for, according to Canalys. What does all of thismean for mobile email in 2013? It is time to developflexible, mobile-optimized email templates and starttesting innovative and imaginative campaigns unique toyour brand.”Additionally, more marketers will see a return on invest-ment from mobile in 2013, meaning that mobile andemail will increasingly be weaved into a multichannelPAGE 18 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  19. 19. GAMINGRewards-based mobile advertising takes shape in 2013By Lauren JohnsonO ver the past year, marketers have increasingly incorporated advertising into mobile games as a way to target a specific group of users. However,in 2013 more brands will need to look at in-applicationadvertising to increase monetization efforts.In 2012, brands relied on mobile advertising to give mo-bile gamers. In addition to incorporating different ad-vertising models, brands will also need to think of morecompelling ways to create content that keeps userscoming back.“Game developers will find it more and more difficultto get their games discovered because of the sheeramount of noise,” said Brian Wong, founder/CEO of Kiip,San Francisco.“The answers will lie in the battleground around thesource of the app distribution — the app stores,” he said.“Right now Google, Apple, Microsoft and Amazon allhave their own turf and are defending it. Those four aregoing to either overcomplicate or simplify things.”Mobile engagementIn 2012, Kiip rolled out partnerships with brands includ-ing Skittles and Pepsi that let users unlock achievementsand offers within mobile apps.Results from a campaign last year with Pepsi’s PropelZero Water showed how in-app advertising offers mar-keters more insight into their initiatives than a click- from their favorite brands.through rate. According to Mr. Wong, mobile gaming will focus aroundThe Pepsi campaign increased brand awareness by 28 three areas in 2013 — discovery, retention and quality.percent for the Propel Zero Water brand. Similar to other app-based marketing, discovery is stillAdditionally, there was a 51 percent purchase intent in- an issue in the space.crease, and roughly 72 percent of users said that theywere going to consider Propel Zero the next time they Not only are marketers challenged to get users to down-were going to buy enhanced water. load an app, they also have to create a great game that keeps users opening the app repeatedly.As consumers continue to use mobile games, they willincreasingly expect to be offered incentives for playing Additionally, marketers need to think about ways to notPAGE 19 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  20. 20. only acquire users but also focus on quality users, per ing environment, and it’s a horrible user experienceMr. Wong. for the 98 percent of users who won’t pay for con- tent. We think there’s an enormous opportunity to“Game developers have been so obsessed with acquir- for brands to embrace advertising that rewards usersing users and the industry has quickly aligned itself to with access to content or rewards for engaging withdeliver the demand,” Mr. Wong said. their ads.”“This means a ton of undifferentiated services sell in- With consumers turning to their mobile devices more tostalls without regard to the quality of the user behind play quick games when they have a break in time dur-that install,” he said. ing the day, marketers need to be focusing on how to provide value for the users that repeatedly use apps, per“As a result, there is a lingering cliff out there in the hori- Mr. Clifford.zon that some developers will begin to drive over. This cliffis the realization that it’s less about scrambling to buy Mobile opportunitymore and more installs – but rather how to keep the users According to Projjol Banerjea, vice president of market-that have decided to play your games in the first place.” ing and talent at SponsorPay, Berlin, acquisition and monetization will continue to be challenges for mobileDeath of the banner? game marketers and developers in 2013.Many of the in-app advertising models that brands areexperimenting with are full-page units, which some ex- “On the acquisition side, the app stores and marketplacesperts say points to the need for more engaging ads in are inundated with developers competing for user atten-mobile games versus banner ads. tion,” Mr. Banerjea said.Many industry experts believe that banner ads may be “App and game discovery is still a domain that’s largelylosing steam with creative and formats that do not take unsolved and consequently presents massive opportu-advantage of the size of a mobile screen. nity,” he said.In many cases, banner ads cram the same creative from “The freemium model that’s prevalent in the industrydesktop campaigns into a smaller-sized screen. also comes with its challenge of average monetization rates that are in the single digits.”Depending on a marketer’s goal, campaigns need to havea consumer-first approach in order to entice users via Although games continue to be a top app category, it is amobile advertising. challenge to keep a user’s attention, meaning that many mobile games have a short longevity.