Monthly Archives: January 2014

Half of Facebook Q4 Ad Revenue Came from Mobile

Facebook mobile adsMobile ads at Facebook now make up more than half of total advertising revenues, according to its Q4 2013 results.

Mobile ad revenues contributed around 53 per cent of Facebook’s ad business in Q4, more than double the share it brought in a year earlier, and raking in $1.25bn (£760m) for the company.

This marks the first ‘billion-dollar quarter’ for mobile at Facebook, up from zero when it started monetising mobile in February 2012. Black Friday, the first Friday after Thanksgiving Day in the US, was the company’s single biggest mobile ad day of the quarter, attributed to bargain hunters checking the site while out shopping.

Total revenue was $2.59bn, an increase of 63 per cent on Q4 2012, with ad revenues making up $2.34bn of that. Profit at the company reached $1.5bn, a huge growth from 2012, where full-year profit was just $53m.

Monthly and daily visitors continue to grow, despite criticism that Facebook is past it, with 1.23bn monthly and 757m daily users seen in Q4. This is slightly slower than growth seen in Q3. Active use on mobile are still climbing, with 556m daily visitors and 945m monthly visitors, growth of 49 per cent and 39 per cent respectively. The company did not break out figures for mobile-only users.

The company said app installs ads are ‘generating very healthy revenue growth’ and pointed to its ‘interesting’ test of Facebook ads in third-party apps, but said it won’t have meaningful results for a while. Facebook is also making ‘steady progress’ with brands, the company says, and its auto-play video ad product, which began testing in December, will be key to getting more on board.

Facebook has further honed its targeting capabilities, doubling its Custom Audiences sements from 500 to 1000, and says News Feed ads generate an eight times ROI, tracked using Facebook’s Offline Conversion Measurement capability.

For the first time, Mark Zuckerberg will be delivering a keynote at Mobile World Congress.

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/half-of-facebook-ad-revenue-comes-from-mobile/#sZKcPU5tPWjJ2x2D.99

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‘Leaky Apps’ Scandal: Where Does the Buck Stop?

Apps stock imageThis week’s revelations about the role that app developers and advertising networks may have (potentially accidentally) played in UK and US government spying raises very important questions for the mobile industry.

Aside from Rovio, which released a comprehensive statement assuring its users that it does not give data to spying agencies, and levelling blame at third-party networks, the silence from the industry has been deafening.

Google’s Doubleclick ads are among those served within Rovio’s Angry Birds, which implicates the company in this alleged haemorrhaging of personal details. Google is also an app owner, with its suite of productivity apps among the most widely used in the world, giving it even greater visibility of data and relevant security issues.

Google: No comment

Asked what the company made of the Wikileaks information, a Google spokesperson said: “We don’t have a comment on this.” When pressed on its responsibility to its users, Google added: “No one’s available for comment.”

Ad networks including Millennial Media and Nexage also serve ads within Rovio’s apps. Millennial Media’s EMEA content and communications manager Dave Ross-Tomlin, made a short statement yesterday. “There has been reporting over the last 24 hours about the collection of mobile data by government ‘spy’ agencies,” he said. “Let us be clear: Millennial Media has not and does not work with, nor pass information to, the NSA, GCHQ, or any other such agencies.”

The company said that it uses non-personally identifiable data provided by publishers – in this case, app developers – with the permission of users. It then adds additional filtering for regulatory compliance, relating to laws like the Children’s Online Privacy Protection Act. We were directed to their privacy policy but Millennial could not give any more detail about whether data could have been collected without them knowing and, if so, how this could be stopped in the future.

MMA: We take privacy seriously

It is not entirely clear within whose jurisdiction this lies and who should be held accountable if consumers’ privacy is infringed. While the Internet Advertising Bureau said it is unable to comment, Stephen Upstone, UK chair of the Mobile Marketing Association, a trade body for the industry, said that his organisation and its members take the issue of consumer privacy very seriously.

