On June 6, Larry Ellison--CEO of Oracle, one of the largest and most advanced computer technology corporations in the world--tweeted for the very first time. In doing so, he joined a club that remains surprisingly elite. Among CEOs of the world’s Fortune 500 companies, a mere 20 have Twitter accounts. Ellison, by the way, hasn’t tweeted since.
As social media spreads around the globe, one enclave has proven stubbornly resistant: the boardroom. Within the C-suite, perceptions remain that social media is at best a soft PR tool and at worst a time sink for already distracted employees. Without a push from the top, many of the biggest companies have been slow to take the social media plunge.
A new report from McKinsey Global Institute, however, makes the business case for social media a little easier to sell. According to an analysis of 4,200 companies by the business consulting giant, social technologies stand to unlock from $900 billion to $1.3 trillion in value. At the high end, that approaches Australia’s annual GDP. How’s that for a bottom line?
Savings comes from some unexpected places. Two-thirds of the value unlocked by social media rests in “improved communications and collaboration within and across enterprises,” according to the report. Far from a distraction, in other words, social media proves a surprising boon to productivity.
Companies are embracing social tools--including internal networks, wikis, and real-time chat--for functions that go way beyond marketing and community building. R&D teams brainstorm products, HR vets applicants, sales fosters leads, and operations and distribution forecasts and monitors supply chains.
Behind this laundry list is a more hefty benefit. Social technologies have the potential to free up expertise trapped in departmental silos. High-skill workers can now be tapped company-wide. Managers can find out “which employees have the deepest knowledge in certain subjects, or who last contributed to a project and how to get in touch with them quickly,” says New York Times tech reporter Quentin Hardy. Just cutting email out of the picture in favor of social sharing translates to a productivity windfall as “more enterprise information becomes accessible and searchable, rather than locked up as ‘dark matter’ in inboxes.”
Among the most promising (and heretofore least hyped) new social technologies are tools like Yammer (recently snapped up by Microsoft for $1.2 billion), which bring Facebook-like functionality into the office. Social-savvy employees post queries and comments to internal conversation threads and coworkers offer feedback, crowdsourcing solutions. Content can be shared and searched, so the same issues don’t resurface. Meanwhile, virtual groups offer a more interactive alternative than email or phones.
Interestingly, the report suggest that tools like Yammer are the tip of the iceberg. Right now, only five percent of all communications and content use in the U.S. happens on social networks, mainly in the form of content sharing and online socializing. But McKinsey analysts point out that almost any human interaction in the workplace can be "socialized"--endowed with the speed, scale, and disruptive economics of the Internet.
It seems noteworthy that the report’s conclusions have been echoed of late from the most authoritative of places: Wall Street. In the last year, the world’s largest enterprise software companies--Google, Microsoft, Salesforce, Adobe, and even Ellison’s own Oracle--have spent upward of $2.5 billion snatching up social media tools to add to their enterprise suites. Even Twitter-phobic CEOs may have a hard time ignoring that business case.
--Author Ryan Holmes is the CEO of HootSuite, a social media management system with 4 million users, including 79 of the Fortune 100 companies.
Sunday, September 30, 2012
Saturday, September 29, 2012
BB 10 L-series tutorials
BlackBerry 10 L-series tutorial videos surface online, give a literal peek at the future (video)
BY JON FINGAS
POSTED SEPTEMBER 29TH 2012 8:38AM
Those of us who've used a BlackBerry PlayBook will be familiar with the inevitable first-boot tutorials showing how to navigate the swipe-driven interface before we're let loose. Thanks to a series of demonstration videos leaked by BlackBerryItalia, it's apparent that we won't escape that educational process on BlackBerry 10 devices, either. The four clips show the basics of what we know the gesture experience will be like on full-touch L-series phones, including the signature BlackBerry Peek to check notifications and the unified inbox. Anyone looking for a direct clue as to what production BlackBerry 10 hardware will entail might be frustrated, mind you -- the rendered phone appears to be a placeholder rather than the L-series or a Dev Alpha B, and the device name is censored in an attempt to protect the source. That said, the clips provide a very straightforward explanation of the new interface concept and give us one more indication that RIM is closer to launch.
