Editor’s Note: Welcome to Reality Check, a feature for RCR Wireless News’ new weekly e-mail service, Mobile Content and Culture. We’ve gathered a group of visionaries and veterans in the mobile content industry to give their insights into the marketplace. In the coming weeks look for columns from Mark Desautels of CTIA, Laura Marriott of the Mobile Marketing Association and more.
The 2006 buzz around paid mobile search has carried over into 2007 with search continuing to be one of the hottest topics in the wireless industry. The market is rapidly evolving despite the absence of significant spend by marketers. The race to build inventory is on!
2006: Mobile Search Emerges with Focus on Consumer Experience-Not Cash
Mobile search offerings in 2006 could best be described as a collection of silos. Consumers needed to decide what they’re searching for before selecting a search engine. They could either search carrier content or Web content or content specific to an information portal, but not necessarily all three at the same time.
Carriers implemented white label search solutions (e.g., Medio, Jumptap) with an outlook to improving the discovery experience within their own content catalogs and information portals. At the same time, they offered paid services in the form of location-based applications that included category searches and mapping (e.g., Citysearch, Infospace, VZ Navigator and Superpages).
At the same time, well-known online branded portals, search engines, and local information sites jumped into the mix and, for the most part, looked to compete head on with the wireless carriers. Online search giants (e.g., Google, Yahoo, Microsoft) have moved aggressively into the mobile arena with free versions of search including directory assistance-both SMS and WAP-as well as free, downloadable mapping applications that compete head-on with paid versions offered by the carriers. Vertical information and search portals-specifically those with a focus on local information (e.g., Vindigo, Go2) also have mobile offerings.
Voice portals also made a resurgence as awareness of mobile search (i.e., using a cellphone to get information) grew. Not limited to access by cellphones, directory assistance and information accessed by automated voice solutions (e.g., TellMe) found its way back into mainstream press. Ad-supported directory assistance companies (e.g., 1 800 Free411) began to post impressive call volume numbers.
2007: Ad-Supported Mobile Search Gains Momentum
Yahoo and Google upped the momentum at the end of 2006 by introducing beta versions of paid search. Infospace announced they were moving to an ad-sponsored (free) version of their application in the first quarter of 2007 while Medio Systems announced the formation of an ad network. Last month, Microsoft purchased TellMe which will allow them to offer multi-modal functionality by enabling users to choose between text messaging and voice input, as well as output (search results). Finally, Google recently announced a voice search and directory assistance service (Goog411).
Challenges Tied to Search Process on Cellphone Still Loom Large
Substantial growth in mobile subscriber adoption of search applications on the cellphone continues to be inhibited by the form factor. Once a mobile subscriber chooses a search mechanism from the plethora of choices (see above), he still must find an efficient means of providing a search term and to generate results relevant to his context, which may and often is different than it is on a computer. Voice applications (e.g., TellMe, Promptu, V-Enable) allow the input of voice search terms while Google (e.g., Neven Vision) and others have purchased or developed technology for picture inputs. On the search engine side, little room is available for presentation of results. Moreover, not all applications allow for the relevance of location or cellphone to be added to the criteria-an even greater challenge for portals without a vertical focus.
Generation of Inventory Stands Atop the List of Business Challenges
Search applications are focused on solving the challenge of creating a better user experience-the challenge viewed as most important to tackling in order to generate the volume of inventory required to excite advertisers and media properties. Page views (adoption multiplied by usage) of web pages on cellphones remain pale in comparison to their online counterparts. According to JupiterResearch, only ten to 15 percent of mobile subscribers in the United States browse the Internet on their cellphone, and only a handful of these subscribers do so regularly. About half of these mobile browsers, however, report using search engines on their cellphones.
Target Audience Ready for Search, But are Advertisers?
Advertisers and marketers leveraging the mobile platform, however, are looking to target a much smaller, tech-savvy audience than the mobile subscriber population broadly. These adoption and usage numbers for mobile search in all formats rise dramatically for the subset of the mobile subscriber population here in the United States, which is already buying mobile content or using data services. For those with 3G handsets, the numbers are also quite attractive. Advertisers, however, must have a purpose for paid mobile search (e.g., selling tickets, mobile content or a cup of coffee) and a “place” for mobile subscribers to “land” when they do click on a search term.
Search Providers Continue to Gear up to Support Advertisers
Search providers are continuing to gear up to provide the best experience to consumers and adequate volumes of targeted inventory to advertisers. They are continuing to expand their platforms to include SMS, WAP and downloadable applications while improving the consumer experience with a range of search term input choices.
Holy Grail of Mobile Search-Local Search is Emerging as More than a Concept
Mobile subscribers are using local search as it is broadly defined here. Paid directory assistance is still the most common form according to our research, but use of ad-supported voice services, mobile browsers and text-based local search have grown in the past 12 months. Selling local inventory-a business traditionally owned by local (printed) phone directories and newspapers-is not yet in place for mobile search terms unless integrated with online purchases. Yahoo recently announced a deal with various newspaper properties to tackle this challenge Nokia has launched smart2go, a 3D local search and mapping application that allows users to pan in and out of digital maps and “fly over” areas in 3-dimensional maps. With the service, Nokia plans to offer sponsored search links, coupons and branded icons on maps.
Realistic Advertiser Expectations with Search Provider Focus on Experience Will Help Foster Market Growth
Opportunities exist for advertisers today both on carrier portals as well as well known web properties, but expectations must be realistic given the size of the audience and limitations of the form factor. Near term opportunities are best for mobile content providers, national advertisers and local retailers, but the best local search opportunities are yet to come.
Search providers should continue to focus on the consumer experience as most are. It’s a nascent market with a lot of upside in the next few years as the combination of cellphones, networks and service plans evolve into an experience at a price point that launches the mobile search market from one limited to early adopters to mass market.
For more information on mobile search, please visit JupiterResearch’s web site at www.jupiterresearch.com
Questions or comments about this column? Please e-mail Julie at [email protected] or RCR Wireless News at [email protected].
