So let’s quickly review the products, which each company announced this week. In Square’s corner, there’s a well-styled iPad stand with an attached credit card reader meant to accompany the company’s existing POS application. In PayPal’s, an offer to provide free credit card processing for any merchant who trades in their existing register for a cloud-based POS system built by a select group of partners.

Moving Upstream
The big shift at play here is that we’re no longer talking about the dongle-wielding flea marketers, for whom credit card acceptance and POS systems were newfangled concepts before these devices. Instead, this week was about moving upstream to serve the higher end of the SMB market, says Mary Monahan, a senior analyst at the strategy and consulting house Javelin Research.

“They started out with simple mobile POS systems for smartphones [in dongles], and now they’re going after these higher-end markets,” says Monahan. “And as they continue to go up, they have to bring out more and more services in order to meet the needs of these higher-end consumers.”

The move upstream comes with a number of challenges. As Monahan points out, it necessitates the addition of other services like inventory and employee management, as well of a host of vertical-specific services as well. And as the depth and complexity of the offerings expand, the POS providers are on the hook for customer service and other support.

Compounding the iPad POS’s more complex feature set, it’s also a harder sell. Unlike the dongle market, the small business owner who would buy an iPad POS product likely already accepts payments, and has entrenched back-office processes in place that typically center on a legacy POS system. That means the switching costs are higher and the immediate value a business owner sees from an ePOS is incremental. The long-term value of an ePOS systems is still nascent, and the immediate value — cheaper transaction processing from Square and PayPal (without a discount) — is marginal.

Open vs. Closed
The gist of PayPal’s and Square’s long-term aspirations is fairly clear: create a two-sided network with a consumer-facing mobile wallet on one end and a merchant processing network on the other, creating a system that gives them control over the entire payment stack. Once that network is intact, the companies can build a number of other services on top of a consumer’s purchase activity.

However, those ancillary features — namely, advertising, loyalty, fulfillment services — require a cloud-based piece of software to sit at the point of sale to not only manage the transaction, but also to work as an operating system bridging the multiple programs a business runs. It’s in this connectedness (the ability to track a consumer from an ad impression on a mobile device to a purchase made in-store, and then use that data to inform a loyalty campaign later on) where ePOS systems will eventually offer the most value to businesses.

The question facing PayPal and Square is how to expedite the adoption of these ePOS systems by merchants in order to accelerate the use of their payment services. PayPal has taken a decidedly open approach, partnering with a number of young, ePOS startups like Shopkeep and Leaf and then adding free year of payment processing for merchants who adopt these programs. Square, on the other hand, has chosen to sell its own POS product, subsidizing the cost of processing other credit cards with an extremely low rate.

“Payment plays are big number games. They have to get a lot of consumers and a lot of merchants on board to get it to pan out,” says Monahan. “That’s why you’re seeing free, no-interchange offers. But as the market matures, some of the offers are going to change. It’s the typical cycle of a new market.”

A familiar analogy
The open vs. closed debate is a familiar story in the technology industry, a cornerstone of Apple’s battles with Microsoft, or, more recently, Android. It’s an analogy that Aron Schwarzkopf, the founder of Leaf, one of the tablet POS systems with which PayPal has partnered, uses in thinking about the POS and payments market.

“Microsoft was able to grow a lot faster because it partnered with so many people. but of course it sacrifice the end experience, because they couldn’t control everyone,” says Schwarzkopf.  “Square will always have a beautiful product with deep control over the end-to-end experience, but will they be siloed to be the small player to have this experience.”

It’s unclear whether Square plans to open its point-of-sale system up to other developers, but given the breadth and complexity of services needed to compete in multiple verticals, tying its payment product to its POS services might limit its scale, particularly as it moves upstream.

Steven Jacobs is deputy editor at Street Fight.

Top executives from Square, PayPal and Leaf will discuss ePOS and the opportunities for local marketers at Street Fight Summit West in San Francisco on June 4th. Buy your ticket today!