mSecure keeps passwords safe
mSecure For iPhone And iPad Keeps All Your Passwords Safe With 256-Bit Blowfish Encryption
By Ben Reid | September 30th, 2012
Generally speaking, the majority of us are concerned about our security and privacy at all times, and since most, if not all of us are rocking a mobile device of some description, the same rules apply therein. Whenever software makers put our sensitive data into potentially precarious positions, we call for heads to roll, however, despite small oversights by software developers potentially leading to dire consequences, the onus is just as much on us to arm ourselves against situations which could see our data accessed, stolen or used for unscrupulous ends.
mSecure by mSeven Software is the kind of application every iOS user should have installed on their device. I’ve reservations about labeling it a mere “password manager,” because it does quite a bit more than your generic credential-storing app. Boasting ultra-secure 256bit blowfish encryption, it protects all of your essential data, including account numbers, usernames, and passwords, and the in-built password generator will render your sensitive info water-tight from those prying eyes.
Like any secure app, it can be set to auto-lock, and includes a free backup utility which will keep your data safe and secure at all times. If you think somebody might try and guess your passwords, you can call upon the optional self-destruct feature, so once you’ve downloaded and installed mSecure, you’ll feel a lot more at peace knowing you’ve taken a big step in protecting your data.
iOS has, much like its desktop counterpart, built up something of a reputation as a safe haven from the spike of malware, and general non-niceties plaguing rivaling Android, but as the FlashBack outbreak on OS X taught us earlier this year, complacency has no place when it comes to security. Apple was forced to remove its claim OS X “doesn’t get PC viruses,” and even though Apple’s mobile operating system has yet to see any form of digital attacks, you can ill afford to rest on your laurels on a device which, if lost, could in most cases present a individual with an invaluable tool.
mSecure is the complete package, and although it’ll set you back $9.99 at the App Store, it is, as I mentioned earlier, the added layer of security everybody should have.
(Source: mSecure for iPhone and iPad on App Store)
Check out our iPhone Apps Gallery and iPad Apps Gallery to explore more apps for your iPhone, iPad and iPod touch.
Will TV have an afterlife?
Broadcast TV Aims for Your Smartphone
Two groups are preparing services that will deliver television signals to mobile devices.
DAVID TALBOT
Thursday, September 27, 2012
Dongle dangle: An antenna add-on for iPhones and iPads, resembling this one, will plug into the accessory port to receive broadcast TV in parts of the United States.
Elgato
Dozens of players within the U.S. broadcast industry are behind two parallel efforts to make iPhones or iPads double as conventional television sets. The plan is to upgrade broadcasting infrastructure to beam out mobile-ready signals.
A consortium called Dyle TV—representing 18 broadcast groups, including Gannet, Hearst, Fox, Univision, and NBC—is farthest along in upgrading broadcast networks; it has completed upgrades on 90 TV stations, representing portions of markets covering 55 percent of the U.S. population. Dyle TV is expected to launch a dongle sometime later this year that can be affixed to the accessory port of iPhones or iPads.
A second joint venture, Mobile500, represents much of the rest of the TV industry, with 437 stations, only 16 of whom have upgraded their networks. This group plans to launch a study October 1 of how people use the service—handing out dongles to 1,500 consumers in Seattle and Minneapolis, where several stations have upgraded.
In both cases, the dongles, now being manufactured by Elgato and Belkin, receive live TV broadcasts from the stations involved in the consortia. For broadcasters, this requires sending a simulcast over a new signal inserted into the regular TV spectrum. The new signal is required because conventional ones can't work in, for example, moving cars.
The dongle is expected to sell for around $100, but Dyle TV says the service will initially be free. Later, users will likely have to pay as part of cable or satellite packages or as a standalone subscription, requiring them to authenticate through the app for the dongle to work. The Mobile500 model would likely work in a similar way.
While the effort is still in its infancy, the approach has a key advantage over LTE networks. No matter how well LTE networks perform at delivering bandwidth to millions of video-hungry consumers toting the newest smartphones, there will be times when the system inevitably chokes, such as during breaking news events. That's where conventional TV broadcasting shines: though you're limited to viewing the content they air, the signal is available to all—even if millions want to tune in.
