Mobile Commerce Outlook 2013: Mobile Commerce to Make Customers Pickier

Mobile Commerce Daily
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February 2013
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Mobile Commerce
Outlook 2013

CONTENTS

PAGE PAGE

3 INTRODUCTION 21 LEGAL/PRIVACY
Mobile commerce to make customers pickier Privacy a bigger concern as regulation grows
By Mickey Alam Khan By Chantal Tode

4 ADVERTISING 23 MULTICHANNEL RETAIL SUPPORT
Mobile advertising is the linchpin that will drive purchases Mobile opportunities outweigh any negatives for merchants
By Rimma Kats By Chantal Tode

7 ANALYTICS 25 MARKETING
As merchants build mobile chops, analytics become even Privacy, measurement to continue to challenge location-
more imperative based marketing
By Chantal Tode By Lauren Johnson

9 APPLICATIONS 27 MUSIC
App discoverability will still be an ongoing obstacle for Music industry split on subscription and library-based
mobile marketers revenue streams
By Rimma Kats By Lauren Johnson

11 BANKING 29 RESEARCH
Mobile popularity challenges banks to keep features fresh Loyalty integration crucial to mobile wallet success

13 CARRIER NETWORKS 31 SEARCH
2013 a pivotal year for wireless carriers, mobile commerce Mobile search will help grow purchase intent

15 CONTENT 34 SOFTWARE AND TECHNOLOGY
Stronger mobile content experiences will be in demand QR codes, augmented reality will anchor mcommerce success
in 2013 By Rimma Kats
By Chantal Tode
36 WEB SITE AND DEVELOPMENT
17 EMAIL Forget about cookie-cutter mobile sites in 2013
Mobile commerce emails to get a lift with loyalty By Rimma Kats
By Lauren Johnson

19 GAMING
Rewards-based mobile advertising takes shape in 2013

Mickey Alam Khan Rimma Kats Jodie Solomon 401 Broadway, Suite 1408
Editor in Chief Associate Editor Director, Ad Sales New York, NY 10013
mickey@ rimma@ ads@ Tel: 212-334-6305
napean.com mobilemarketer.com mobilemarketer.com Fax: 212-334-6339
Email: news@mobilemarketer.com
Web site: www.MobileMarketer.com

For newsletter subscriptions:
Chantal Tode Lauren Johnson Kristina Mayne http://www.mobilemarketer.com/
Associate Editor Associate Reporter Content Assistant newsletter.php
chantal@ lauren@ kristina@
mobilemarketer.com mobilemarketer.com mobilemarketer.com For advertising:
http://www.mobilemarketer.com/cms/
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For reprints:
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PAGE 2 Mobile Commerce Daily MOBILE COMMERCE OUTLOOK 2013

INTRODUCTION

Mobile commerce to make customers pickier

T he runaway hit for retail this year will be mobile com-
merce. The best way to leave money on the table is not
to have a commerce-enabled mobile site and application.
dominance. And mobile is where most searches will
soon migrate.

But retailers’ biggest beef with Amazon is what threatens
Retailers and financial institutions are undergoing the their stability and customer relationships – the growing
biggest business-model shifts in a generation. Technology phenomenon of showrooming where consumers compare
has changed the relationship between retailers and their product prices on Amazon’s mobile site and apps while in
customers, shifting the balance towards those who buy the competitor’s store.
away from those who sell. Mobile is hastening this evolu-
tion, or as it will be for some merchants, revolution. Amazon is training consumers to shop mainly by price
and then for convenience, threatening retailers’ business
Basket case models that rely on customer relationships for repeat
While it is hard to quantify, it is obvious that mobile is purchases and loyalty to brand over pricing. Amazon is
helping boost the basket size for smart retailers offering not going away anytime soon, nor is the behavior it is
seamless shopping and checkout experiences on smart- ingraining in consumers.
phones and tablets.
Shop shop or chop chop
Whether the sales are incremental or channel shift is That said, brand still does count for much in retail.
up for debate, echoing some of the same discussions
over ecommerce and retail stores. Mobile is also driv- Those retailers investing in smart marketing, attractive
ing traffic in-store, thus giving it its biggest edge of PC- pricing, convenient product delivery and a quick and
based ecommerce. seamless shopping experience on mobile will continue
their growth momentum. Mobile brings the store closer to
The early advantage in mobile commerce goes to play- the consumer.
ers already invested in the ecommerce space: eBay and
Amazon. EBay’s PayPal unit last year closed $14 billion This Mobile Commerce Outlook outlines some of the op-
in transactions via mobile devices – one-tenth of the on- portunities and challenges in the year ahead for mobile
line total. This year, eBay expects to close $20 billion in commerce. Many thanks to Mobile Commerce Daily’s
transactions on mobile and another $20 billion via Pay- Chantal Tode, Rimma Kats and Lauren Johnson for their
Pal, clearly putting it in the lead for mobile payments reporting and analysis. Thanks also to Rimma for her art
yet again. direction and to ad sales director Jodie Solomon and con-
tent assistant Kristina Mayne for their support.
Amazon, for its part, is the great disruptor. Online was its
killer weapon and now mobile serves the coup de grace. Please read this Outlook from cover to cover. Mobile will
Take any retail category and Amazon is forcing its com- change the world of retail even more than ecommerce
petitors into the uncomfortable position of defending did, redefining the relationship between shop and shopper
their turf at the risk of losing loyal customers. Amazon to the extreme advantage of the latter.
thrives on extreme loyalty from a customer base addicted
to quick and easy shopping on PC and mobile. It also ben-
efits from its 1-click ordering process that is a natural
for mobile.