Geo-Fence Your Business Location
One of the most basic forms of mobile location-targeting, geo-fencing, remains an incredibly important and fundamental approach, accounting for 40% of the campaigns run on the xAd network in Q1 2013. Sometimes the simplest way is the most effective, and brands and businesses understand the power of focusing on audiences available within the immediate vicinity of their business’s address. Geo-fencing your business location is the perfect marriage of targeted location at scale, as it allows you to cast a wide, yet relevantly targeted net — gaining target market awareness amongst both new and current customers.

Geo-Fence the Competition
The same science used in geo-fencing an advertiser’s actual business location applies here. Every business knows whom their competitors are, and is on alert for those lurking on the horizon. By geo-conquesting the brick-and-mortar locations of your competitors, you can affect the future purchase decisions of those consumers. This form of place-based targeting is so popular, that among the brands and businesses running geo-fencing campaigns on the xAd network, many include a component of geo-conquesting. That means if you are not already leveraging place-based mobile targeting within the vicinity of your business… your competitors surely are.

Event Targeting
The bigger the venue, the grander the audience. Event-focused targeting has become an important opportunity for marketers looking to make a concentrated splash in a short period of time. Mobile devices have become secondary screens at many events and are often considered a complement to the physical experience.  At a recent Muse concert at New York’s Madison Square Garden, I was amazed to witness a sea of smartphone screens in use throughout the show — fueling social sharing, and documenting the experience from the perspective of each screaming fan. It was almost impossible to find someone not using their phone during the event. The same can be experienced during sporting events, charity walks, and street festivals. All of these events are short-lived but packed full of people carrying and using their smartphones, making event targeting an interesting addition to your mobile-location strategy.

POI Targeting
Point of Interest (POI) targeting is similar to event targeting in that it usually envelops a massive audience. The difference is that points of mass interest don’t typically pack up and disappear. For example, the Empire State Building or the San Francisco Bay Bridge are not going anywhere. They are frequented by tourists and townies alike – equaling an often gigantic, yet highly targeted — audience.

With specific place-based targeting, brands looking for new and creative strategies are seeing the benefit. For example, campaigns for multiple Broadway shows included a multi-layer approach incorporating POI targeting of one of New York’s most popular locales, Times Square. The clients reported performance was on-point with projected benchmarks and even saw direct revenue from the campaign. So when looking for an outside the zip code way of targeting your mobile campaigns, POI targeting is a fun and creative way to get some big bang for the buck.

Brand Affinity Targeting
Similar to event and POI targeting, brand affinity targeting does not require your own brick-and-mortar location. Instead, it relies on the geographical activities of your audience to understand which businesses and brands they frequent most. For example, if you know your audience is largely made up of women aged 25-34, with a household income above $75k, you may identify Nordstrom and WholeFoods as two businesses this audience frequents often when targeting mobile users. Of course, this information can vary by city so it’s important to understand those variations related to the markets you’re looking to target. But not all ad networks have the ability to leverage this type of data so talk to your current agency or ad network about their capabilities in helping you leverage consumer brand affinity data for mobile ad targeting.

Place-based targeting is simply the next evolution of mobile targeting and its success will continue to shape the marketplace in the coming years as brands and marketers become more comfortable with the power and performance of mobile location.

Annisa Farese is marketing and communications manager for xAd Inc., which leverages local search data to drive performance in search and display campaigns for clients that range from local SMBs to global brands. To learn more about xAd, visit www.xAd.com or follow the company on Twitter at @xAdInc.

