As everyone fixates on the Facebook IPO, we liked this article showing the guy who is in charge of their ad strategy – the typical smart SAI title says it all; The $100bn valuation pretty much depends on this one guy. No pressure then.

And Facebook have announced their first event specifically for marketers taking place on February 29th in New York. We can expect to hear more about the ad strategy then. And what they plan to do with mobile

Some changes are already being leaked, with one change being a reduction in the size of the basic ads – down from the 135 characters to just 90. And this come as users report seeing up to 7 ads on their screen.

Maybe Less is More. But for who?

The Facebook mobile strategy took another big step this week with the announcement of a partnership with Orange to distribute Facebook to its 70 million users in Africa. As data usage is still low in this region Facebook will use a technology called USSD, which is built in virtually all GSM phones and used for services like callback. They expect one million new customers by the end of the year.

This approach is separate from Facebook Zero where users can access a stripped down version of Facebook for free on their mobile if their operator has signed up.

And the Guardian is finding its integration with Facebook hugely successful.

GAFA coming to the living room?

There seems to be something a foot at the GAFA HQs. Googlehave hired a senior Apple guy (with a track record in hardware) for a secret project. There are stories that Google are to launch a product in home entertainment.

The Guardian has an interesting piece of speculation around how Amazon could enter the TV market.

With the news that Google are partnering with Sony to launch GoogleTV in the UKthis spring, and Tim Cook hinting that Apple still see TV as an opportunity newTV seems to be getting closer.

Some new research suggests people like the idea of getting TV on a variety of devices. And media and web pioneer Barry Diller is investing in Aereo- a new startup that offers TV access via broadband, using an innovative technology that essentially gives each subscriber their own antenna. As someone who ran ABC, owned the Home Shopping Network and started Fox TV for Murdoch, Diller gets TV better than most.

Second screen is the other hot area in newTV and this article has some anecdotal information on how it is working for US brands. 

“It’s almost, in effect, helping brands close the loop from interest to actual action in a more direct response model.”

Places

Whilst the novelty of checking in places to be mayor may be waining its clear that the context of location is going to be really useful – and probably really valuable.

Foursquare have built a fantastic resource – we haven’t found anywhere not on their systems for months (even in exotic places like Sri Lanka, Sao Paulo and St Ives). And their APIs are both comprehensive and generous – so we see smart ideas like 4SQWiFI – and app that helps you find wifi hotspots by using the FourSquare database – often with the password too.

A new(ish) feature on FourSquare itself is Explore, where you can pick a location and find places in that location – great for forward planning. And you can now filter  – so just see places your friends have been to or places you have been before. Now they need to integrate Google StreetView so you can take a look around at the same time.

This is a good summary of how brands are using Places

Quick Reads

Some very interesting thinking around mobile measurement from the smart people at StrikeAds

Apple cuts the price of iADs. We expect some significant developments from Apple before too long.

Google share some findings on how mobile was used in holiday shopping in the US. Some impressive numbers here.

A great infographic on how infographics are ruining the web

Football gets social – which clubs are doing well on Facebook and Twitter. And, yes, it’s an infographic.

Forrester offer some sensible thinking on developing a mobile strategy. Don’t have a mobile strategy? You don’t have a future strategy. We need to talk.

Finally…. Whilst P&G and Unilever are pivoting to a more digitally focused approach to marketing, Nike have been pioneers. This is a good look at how they have reorganised to bring marketing closer to product and switched money from TV to digital

 ”Connecting used to be, ‘Here’s some product, and here’s some advertising. We hope you like it,’ ” he says. “Connecting today is a dialogue.”

And if you have some time it’s worth reading a fascinating Malcolm Gladwell article on the pioneers of infomercials, as they were the people who first worked out that combining product and marketing can be really profitable.

As we gear up for Euro 2012 and the Olympics what we can learn about the prospects for mobile from the Superbowl?

One fact that terrifies all the operators is that people use their phones at these events to share pictures and video – AT&T reported that people in the stadium uploaded about 40% more data than they downloaded.

But the second screen hype seems to have been just that – hype. Whilst Shazam are bullish about how the ads they tagged performed other commentators suggest a missed opportunity. Many of the ads had no call to action and others just had a web address, whilst only 16% pointed people to social.

As we expected the thing that did work was search. Google tell us that;

SuperBowl ad related searches in the US rose 200% on desktop, 970% on tablets and a whopping 2700% on smartphones.

The nice people at Frukt have a good round of the ads that ran and we’re reminded that TV can and does get people talking. Chrysler ran a fantastic 2 minute ad, created by Wiedens with a little help from Clint Eastwood, that hassparked lots of debate with the Fruitcake party – sorry the Tea party -condemning it as political. Searches for Clint Eastwood during the game went up by 5000% – we hope that Chrysler had bought search directing people to somewhere they could watch the ad again.