“I am not aware of any companies sharing of customer data accidentally or deliberately,” Upstone said. “The MMA takes an active role in encouraging regulation and best practice with the mobile marketing and advertising industry globally. We consult with brand marketers, advertising agencies, publishers, software and service suppliers on behalf of the industry and consumers.”

When asked who could be held responsible if data has been handed over to security services, purposefully of not, Upstone added: “Individual companies that handle data are responsible for ensuring it is properly handled, securely stored and that the laws and regulations are being respected. App developers who work with third-party suppliers and manage data are responsible for choosing vendors who are managing data properly.”

Rovio has said that it is now re-evaluating its work with ad networks as it considers how to ensure that data is not made so freely available in future, but without clear evidence of who has done what, many in the industry face having this key app ad inventory removed from their arsenal. And with little response from app developers and the ad networks they work with, it is difficult to know how the industry can stop this happening in the future.

ICO: We have raised concerns about US spying

We got in touch with a number of consumer protection organisations, including Consumer Future and Which?, but they were unable to comment as they did not have the relevant expertise. An Information Commissioner spokesperson said that app developers must comply with the requirements of the Data Protection Act, including being open about how data will be used and that data collection is not excessive, on which the organisation has created guidelines.

On the NSA and surveillance, the ICO spokesperson said: “There are real issues about the extent to which US law enforcement agencies can access personal data of UK and other European citizens. Aspects of US law under which companies can be compelled to provide information to US agencies potentially conflict with European data protection law, including the UK’s own Data Protection Act. The ICO has raised this with its European counterparts, and the issue is being considered by the European Commission, who are in discussions with the US Government.”

This is just the latest in a long list of examples of government infringing on civil liberties, so are people right to ask whether privacy itself is a thing of the past? Online security firm Bitdefender says that users who embrace privacy are ‘denied access to modern technology’.

Bitdefender: Internet is a pool of data waiting to be mined

“Many of the apps that we install on a daily basis are paid for with our private details,” said Alexandru Catalin Cosoi, chief security strategist at Bitdefender. ”On one hand, advertisers are becoming greedier and greedier, because the more personal information they get, the more accurate their profiling, and on the other hand, developers are better paid if they accept the task of getting more information for the advertiser.

“It looks like a win-win situation, but the end-user has the most to lose in the case of a data breach, and what’s most harmful is that most of the time they aren’t even aware that their private information is being harvested. Social networks are booming and a good chunk of users either have no idea how to, or do not care about, safely using these. The internet has become a pool of personal information ready to be mined.”

It was announced yesterday that Ed Snowden, the man who did some data mining of his own when he leaked documents about government spying to Wikileaks, has been nominated for the Nobel Peace Price. But the prize is not without its critics, with past nominees including Joseph Stalin.

In an interview in December Edward Snowden said: “I didn’t want to change society. I wanted to give society a chance to determine if it should change itself.” These revelations look like a good opportunity for the mobile industry to do some soul-searching of its own.

We reached out to a number of ad networks, including Nexage and Medaiplex, who did not get back to us. Adblock, creators of software to stop ads, declined to comment and App Annie, the app data analytics platform that tracks 3.9m apps, said it ‘may be next week when they engage with the question’. We are awaiting further comment from a number of other organisations. 

Written for Mobile Marketing Magazine and first published here:  http://mobilemarketingmagazine.com/leaky-apps-scandal-where-does-the-buck-stop/#vouAJQ4eioHpUut1.99

Rovio Points to Ad Networks Over Data Leaks to NSA and GCHQ

Angry Birds CartoonAfter revelations in the Guardian today, on the EU’s international Data Protection Day no less, that Angry Birds and other ‘leaky’ phone apps like Google Maps have been targeted by NSA and GCHQ for private user data, the app developer Rovio has responded by pointing the finger at third-party ad networks.

The allegations about the security of popular apps relate to documents leaked by Edward Snowden to Wikileaks and subsequently passed on to the Guardian, the New York Times and ProPublica.