Episode 129

Recorded: May 12, 2013
Hosts: Rob Woodbridge & Asif Khan

Show highlights:

A few announcements
- We wrote (part of) a book! The Everything Guide to Mobile Apps and it is available for order now!
- If you’d like to leave a message for us to play on the show, leave it here

App Fascination of the week: Scringo (4:35)

Featured Guest
Duncan McCall, co-founder & CEO of PlaceIQ. (25:25)

Top news of the week

1. Launch of BlockAvenue (8:40)
2. Pennies For Life campaign by Microloan (15:25)
3. Will Facebook purchase Waze? (19:10)
4. Unilever working with CausePlay inside of Northgate Gonzalez Markets – the hyper local mashup (36:23)
5. Outback Steakhouse checking in to 2007 with Laps for Apps (41:22)
6. Square goes after Foursquare with recommendations (45:55)

Resource of the Week
Pew Research on location (54:23)

Ex-Groupon CEO Mason Moving to San Francisco to Start New Company (Reuters)
Former Groupon Inc. Chief Executive Andrew Mason is moving to San Francisco to start a company after recently recording an album of “motivational business music,” according to an update on his blog on Thursday. Mason said on Thursday that he will be spending a day each week at start-up incubator Y-Combinator in coming months “to keep my brain from atrophying.”

Moving Upstream, PayPal and Square Make a Play for the Local Merchant’s POS (Street Fight)
Steven Jacobs: There’s a not-too-quiet rivalry brewing between Square and PayPal over offline payments, and this week saw the unofficial opening of an important new theatre: the SMB point of sale (POS). It’s perhaps the stickiest problem for both companies to solve in order to make payments work, and their respective announcements demonstrate a strategic skism similar to what we’ve seen in desktop computers and mobile phones.

Aruba Buys Meridian Apps, Eyes ‘Indoor GPS’ Services (ZDNet)
Aruba Networks on Thursday acquired Meridian Apps, a privately held company, that offers indoor location based services. With the move, Aruba is looking to combine its enterprise Wi-Fi technology with Meridian’s location services to provide context about users and devices.

5 Ways Brands Can Leverage Place-Based Mobile Targeting (Street Fight)
Annisa Farese: The ability to target consumers based on location is no longer an emerging element of mobile technology — it is the standard on which all other strategies are based. The growing demand for this type of mobile advertising has brought on the development of new and effective location targeting strategies, the most popular being place-based mobile ad targeting. Want in? Here are five place-based mobile targeting strategies to try.

How Google Made Maps Human, Savvy, and Monetizable (Fast Company)
To help understand the radical change coming to Google Maps announced at this week’s Google I/O conference in San Francisco, the product team says you should think about beer. Specifically, they want you to look for a bar in San Francisco that has a great beer list. That’s a familiar Maps thing: Search for “Belgian beer” near your location.

Merchant Warehouse Moves Up Value Chain From Payments to ‘Engagement’ (Local Onliner)
Peter Kravsilosky: Payment processors and related companies work with most SMBs and are increasingly seen as a potential sales channel for reaching them with additional services. This week, we talked with one processor, Boston-based Merchant Warehouse, about its efforts to leverage its base of 75,000 business customers beyond terminal sales.

Does Location Data Matter? Not How You Think It Does. (iMedia Connection)
David Petersen: Location-based mobile advertising, and its typical application of geo-fencing, is one of today’s hottest mobile marketing’s topics. However, the true power of location is often misunderstood. When it comes to driving ROI through mobile advertising, location often doesn’t matter – at least not in the way you think it does. Instead of simply geo-fencing a static location, the more effective use of mobile location technology considers historical location data and the consumer behavior it reveals.

Is Sensor Journalism Feasible, or Even Ethical? Columbia’s Tow Center Hopes to Find Out (PaidContent)
Journalists and organizations now have the ability to use sensors to collect their own real-time data and report on it. The practice raises both practical and ethical questions, Columbia’s Emily Bell said Thursday.

Portland Startup Launches Transit Mobile Ticketing Service. Is This the Future? (PandoDaily)
You know that moment when you’re rushing to catch the bus and you realize you don’t have the exact cash fare in your pocket? GlobeSherpa claims it is going to change that. Today, the Portland-based startup announced the launch of the beta program for its mobile ticketing service for the entire Portland TriMet public transit system.