"We're not going to say people will use live TV as much as on-demand content," says Salil Dalvi, co-general manager of the Dyle venture, and also a senior vice president of NBC Universal Digital Distribution. "But what we do as a broadcast platform is to take wide demand content—such as the Today show, and other content that everyone is tuning into at the same time—and deliver it in the most efficient way possible."
The service is already available in one device—an antenna-equipped Samsung Galaxy Lightray sold by Metro PCS. In addition, the vehicle aftermarket company Audiovox is also supplying the technology for rear-seat entertainment systems.
The approach has promise, says Dipankar Raychaudhuri, who heads a wireless research laboratory at Rutgers University. LTE and 3G capacity is not nearly large enough to serve as a wholesale replacement method for broadcast TV, he says.
And depending on how people use a new generation of LTE-enabled smartphones, data crunches could materialize. That's why the TV approach would help. "There is a very important advantage of scale here in the sense that you could reach 10,000 to 100,000 subscribers in one metro area without tying up cellular networks," he says. By contrast, individuals downloading to 10,000 devices would consume as much as 10 gigabits per second from carriers' base stations. But whether the services take off depends on how many people want to get local news and live sports on their phones, he says.
The efforts have been a long time coming. One stumbling block has been that broadcasters often must negotiate a new set of programming rights for the underlying shows, says John Lawson, executive director of the Mobile500 group. "It is taking longer than any of us hoped, but it does seem to be moving forward," he says.
For now, the two groups are focusing on making one dongle for Apple devices; future dongles might be offered for the wide variety of Android phones and others having connection ports of different shapes and sizes.
In the broader battle to reshape TV, companies including Google and Apple are working on solutions (see "Searching for the Future of Television" and "Rumor: An Apple ITV in 2012.") Syncbak of Marion, Iowa, for example, has set up a pilot project with 60 stations nationwide to stream TV over mobile networks. And in one of the more audacious moves, Aereo, based in New York City, has put tiny TV antennas in data centers and streams TV over the Internet to people who can tune individual antennas from their device. (Aereo is being sued for alleged copyright infringement. The litigants include NBC Universal and Fox, which are behind Dyle TV.)
Traditional broadcast TV faces a generational challenge, as younger people are more likely to consume on-demand content using mobile devices than they are to watch TV in the living room. But mobile network operators have their own challenges, as they scramble to fend off capacity constraints (see "Are the Networks Ready for an Influx of iPhone5?"). To cope with increased demand, carriers are adding transmitters, augmenting LTE with available Wi-Fi signals, and finding ways to cache popular content.
The TV industry has one structural advantage: while it costs roughly $10 billion to $15 billion for a carrier to roll out a new nationwide LTE network, the entire TV industry can upgrade to allow mobile broadcasts for less than $300 million, says Erik Moreno, the other Dyle general manager, and an executive at Fox.
Should the Dyle TV and Mobile500 model take off, innovation, or disruption, could follow. "If you fast-forward to a few years from now, you can envision an individual station not just offering this simulcast, but other content for mobile customers," Moreno says.
RIM latest financial report
HomeBlackBerry NewsNews & Rumors, Editorial
Here’s what investors need to understand about RIM’s Q2 results
by Chris Umiastowski on 27 Sep 2012 09:30 PM
28
Once every 13 weeks, RIM drops their latest set of financial results. Tonight, the results were slightly better than expected. Supporting this, the stock soared by about 20% in after-hours trading.
I always like to analyze the numbers, and I like to look at them in comparison to expectations. But as usual, I'm reminding you that anyone who looks only at the quarterly numbers and compares them to Wall Street estimates is missing the big picture. These numbers don't tell us anything about RIM's future, but they do highlight certain opportunities and risks.
So let's get to it.
Revenue was actually $2.9 billion, up by 2% to compared to last quarter. Up is better than down, but 2% isn't a big move. To me it just shows that sales are stable while RIM goes through an enormous transition towards the new BlackBerry 10 platform. Overall, this is good news (so far) because it helps RIM maintain its cash balance which it needs badly.
As we heard from Thorsten on Tuesday in San Jose, the customer base is now 80 million strong, with 60 million users on BBM. This is another good sign because it means RIM's user base is still growing by more than 10% annually. Again, this is super important for the company - a shrinking customer base would increase the risk of a BlackBerry 10 flop. A growing customer base is very encouraging.
