Apple has been getting a lot of press lately regarding its mobile advertising practices and policies. Today was no different with The Wall Street Journal’s Jennifer Valentino-DeVries reporting on Apple changing its privacy policy to collect location data:
As it rolls out a new iPhone operating system and an advertising platform, Apple is changing its privacy policy to allow collection and sharing of “precise location data,” including “real-time geographic location” of devices.
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Many analysts view location targeting as a possible boon for the mobile-advertising industry, allowing businesses to direct ads to people who are within a certain distance of a store or who frequent a particular area. It could open mobile advertising to smaller local businesses and make ads more valuable — important developments for Apple as it gets into the advertising game with iAd.
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But location is a category particularly fraught with pitfalls when it comes to privacy. More than data on Web-browsing habits or social networks, this location information is tied to a user physically. And increasingly, mobile devices have the ability to gather location data continuously, even if the user isn’t in an application that obviously uses it. With Apple’s new iPhone operating system, for example, applications can track location even after a user has left the program.
Apple is aware of the concerns. When it announced its new operating system and iAd, executives were quick to point out that the company takes privacy seriously and has added new privacy controls for users. (The folks at PCWorld have some good images of what iPhone users can expect to see with these controls.) To collect location data, an application must first get the user’s permission. Users in earlier iPhone operating systems could turn off location services completely on the location-services control panel, and now they can turn them off for certain applications as well. And when an application is collecting location information, a little arrow now appears telling users they’re being tracked.
It will be very important for Apple to stay vocal and open about this subject. Location-based services and advertising will be tremendous, especially for smaller, local establishments such as restaurants, as the charts in this link indicate. Because the iPhone plays such a key role in attracting users to try new services, the last thing the industry would want is for consumers to run the other way due to privacy concerns.
In preparation for next week’s Independent Photo Imagers (IPI) Members’ Retreat & Supplying Partner Trade Show, I wrote an article for their newsletter. Since it contains some good insight, I figured it was worth sharing with “the world at large!” 
Enjoy:
Tapping mobile technology to expand your business
By Pierre Barbeau, CEO of Moblico
No matter what industry you’re in, by now you’ve probably noticed mobile devices and supporting technology/apps are showing up everywhere. Consumers are using their mobile phones less for calls, and more as mini-computers. According to research by wireless industry association CTIA, the number of text messages sent per individual mobile device’s users increased by nearly 50% nationwide during the last year. And what’s more, the amount of data in text, e-mail messages, streaming video, music and other services on mobile devices in 2009 surpassed the amount of voice calls in the U.S.
Experian/ PriceGrabber.com just released the results of a survey surrounding smartphone usage. PriceGrabber polled 2,445 online consumers from March 26 to April 12, 2010 and determined that 22% of consumers intended to makes a purchase from their mobile device in the next 12 months, 19% of consumers use their phone to browse for products, compared with 14% in 2009, and of the 13% of respondents who did use their phones to shop, the majority of them had purchased books, electronics, and clothes.
Why this should matter to you
What does this mean to photo retailers specifically? That it is time to get in the mobile game and profit from consumer behavior and needs! At the upcoming IPI member’s retreat, my team from Moblico, a provider of mobile customer relationship management solutions, and I will be there to share insight and demonstrate specific ways photo retailers can take advantage of mobile to attract, transact, and retain customers. Or, more importantly, extend your store experience to keep your customers buying, even when they are not in your store!
Why mobile is becoming a critical tool for retailers:
1. It’s Personal: Consumers are increasingly dependent on their mobile phones. People are customizing their devices so that not only are they a reflection of them, they are assisting them with many areas of their daily lives such as product research and store locations. For instance, many major retailers have branded mobile apps that consumers have handy on their devices.
2. It’s Instant: Consumers want what they want, and typically they want it right away! Traditionally when someone reads or sees an advertisement, they have to remember a call to action which could be to show up to a store on a certain day or conduct an activity to receive some kind of incentive. With mobile, a retailer can offer a promotion that asks consumers to sign up to receive text messages, offering them entry into a contest or other activity such as 50% off the purchase price of an item that day, just for submitting their mobile information. By building their mobile database, retailers can target interests by sending exclusive offers or other instant communications that fit consumers’ needs. This is especially effective because the messages are being sent to consumers who want them.
3. It’s Convenient: Let’s face it, it does not get any easier than something that is always in a consumer’s hand, pocket, purse, etc. Consumers are more likely to take advantage of something that is not a lot of work for them. In fact, for Black Friday, many major retailers like Wal-Mart have been enticing reluctant consumers with mobile offers and “secret sales,” boosting store traffic and causing people to make purchases online.