LBMA PODCAST: Square, BlockAvenue, and PlaceIQ CEO Duncan McCall (Street Fight)
In this week’s episode, hosts Rob Woodbridge and Asif Khan talk about rumors that Facebook is looking to purchase Waze for $1 billion. Meanwhile, Square is set to check in to Foursquare’s neighborhood; BlockAvenue launches to give your city a grade; and Unilever goes hyperlocal with its rewards program. Plus special guest Duncan McCall, CEO of PlaceIQ.

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The overlay is literal because the Glass user interacts with a digital display that is projected directly onto the visible world. As this reviewer describes it, Glass is like “picture-in-picture for life.” What’s more, Glass is perpetual, because as long as you’re wearing the device, you have constant ongoing access to its services, meaning that you are connected to the Internet at all times. The result is a collapse of the division between Internet life and “real life,” a collapse we’ve been moving towards for some time now.

You might say it’s just an interface; the information itself isn’t any different. But new mediums enable new messages, and Glass will almost certainly change the way we think about focusing the vast resources of the Internet on highly local, highly immediate use cases. Google is focused right now on perfecting the interface and its basic functions, such as picture-taking and performing search queries. Once it’s open to the app developer community, however, Glass will really take off.

As I say, Glass is important almost regardless of the number of people who actually buy it and use it. It’s the most dedicated hardware design to date for the type of augmented reality interface we’ve already seen in tools like Yelp’s Monocle interface and the Layar app. Even more than these smartphone-based tools, Glass represents a literalization of the idea that the places we occupy and the objects that surround us on a daily basis can be illuminated by linking them to relevant online data.

As with Glass, actual usage of tools like Monocle and Layar isn’t really the point. These tools simply illustrate the larger concept, though not necessarily in the most usable manner. I don’t see too many people looking at the world through a smartphone display these days. In fact, Dutch company Layar seems to have pivoted in recent months from an open platform for augmented reality “layers” provided by a developer community to a service dedicated to helping consumers engage with print advertisements, perhaps realizing that smartphones are not the ideal augmented reality interface.

Similarly, Glass may be overpriced or simply too odd for many consumers, but it still represents a manner of thinking about the interconnectedness of the internet and the world that is an inevitable outcome of current trends. With smartphones as our constant companions, we already spend a vast amount of our time looking down to look things up.

Layar’s pivot neatly illustrates the two ways data can be overlaid onto our immediate surroundings. The first is achieved by interrelating the display view on an interface with geotagged data. So, for instance, Yelp’s Monocle takes the geographical coordinates of businesses in Yelp’s database and associates them with physical locations viewed through a smartphone display. It will be interesting to see whether Glass is able to achieve a more ambitious version of the same idea, given that a wearable device could potentially understand the world in three dimensions, and given the fact that Google’s already dominant position in real-world data gathering gives it the potential to dream up some remarkable applications. To take a trivial example, Glass could potentially tell you the exact location of any item in a particular Home Depot and lead you straight to it. Of course, we wouldn’t necessarily need Glass to produce such a tool, but with Glass we are probably more likely to see things like this attempted.

The other type of overlay involves interaction with data embedded in the objects around us, such as QR codes, traditional bar codes, written language, iconic images, and the like. Here the range of possibilities is only beginning to open up. For a few years we’ve had apps like eBay’s RedLaser, which lets you scan barcodes for purposes of comparison shopping. And then there’s Buycott, a new app built by a young developer in Los Angeles that tells you whether a product at your local store has ties to Monsanto or the Koch brothers. That particular app might only appeal to people of a liberal bent, but the concept of special interest data overlays has vast potential.

Damian Rollison is vice president of product and technology at Universal Business Listing, a company dedicated to promoting online visibility for local businesses. He holds degrees from University of California, Berkeley and the University of Virginia, where he worked at the Institute for Advanced Technology in the Humanities. He can be reached via Twitter.

Add Marqeta to that list as well, however. The maker of a branded and white-labeled prepaid loyalty network announced that it closed a $14 million series A round led by Greylock Partners this morning, and revealed that its technology underpins the Facebook Card — the social network’s most recent stab at gifting.