In my editorial from earlier today, I talked about the importance of cash to RIM's Q2 results. Recall that after Q1, RIM had a cash balance of $2.2 billion, having generated almost $300 million in cash flow from operations (excluding working capital changes) for the period.
Last quarter they said they'd maintain an approximately flat cash balance in Q2. I was worried it might drop. It did not. They actually ended the quarter with more cash - specifically $2.3 billion. How did they achieve this? It looks to me like another reduction in working capital (reducing inventory and accounts receivable). Obviously this isn't a sustainable source of cash, but I'll take what I can get.
RIM says its cash balance will remain stable next quarter, with some movement around the exact timing of restructuring charges. This can only mean they aren't expecting a revenue collapse, otherwise I don't see how it would be possible. I admit I'm surprised as to how stable their sales seem to be given the age and global competitiveness of BlackBerry 7.
But it's not all roses. To keep its sales up, RIM has been dropping prices. Ehud Gelblum, the analyst from Morgan Stanley, asked a great question about profitability on handsets. RIM management didn't answer him directly but it was very obvious to me they were admitting they lose money on device sales. Their rationale? It's necessary to protect their subscriber base and get people onto BlackBerry 7 devices as much as possible. I happen to agree with RIM completely on this. They need a user base to carry forward. They can't risk losing subscribers. It's worth eating some of the cost to make this happen.
But it still leaves RIM in a position of uncertainty. They don't make money on devices. They need to change this in order to have a long-term sustainable business model. And to make matters (potentially) worse, they generate over $1 billion in revenue per quarter on service fees. These service fees are under pressure. We have no idea how much pressure they're under. In fact, that $1 billion number has been very stable. But RIM acknowledges the pressure. What if this cracks? What it if really starts to decline? What if that happens while RIM still isn't able to make money on hardware? Should that happen this company will hemorrhage cash. At that point, it may not matter how good BlackBerry 10 is.
The good news is the market is clearly still willing to pay for high end devices. The iPhone 5 and the Galaxy S3 are good examples. If RIM can join Apple and Samsung at the high end of the market, it should earn a reasonable profit on hardware. And if it can deliver a superb messaging experience (as it always has) carriers will continue to pay for the use of RIM infrastructure. I just didn't want to paint a rosy picture without also presenting the risks.
Bottom line: RIM delivered numbers that surprised Wall Street to the upside. They've got some runway left. They're showing off a strong set of developer tools an user interface features on BlackBerry 10. The wait isn't going to be much longer now. The company is very different from it was one year ago. They're not out of the woods. Not by a long shot.
Blackberries for Business - Loaded With Business Features. Stay Connected & Boost Productivity!
www.rogers.com/business
Here’s what investors need to understand about RIM’s Q2 results
by Chris Umiastowski on 27 Sep 2012 09:30 PM
28
Once every 13 weeks, RIM drops their latest set of financial results. Tonight, the results were slightly better than expected. Supporting this, the stock soared by about 20% in after-hours trading.
I always like to analyze the numbers, and I like to look at them in comparison to expectations. But as usual, I'm reminding you that anyone who looks only at the quarterly numbers and compares them to Wall Street estimates is missing the big picture. These numbers don't tell us anything about RIM's future, but they do highlight certain opportunities and risks.
So let's get to it.
Revenue was actually $2.9 billion, up by 2% to compared to last quarter. Up is better than down, but 2% isn't a big move. To me it just shows that sales are stable while RIM goes through an enormous transition towards the new BlackBerry 10 platform. Overall, this is good news (so far) because it helps RIM maintain its cash balance which it needs badly.
As we heard from Thorsten on Tuesday in San Jose, the customer base is now 80 million strong, with 60 million users on BBM. This is another good sign because it means RIM's user base is still growing by more than 10% annually. Again, this is super important for the company - a shrinking customer base would increase the risk of a BlackBerry 10 flop. A growing customer base is very encouraging.
In my editorial from earlier today, I talked about the importance of cash to RIM's Q2 results. Recall that after Q1, RIM had a cash balance of $2.2 billion, having generated almost $300 million in cash flow from operations (excluding working capital changes) for the period.