As Google say in their blog post;

Advertisers are beginning to see that mobile can deepen engagement with their brands and extend the value of their ad buy beyond the 30 seconds on air.

But we agree with those that point out the real winner might have been Apple – who didn’t run any ads but got fantastic coverage when virtually everyone on the Giants team pulled out their iPhone to take pictures of each other.

Facebook ads coming soon

Following the IPO filing we’ve seen speculation that Facebook are about to solve their mobile monetization issue with the extension of featured stories to mobile users. It’s clear that mobile is an issue for Facebook, but also a huge opportunity.

In the US the mobile ad market as a whole is expected to be worth just $2.6bn this year with Google $750m) and Apple ($90m) the key players. With the huge usage, high dwell time and the data that Facebook have, they should be able to make a big impact in mobile ads.

Some question just how effective this well be, arguing that the mobile experience on Facebook is underwhelming. Whilst we tend to agree, we expect to see some radical improvements in the mobile experience soon. Remember that at F7 we were told Timeline would be available on all devices?

One other interesting revelation from the filing papers is that the Facebook interpretation of an active user is a little looser than one might expect. For example, if you click the like button on the Addictive homepage, you’re an active user of Facebook, even if you never visit the Facebook site. Looking at Nielsen data it would seem that around 8 million US users (of 161m) fall into this category, so it’s not a huge issue.

One other piece of news on Facebook underlines their commitment to mobile –they have announced a deal with UK company Bango, to enable mobile payments. Few details yet, but its an interesting step for Facebook, adding payments to their vertical stack. Intriguingly we see that Bango also signed a deal with Amazon recently – again no details on what the deal is about. Given how dominant Amazon are with their one click payments it seems odd they need to bring in a partner in this space.

Path runs into privacy problems

When people question whether Facebook will be as dominant on mobile as it is on desktop, Path is invariably quoted as one of the examples of potential threats.Since relaunching they have done very well and would seem to have a bright future.

But this week they have been getting attention for the wrong reasons. A smart programmer discovered that Path takes a copy of each users contacts and stores it on their servers. So somewhere in San Francisco is a full copy of all our contacts. Path were quick to apologise and change their policy. And it was swiftly pointed out that many social apps behave in a similar way. But it does feel like this issue isn’t going to go away and the Guardian has a good round up of the story and some thoughts on implications.

Google

Google have been busy this week with news of their Solve for X conference where they bring together some of the smartest people in the world to look at solving big problems. Some of the amazing subjects include a new way to produce fresh water and a way to take a picture of the minds eye.

News of some high tech glasses they have developed, leaked too. These glasses are wearable but provide a computer interface. So, as you meet someone, Google Googles can identify the person and give you their profile on your glasses – so you need never forget a name again. We’re getting closer and closer to the Minority Report.

The new Google office – or campus – in East London looks like a great resource and a way to connect with the vibrant start up culture in this area

But thinking about their business now, we were fascinated by a chart on Splatf called eggs in one basket – which looks at what proportion of a companies revenue comes from its biggest revenue source.

So Amazon make nearly 90& of their money from product sales. Apple make 52% of their revenue from iPhones. RIM make nearly 80% of their money from hardware sales.

And lots of business rely on advertising; Facebook around 83%, Yahoo 81%, AOL 63%. And Google makes 96% of its revenue from advertising. That is a lot of eggs in one basket and some people think this is in jeopardy as Apple, Facebook and Amazon seek to balkanise the web and lock Google out of their walled gardens.This Time article on the subject is worth a read.

We think it’s always dangerous to underestimate Google.

Retail

After our piece on Brand Cathedrals last week we were interested to see thatAmazon seems likely to open a physical store – probably to promote the Kindle.

Forrester have a new report out looking at the renaissance of the retail store and we think some smart retailers are going to use showrooming, mobile and ecommerce to reinvent high street shopping. As the Tesco QR shop in Koreashowed, you don’t need a lot of space to sell product. And just as stores like JCrew’s Liquor Store in New York sells other brands to compliment their own label product, why doesn’t a retailer use the Amazon affiliate scheme to dramatically expand their range? 6% isn’t a bad margin

Switching to online retail, the hottest thing in social right now is Pinterest, andthey are starting to monetise their content with some affiliate deals. Given the rapid growth of this site and its clear influence on retail, we wouldn’t be surprised to see someone like Amazon come sniffing round with a checkbook. Whilst Boutique.com, the Google foray into retail, failed, people like ASOS and Net a Porter are showing you can sell a lot of schmutter if you get social and online content right.

There are lots of interesting starts ups playing in this space.

Moneyball Marketing

Over the past few weeks we have read some interesting thinking around how marketing is (finally) adapting to digital. In Harvard Business Review there is a good piece by McKinseys Davis Edelman looking at how different the consumer journey is nowadays.