As a disruptor, Amazon is dangerously close to becom-
ing the search engine of choice for retail searches, thus Mickey Alam Khan
upsetting Google’s plans for continued search world mickey@napean.com

ADVERTISING
Mobile advertising is the linchpin that will drive purchases
By Rimma Kats

W
hile interactive mobile advertising is certainly Contextually additive functions such as location recog-
not a new concept, few brands and their agen- nition for store location and click-to-call should be con-
cies have taken the additional step of execut- sidered in every mobile ad execution.
ing commerce integration as a central component in
execution strategy. That said, the outlook for mobile “Unfortunately, it is a fact that a considerable percent-
commerce-enabled advertising in 2013 looks bright. age of brands still do not yet have a mobile- optimized
site presence to direct user clicks,” Mr. Forshay said. “A
Marketers such as Macy’s, J.C. Penney and Target have mobile-optimized site experience is table stakes for re-
continually used mobile advertising to drive consum- tail brands, providing the primary foundational corner-
ers to their mobile-optimized sites and applications and stone around which all mobile marketing efforts should
bolster sales. Mobile commerce-enabled advertising is be constructed.
becoming more than just click-throughs and provides
companies with ways to offer consumers relevant, tar-
geted offers and incentives.

“The mobile user experience is defined by immediacy,
speed and efficiency,” said Scott Forshay, Austin, TX-
based mobile and emerging technologies specialist at
Acquity Group, Chicago.

“Deep linking interactive mobile video ad units directly
to product detail pages on a mobile-optimized site builds
upon the momentum gained by the ad engagement to
facilitate a transaction almost instantaneously, irrespec-
tive of time or space,” he said.

Importance of testing
The most glaring issue with current mobile advertising
is an adherence to big browser display principles scaled
down to a smaller form factor.

The ineffectiveness of banner display in big browser digi-
tal advertising is well documented.

Adhering to traditionally ineffective engagement meth-
ods on such an intensely personal medium with display
real estate constraints will only make the user experi-
ence more frustrating, further alienating the audience
and the advertiser alike.

Moreover, some would say that mobile advertising has
failed, by and large, to deliver additive user experience
functionality unique to the capabilities of the medium.

“Those brands with that foundation securely in place to include interactive video advertising with integrated
have significant opportunities to competitively differen- commerce capabilities as a point of differentiation and
tiate in mobile advertising as Web traffic and content advantage, seeking to capitalize on the immediacy of the
consumption continue to migrate away from the big mobile experience to influence this new breed of con-
browser to the pervasive screen,” he said. stantly connected consumer.

As media consumption on device continues to increase “I recommend a heightened focus on targeting for ad-
and time spent by consumers engaging with apps begins vertisers and publishers alike and an emphasis on being
to rival television, spend on mobile advertising will con- relevant and additive to the user experience,” Mr. For-
tinue to increase significantly. shay said. “Traditional digital spray-and- pray ad models
simply do not work in mobile.
Also, as the competitive landscape evolves and competi-
tion for on-device attention increases, brands will look “Additionally, calls to action in creative execution need
to be more comprehensive in terms of taking into ac-
count the potential variability of the user experience,” he
said. “It is not simply enough to link an interactive video
unit to a product page and be done with it.

“If the consumer viewing the ad wants to find the near-
est store to purchase the product or wants to call a sales
associate to inquire about it further, those basic func-
tions need to be available if the entirety of the mobile
user experience is taken into consideration.”

Building experiences
A large challenge in mobile commerce is the small screen
size and the consumer having to enter a plethora of
fields with accuracy, per Sarah Hodkinson, head of sales
strategy at PayPal Media Network.