“For brand advertisers, the opportunity to emotionallyconnect with consumers through play is huge and the Additionally, consumers will continue to use multipleaudience is enormous,” said Bill Clifford, chief revenue screens in 2013 to digest content, meaning that mar-officer at SessionM, Boston. keters will need to create experiences that flow across screens in order to grab a user’s attention.“Too many game developers subscribe to a model of pep-pering users with banner ads and interstitials at a high “In 2013, we expect consumers to place increas-frequency until consumers get so irritated they choose to ing demands on games publishers to deliver persis-pay to not see ads,” he said. tent experiences across different platforms, both mo- bile – smartphone and tablets – as well as online,” Mr.“That’s not conducive to a healthy brand-build- Banerjea said.PAGE 20 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  21. 21. LEGAL/PRIVACYPrivacy a bigger concern as regulation growsBy Chantal TodeM erchants pursuing a mobile strategy will once to-date on the new rules. Mobile applications are also a again need to tread carefully when it comes to growing area of focus for regulators, so merchants and protecting the privacy of consumers and ensur- marketers would do well to have their privacy policiesing their mobile marketing programs are in compliance. prominently placed in their apps.With new guidelines from the Federal Trade Commission “Look for increased scrutiny regulation and enforcementcoming into effect in 2013 that explicitly address mobile actions concerning data collection and use practices re-and protecting children’s privacy, any merchants mar- lating to mobile devices and tablets,” said Linda Gold-keting to children will need to make sure they are up- stein, chair and partner at Manatt, Phelps and Phillips LLP, New York. “The disclosure of data collection and use practices by e-merchants and others have been found to be wholly inadequate by the FTC and other regulators,” she said. “While the FTC has been largely focused on the lack of disclosures provided for children’s apps on mobile devic- es and tablets in violation of COPPA, California Attorney General Kamala Harris has targeted all app owners that fail to provide users with adequate disclosure of their privacy policy, as violating of California law,” she said. “Marketers looking to market to kids through their mo- bile and tablet devices will certainly face increased scru- tiny and challenges in 2013 and in the years to come.” Governance could grow The FTC also recently released some non-binding guide- lines related to privacy for mobile marketers that point to some of the concerns that the agency has. Of particular not is that the FTC says mobile platforms should consider offering a Do Not Track mechanism that would enable smartphone users to choose to prevent tracking by ad networks or other third parties as they navigate among apps on their phones. With concern on the part of regulators and privacy advo- cates growing over how many parties are collecting data from devices and what kind of data they are collecting, Ms. Goldstein expects there will be more bills seeking to govern mobile privacy in 2013, with some perhaps gain- ing more traction than in the past.PAGE 21 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  22. 22. Already, one marketer – Delta Air Lines – has been sued eral Communications Commission both ruled last yearby the California attorney general’s office over claims that text messages sent to confirm that someone hasrelated to a lack of privacy controls for its mobile app. requested to opt out of a text messaging program areAdditionally, the FTC has warned that it is launching not unlawful. As a result, this may put an end to lawsuitsmultiple investigations to determine whether certain claiming such messages violate the Telephone Consumercompanies violated legal requirements. Protection Act, which have been expensive and cast a lot of uncertainty in the industry.“Companies that develop or market apps need to thinkabout privacy issues in the early stages of developing However, these developments do not eliminate the needan app,” said Gonzalo Mon, attorney with Kelley Drye for merchants to carefully review their text messaging& Warren LLP, Washington. “For example, developers programs, particularly their opt-in procedures – to en-should generally collect only the information they need sure they are in compliance with existing laws.in order for an app to function. “In particular, merchants should ensure that they get ex-“Next, developers should work with their legal team to press opt-in consent before they send text messages todraft a privacy policy,” he said. consumers,” Mr. Mon said.