And a former Googler has some great thinking on how brands can play Moneyball marketing –using data to get real competitive advantage.

Demonstrating just how mainstream this new approach is, Adage has this great quote;

a December investor presentation by Chief Marketing Officer Keith Weed in which he noted several digital programs that produced north of $3 in revenue for each dollar spent.

Although this thinking is around digital we’re seeing clear evidence that mobile can play it’s part. A new study from research firm Insight Express shows how over the past few years Mobile has outperformed Online in its ability to drive brand attributes like awareness, favourability and purchase intent.

So as well as getting response, mobile advertising can drive the brand too – we just need to improve the standard of creative work.

Quick reads

This is smart thinking on the need to integrate mobile and online

Amazon are signing a deal with Viacom to get more films for their Web Video service.

Some good reading on the need for a mobile strategy.

Siri is only the beginning – good article by the guy who invented Siri

Google have launched  a mobile version of their Chrome browser for Android.How long for the iOS one?

Mobile search volume in the US doubled between December 2010 and December 2011.

And finally you’d be forgiven for thinking that digital has had a disastrous effect on entertainment with piracy etc. This report shows the opposite is actually true; the industry grew, whilst consumers increased their spend.

As predicted Facebook have announced their IPO and the documents they provide as part of the process make interesting reading.

Advertising provides 85% of their revenue – down from 95% as revenue from Zynga grew to account for 12% of the total. (btw this news drove Zynga shares up by 16%). And new data shows that Facebook now accounts for 28% of all online display ads in the US – far ahead of Yahoo in second place with 11%.

But one quote from the risk factors is interesting for Fix readers;

“our revenue may be negatively affected unless and until we include ads or sponsored stories on our mobile apps and mobile website. We believe that people around the world will continue to increase their use of Facebook from mobile devices, and that some of this mobile usage has been and will continue to be a substitute for use of Facebook through personal computers.”

So, yes we will see ads on Facebook mobile before too long.

But there is a lot of work to be done to find a way to do that without negatively impacting the user experience on mobile devices.

One clear sign of their ambitions in mobile is the hiring of James Pearce to build relationships with mobile developers. James has been instrumental in building Sencha, the company that has driven the development of html5 and javascript tools to enable mobile webapps to get close to native apps in functionality.

Here you can read the full IPO documents for Facebook

Amazon stumbles

Following Apples stellar financial performance Wall Street was less than impressed with Amazon posting a decline in profits of 57% despite revenue being up 35% on the same period last year. And their forecast for the next quarter is essentially to break even.

The fall in profits is driven by a big hike in costs as they lose money on each of the Kindles they sell. And they are selling lots of Kindles – it’s the top selling product in most Amazon markets and has been since launch. And the Kindle Fire has got off to a great start in the US;

Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 17 weeks ago

Another area that sucked up investment is the Amazon play in offers – LivingSocial lost over half a billion dollars – on sales of around a quarter of a billion. There do appear to be some extenuating factors in these figures though.

But their entry into appstores seems to be paying off with customers ‘nearly tripling’ whilst Flurry research shows that the Kindle Fire is accounting for around a third of all Android tablet sessions

Given the range of activities and strength of Amazon across so many areas we have to give Jeff Bezos the benefit of the doubt – he is investing for the future. Including surreptitiously buying a business that is a leader in speech recognition

You can download the full press release here

NewTV

Whilst the main focus for sports fans in the UK is obviously who will seize the challenge of managing sleeping giants Leeds United, in the US everyone is gearing up for the SuperBowl. As well as being very very long, it has long been famous for the ad breaks when advertisers usually launch new commercials.

This year is expected to be the first 2screen superbowl with all the players in social TV trying to maximise their impact. Shazam will be used by around half of the advertisers whilst Yahoo acquisition IntoNow has a partnership with Pepsi Max.

Fast Company has a good look at some of the key players in this space – but as long as the market is balkanised – with so many disparate players – the opportunity is limited.

We believe that any marketing strategy that requires people to use a particular app is doomed to be niche. Even with the huge installed base of Shazam, you’re effectively locking out a big chunk of the audience. Like last year, we suspect the big winners will be people who use search smartly.

Whilst on the topic of new TV, this story about a comedian who gets 5 million viewers to his twice weekly videos on YouTube is interesting. That sort of scale compares well to lots of satellite TV stations.

MySpace still hanging in there

Even though the big story in social (and mobile and advertising and .. well everything) is Facebook,  it is worth remembering that there is lots of others stuff happening in social. New research showed that MySpace is still a significant player – and still bigger than Google+. Tumblr has grown rapidly and has a high dwell time, but the most surprising thing is that Pinterest is now a top 10 social network – with huge growth in users over the last few months. And as well as having high dwell time it is also a huge traffic driver to retailers

This video interview with Twitter chief Dick Costello is worth watching too.