4. It’s Dynamic: A technology that is popular in other parts of the world that is now emerging in the U.S. is mobile barcodes (or quick response/QR codes). In its simplest form, a person uses the camera phone to automatically launch a website or initiate a phone call or text message, just by scanning over an image. On the coupon side, retailers are cutting costs and increasing sales by pushing coupons directly to consumers’ phones.
5. It’s Trackable: Unlike direct mail, flyers or catalogues, retailers have the ability to track the effectiveness of their mobile initiatives in many ways. Mobile can help eliminate that “black hole” of the unknown! Unlike direct mail, flyers or catalogues, retailers have the ability to track the effectiveness of their mobile initiatives in many ways, some as simple as tracking how many people text in a response to an offer, or some more in-depth such as which region was the most responsive to a particular piece of your strategy.
Mobile really is a channel that can benefit retailers in ways that are only limited by imagination. Our team of experts can guide you on how to best take advantage of the opportunities, customized to your specific business. We look forward to meeting with you at IPI Members Retreat in Las Vegas! I will also be giving a presentation entitled, “Discover New & Simple Ways to Profit with Mobile Marketing” at the IPI Breakout Presentation on Thursday, June 24 at 11:30 a.m. that will include an invaluable demonstration as to how photo retailers can directly leverage mobile and turn a profit right away! You won’t want to miss it.
Crowded Mobile Networks
It’s really very fascinating to see the different ways people are using mobile to enhance everyday activities, and search seems to be a big component of that. For example, if you are out and about in an unfamiliar area, you can download apps to help you see what’s around or just use “old fashioned” search engines via mobile web.
The same applies for retail. Julia Tang of the Google Retail Team recently posted a snippet of video from Google’s “Future of Multi-Channel” panel in which Alex Barza, Google’s Mobile Ad Sales Lead, and Surojit Chatterjee, Google’s Product Manager, discussed examples of why mobile is the next ‘big bet.’
The segment is rather short, but they do get in some key points, including “54% of users who researched online but bought offline used their mobile device to conduct their search.” They also cited growth of augmented reality as a part of searches. Also, they stated that 20% of consumers are using smartphones, which plays a key role in such dynamic search adoption.
With such promising and interesting growth in terms of ways smartphones are used beyond calls and texting, I’m led to my next point: actual usage. For every mobile advance that gets adopted, the “OMG TOO MANY USERS” seems to come up. For instance, USA Today reported that new subscribers to AT&T that have smartphones will not be able to get unlimited data packages.
Newcomers will have two options: Under the DataPlus plan, subscribers can pay $15 a month for 200 megabytes of data; that would handle about 400 photos or 100 minutes of streaming video. The DataPro plan offers 10 times that capacity, 2 gigabytes, for $25.
Here’s the part I found most interesting:
AT&T says 65% of its smartphone customers use less than 200 MB a month, and 98% use less than 2 GB.
But, largely due to the success of the iPhone, AT&T “has the most loaded and most used data network in the U.S.,” says Roger Entner, head of telecom research at Nielsen.
And just 3% of AT&T’s smartphone customers account for as much as 40% of its data traffic, contributing to slow transmissions and dropped calls. AT&T must control heavy users, or at least get them to pay more, Entner says.
In a February GigaOm article, streaming video is cited as the biggest bandwidth hog, causing carriers to drive up these price plans. So I wonder then, why not address that problem directly? There seems to be quite a few solutions the carriers can take advantage of right away:
If the pipes are too small and what’s going through them too big — which is the case on many mobile data networks (hey AT&T, how’s that iPhone traffic treating you?) — then wouldn’t it make sense to add some compression algorithms to the mix?
It makes sense certainly, and something operators — not to mention mobile phone users — have experimented with. On the vendor side, players like OpenWave and Bytemobile offer network-based solutions that operators can deploy to “optimize” mobile data delivery via a variety of techniques. Meanwhile, a handful of mobile Web browsers, such as Skyfire, have tried to drive compression right down to the handset, utilizing proxy servers and compression algorithms on the back-end and specialty browser clients on the phone.
So, will other carriers follow AT&T? Or will they look for other answers that aren’t going to hurt consumers and stifle mobile growth in areas like retail? Hopefully they will before getting in over their heads much like AT&T did with the iPhone.
But of course, like everything else, we’ll have to see how this all plays out.
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