The company has built a loyalty program that allows consumers to prepay for credit at participating merchants for a small discount (maybe $10 extra for $100 in credit), and pay for items at those stores using a branded, co-branded, or white-labeled plastic card. Marqeta works with Discover’s payment processing network to settle transactions in the same way that a Macy’s might issue its own branded credit card with Visa as its back end.

Consumers can manage their account and find participating locations through a mobile application, but that’s about the extent of mobile’s role. The company’s core technology rests on a cloud-based piece of software that can identify, authorize, settle payments in real-time, and do so for multiple locations in a secure and scalable manner.

“Payments is an incredibly complex ecosystem. It’s heavily regulated at the state level and there’s a list of extremely sensitive privacy concerns,” says the company’s founder, Jason Gardner, who sold his last startup, another payments company, to MoneyGram International in 2007. “When you swipe a card we know who you are where you are, how much money you have on that specific account. And how to authorization in less than a second. It’s the tech thats hard to manage.”

From a business development perspective, the payments model suffers from the same chicken-and-egg problem that faces most two-sided networks: you need merchants on the network to convince consumers to join, and consumers to motivate merchants. That’s where co-branded and white-label deals do a lot to help tip the balance for young startups. Partnerships with large stores can give startups a great way to scale the merchant side, but even more importantly, open access to the brand’s marketing dollars and reach to engage consumers. Marqeta has already hooked up with Jamba Juice to manage gifting and loyalty features, and Gardner says the startup has others in the pipeline.

The partnership with Facebook however, is unique. For companies that sell products directly, the concept of a loyalty program is nothing new. But the idea that a company, which generates revenue through advertising, could launch a loyalty card is something much more novel. In the media industry, there’s been a lot of talk about the intersection of content and commerce, though publishers and audience owners have struggled to make the transition. The white-label offers-space, for instance, struggled to live up to expectations, with Group Commerce selling for parts to their competitors within a year of raising a mountain of cash.

However, it’s not too hard to imagine that a publisher like Thrillist — with its history in e-commerce — might find success in launching a branded loyalty card with a select group of  merchants. The company could use the card as an added service for existing advertisers, and a way to position itself within the local commerce The bottom line is that payments is at the early stages of a dramatic shift. The siloed payment stack that has dominated is giving way to a more interconnect and omnipresent type of payment ecosystem that’s more aligned with the web. And the way in which payments is applied will evolve.

“What you see going on in payments is similar to the early days of the internet with a lot of companies popping up, figuring out efficiencies, or building technologies that fit that system,” he explained. “If you think about where we are today [with the web], with the companies and efficiencies that have been built; if you mirror that with payments, it creates an interesting way to look at how the payments ecosystem might evolve and interconnect over time.”

Steven Jacobs is deputy editor at Street Fight

Merchant:

Everyone wants a prize, and most people are willing to spend a little more to get one. At least that’s been the experience of Tiffany Amorosino. The co-owner of Bella Sante Spa uses a platform called OfferLink by Cartera to reward customers with free gift cards when they meet certain purchase price thresholds.

Since opening her spa in 1996, Amorosino has seen a significant shift in the way SMB marketing is done. “I’d say, the movement is away from any kind of media purchase that isn’t quantifiable,” said Amorosino. “If I take a $10,000, $15,000, or $20,000 magazine ad, I’m hoping people are reading that, I’m hoping they’re seeing it, but there is no way to really measure it.”

Focusing on results
Amorosino now focuses the bulk of her marketing budget on two platforms that she feels offer those quantifiable results: Demandforce and OfferLink. “Over the last couple of years, we have invested in search engine optimization for our website, and tested a lot of stuff to see what works. We invested in a bunch at the beginning to get our ranking up. Once our rankings got up, we decreased the amount of SEO we did, as far as investing in retargeting ads and making sure we had the right keywords,” said Amorosino.