Brand Cathedrals

We are huge believers in the power of brand cathedrals – those retail experiences where people go to pay homage to the brand just as much as to buy. For the launch of 3 we pushed the idea of stores that were places you celebrated the breadth of content the network was to offer, but lost the pitch. Nike does it well, as do some fashion brands like Comme De Garcon with their Dover Street Market.

But no-one does it better than Apple and announcing a new hire to head up their retail business they say;

“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,”

John is John Browett – currently CEO of Dixons. Obviously we’ve been going to the wrong Dixons stores.

Quick reads

No surprise that top VC firm Accel is keen to invest in mobile. This interview is a good take on what’s interesting the investors.

Games giant EA mobile sales are up 19% to $70m

Travel site Kayak was an early entrant into mobile and they’ve now decided that they are a mobile first company, with the new design of their desktop website taking its cues from their mobile properties. We are going to see this more and more – especially as responsive designbecomes better understood.

And ESPN have now decided that mobile isn’t the third screen – it’s the first screen.

By 2020 we’ll have 24 billion connected devices – a good infographic.

Google have added impressive new capabilities to Maps and Google Earth

This is an interesting take on how Google and Apple have very different approaches to innovation

This is a clever use of QR codes that will be copied endlessly.

Finally

I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we’re quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available. In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.

P&Gs CEO on an analyst call this week.

We agree.

Apple reported their figures for Q4 of 2012 and blew analysts forecasts away – with a staggering performance. They sold more iPhones in 2011 than they sold in 2007, 2008, 2009 and 2010 – combined!

They made more profit in Q4 ($13.1bn) than Google made revenue over the same period ($10.6bn) – and the Apple revenue in Q4 was $46bn

They have $97bn in cash – and consider that Facebook hope to be a company that is valued at $100bn when they do their IPO.

The full details are here. There are some charts here that help put them in perspective. If you still want more read the TechCrunch article – that was originally called Boom, Boom, Boom

And they still have plenty of opportunity for growth – Apple CEO Tim Cook says demand in China is staggering and off the chart and a Chinese Business School professor is quoted as saying;

 “The desire for this brand has already broadened out from the trendy urban demographic to just about everyone,”

The rumours about iPhone 5 are starting to flow with suggestions it’s coming this summer and will have a much bigger screen – maybe as large as 4 inches.

Google change the way they use data

As they come under some criticism over the way they have implemented social search – using Google + to improve search results but ignoring/unable to use data from Facebook and Twitter  – Google are making changes to they way the collect and use data. Instead of over 60 separate privacy notices there will now be one. This means Google can use all the data they have on someone to improve their services – and to better target advertising.

Online display advertising is forecast to boom in the coming years and Google want to ensure they have maximum firepower to see off Facebook ambitions in this space.

Everyone in GAFA is collecting data on what we do online and intends to use that to make more money. Google is keen to extend their supremacy in search advertising into display and everyone else wants to stop them. New research suggests that they continue to do really well in mobile – at the expense of Apple – largely because they are so dominant in mobile search.

Privacy

But of course, one mans data insight is another’s privacy concern.

O2 learnt this week just how quickly people jump onto something that seems like a privacy issue. A smart developer noticed that O2 was passing on a users phone number amongst the info shared when a mobile users visits a website. This news spread quickly and O2 was almost as quick to change their policy and stop this practice. But this fuss has highlighted the issue that mobile is different to online and we all need to remember this.

More on NewTV 

As Netflix talk up their UK launch and report great sales in the US, the FT pulls evidence together that whilst the topline data suggests TV is doing well, when you look beyond the marquee shows ( top drama, reality shows and sport) fragmentation is having a corrosive effect.

Quick reads

We talked about how mobile is perfect for Branded Utility last week and this is  a good summary of the better examples

Marin research on their customers activity in search shows that 12% of UK search is mobile – but only around 7% of search budgets are being spent on mobile. That spells opportunity for smart brands.

This Fix is being written in breaks at the excellent Mobile Retail Conference in London, where I’m chairing the afternoon session. Many of the talks are around how retailers deal with people using their mobile to check prices and reviews etc. US retailer Target is asking their suppliers to help them counter this showrooming, by providing exclusive products and better pricing.

There is a UK answer to Square launching soon – called Mpowa.

Probably not a surprise to Fix readers but new data shows that Mobile is now around 40% of VC investments in Tech

With over 500 million apps everyone agrees that the Apple appstore is broken – and this is some smart thinking on how it might evolve.

Not that quick but still worth reading; Really good interview with the head of design for Android from Wired – long but gets into some good detail on where Google are going with mobile

US clients want their agencies to give them strategic thinking – but only 9% believe their trad agencies get digital. We think it’s probably similar over here – which is why we’re helping a couple of smart agencies get match fit for mobile. We’re always happy to help others.