“The policy should accurately reflect what information “Merchants should be careful to ensure that the termsis collected through the app and how that information and conditions of their mobile programs accurately re-is used. flect how the programs will run,” he said. “Some market- ers have gotten sued over even minor deviations.”“Finally, developers must ensure that consumers can readthe privacy policy before they download the app. If acompany fails to take these steps, it could quickly find it-self in the midst of a lawsuit or regulatory investigation.”Data delugeAs consumers continue to embrace mobile for a varietyof daily activities, the sheer volume of data that is beingcollected about users will become a growing concern,as well. Data security could take on more importancefor merchants as the legal and reputational stakes forbreaches increase.“Look for merchants to migrate to cloud providers fortheir hosting services, in order to take advantage of new-er technologies, economies of scale and cost efficiencies,while reducing internal overhead costs,” Ms. Goldsteinsaid. “Merchants that embrace these technologies mightseek to use these efforts to their competitive advantage.”Other developments in 2012 are also likely to change thelegal landscape in 2013 for mobile marketers.On the positive front, a California court and the Fed-PAGE 22 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  23. 23. MULTICHANNEL RETAIL SUPPORTMobile opportunities outweigh any negatives for merchantsBy Chantal TodeG ift shoppers who embraced mobile for exclusive holiday season when it came to mobile, with users em- offers and added convenience will be looking for bracing their smartphones and tablets to shop in re- more similar experiences in 2013 and retailers cord numbers. As a result, savvy merchants will bewould be wise to provide them. This means moving be- looking for how to continue drive mobile use in 2013yond the initial first steps in mobile and delivering more even as overall sales slog along because of ongoingpersonalized mobile experiences at scale to help support economic challenges.multichannel retail strategies. “Retailers have really only gone through Mobile 1.0, onRetailers had a lot to be happy about during the 2012 both the app and the Web side, and this holiday season will reflect some early adopters of 2.0 – more focus on personalization and localized content,” said Nikki Baird, managing partner at RSR Research, Miami, FL. “I think that will be the big trend for 2013. “Also, there will be better integration of mobile into the in-store experience, whether that is through simple sig- nage and QR codes or more sophisticated WiFi or app- enabled interactions, she said. Scaling up Merchants conducted a lot of tests in mobile in 2012 to learn about how best to engage these consumers. How- ever, in 2013 merchants will need to roll out their mobile campaigns on a regional and national basis. One of the opportunities merchants have with mobile is the emergence of the mobile wallet and the impact it is having on traditional print mailers and weekly circulars. Merchants are also likely to focus on mobile coupons, as they can be relatively easily deployed and shoppers like them. “The things that have been presented in a physical way are now really moving into digital as something that is readily available and stored on a smartphone or redeemed in-store,” said Stephen Burke, vice presi- dent of the mobile practice at Resource Interactive, Columbus, OH. “Safeway and Kroger are making progress in this area, while others are integrating with Apple Passbook or have standalone wallets that they create,” he said.PAGE 23 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  24. 24. Cross-department cooperation “If retailers implement some of the in-store trackingActual mobile payments may still be a little further down measures that they seem to be contemplating right now,the pipeline for merchants because of the complexities there may be a huge privacy blow-up or at least debateinvolved and the need to invest in infrastructure, a step in 2013 – how much retailers can and should track, andmany will be reluctant to take until it becomes clearer what they can or should do with the information theywhich mobile payments offerings are likely to dominate. collect,” RSR Research’s Ms. Baird said.