They show that apps, where commercial data is collected by developers or advertising networks, are considered a target for spies, with Angry Birds used as a case study. Information that may have been intercepted includes phone model and screen size, personal details like age, gender, sexual orientation and sexual preferences, and location data, including live Google Maps queries.

‘Anyone using Google Maps on a smartphone is working in support of GCHQ’ 

The documents do not show how much data has been collected, stored or searched, or how many people are affected, but a document from 2008 highlighted by the Guardian explains that the level of access ‘effectively means that anyone using Google Maps on a smartphone is working in support of a GCHQ system’. And apps have certainly come a long way since then. The NSA has spent more than $1bn in its phone targeting efforts, the Guardian reports.

Rovio, who spoke to Mobile Marketing last week about its plans for the Angry Birds apps, which have been downloaded more than 2bn times to date, has now issued a statement. The company says that it ‘does not share data, collaborate or collude with any government spy agencies such as NSA or GCHQ anywhere in the world’.

“The alleged surveillance may be conducted through third-party advertising networks used by millions of commercial web sites and mobile applications across all industries,” Rovio said. “If advertising networks are indeed targeted, it would appear that no internet-enabled device that visits ad-enabled web sites or uses ad-enabled applications is immune to such surveillance. Rovio does not allow any third-party network to use or hand over personal end-user data from Rovio’s apps.”

‘We will have to re-evaluate working with these networks’

Mikael Hed, CEO of Rovio Entertainment, added: “The most important conversation to be had is how to ensure user privacy is protected while preventing the negative impact on the whole advertising industry and the countless mobile apps that rely on ad networks. In order to protect our end users, we will, like all other companies using third-party advertising networks, have to re-evaluate working with these networks if they are being used for spying purposes.”

We have reached out to ad networks working with Rovio, including Millennial Media, Nexage and Google’s DoubleClick, along with the relevant industry bodies and privacy campaigners to comment on the story. Watch this space.

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/rovio-points-to-ad-networks-over-data-leaks-to-nsa-and-gchq/#LVXpgpxoBCtYwy80.99

BBC Launches Instafax Instagram Video News

BBC InstafaxHaving closed its analogue information service Ceefax back in 2012, the BBC has now flexed its social creds by launching a digital news teasing ‘experiment’ on Instagram.

Three 15-second videos will be uploaded every day by the Video Innovation Lab and the teasers have already covered topics as diverse as the ongoing Syrian conflict, the death of a World War Two veteran and the Australian heatwave.

Responding to the inevitable social feedback, the BBC said: “We are trying to create content within the social spaces people are inhabiting. That’s the main goal. The way we see it, Instagram and our website are – in many ways – two separate audiences.

“At the end of the day, it’s just an experiment. And we’re very happy you are having these conversations here. They are helpful for us when trying to decide how to move forward.” The experiment will initially last for one month.

People have already suggested giving users the ability to share the content, as well as being able to click through to see a more detailed account of each story on the BBC website. The videos currently only suggest people enter the BBC’s web address to access more news.

iWonder Launch

The organisation has also launched a cross-device learning series called iWonder. The responsive web service has launched to coincide with the start of World War One commemorations, with eight interactive stories going live yesterday. Another 17 will be added by the end of the month.

Tim Plyming, executive producer of knowledge and learning, said: I am certain that the iWonder interactive guides will be a new and exciting way for the BBC to create compelling content. The format has been designed with BBC’s four screen strategy firmly in mind which means you can enjoy this great content whenever and wherever you are – whether you’re using a smartphone, tablet or desktop device.”

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/bbc-launches-instafax-instagram-video-news/#PXKSCKuPa7ZCGvQb.99

Wikipedia’s Jimmy Wales Joins The People’s Operator

A rare piece of really nice mobile news, and on my birthday too…

Wikipedia founder Jimmy Wales has been appointed to the board of The People’s Operator, a mobile network set up at the end of 2012 to transform the telecoms industry.

The for-profit operation based in Tech City is online-only and spends little on offices and marketing, which enables it to give 10 per cent of each person’s bill directly to a charity of their choice.