As Apple stock hit new heights Facebook have suspended secondary market trading in their stock for a week – suggesting they may be about to announce their IPO

Finally

….In the week when Deloitte release a study suggesting that Facebook adds £2bn to the UK economy, and supports 35k jobs, a new study facilitated by Google seeks to measure the contribution of the Internet on society. This pulls together various sources and puts figures against the contribution to each European country. For the UK the figure is £100 billion, with the potential to be 50% higher by 2015.

These studies underline the fact that digital is key to the economy and that many businesses revolve around the internet. Quite why some people still struggle to accept the huge influence digital can and does have on marketing, remains a mystery.

As Mary Meeker says of mobile, some companies will win big, whilst many will wonder what just happened.

Apple made their much anticipated move into education today with iBooks2  which pushes the iPad as a tool for students. This new service enables publishers to easily convert textbooks into iPad friendly ebooks and also allows anyone to create a book for free – with lots of interactive features possible.

Apple already do a lot in education and with their discounts for students and now lower cost of e-textbooks they’ll be hoping this reduces the attractiveness of the lower priced Kindle Fire for students (and parents). Of course the books ‘converted’ using Apple tools are incompatible with the Kindle or any other non Apple device.

One of the key Apple products for education is the excellent iTunesU, which has courses from 1000 universities – and has had over 700 million downloads.  One of the things that makes the iPad so interesting is that it’s a device for reading textbooks and for watching video – so we expect to see innovation in education, building on the great work that the Khan Academy does with educational video.

It’s also worth remembering Chris Andersons seminal Ted talk where he demonstrates how video is driving innovation as people learn from others around the world.

The other Apple “news” this week is that the iPad3 is expected to launch in March

Amazon 

Jason Calacanis has a great article on the power of Amazon Prime – their service where an annual fee gets you free delivery and – increasingly – other benefits; US Prime customers also get free movie downloads.

And as a reminder of the power of Amazon to disrupt analyst RBC Capital estimate that Amazon loses $2 on every Kindle Fire sale, they make an additional $136 in sales to each Kindle Fire customer.

NewTV

The Observer had a good round up of the challenges facing traditional TV, which builds on our piece last week about the new economics of newTV. A good round up of CES emphasizes how focused everyone is on making connected TV work. And a very interesting article in Fact Company tells how lots of hardware brands are keen to build Shazam into their products. If you missed our take on how significant this all is you can read it here.

Branded Utility

Anyone remember Branded Utility? The idea that brands would do something useful for their customers as a way of getting their attention. Whilst it’s no longer such a buzzword, the thinking drives some of the more interesting brand work we see. But the original example that got people excited was Nike + – a branded service that solved a real problem, made lots of money and build the Nike brand.

Well now they seem to have done it again; Nike Fuel is a band you wear that measures your movement and energy. If you watch the promotional video we’re sure you’ll want one too.

This is a great example of brands using technology to create converged services. The next generation of digital isn’t about single purpose apps but instead sophisticated services that really harness the power of technology. One fun example is the connected toothbrush – one that knows how long you have really brushed for and can give badges to kids who look after their teeth well.  Sounds like a joke? We expect to see it in stores this year.

Online advertising

Online advertising isn’t flavour of the month right now; too many people write it off as banners and buttons and focus on earned and owned media rather than paid media. But new research suggests brands are starting to invest – with 64% of brand marketers planning to spend more.

The basic plumbing still needs work though. As well as the clutter on most web pages, we now see that almost a third of all display ads never get seen; many are at the bottom of web pages where people never scroll down. And a high proportion of campaigns had ads running next to content deemed ‘not brand safe’.

Smart agencies know how to make online display work well, but clearly there are a lot of people wasting their clients money. On mobile it’s crucial that we don’t import these failings from desktop – and new research shows that good old fashioned context has a very positive effect on campaign results in mobile.

Facebook

As Timeline rolls out, Facebook have announced 60 lifestyle apps that bring to life the verbs that Facebook is building Timeline around. As well as Spotify for listened and the Guardian for read, new apps include hot start ups like Foodily (ate) and Zeebox (watched). The full list is here.

Brands are going to need to think through the verbs they can harness if they want to be part of peoples timelines – and we believe the marketers addiction to the Like will soon start to wane.

At this months Facebook Developers Garage, hearing of the latest changes to the platform emphasised just how complicated an ecosytem Facebook is. And this excellent infographic summarises all the changes over the past             years.

But despite being complicated, marketers are investing in Facebook and they now pay 23% more per impression that they did a year ago. The full research report is worth a look.

Google

It looks like our friends at Google may be in for a tough time soon. The bureaucrats in Brussels seem to be moving very quickly in putting together their report on Google, with an announcement expected in the next few weeks. A well informed journalist tells us that Brussels moving quickly generally means bad news.

