In this latest manouevre in the revenue contest....
No, it is a war movie, so let's start again. The scene in the movie seems to show Apple pulling its Praetorian Guard into the bastion and firing off a salvo at its own people huddled outside the walls.
Apple is using potentially devasting ammunition. It looks like this, according to intelligence dispatched from Apple to its developer militia: "If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store."
You can use the iPhone core location framework and receive a pass into the bastion if your app provides "beneficial information" such as weather forecasts or where to find ATMs. But no LBS advertising apps are welcome.
That's like telling the smaller developers: "We'll accept your apps if they'll sell more iPhones or make us money some other way, but you can't make money from them." With the vast majority of mobile apps being free, many developers rely on LBS advertising within the apps to monetise them.
Apple hasn't elaborated on its decision. Two interpretations are doing the rounds. One, Apple is protecting iPhone users from a bombardment of location-based advertising; or two, Apple wants to deploy all the artillery for its own gain.
News from the front lines
The action in the movie now cuts from the Apple fortress to the intelligence section of a neutral observer. Analysts at Base Smaato are calculating who holds what ground in the war, and how the front has shifted during recent phases of the campaigns.
Through the smoke, confusion and fog of war caused by factors like the writer's continuing mixture of mobile commercial and military science metaphors, we learn from the Smaato advertising company that Symbian still holds the high ground in click-through rates (CTR), as it did the month before. Over the same time span, Apple's position became relatively weaker.
It shouldn't surprise anyone that the elite Scandinavian force is still calling the shots. As Smaato explains, Nokia dominates in developing markets where mobile advertising is a more reliable source of income than the sale of mobile apps.
Symbian leads globally with a January 2010 CTR of 178. Apple was second with a CTR of 119 in December, but last month it fell back to third place on 104. This is only just ahead of Windows Mobile, on 98.
Android made the most dramatic advance, more than doubling its CTR from 65 in December to 163 last month. This gives Android a clear edge over Apple in this sector of the war and threatens Symbian's position. Smaato attributes the mighty gain by Android at least partly to the significant uptake of Motorola Droid and Google Nexus One phones.
It isn't known if figures like this influenced Apple's decision about LBS advertising aps.
All eyes on the prize
The newest research from Gartner reveals that mobile advertising revenues amounted to about $530 million (338.4 million pounds) last year. This figure could soar to $13.5 billion by 2013. That looks like a good enough reason to commit more resources and try new tactics in the war.
The combatants will have noted other intel too, such as the announcement last week that mobile phone operators in Britain have teamed up with comScore, a digital market research company, to measure mobile Internet usage. This is the first undertaking of its kind. Some may call it an "exercise" but this is war, remember.
UK's operators are said to be eager to use this type of information to jump-start the mobile advertising market, which has failed to reach the potential that was initially predicted for it. Advertisers need powerful persuasion to devote more of their efforts towards targeting consumers via mobile phones. While advertisers recognise the advantages of the mobile medium - it is highly personal and it's location-aware - they have been deterred by the lack of hard data about mobile media consumption.
The UK initiative is bolstered by other, parallel new findings published last week. According to research firm Insight Express, mobile advertising campaigns are 4.5 to 5 times more effective than web ads based on industry standard measures.
Joy Liuzzo, senior director of marketing and mobile research at Insight Express, said: "The high levels of engagement, the explosion in technical capabilities, low levels of clutter and the novelty of mobile advertising all likely contribute to increased brand impact."
However, this research also has negative parallels with the perceived lack of mobile media data. The report notes that the splintering of mobile platforms and standards across operating systems and cellular networks is still a "challenge" for marketers. In our war movie we'll call it a "deterrent".
If there is this lack of consistency and standards, might it make good sense to consolidate your own position by shutting out the third-party developers? Even if it seems harsh to the small guys, isn't it wise to realign your forces around powerful allies and subordinates you've acquired? Surely by doing this you can at least strive for some type of commonality within your own brand.
In some languages, such as English, "commonality" may sound like "monopoly," but your ears could be fooling you.
Building the armies
Even though this is a war movie, it may seem brutal to talk about "annexation" and "occupation" so we'll stick with the tamer word "take-over". There has been a spate of them as the powerful protagonists have been buying specialist troops to beef up their armies.
Some indication of what was to come occurred in July last year when Microsoft and Yahoo! signed a ten-year deal. The agreement was that Microsoft would power Yahoo! searches, while Yahoo! would become a worldwide sales force for Microsoft.
Many smaller ad companies were shaken in November when Google signed an agreement to buy AdMob, the major mobile display ad technology provider, for US$750 million in stock.
Apple stirred things up further when it bought the Quattro Wireless advertising company in January for a price reported to be close to $300 million.
Also last month, Opera Software acquired mobile advertising company AdMarvel. This was a move to monetise Opera-branded mobile products offered by carriers and content partners. According to Statcounter, Opera is the most used mobile browser worldwide.
Inventing new weapons
No good war movie leaves out the part where the army eggheads develop and try out new technology to strengthen their arsenals. Two such cases came to light in the last week.
Yahoo! has filed a patent, "System for providing location predictive advertising", that may be able to predict where you're going by studying the direction you're travelling in. This system would then be able to deliver relevant ads while you're on the move. For example, if you've just left San Francisco to journey to Los Angeles and you search for "hotels", the search may display a listing of Los Angeles hotels.
According to Yahoo! this technology could be applied at intra-city, inter-city and international level. The suggestion is that advertisers who spend money on untargeted sources may now save money on what might have previously been considered wasteful expenditure. For example, hoteliers in Los Angeles may profit by advertising in San Francisco.
In a different type of development, Apple has applied for a patent that may considerably simplify the procedure of sharing your location by using the Maps app on the iPhone.
The current method is to find your current location, tap on the blue marker on the map, tap "Share Location" and then send it to a contact either as an e-mail or MMS. Your friend receives the e-mail or MMS with your location, opens it in Maps, and has the option of finding directions to your location.
According to the new patent application Apple may simply add buttons for "Request location info" and "Release location info". This would enable you to share your location or request someone else's with a single button press.
Advertisers may be interested in an option that would let them share their locations with you in the same way.
Whichever way the war goes, you can expect to see a steady flow of slick, quick and smart apps designed to feed you with location-based ads. If this sounds intrusive to you, note that a large number of mobile users welcome targeted, location-specific advertising if there are suitable incentives.
But let's cut back to the Apple bastion and its current approach to mobile advertising. Recently there have been rumours that Apple wants to revolutionise mobile advertising to prove that the boss is wrong. Apple CEO Steve Jobs was heard to complain that "mobile ads suck". Tighter in-house control of advertising via Apple mobile devices may be part of the key to changing his mind.