Last quarter they said they'd maintain an approximately flat cash balance in Q2. I was worried it might drop. It did not. They actually ended the quarter with more cash - specifically $2.3 billion. How did they achieve this? It looks to me like another reduction in working capital (reducing inventory and accounts receivable). Obviously this isn't a sustainable source of cash, but I'll take what I can get.
RIM says its cash balance will remain stable next quarter, with some movement around the exact timing of restructuring charges. This can only mean they aren't expecting a revenue collapse, otherwise I don't see how it would be possible. I admit I'm surprised as to how stable their sales seem to be given the age and global competitiveness of BlackBerry 7.
But it's not all roses. To keep its sales up, RIM has been dropping prices. Ehud Gelblum, the analyst from Morgan Stanley, asked a great question about profitability on handsets. RIM management didn't answer him directly but it was very obvious to me they were admitting they lose money on device sales. Their rationale? It's necessary to protect their subscriber base and get people onto BlackBerry 7 devices as much as possible. I happen to agree with RIM completely on this. They need a user base to carry forward. They can't risk losing subscribers. It's worth eating some of the cost to make this happen.
But it still leaves RIM in a position of uncertainty. They don't make money on devices. They need to change this in order to have a long-term sustainable business model. And to make matters (potentially) worse, they generate over $1 billion in revenue per quarter on service fees. These service fees are under pressure. We have no idea how much pressure they're under. In fact, that $1 billion number has been very stable. But RIM acknowledges the pressure. What if this cracks? What it if really starts to decline? What if that happens while RIM still isn't able to make money on hardware? Should that happen this company will hemorrhage cash. At that point, it may not matter how good BlackBerry 10 is.
The good news is the market is clearly still willing to pay for high end devices. The iPhone 5 and the Galaxy S3 are good examples. If RIM can join Apple and Samsung at the high end of the market, it should earn a reasonable profit on hardware. And if it can deliver a superb messaging experience (as it always has) carriers will continue to pay for the use of RIM infrastructure. I just didn't want to paint a rosy picture without also presenting the risks.
Bottom line: RIM delivered numbers that surprised Wall Street to the upside. They've got some runway left. They're showing off a strong set of developer tools an user interface features on BlackBerry 10. The wait isn't going to be much longer now. The company is very different from it was one year ago. They're not out of the woods. Not by a long shot.
Blackberries for Business - Loaded With Business Features. Stay Connected & Boost Productivity!
www.rogers.com/business
Friday, September 28, 2012
Facebook updates Messenger for new iPhone
Facebook Messenger is Updated for the iPhone 5
Posted 6 hours ago
Facebook Messenger has been updated for the iPhone 5 and brings a new design for conversations.
Reach friends wherever they are with Facebook Messenger.
Features:
-Message a friend or start a group conversation
-Reach friends on mobile or web
-Get push notifications
-Know who's seen your messages
-Include your location and share photos
What's New In This Version:
- Swipe left anywhere in the app to quickly see who's available and send a message
- Add friends you message most to the top of your Favorites
- New design for conversations
- Improved speed and reliability
- Support for iOS 6 and iPhone 5
- Bug fixes
You can download Facebook Messenger from the App Store for free.
Posted 6 hours ago
Facebook Messenger has been updated for the iPhone 5 and brings a new design for conversations.
Reach friends wherever they are with Facebook Messenger.
Features:
-Message a friend or start a group conversation
-Reach friends on mobile or web
-Get push notifications
-Know who's seen your messages
-Include your location and share photos
What's New In This Version:
- Swipe left anywhere in the app to quickly see who's available and send a message
- Add friends you message most to the top of your Favorites
- New design for conversations
- Improved speed and reliability
- Support for iOS 6 and iPhone 5
- Bug fixes
You can download Facebook Messenger from the App Store for free.
Mobile Ads and you.
By SHIRA OVIDE And GREG BENSINGER
Advertisements on mobile gadgets have a bad rap. But slowly, the rulebook for what works in mobile advertising is being sketched out. Shira Ovide has details on The News Hub. (Photo: Getty Images)
In 2010, Apple Inc. AAPL -2.09% co-founder Steve Jobs proclaimed, "Mobile advertising really sucks." Now, however, the rule book for what works in mobile advertising is slowly being written.
Some of the ingredients to success include ads that play on the unique properties of mobile gadgets, including location, or ads disguised as a game, coupon or information that consumers want, say ad executives and industry observers.