Over the last 18 months, Amorosino has invested in Demandforce for email segmenting. “It really does allow us to hyper-segment our existing clientele for specific offers,” said Amorosino. She also uses a card-linked program called Offerlink to reward her most frequent customers and drive up the average purchase price at her spa.

A hands-free solution
Amorosino considers OfferLink a hands-free program, and says she isn’t even sure how her customers link up their credit cards. “That’s also the piece that makes it easier for us. The offer comes from OfferLink. I honestly don’t know how it is,” said Amorosino. “Let’s say you’re an AAdvantage member [with] a MasterCard, you’re getting these offers in your credit card statement or you’re getting [them] directly from the credit card company.”

The offers that Amorosino refers to are $25 gift cards that customers earn when the purchases they make with their linked credit cards at Bella Sante Spa reach a certain dollar amount. Customers can also earn 30%-off discounts on specific services. When Amorosino started using OfferLink, she says the average purchase to get a reward was between $150 and $175. Now, after nine months of using the program, she’s been able to inch the average purchase up to somewhere between $200 and $225.

“The customer is incentivized to increase their purchase size in order to meet the mark to get the reward,” said Amorosino. “There’s more spending in general. The guest comes in and spends more. I would [also] say [they’re] higher qualified leads. Those are the largest benefits.”

Although Amorosino spends the bulk of her marketing budget on digital programs, she wouldn’t necessarily recommend that new business owners take the same approach. She says first-time spa owners should invest in building their websites before anything. “[Make] sure you have some good rankings, so people know you exist,” said Amorosino.

After that, the next step in Amorosino’s beginner’s marketing plan would be to promote word-of-mouth referrals. “[Incentivize] your best clients to bring their friends in and family,” said Amorosino. “[And] really make sure you’re delivering service, because if one person has a fabulous time, they’ll tell three to five people. If one person has a horrible time, they’ll tell hundreds.”

The Takeaway
Digital loyalty platforms have become ubiquitous, especially at spas and salons. What makes OfferLink unique — and one of the main advantages of the program, in Amorosino’s eyes — is the hands-off approach merchants can take.

By participating in a card-linked program, Amorosino can reward customers and increase her average purchase prices without worrying about the day-to-day minutia that usually comes along with running a loyalty program. Employees at Bella Sante Spa aren’t responsible for onboarding, upselling, or issuing rewards, and they can direct anyone with questions or concerns about their program to OfferLink for more specific customer information.

Stephanie Miles is an associate editor at Street Fight.

Click here to read more Street Fight case studies.

Eight Years Later, Google Reinvents Its Maps for a Data Rich Web (GigaOm)
Eight years after Google launched Maps as a beta product, the search giant is reinventing the map for a new data rich web that lives on fast broadband, and runs on computers with oomph to spare. The new Google Maps marries data, social and the concept of hyper-personalization, tastefully layering those principles on top of beautiful and detail-rich maps.

Looking Up: Local Data and the Real World (Street Fight)
Damian Rollison: Google Glass may be overpriced or simply too odd for many consumers, but it still represents a manner of thinking about the interconnectedness of the Internet and the world that is an inevitable outcome of current trends. With smartphones as our constant companions, we already spend a vast amount of our time looking down to look things up.

PayPal Takes Aim at Square With Free Mobile Payment Processing (CNet)
In a bid to one-up Square, PayPal is offering free payment processing through the rest of the year for some U.S. businesses that use its PayPal Here mobile payment system. Starting next month, PayPal will offer free credit, debit card and check processing to “qualifying” merchants.

Marqeta Finds $14M in Funding as Loyalty Plays Start Thinning Out (Street Fight)
The flood of new loyalty and payment startups that littered last summer’s newscycle has dried up, with only a handful of companies – namely, Square, Belly, FiveStars and LevelUp – making it to a meaningful second or third round of funding. Add Marqeta to that list. The maker of a branded and white-labeled prepaid loyalty card announced that it closed a $14 million series A round led by Greylock Partners this morning, and revealed that its technology underpins the Facebook Card, the social network’s most recent stab at gifting.