This isn’t a huge surprise for Google – we met Eric Schmidt a few years back and were told that if Google were to have issues with regulators, it would almost certainly be in Europe rather than in the US or Asia.

Maybe we’ll all be told we have to use the EU funded search engine Quaero instead of Google?

SOPA

As parts of the web went dark this week to protest against SOPA we thought we’d point you to two great explanations of just how stupid – and dangerous  – this legislation is.

Seth Godin nails it when he points out that Kodak could have been protected by banning cameraphones. And this video by Clay Shirkey puts SOPA in a historical context  – well worth watching.

Quick reads

Latest hotstart up Pinterest has a great approach to signing up members –well worth learning from.

eBay expects to make $8bn in mobile sales this year and their subsidiary PayPal should do $7bn in mobile payments

A former HuffingtonPost Mobile exec makes a great case for using HTML5

There are some great tools for listening to social and this deck covers most of them.

Finally

this article makes the argument that agencies need to get mobile if they are to be taken seriously by their clients. We agree.

NewTV + new advertising economics

This week Las Vegas is full of people gambling on what new tech products are likely to take off. The Consumer Electronics Show is now the tech trade show and most of the big players – other than Apple – are there.

But the hot area this year isn’t mobile, although Nokia have made a big impression with the Lumia there.. It’s all about connected (or Smart) TV, with Samsung, LG and Sony pushing new hardware and coming out as Google TV partners.

As background to the emergence of newTV – connected TV, 2screen and TV delivered over mobile devices – some new research heralds the decline of traditional broadcast TV.

Research from Accenture suggests that less than half the population watch broadcast TV on a TV– down from 72% in 2009. Instead people are watching TV on other devices – 33% on PCs and 10% on smartphones.

And new Neilsen data shows that 145 million people watch video online in the US, compared to to about 290 million who watch traditional TV. Of course much much more time is spent watching on traditional TV but Netflix is getting 10 hours a month and YouTube almost 3 – which is only going to grow.

Of course there is a way to go here – some data suggests that 25 million US households have internet connected TVs – but only around half are actually connected.

But around a third of the people who watched Downton Abbey, ITVs most popular show over Christmas, did so on timeshift – using Sky+ of ITV Player. And as we reported last week people are being weaned off cable subscriptions to find content online.

We continue to believe that traditional TV is losing the war for attention – and that mobile devices are capturing that attention. And the interesting thing about this theory is economics – as the attention shifts from one device to another does the money follow?

This week Sky made a big investment in 2Screen pioneer ZeeBox.  As well as adding social functionality to their already impressive range of mobile services Zeebox gives Sky a lever to disrupt the TV ad market in the UK. Right now advertising is a relatively small part of Sky revenues – they make most of their money from subscriptions – and as most of the audience is watching channels other than Sky, they only get ad revenue for a small portion of their customers viewing.

But now they can go to big advertisers and offer what they call Synchronised Ad Inventory– which means that when the ad appears in the middle break of X Factor on ITV, Zeebox will know which ad is on (by using the soundtrack to identify it) and can offer advertisers a way to offer additional content – a response mechanism or a part 2 to that ad. And that deal doesn’t involve ITV at all.

Sound a little futuristic? Shazam is already offering a similar service in the US where their app (now on around 175 million smartphones) recognises the ad from the soundtrack and serves up related content. Around a third of all the ads in the Superbowl are expected to use this service.

Our key prediction for 2012 is that smart brands will use mobile to deliver participation opportunities, where TV ads act as the invitation to participate.

New economics for Mobile Network Operators?

A business in France has launched a new service that is being lauded as the future for operators. Having ran a successful broadband business, Free combines 3G, WiFi, Femtocells and it’s own fibre network to deliver a fast mobile service at a very competitive price. One very smart feature is that each of the 5 million set top boxes in customers homes share a proportion of their bandwidth with other Free customers over WiFI – meaning they have one of the biggest WiFi clouds covering Paris and Lyon etc. Ewan Macleod has looked at Free too, calling it the most exciting announcement since Steve Jobs launched the iPhone

And a good article on Twilio also suggests that innovation from new players will disrupt the operators business model.

So as operators prepare to bid for the 4G Spectrum, in the UK – with the auction rules published today – they have to factor in how tech players are going to change their business. And the auction rules Ofcom have published are a little surprising as they don’t feature the expected guarantees for Three and Everything EveryWhere

Managing Social

Some of the smartest thinkers on Social work for Altimeter and one of their people has shared a good report on how to manage the proliferation of social media.

Still on social Booz & Co have produced a new metric for measuring the success of social – likes per $million of revenue.  Whilst the industry desperately needs some smart thinking around the real value of social, we’re not sure this makes much sense. The data would probably be more interesting if they used number of customers rather than the revenue.

GAFA

John Battelle has produced a very interesting chart looking at how the GAFA companies (and Microsoft) compare across product categories.

