BIA/Kelsey Group ILM West Day Three LiveBlog
MIHMORANDUM NO. 1261 | December 14th, 2011
Back on Day Three — off to a bit of late start again :)
Bo Fishback, Zaarly
Zaarly is 10 months old, $1MM in seed funding, $14MM in Series A funding, and got Meg Whitman on the board. They are doing peer-to-peer selling. Say what you want, what you are willing to pay, and how soon you need it. From a seller’s standpoint, you go and see what people are trying to buy. Basically a reverse Craigslist. Buyers and sellers are on equal footing.
They only really need a handful of buyers in a given market — 300 people in a city provides a “liquid market.” Most of their marketing has just been viral — they’ve been active in the social sphere. They are looking at cities, universities to get started.
There are both a ton of individuals AND small businesses on Zaarly. These guys can compete equally with larger businesses if they are a better fit or better at monitoring. Lots of oddjob types of people are really making a living on Zaarly.
Used furniture is pretty popular as an item. Non-physical goods (i.e. services) are better. “The best agenda for New Year’s Eve,” for example. Gifting from one market to another is also popular.
Price optimization recommendations are going to be really interesting data for them — what price to assign for lots of items? Lots of these may adjust based on time and urgency. A bit of a reverse auction kind of model.
3,000 – 4,000 small businesses are already using Zaarly. Push notifications on iOS5 have really helped them monitor what people are looking for.
How does the mobile payment piece fit in to this equation? They’re looking to partner on the payment side–make it instantaneous and seamless. They only take a transaction fee if you decide to pay by credit card.
What about other places on either the buyer or seller side? eBay, obviously. They’re not quite sure where they go as a platform. They will be rolling out an API.
Zaarly considering sponsored listings…they are working on an algorithm to optimize the more likely transactions to occur. One of the hardest things for people getting started is what to ask for…then they start to get creative.
They will be pretty aggressive about regulating sex, drugs, anything that seems creepy. The harder filters are on price–ridiculously low price. They do allow counter offers.
Q: Comparison to Gigwalk? (my question!–thanks for asking it, Mike!)
A: Not really in the same space, most of the tasks are ‘higher-level.’ Fewer than 4% of their zaarlies would overlap with Gigwalks.
Q: Combatting Fraud.
A: One user trying to pay himself on Zaarly — because he’d stolen a credit card. They want to partner with companies who really understand how to combat this stuff.
Chi-Chao Chang, xAd
Publishers in xAd’s network already have apps/sites that demonstrate local intent on the part of the user.
A significant number of their advertisers come from resellers like AT&T and Citygrid. They have just started to initiate their own direct sales as well.
They have traditional search ads like titles, descriptions, reviews; they’re also starting to get into display (300×25, 300X250) and make these more interactive. The conversion points include directions and calls directly from the ads.
Apps and search are more or less equivalent in terms of mobile usage. Google owns 90%+ of mobile search ads, but xAd is doing a ton with in-app geo-targeted ads. They’re selling bundles of targeted mobile traffic rather than differentiated as search.
CTRs from mobile app ads are higher than browser CTRs, but call rates are higher on browser vs apps.
xAd’s vision around direct sales is to complement the demand they’re seeing from resellers. Advertisers are very concerned with call quality; it’s more difficult space than xAd had anticipated.
For direct sales, they’re focused on segments where they’re not seeing a lot of volume from resellers.
Andrew Osis, Poynt
Android is now Poynt’s largest userbase by far. They started as the default local search app for Blackberry users, but they’re now adapting to other devices. Challenges presented by operating systems are not all the same. Compasses, location awareness vary by platform.
Their evolution into pricing, events, and other features has been shaped and directed by user feedback.
Monetization is via showing sponsored ads from other networks. They’re adapting to different ad models: CPM -> CPC -> CPA -> ___. Looking at post-click engagement, secondary interaction, customer acquisition going forward.
Q: Where is the imbalance? There is a lot more inventory out there than demand to fill those slots?
A: No, the supply-demand relationship really oscillates over time. Somewhat category-driven. Poynt has a much better idea of what users in specific markets on specific platforms (e.g. an Android user in Chicago vs a Blackberry user in New York) based on 2 Billion+ interactions over time.
Poynt now focused on global expansion: now partnering with the Times of India group in addition to Western Europe and North America.
Poynt has recently acquired some intellectual property around delivery of location-based deals.
David Williams, AT&T Interactive
AT&T has evolved from a dedicated print directory mindset into a web/mobile advertising business, leveraging a 5,000-person sales team, connecting consumers with local businesses no matter where they are searching.