Google Announces 3 New Location Services for Android (Mashable)
At the Google I/O keynote at the Moscone Center in San Francisco Wednesday , Google announced enhancements to its Android location services. It will be rolling out three new location APIs to developers, all of which take advantage of all the sensors available on Android devices.

Case Study: Salon Increases Average Purchase Price With Card-Linked Offers (Street Fight)
Everyone wants a prize, and most people are willing to spend a little more to get one. At least that’s been the experience of Tiffany Amorosino. The co-owner of Bella Sante Spa uses a platform called OfferLink by Cartera to reward customers with free gift cards when they meet certain purchase price thresholds. Since opening her spa in 1996, Amorosino has seen a significant shift in the way SMB marketing is done.

Twitter and Foursquare Partner With Movie Ads Firm  (AdWeek)
National CineMedia is teaming with Foursquare to provide users of the mobile app local offers that aim to be relevant to the movie-going experience. NCM’s regional sales team, per the company, will offer local brands some kind of advertising play centering on Foursquare’s check-ins and local search.

Yelp is Acquiring a Taste for Ex-Rival Google (New York Post)
Chief Financial Officer Rob Krolik, who spoke privately at a Jefferies tech conference last week in New York, said Yelp would have “no problem” teaming with Google, according to an analyst who attended the meeting. A company spokesman confirmed Krolik’s remarks, adding the firm was open to any beneficial partnership.

Groupon: We Can Be A $100 Billion Company (Business Insider)
Henry Blodget: If Groupon can eventually grow to $10 billion of revenue, let alone the $100 billion that Co-CEO Ted Leonsis told me, Groupon’s shareholders should be amply rewarded. The company will have to demonstrate that it can become a destination for consumer-driven commerce, rather than a “push” driven email deals company.

Walt Doyle, Former CEO of Where, Leaves PayPal: What’s Next? (Xconomy)
Walt Doyle, the longtime CEO of Where, which was acquired by PayPal in April 2011, has left the company as of today. Doyle served as general manager of PayPal Media Network after the acquisition. With Doyle’s departure, the local office is led by David Chang, the chief operating officer of PayPal Media Network.

Ticketfly Adds Fanbase Customer Analytics Platform to Help Venue Owners Pack Events (PandoDaily)
Ticketfly is releasing its Fanbase customer analytics suite that will allow venues and promoters to identify, engage, and reward their best customers. The genesis for this new product was the realization that just 7 percent of consumers accounted for 24 percent of ticket orders in 2012, and 30 percent of ticket revenue.

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SMBs are not entirely sitting on the sidelines, however. The Location-Based Marketing Association reports that 12% of them have run location-based campaigns in the last year and that figure is expected to grow. A Fox Business survey found that 66% of business owners do use mobile channels to communicate with customers. And almost all SMBs will say they leverage social media to some degree.

The goal is not just usage but effectiveness. Asif Khan, president of the LBMA, will present the state of mobile adoption and provide insights and strategies for helping SMBs achieve better results on the platform in the upcoming webinar, “Mobile Optimization Trends Among Small- and Medium-Sized Businesses.” The webinar will take place Tuesday, May 21st at 1p.m. ET/10 a.m. PT and is open to all attendees.

Takeaways will include:

• Creating a framework for thinking about the mobile channel to reach customers
• Hands-on tips and strategies for getting started and further maximizing more sophisticated strategies
• Insights into the dynamic of the SMB-vendor relationship that works

Khan will be joined by David Williams, vice president of marketing, demand generation at YP, who will give the vendor perspective on working with SMBs.

Click here to reserve a spot for this free webinar.

ESPN.com used to be a favorite online stomping ground for me, because they only ran ads of 15-seconds or less — but even they are taking the easy money that comes with shifting an ad created for one medium to block the passage to a video being sought in another. Local media companies rarely run anything less than 30 seconds, because that’s what advertisers want to buy.