“The smartphone as a payment vehicle is probably a year Advantage of showroomingor two away in the U.S. market for more than relatively Overall, merchants will recognize that the oppor-small purchases such as a coffee or a cheeseburger,” Mr. tunities in mobile far outweigh any negatives thereBurke said. might be.The coming year could also see merchants put a bigger For example, there was a lot of focus last year on shop-focus on advertising in mobile as a way to drive traffic to pers using their smartphones in stores to compare priceseither a bricks-and-mortar store or a digital storefront. – or showrooming.Merchants face several challenges in broadening their “Everybody is clear that a smartphone-wielding consum-mobile strategies, including the need to bring together er is a positive opportunity and not an negative opportu-representatives from across several different depart- nity,” Resource Interactive’s Mr. Burke said.ments and getting them to work together. “The opportunity to take advantage of showrooming isHowever, as merchants increasingly recognize the need becoming evident to retailers and they are up to thefor customer-driven experiences, they are growing num- challenge,” he said.bers of examples of marketers taking the steps to drivethis kind of cooperation. “For example, in clothing retailers have the advan- tage of immediacy – what is available now – and canAnother challenge they face is measurement, such as compete effectively.”how does a mobile im-pression lead to a physi-cal sale, how do you trickthis and which depart-ment gets the credit forthe sale.Merchants also increas-ingly need to be sure theyare focusing on privacy is-sues as it relates to mo-bile. For example, in-storetracking strategies are be-ing closely considered bysome retailers as a wayto learn more about con-sumers’ in-store shoppinghabits, but could raise pri-vacy concerns for some.PAGE 24 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  25. 25. MARKETINGPrivacy, measurement to continue to challenge location-based marketingBy Lauren JohnsonW ith more consumers using their mobile devices with the idea of forking over personal information, it is to receive contextual and relevant advertis- crucial that there is an exchange in getting consumers’ ing, location-based advertising will be an area information, per Ms. Ho.for marketers to eye in 2013. However, there will stillbe plenty of challenges including location and measure- “In the consumers’ eyes, this exchange is their personalment that may hold the industry back. location information in exchange for more targeted and relevant content or information,” Ms. Ho said.Privacy, measurement will continue to challenge loca-tion-based marketing “When this balance is maintained, advertisers will ben- efit by seeing strong performance of their ads,” she said.With more consumers using their mobile devices toreceive contextual and relevant advertising, location-based advertising will be an area for marketers to eyein 2013. However, there will still be plenty of challengesincluding location and measurement that may hold theindustry back.New technologies such as Apple’s Passbook and mobilewallets were set up in 2012 that will help kick location-based marketing into gear in 2013. Although there arechallenges, marketers can expect to see more redeem-able mobile coupons and offers that are tied to a loca-tion in 2013.“In 2013, we will start to see a shift to more perfor-mance-based mobile ad strategies now that some of theearly mobile advertisers have blazed the trail to showthat real commerce activity can be driven from mobiledevices,” said Monica Ho, vice president of marketing atxAd, New York.“In the past year, we have seen a noticeable shift incampaign focus from overall reach and awareness cam-paigns to campaigns centered around the redemptionof locally-focused offers and promotions or other localcommerce-based actions that go well beyond just theinitial ad click,” she said.Watchful eyesDespite the opportunities, experts agree that privacy willbe an issue with location-based campaigns in 2013.Although consumers are becoming more comfortablePAGE 25 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  26. 26. In return, publishers can expect to see higher CPMs with privacy,” said Darrin Clement, CEO of Maponics, Whitelocation-enabled traffic. River Junction, VT.Location-based ads also need to work on better mea- “Challenges will be how to how to keep this balance insurement, per Ms. Ho. check,” he said.For marketers to see a more complete picture of location- For example, letting users set zones such where purchasebased advertising, marketers need to make sure that they intent is high — such as in shopping malls — where theyare getting location data and enough of it to scale larger want to receive ads will be key.campaigns. “People don’t want to be ad-attacked every time theyMore than brand building walk by a retailer,” Mr. Clement said.Some experts say that there will be a shift towards moreROI-based campaigns versus