AT&T is now focused on mobile as a growth area where they get much more attention. 17 Million local listings and 77 million monthly unique visitors across its network.
AT&T thinks that companies looking to get into mobile should first start on mobile web. People start with search but what is the experience on the clickthrough from those mobile results? Don’t waste those clicks.
AT&T has embraced its legacy brand, as a way to cut through the clutter of thousands of apps…but it does cut both ways. In the app store, people are specifically searching for generic terms like YP and YellowPages, GasPrices, etc.
AT&T is now building out a local ad network–to Yahoo, Supermedia, nSphere, Bing, Foursquare, AOL, for example. In particular with Foursquare, AT&T’s Deal-of-the-Day product also gets offered on Foursquare as a check-in deal.
AT&T has served over 1 Billion ads, and are seeing 4x better clickthrough rates on mobile compared to desktop.
AT&T’s salesforce reaches real mom-and-pop SMB’s, and as a result, consumers are seeing much more relevant ads to them than national chains that a lot of other ad networks are partnering with. They’re also looking at time-of-day ad serving in addition to location signals.
Mobile Predictions for 2012 (BIA / Kelsey and Others)
Mike Boland, BIA / Kelsey – Facebook will go public, and turn on mobile monetization. Foursquare and Yelp will also have this.
Steve Espinosa, AppStack – Steve thinks this will be much more about an “organic” placement. Facebook is very concerned with the user experience of that ad.
Venkat Kolluri, Chitika – Hard to say when things are going to happen. But it’s impossible to ignore the “gift” of a user’s location for mobile ad targeting.
Jed Williams, BIA / Kelsey – Where does social curation / discovery come in. Kelsey thinks this will be the #2 referral behind search.
Ankit Gupta, Pulse – Challenge from a monetization standpoint is figuring out the right ad unit.
Steve Espinosa, AppStack – Hard to make the social curation useful to users. The explore feature on Foursquare is closest so far.
Mike Boland, BIA / Kelsey – The location check-in as we know it will die. This will be more passive, along the lines of “radar.”
David Courtney, JiWire – These have already been dying. The active userbase has been declining on Foursquare and Gowalla for a long time. Location-based apps where you opt in are much more likely to survive. AMEX sponsors free wifi usage on JiWire. There is a monetary value attached to the data that this gives them.
Venkat Kolluri, Chitika – The larger trend is going to be away from “pull” to “push” model.
Steve Espinosa, AppStack – Auto-checkin is not going to happen. Too many privacy issues. Predetermined optins are possible…pushing a notification about “you’re here…do you want a free drink?”
Boland – Agree. Mechanics are going to be important.
Ankit Gupta, Pulse – Sharing limited to a small group of close friends is definitely where things are going.
Jed Williams, BIA / Kelsey – OpenGraph will expand to more social verbs. “Want, read, listen” — new forms of social sharing. This will dynamize their advertising market.
Ankit Gupta, Pulse – Privacy of social data will still require a balance in what Facebook can do.
Steve Espinosa, AppStack – Pinterest is just a collage of things people like built on the OpenGraph. The OpenGraph API allows Facebook to normalize data and move to “Facebook Adsense.”
Mike Boland, BIA / Kelsey – Quality of mobile ads will catch up to the quality of apps. Ad prices will drop and higher rates will be in cost-per-action.
David Courtney, JiWire – The value will determine price, not quality of the ads.
Steve Espinosa, AppStack – 6-8% of all searches on Google are Mobile AND Local. The mobile version of the typical SMB website is CRAP. This is a big disconnect. Not only that, but the experience/quality of AD units are just awful, currently.
Venkat Kolluri, Chitika – Typical SMB’s do not understand CTR, CPC, any of the acronyms. But when the phone rings, they know what to do.
Mike Boland, BIA / Kelsey – The retail Point-of-Sale will be poached by connected devices and social signals. The store basically becomes a showroom for the e-tailers.
Venkat Kolluri, Chitika – This trend will continue. RTB — Real Time Bidding — is growing fast. People are already price-checking in the aisles…they don’t even need to be trained on this behavior.
Mike Boland, BIA / Kelsey – Location becomes the most important targeting metric for mobile ads and deals. Location-targeted at spending surpasses non-location-targeted.
David Courtney, JiWire – Directionally, yes, “we are betting the company on it” — at least the first part of the prediction.
Ankit Gupta, Pulse – Yes.
Jed Williams, BIA / Kelsey – Can local and social triggers work to sell a deal on a mobile device?
David Courtney, JiWire – You’d love to get relevant deals based on where you are and whom you know. The holy grail is getting this on your mobile.
And We’re Done!
Look for a recap post distilling the entire conference later today.