A further 25 per cent of TPO’s overall profit also goes to the TPO Foundation, which passes that on to good causes like the NSPCC, the Big Issue Foundation and Childline. The company also works with the Unite and GMB unions, the Labour Party, as well promoting the Living Wage and sustainable supply chains.

Wales has taken a stake in the business and will work as co-chair of the board, where he will drive the growth of a global community. The operator is looking to expand into ‘key markets’, starting with the US.

Speaking of his appointment, announced at DLD14 (Digial-Life-Design) in Munich, Wales said: “With over 4bn mobile phone subscribers forecast for 2016 worldwide, TPO has huge potential for viral growth and the more it grows, the more money will pass to the people and communities that need it.

“Only a small percentage in global take up will make a massive difference to people’s lives. Just as Wikipedia grew virally as communities wanted to work together to liberate knowledge, so I believe TPO will grow in a similar way as communities work together to support good causes across the globe.”

Even with such noble aims, the operator offers pretty competitive SIM-only deals, with customers charged £14.99 for unlimited data, texts and calls. Business users can get handsets on contract starting at £17.50 per month for a Nokia Lumia 520 and reaching £37 per month for an iPhone 5.

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/wikipedias-jimmy-wales-joins-the-peoples-operator/#xuqfhYFQHXXHWCtf.99

Apple to Refund $32.5m of In-app Purchases Made by Children

Apple App StoreApple has been ordered to refund American parents ‘at least’ $32.5m (£19.8m) for in-app purchases made by their children without their ‘informed consent’.

‘Tens of thousands’ of complaints had been leveled at the company since early 2011, the Federal Trade Commission said, with many claiming thousands of dollars in charges they didn’t know about. One consumer said her daughter had spent $2,600 in the app Tap Pet Hotel.

The FTC found that Apple was storing users’ passwords for 15 minutes after they had authorised an initial download, enabling children to go on an inconspicuous buying spree. The second accusation was that parents were often simply asked for their password without Apple making it clear that this was to authorise in-app purchases. Both of these violate the FTC Act.

Apple will also have to change its billing practice by 31 March so that parents are clearly informed if entering their password is being taken to authorise a payment. The company must contact all of the people it knows were charged in this way and give them a refund at their request.

In an email to Apple employees obtained by 9to5Mac, CEO Tim Cook said the case wasn’t needed as the company was already addressing these issues. Apple has emailed the 28m people who made in-app purchases within kids games and has received 37,000 claims. Of the amount set aside for refunds, this would indicate an average unauthorised charge of around $878 per claimant.

“This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community: whether you’re doing business in the mobile arena or the mall down the street, fundamental consumer protections apply,” said FTC Chairwoman Edith Ramirez. “You cannot charge consumers for purchases they did not authorise.”

As Apple only takes 30 per cent of each transaction made, with 70 per cent going to developers, this means they are likely to pay out more than they actually received for each unauthorised payment. But $32.5m is a drop in the ocean compared to the revenues Apple makes in the App Store. Last year, the company made $10bn.

One of the four commissioners working on the case disagreed with the decision. In a statement, Commissioner Wright said he did not feel Apple should have to change its business because of an ‘extremely small and arguably, diminishing subset of consumers’. But this kind of problem is not limited to the US, with complaints to premium charge regulators PhonePayPlus growing rapidly in recent years.

The FTC outlined a range of steps it has taken to address issues created by growing smartphone use, including creating guidelines to avoid deception in mobile advertising, to improve transparency on data privacy and to help smooth the transition to mobile payments.

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/apple-to-refund-32-5m-of-in-app-purchases-made-by-children/#R0qH7Sg2FiqIlLoS.99

Smart Pipes or Dumb Monsters: What Can Telcos Do About Death of SMS?

Teen TextingOTT messaging exceeded the number of text messages sent in the UK last year by more than 15bn.

According to Deloitte estimates, the number of instant messages sent in the UK reached 160bn in 2013, growing from 57m in 2012. Meanwhile, the number of text messages sent dropped from 152bn in 2012 to 145bn in 2013.