brand-building initiatives “They need the ability to customize their experience,” hein 2013. said. “What they really want are apps that allow them to set preferences.”In 2013, marketers will increasingly combine mobile andlocation on redeemable offers and coupons in campaigns Mobile educationthat close the loop on sales. In 2013, more marketers will incorporate mobile into their marketing mix, according to Greg Hallinan, chiefThe introduction of Apple’s Passbook and the advance- marketing officer of Verve Wireless, Encinitas, CA.ment of mobile payments in 2012 will fuel the growth oflocation-based offers and coupon redemption in 2013. Additionally, marketers will increasingly look at how mobile can be used in a multichannel way as consum-Not only will these offers help marketers better track ini- ers continue to rely on their handsets as a primarytiatives, it will also help educate consumers on the value communication tool.of interacting with mobile marketing. For example, mobile has traditionally been viewed as theFor example, using predictive location that anticipates third screen to grab a consumer’s attention while watch-where a user is headed to serve a relevant ad or retarget- ing television.ing a user by common behavior in a particular area aretwo trends on the horizon for 2013, per Ms. Ho. However, recent research shows that mobile is in- creasingly becoming the first screen that users go to,According to a forecast from BIA/Kelsey, 58 percent of whether it is to watch video clips or interacting withall mobile advertising spend will be location-focused by advertising content.2016, showing the shift that the industry will likely takein 2013. According to Mr. Hallinan, retailers in particular are well suited for location-based campaigns because they canTake control target users with both the top and bottom of the pur-As marketers are able to leverage more relevant informa- chase funnel.tion about consumers, marketers will be able to makelocation-based campaigns more specific and tailored. “I think definitions and organic agency knowledge will continue to be a challenge in the early part of the year as“A big opportunity will be control — marketers will have brands and their agencies determine how best to deploygreater control of who they reach and where they reach mobile at scale and discover what works for their specificthem, and consumers will have greater control of their brands,” Mr. Hallinan said.PAGE 26 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013
  27. 27. MUSICMusic industry split on subscription and library-based revenue streamsBy Lauren JohnsonI n 2013, there will be a continued shift to more sub- the new paradigm that many music fans don’t necessar- scription-based music streaming services. However, ily need to own their music anymore,” said Brian Colbert, there is also still a place for personal music libraries. vice president of mobile at Pandora, Oakland, CA.As smartphones and tablets continue to be used by con- “Whether it is streaming radio or an all-you-eat subscrip-sumers’ main device during the day, marketers will con- tion model, the digital music landscape is experiencingtinue to find new ways to target groups of engaged us- another seismic shift, similar to how digital downloadsers. In fact, some experts argue that the smartphone will changed the industry a decade ago,” he said.be become a primary screen in 2013. “What’s encouraging from a music perspective is“On the music front, the industry is trying to adjust to that smartphones are becoming the first screen for music lovers.” Music free-for-all In 2012, the music space continued to heat up with com- panies including Pandora, Spotify and Rdio all clamoring for the attention of mobile users. These companies also increasingly used their mobile products to lure in brands to help monetize content. For example, Spotify rolled out a free radio feature to its mobile app to let users stream music by genres. Brands including Red Bull, McDonald’s and Macy’s all ran campaigns on Spotify’s mobile applications in 2012. Specifically, there is a growing need from market- ers to tie advertising campaigns to commerce as con- sumers become more comfortable shopping from their handsets. “Pandora saw a huge spike in mobile shopping and pur- chases after Thanksgiving weekend and that trend will only continue into 2013 as retailers mobilize their Web sites and checkout processes,” Mr. Colbert said. Additionally, tablets will continue to prove themselves as commerce-drivers with better browsing experiences than smartphones, per the Pandora executive. “Lastly, concerns over credit card security seem to be easing as consumers get more comfortable making largerPAGE 27 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013

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