Quick Reads

As the UK waits for the Kindle Fire, in the US people are starting to develop apps for it. We were invited to a developer event at CES focused on how to sell apps on the Kindle and US bank Wells Fargo have launched Kindle apps.

Clay Shirky has some typically clever thinking on newspapers and paywalls.

Analytics guru Avinash Kaushik has some good thinking on why companies are not getting real value from analytics.

We’ve had a number of conversations with clients about how email marketing needs rethinking given how many people are now reading emails on their smartphone. This data puts some numbers against this – a rise of 20 million in the US

The new edition of the Google Think Quarterly is out – well worth reading.

Finally

We’re on the board of the MMA and wanted to tell you about the next event. It’s taking place between 8.30 and 11 on February 1^st  in Central London and features speakers from Groupon, Nielsen and Evans Cycles.

If you work for a brand we can get you a free ticket – just let us know.

The news that Walmart has bought a mobile agency this week has been widely reported, as has the news that the Financial Timeshas bought the firm that developed their highly successful HTML5 webapp. But we also see that the Mirror Newspaper has bought a mobile focused agency and Deloitte have bought a Seattle app development firm called Ubermind too.

People who get really mobile (and can develop smart thinking and doing) continue to be the exception rather than the rule and smart companies are recognizing the competitive advantages that can be gained through the strategic use of mobile.

The FT and Mirror news confirms the trend we are seeing for marketing services offered by people other than traditional agencies. US publisher Meredith bought mobile agency HyperFactory a while back and Adobe bought search firm Efficient Frontier late last year.

Mobile payments solving the wrong problem?

Being in startup bootstrapping mode we don’t get taxis that often, but the other day we found ourselves in one of the Vodafone enabled Black cabs where you can pay with your mobile. But when we asked the driver if anyone had paid with their mobile he said no.

Paying for taxis isn’t a problem. But often finding a cab is. Why doesn’t Vodafone solve the real problem by launching a version of Uber or Hailo? Knowing that your operator can help you get a cab would be a great service and could perhaps drive loyalty better than the chance to win tickets to events. This type of service provides a context for mobile payments by solving a real problem.

And the news that Brits can now pay for coffee with the Starbucks app prompts a similar thought. The problem with getting a coffee at Starbucks isn’t paying for it – it’s ordering the coffee and waiting for it. In New York Starbucks employ people to work the queue asking what you want and shouting the order to the barista. Of course it doesn’t quite work and it’s really annoying.

So why doesn’t mobile solve the real problem – recognize you’ve entered the store, asking whether you want your usual and transmitting that to the counter. Quick, efficient and pretty easy to do.

Solving the real problem creates the context for the mobile payment. And is much more likely to drive usage.

Apple to bid against Sky for Premiership rights?

As the speculation about Apple making a big play in TV builds there are rumours that they will bid for the TV rights for the Premiership. As Sky have proven, making big investments in very attractive content can pay off and the additional opportunities to use the content on mobile and digital makes the investment even more attractive to people like Apple. Especially as Sky are already seeing some success with sport on mobile. And we have seen YouTube provide live coverage of the IPL cricket with considerable success.

Could they also drive some new business models? There is a lot of thinking around the idea that (some) clubs would make more money by selling to fans direct. Could Apple use their learnings from iTunes etc to facilitate this?

The availability of must see content on digital drives the decline in cable that Deloitte report in the US – with 11% saying they are considering cancelling a paid for TV service because most/all there favourite shows are available online – and 9% already have. Smartphones and tablets are a small but growing part of this.

New York VC Fred Wilson has started to use the hashtag #screwcable to reflect his frustration with old media thinking being made redundant through digital.

And Sky say that they think 2012 is the year of the tablet so we can expect more developments in this area.

Apple to relaunch iAds?

With a new guy running the iAds team and a mysterious event announced for later this month we may be seeing a rethink on iAds from Apple. Could they open up the format to other people to sell? Or even extend the service to non iOS devices? Would the data they’d get on Android etc (plus the revenue) make that worthwhile for Apple?

Quick reads

John Battelle has some good thinking on how Facebook could monetise their reach across the web by launching an ad network. His other predictions are worth reading too.

Forbes have a great article on Amazon – hailing them as the best strategic player in tech.

This is a good summary of stats on US mcommerce over the holiday period. We’re looking for similar data for the UK so if you have anything let us know.

The Consumer Electronic show opens in Las Vegas next week and these are some of the hot devices expected to be launched.

Lots of people are doing predictions at the moment and two of the best are the JWT deck and one from our friends at Carat. Of course a key topic is mobile.

Finally

we spent Christmas in Sri Lanka and got some first hand experience on how mobile is impacting emerging markets. The guy who ran the surf shop is also a fisherman and told us that when someone spots a large shoal of fish they now ring their friends and tell them to launch their boats. The President sent a New Year message to all the population by SMS. And smartphones are being pushed hard too – at the coolest new restaurant in Colombo the waiter takes the order on an iPhone.