What doesn't work? The same old Web ads plopped into a smartphone.
Mobile advertising has been touted as the next big thing since Apple's iPhone debuted in 2007. Yet the promise remained unfulfilled because marketing companies have to navigate consumers' desires for privacy with the enticements mobile devices offer, such as fresh information about users' location and spending habits.
Accidental clicks on mobile ads, difficulties buying ads in big quantities, and fuzzy metrics also have kept a lid on mobile ad spending, marketers said.
This year, research firm eMarketer Inc. projects less than 2% of all U.S. marketing spending, or just $2.6 billion, to go toward mobile advertising. Meanwhile, consumers using smartphones and tablets now generate more than 10% of Internet traffic, according to data provider StatCounter Inc.
"The mobile ad market is just not fully formed yet," said KC Estenson, who oversees the online and mobile business for Time Warner Inc.'s TWX -0.10% CNN.
Enlarge Image
As users move to mobile faster than marketers, mobile ad prices are being pushed down. While rates vary widely, on average it costs $2.85 to reach 1,000 iPhone users with a mobile ad, according to mobile-browser firm Opera Software ASA OPERA.OS +1.38% . By comparison, an ad in a national newspaper can cost as much as $50 or $100 for 1,000 viewers, a standard ad-rate metric.
Here's a look at what types of mobile ads are resonating, and which pitches are getting the thumbs down from consumers or marketers.
Search Ads
Just as with the online-ad industry, mobile marketers are plowing the biggest chunk of spending into search ads, where it is easy to prove a person visited a website or bought a product in response to an ad.
About half of all U.S. mobile ad spending goes toward search ads, more than the roughly 47% of total digital spending going into Web search, according to eMarketer. Google takes a 95% share of all mobile-search revenue in the U.S., estimates eMarketer.
In some categories such as hotels, restaurants and auto insurance, "you're seeing bids for ads that are higher on mobile than on desktop," said Jason Spero, who runs Google's mobile-ad business. He adds that "as an industry, we have some work to get" such rates across the board.
Comcast Corp. CMCSA -0.11% has paid for mobile-search ads that allowed users to tap a button on a smartphone to initiate a phone call to the cable company.
The Philadelphia company this year said mobile users accounted for more than 10% of its online sales. The rate at which people clicked on its mobile-search ads was almost four times greater than on desktop ads, Comcast said.
Useful or Fun
Skittish about bombarding mobile users with seemingly random ads, marketers including Kraft Foods Inc. KFT +0.38% and Macy's Inc. M +0.29% are experimenting with messages they want consumers to believe are fun, pay rewards or help them find useful information.
Scott Nordby, president of Innovative Real Estate Group in Colorado, said he pays online-real estate company Zillow Inc. about $340 a month to ensure his thumbnail photo and contact information show up on 10,000 Zillow-powered home listings in a single Denver Zip code. With a few taps on the smartphone screen, a would-be home buyer can call or email Mr. Nordby and his team.
Mr. Nordby said he receives about 150 to 180 inquiries a month—or more than half his total referrals—from would-be home buyers who found him on Zillow. Roughly one in 10 referrals from Zillow come through calls from would-be buyers' smartphones. He adds he's "thrilled" with the results.
Zillow Chief Executive Spencer Rascoff said people who use Zillow on mobile devices are three times more likely to contact agents like Mr. Nordby than people who surf Zillow on a traditional computer.
Big Is Beautiful
As smartphone screens get larger, companies have found some success with ads such as "takeovers" that briefly fill all or most of a device's screen.
San Francisco app company Fotopedia sells such ads on its iPhone and iPad apps, which let people flip through high-quality photographs of Paris, national parks or wild animals.
Marketers including National Geographic and travel websites Jetsetter and Expedia Inc. EXPE -0.65% pay roughly $1 to $1.50 for each user who clicks an ad, which fill a full screen. Like fashion ads in a luxury magazine, the Fotopedia ads appear every 10 "pages" or so of the app.
As many as 18% of people who see an ad click on it, said Christophe Daligault, Fotopedia's senior vice president of global operations. On the Web, it isn't unusual for just 1% of people shown an ad to interact with it, marketers said.