This represents the first time that the number of texts sent has dropped. In 2014, the company believes that more than 300bn IMs will be sent, compared to just 140bn SMS.

But, in spite of the impressive growth of OTT messaging, with a growing range of global contenders, SMS still represents a huge share of revenue. In 2014, it will generate revenues of £60bn, equivalent to 50 times IM revenue. And Deloitte says it expects text messaging to continue to generate significantly greater revenues until 2018.

Scott McKenzie, director of Coleago Consulting, which advises the telco industry said he is surprised that SMS revenues aren’t going to fall faster than this. He now believes that the market has to aggressively go after mobile data if it wants to survive, to embrace that they’re going to be a ‘smart pipe’.

“The telcos are just becoming broadband internet companies,” he said. “SMS has been a highly lucrative area for them with a high margin, so they’re going to have to figure out how to profitably deliver mobile broadband to everybody. If they don’t cannibalise their own revenue, someone else will do it for them.”

But Jose Romero, VP product strategy and marketing at Movius, which sells new services to the carriers, believes that if this happens, telcos are restricting the kinds of services they can charge for and are likely to succeeded by smaller, cheaper mobile internet providers. He says they have to innovate.

“Some of these companies are in desperate situation where their business is starting to tank and if they don’t do something now – they will lose their business – specifically in developed markets,” he said. “They are hurting really, really bad from the loss of SMS revenue but they are quickly becoming an internet pipe that doesn’t generate much money.”

He says the large telcos need to speed up decision-making, stop doing ‘me too’ innovation and not be afraid to be first to market. “Carriers can actually compete in the area that they are very strong at – innovative voice services with high reliability – there is still a lot more money to be made from existing voice infrastructure so why don’t they do that?” he said.

Options that telcos are already exploring include offering different user profiles for ‘work’ and ‘home’ phone use on a single handset, and creating better roaming offers so people aren’t afraid to use talk minutes abroad. But Romero also highlights that Google now offers its users the opportunity to choose their default messaging client when they buy a new phone – picking either their carrier or an OTT provider – and this could easily be offered for voice too.

“If the carriers don’t innovate in the next two to three years, the OTT players will take over,” he said. “These companies can even go into other areas that they’re not comfortable with – they’ve got to look for new ways to become relevant or they will lose market share.” He points to AT&T’s presence at CES, tackling areas as broad as connected cars and healthcare.

But both men agree that telcos shouldn’t try and beat OTT providers at messaging. “Their experience of delivery of apps is pretty woeful,” said McKenzie, ” and there are millions of great apps out there already. But these messaging apps don’t actually generate a massive amount of revenue. And apps can change, WhatsApp could be replaced by something tomorrow.”

Both hightlight the failure of telco JV Joyne, a rich messaging app aimed at taking out the OTT market. “The project was five years late because they couldn’t agree on standard and took forever to get the thing off ground,” McKenzie said.

Understanding consumer behaviour to assess individuals’ needs, as well as offering good value packages and different levels of service for different types of customer, is key, he says. “It’s in their interests to have efficient customer service, which lower costs and reduce churn rates. The mobile market is going to get a lot more competitive in the UK.” Some companies are already adjusting pricing to make OTT less attractive, he highlighted, while T-Mobile in the US hosted an ‘uncarrier’ event at CES last week in a bid to differentiate itself.

McKenzie believes that in-market consolidation ‘makes a lot of sense’ and it has already been done across the world. But competition authorities are increasingly wary of the negative effect this may have on consumers. Private equity firms, outside operators and investors from Asia were also identified as potential entrants into the UK telco market.

But Romero doesn’t like consolidation, saying this could perpetuate the problems telcos already have. “It is something that is going to happen very quickly here. But it’s just going to create these monster operators and again – if they don’t innovate – they just become a pipe.”

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/smart-pipes-or-dumb-monsters-what-can-telcos-do-about-death-of-sms/#TjDpe7OzL841uqVX.99