We also saw that FourSquare has amazing coverage – everywhere we went was on their database, with mayors and tips; they are a truly global business now. And we used Path a lot to document the holiday and share with friends – and without the use of the FourSquare API the service just wouldn’t work.

Back in London, we have some spare desks at the moment in our very cool offices on Clerkenwell Green. If you’re interested get in touch.

Facebook have just announced that timeline is now available on mobile. Over the coming months we’re going to see lots of developments in how Facebook use mobile and that’s going to have a big impact on the whole ecology.

And Amazon have broken with their usual secrecy to release sales figures for their Kindle. In the US they are selling over a million Kindle devices each week with the new Fire the topseller. UK data is less specific but Amazon tell us they sold over 3 million items on just one day (December 5 – Cyber Monday) with the Kindle the top seller.

Facebook are rumoured to be ready to jump into mobile advertising early next year and given the wealth of targeting data they have access to they should do very well.

And this week we heard that Apple are struggling with their iAds product – dropping the minimum buy to just $400k (down from $1million at launch) and allowing a cap on the cost per click they charge in addition to the cost per thousand for the campaign reach. As George in Seinfeld was told, Double Dipping isn’t popular.

Still on mobile advertising, new data from a good Ofcom study showed that the UK is doing pretty well in mobile advertising compared to some – but there is still a way to go. Looking at mobile ad spend per head of population, the UK is at £1.33 compared to the US at £1.25. But Japan shows the potential with £6.52.

And eMarketer gives us a clue why we are lagging; whilst mobile gets around 10% of peoples time in the US, it only gets 1% of adspend. The UK figures are probably similar. As Mary Meeker points out there is a $50 billion opportunity as this gap between time spent with digital and adspend closes. All the data and charts are on our blog.

Money always follows audience and we will eventually see mobile take its deserved share of adspend – specially as brands start to be able to close the loop between ad exposure on mobile and actual transactions.

We’re not that far away from campaign measurement that links exposure on the mobile device with someone checking in at a retail store, redeeming a mobile coupon and buying the product with their mobile wallet. When this happens we’ll see huge shifts in budget.

But one issue that needs work is understanding how mobile advertising works. Right now mobile is hampered by the disdain for banners and buttons that plagues online advertising. Whilst mobile is unlikely to emulate the clutter that mars online we need some thinking about how and why digital advertising works.

Ignoring clickthrough for a moment we see some advertisers like P&G buying mobile and online ads for reach. Studies from all the research companies show that online can and does affect brand metrics. But we need to understand how it works and we think its time to think about how low involvement processing works in digital. This theory from Robert Heath is well respected amongst marketers and is accepted as one of the ways that TV advertising works. The basic thought is that whilst we don’t consciously pay attention to a message, our sub conscious processes it with low involvement from our brain.

We suspect that’s how digital banners work and we’re keen to explore if we can prove this in mobile. Years ago we invented a brand (YesSirNoSir) and advertised it online, to see what the effect of pure digital was. One of our plans for 2012 is to replicate this on mobile and we’ll be looking for partners; if you would like to get involved get in touch.

Quick reads

Booz Allen have looked at which brands are getting organised for social

Our friends at Infectious are nailing the emerging space of exchanges and have shared a great case study showing that this approach works for brands as well as response advertisers

The smart people at WeAreSocial point out an interesting new opportunity for brands in Facebook – Private Messages.

Amazon have upset some people with their aggressive push on mobile price checking – whilst Google point out that retailers need to improve how they use mobile instore.

Google+ is building out the features and now has facial recognition. Maybe we’re being slow but couldn’t you hack this security with a photo of the person?

And the Google answer to FlipBoard has launched in the US. The skunkworks name was Propeller but its launch name is Currants. Reaction is generally good but its lack of social features seem to be an issue.

The Adobe Investor presentation is – as you might imagine – a little dry . But it’s worth reading as what they offer sounds very like what a digital agency might offer.

Finally

its Christmas and we’re out of here.

Rather than cards we thought we’d share some of our collection of soulful Christmas music we’ve been building over the years. In the past this has been a CD and a YouTube playlist. This year it’s a Spotify playlist.

This will be the soundtrack as we enjoy Turkey and Pinot Noir on the beach in Sri Lanka. However you spend your Christmas we hope you enjoy listening and that you have a great time.

By the way if you still haven’t sorted New Year, our place in St Ives is available.

We were fascinated by this chart

Looking at mobile ad spend per head of population it shows the UK at £1.33 which compares well to the US at £1.25. But look at the figures for Japan – where the equivalent figure is £6.52.

Which might have something to do with this

Despite gettting 10% of peoples time mobile is only getting 1% of ad spend.

So what is everyone waiting for?