Still, big ads should be used sparingly, some marketers said. Craig Bierley, director of General Motors Co.'s GM -1.86% Buick advertising, said the auto maker tends to limit takeover ads to major product introductions because otherwise "people might find it annoying."
Unfamiliar Places
One approach mobile marketers are trying—with mixed results—is inserting ads in new places to overcome "ad blindness" by consumers used to tuning out marketing pitches in the usual spots, such on the edges on websites.
Start-ups such as Facebook Inc. and Twitter Inc. also are slipping ad messages into the flow of virtual conversations on their digital services.
Amazon.com Inc. AMZN -0.88% is pushing into new territory with ads on its newest Kindle tablets and e-readers. In the U.S., the company's new $199 Kindle Fire HD device displays ads filling its 7-inch screen whenever a user lets it "go to sleep." In the wake of consumer complaints following the introduction of the new Kindles this month, Amazon offered a $15 option to turn the ads off permanently.
Some Kindle Fire HD buyers said they didn't mind the ads. But Steve Campbell, a 56-year-old resident of Naples, Fla., said, "This thing is just constantly pumping ads at me," and is "tempted" to pay the $15 to opt out of the ads.
An Amazon spokesman declined to comment.
'Spray and Pray'
Banner ads—the boxes or rectangular ads on many mobile websites or apps—are known as the "spray and pray" approach. Marketers, consumers and companies all said these ads are cheap, crude and annoy mobile users. Still, banner ads account for nearly $2 of every $10 spent on U.S. mobile ads, according to eMarketer.
Mr. Rascoff said Zillow stopped showing generic banner ads about a year ago following consumer complaints the ads were irrelevant or hogged space on 4-inch mobile screens. "There's good money to be made, but at what cost?" he said.
Marketers and ad-dependent companies said banner ads are an inevitable first step in a new ad medium, just as the first wave of the Internet was dominated by now notorious pop-up and "dancing cowboy" ads.
Advertisements on mobile gadgets have a bad rap. But slowly, the rulebook for what works in mobile advertising is being sketched out. Shira Ovide has details on The News Hub. (Photo: Getty Images)
In 2010, Apple Inc. AAPL -2.09% co-founder Steve Jobs proclaimed, "Mobile advertising really sucks." Now, however, the rule book for what works in mobile advertising is slowly being written.
Some of the ingredients to success include ads that play on the unique properties of mobile gadgets, including location, or ads disguised as a game, coupon or information that consumers want, say ad executives and industry observers.
What doesn't work? The same old Web ads plopped into a smartphone.
Mobile advertising has been touted as the next big thing since Apple's iPhone debuted in 2007. Yet the promise remained unfulfilled because marketing companies have to navigate consumers' desires for privacy with the enticements mobile devices offer, such as fresh information about users' location and spending habits.
Accidental clicks on mobile ads, difficulties buying ads in big quantities, and fuzzy metrics also have kept a lid on mobile ad spending, marketers said.
This year, research firm eMarketer Inc. projects less than 2% of all U.S. marketing spending, or just $2.6 billion, to go toward mobile advertising. Meanwhile, consumers using smartphones and tablets now generate more than 10% of Internet traffic, according to data provider StatCounter Inc.
"The mobile ad market is just not fully formed yet," said KC Estenson, who oversees the online and mobile business for Time Warner Inc.'s TWX -0.10% CNN.
Enlarge Image
As users move to mobile faster than marketers, mobile ad prices are being pushed down. While rates vary widely, on average it costs $2.85 to reach 1,000 iPhone users with a mobile ad, according to mobile-browser firm Opera Software ASA OPERA.OS +1.38% . By comparison, an ad in a national newspaper can cost as much as $50 or $100 for 1,000 viewers, a standard ad-rate metric.
Here's a look at what types of mobile ads are resonating, and which pitches are getting the thumbs down from consumers or marketers.
Search Ads
Just as with the online-ad industry, mobile marketers are plowing the biggest chunk of spending into search ads, where it is easy to prove a person visited a website or bought a product in response to an ad.
About half of all U.S. mobile ad spending goes toward search ads, more than the roughly 47% of total digital spending going into Web search, according to eMarketer. Google takes a 95% share of all mobile-search revenue in the U.S., estimates eMarketer.