Make no mistake. This is a most grave error, for it spits in the face of the one who has clicked through to watch a short video. Even the Interactive Advertising Bureau — that maker and keeper of online ad “standards” — sees the problem with 30-second spots:

15 seconds appears to be an optimal length for digital video creative in the pre-roll position. 5-second spots had trouble conveying a message; while 30-second spots risked turning off a viewer waiting to watch something else.

This debate over the length of pre-rolls isn’t new. Nearly 10 years ago, I read an article in MediaDailyNews about preroll ads. The reporter had interviewed people from Microsoft (MSN provided the early expertise in online video) who said that the optimum length for a preroll ad was “7 or 12 seconds.” After that, people expressed their displeasure by shutting down the video. I thought this was great advice, so I published a piece for my blog that linked back to the source. The next day, the source article had been changed to “15 or 30 seconds.” I was told that Microsoft had demanded the change. It took me several days to track down the right people at MSN, but when I did, I was told that higher ups changed it because advertisers would only pay for 15-30 second ads. I was outraged, but I was alone.

Time, according to J. Walter Thompson CEO Bob Jeffrey, is the new currency, and every second counts. Why do people fast-forward through commercials with a DVR? Because a full one-third of prime time is nothing but marketing. Who wants to give up that much of their precious time to be bombarded with ads? Nobody in their right mind. But the assumption here by marketers is that people will tolerate ads in order to watch their favorite shows.

Toleration is a concept that local TV companies have used to justify just about anything. John Locke, however, taught us that the single, most important freedom necessary for toleration is the power to say no — for without the power of intolerance, tolerance is merely a mask for totalitarian orders. If I cannot say “I refuse to tolerate,” then toleration is impossible. If I have not the power to say no, then my yes is artificial and a fraud. I have no choice in the matter, and my approval is nothing more than an act of submission to an authority.

So when advertising studies reveal that local viewers will “tolerate” multi-minute bundles of 30-second spots, they are defrauding the people who pay to have their messages presented, because it’s not toleration at all. When given the chance to “opt out,” the evidence from studies about remote control devices and DVRs strongly suggests they’d rather not. I realize fully that some “studies” suggest otherwise, but these have always been sponsored by someone with a serious dog in the fight. I would like to see a serious, independent examination of the subject.

Now, let’s look at the Web, where tolerance is even more of a reality. Why? Because viewers — who already vote with their clickers and their DVRs over-the-air — can simply dump out of a pre-roll or any other kind of time-consuming interruption. My own experience with MSN those many years ago is just the tip of the iceberg in how far those with something to lose will go to defend the status quo. As Clay Shirky says: “Institutions will always try to preserve the problem to which they are the solution.” So it is with Madison Avenue.

Even YouTube, the biggest online video purveyor of all, gives customers the chance to skip its TrueView ads after 5 seconds. Advertisers aren’t charged unless people view at least 30 seconds of such ads. There is debate about how many people actually watch the entire TrueView prerolls and how many people drop out, and, as usual, it all depends on who’s counting.

It stands to reason that there’s a market for 7- and 12-second video ads, because the original research began with customers. However, it has to be brought about by local publishers, because the ad industry won’t go there. Local advertising is sold, not bought, and the face-to-face value proposition of local media sales people makes it doable. Call me a nut, but if I knew that a certain source only ran 7- or 12-second prerolls, I’d spend all my video viewing time there. There is no video that I need to see badly enough to sit through a 30-second preroll, and I know I’m not alone.

In the wake of a record year for both revenue and profit in 2012, it’s hard to convince local broadcasters that they need to think differently online. We’re like the little boy whistling in the dark pretending that we can simply shift television “spots” to the Web. This is a terrific opportunity for others to disrupt local TV’s dominance in the local video advertising business.

If I were in charge of sales for a local or hyperlocal media provider, I’d carefully consider MSN’s pioneering research, and start experimenting with the making and selling of 7- and 12-second ads for online video.

Terry Heaton is President of Reinvent21, a consulting company specializing in business reinvention for the 21st Century. He’s an internationally-recognized creative expert on all things web-related, especially as they relate to local media.