In some categories such as hotels, restaurants and auto insurance, "you're seeing bids for ads that are higher on mobile than on desktop," said Jason Spero, who runs Google's mobile-ad business. He adds that "as an industry, we have some work to get" such rates across the board.
Comcast Corp. CMCSA -0.11% has paid for mobile-search ads that allowed users to tap a button on a smartphone to initiate a phone call to the cable company.
The Philadelphia company this year said mobile users accounted for more than 10% of its online sales. The rate at which people clicked on its mobile-search ads was almost four times greater than on desktop ads, Comcast said.
Useful or Fun
Skittish about bombarding mobile users with seemingly random ads, marketers including Kraft Foods Inc. KFT +0.38% and Macy's Inc. M +0.29% are experimenting with messages they want consumers to believe are fun, pay rewards or help them find useful information.
Scott Nordby, president of Innovative Real Estate Group in Colorado, said he pays online-real estate company Zillow Inc. about $340 a month to ensure his thumbnail photo and contact information show up on 10,000 Zillow-powered home listings in a single Denver Zip code. With a few taps on the smartphone screen, a would-be home buyer can call or email Mr. Nordby and his team.
Mr. Nordby said he receives about 150 to 180 inquiries a month—or more than half his total referrals—from would-be home buyers who found him on Zillow. Roughly one in 10 referrals from Zillow come through calls from would-be buyers' smartphones. He adds he's "thrilled" with the results.
Zillow Chief Executive Spencer Rascoff said people who use Zillow on mobile devices are three times more likely to contact agents like Mr. Nordby than people who surf Zillow on a traditional computer.
Big Is Beautiful
As smartphone screens get larger, companies have found some success with ads such as "takeovers" that briefly fill all or most of a device's screen.
San Francisco app company Fotopedia sells such ads on its iPhone and iPad apps, which let people flip through high-quality photographs of Paris, national parks or wild animals.
Marketers including National Geographic and travel websites Jetsetter and Expedia Inc. EXPE -0.65% pay roughly $1 to $1.50 for each user who clicks an ad, which fill a full screen. Like fashion ads in a luxury magazine, the Fotopedia ads appear every 10 "pages" or so of the app.
As many as 18% of people who see an ad click on it, said Christophe Daligault, Fotopedia's senior vice president of global operations. On the Web, it isn't unusual for just 1% of people shown an ad to interact with it, marketers said.
Still, big ads should be used sparingly, some marketers said. Craig Bierley, director of General Motors Co.'s GM -1.86% Buick advertising, said the auto maker tends to limit takeover ads to major product introductions because otherwise "people might find it annoying."
Unfamiliar Places
One approach mobile marketers are trying—with mixed results—is inserting ads in new places to overcome "ad blindness" by consumers used to tuning out marketing pitches in the usual spots, such on the edges on websites.
Start-ups such as Facebook Inc. and Twitter Inc. also are slipping ad messages into the flow of virtual conversations on their digital services.
Amazon.com Inc. AMZN -0.88% is pushing into new territory with ads on its newest Kindle tablets and e-readers. In the U.S., the company's new $199 Kindle Fire HD device displays ads filling its 7-inch screen whenever a user lets it "go to sleep." In the wake of consumer complaints following the introduction of the new Kindles this month, Amazon offered a $15 option to turn the ads off permanently.
Some Kindle Fire HD buyers said they didn't mind the ads. But Steve Campbell, a 56-year-old resident of Naples, Fla., said, "This thing is just constantly pumping ads at me," and is "tempted" to pay the $15 to opt out of the ads.
An Amazon spokesman declined to comment.
'Spray and Pray'
Banner ads—the boxes or rectangular ads on many mobile websites or apps—are known as the "spray and pray" approach. Marketers, consumers and companies all said these ads are cheap, crude and annoy mobile users. Still, banner ads account for nearly $2 of every $10 spent on U.S. mobile ads, according to eMarketer.
Mr. Rascoff said Zillow stopped showing generic banner ads about a year ago following consumer complaints the ads were irrelevant or hogged space on 4-inch mobile screens. "There's good money to be made, but at what cost?" he said.
Marketers and ad-dependent companies said banner ads are an inevitable first step in a new ad medium, just as the first wave of the Internet was dominated by now notorious pop-up and "dancing cowboy" ads.
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