“Fortunately, with PayPal’s Mobile Express Check-
out functionality we can help brands avert this chal-
lenge and increase conversions in mobile commerce,”
she said.

“In 2013, you will also see the service help brands drive
commerce in-stores, but also providing the flexibility to
blend it with someone’s online purchasing experience to
utilize relevant offers wherever you shop, whether online
or in the store.

“We will accomplish this through highly targeted of-
fers that close the loop at point of sale through Pay-
Pal’s acceptance offline, yielding full-funnel metrics that
span from impression through to redemption and total


transaction size.” tised to, complete-
ly enabling the
This year, it goes without saying that there will be an impulse-purchase
increase in mobile advertising growth. ability, and result-
ing in massive po-
Mobile ads will need to be hyper-relevant to be effec- tential profits for
tive and for closing the loop from a reporting standpoint, the companies
which will enable brands to effectively measure the ROI employing this.”
of offers delivered.
What to expect
“We anticipate increased growth and further advances In 2013, consum-
in 2013 that will enable us to build on mobile strate- ers will see a lot
gies that help close the loop between advertisers and more mobile ad content delivered to them at incredibly
consumers, enabling them to establish more meaningful personal levels.
relationships,” Ms. Hodkinson said.
The data has been collected and the analytics and adver-
“That will be the future, and both PayPal and the Pay- tising platforms are beginning to emerge.
Pal Media Network will continue to be at the forefront
of the new technologies that make mobile commerce- Additionally, marketers will begin to fully understand
enabled advertising better and more targeted,” she said. what consumers want, when they want it, and they will
Marketers are beginning to recognize a need in the mar- give them the ability to buy products through mobile
ketplace and are finally beginning to pay the necessary advertising campaigns.
attention to their mobile initiatives.
As devices and network speeds improve, mobile com-
This means that companies are beginning to develop merce will continue to accelerate and build momentum
standalone mobile assets, and in turn enabling stand- in 2013.
alone commerce-enabled mobile advertising.
“I predict that many retailers that started with quick and
“The issues and challenges that companies will face are dirty transcoded sites will move to API-linked integrated
directly linked to whether or not they have set up a mo- solutions that leverage and extend their ecommerce op-
bile ecosystem capable of supporting standalone com- erations into the mobile space,” said Wilson Kerr, Bos-
merce pages that are not directly linked to their PC as- ton-based vice president of business development at
sets,” said Marci Troutman, CEO of SiteMinis, Atlanta. Unbound Commerce.

“Only if companies are able to quickly create stand- “Even today, the majority of retailers still do not have a
alone mobile content for ads will that content be able mobile-optimized site catered to the 50-plus percent of
to be tied to commerce pages and even be commerce- Americans who own smartphones,” he said. “This past
enabled,” she said. “However, the obvious problem that Cyber Monday, we saw a 410 percent increase in mobile
they will face is how to handle secure payments in an commerce transactions across our 360-plus retailer net-
ad environment, and perhaps more importantly, how to work.
make the consumer feel comfortable purchasing some-
thing through an ad. “PayPal reported that mobile checkout transactions in-
creased 96 percent year-to-year. Again, mobile com-
“The opportunities are absolutely staggering though. This merce will continue to accelerate and gain traction in
is a situation in which a consumer can make a purchase 2013, as more consumers find better and faster experi-
decision at the exact same instant they are being adver- ences when shopping on their mobile devices.”

ANALYTICS

As merchants build mobile chops, analytics become even more imperative
By Chantal Tode

A
s the early days of mobile gives way to bigger, that have been elusive. However, now that merchants
more thoughtful strategies, merchants are begin- are gaining a better understanding of how mobile works,
ning to realize they have unlocked a treasure trove they are ready to tackle how to optimize their efforts via
of meaningful customer data, keenly focused on figuring better analytics.
out the most effective way to leverage this information.
“The mobile space has been a bit of a wild frontier, with
No one denies the importance of analytics, but mobile everyone chasing shiny pennies,” said Ken Madden,
has presented some challenges on this front, namely the executive vice president and head of digital for North
complexity of the platform and the closed-loop metrics America and analytics – global at OgilvyAction. “But now
we are starting to see a quickening pace, moving to-
wards true test and learn scenarios.

“On top of that, merchants are looking to make more
direct connections between mobile users and in-store
shoppers and purchases,” he said. “So, in 2013 we will
see more merchants connecting the dots from mobile
usage to actual purchase transactions through loyalty
cards and email addresses.”

Analytics a core focus
The biggest difference in 2013 will be that mobile ana-
lytics will become a core focus for many merchants.

This is because merchants increasingly recognize that
mobile provides an opportunity to connect personally
and deeply with their customers. Mobile also adds a layer
of context that is deeper than in any other channel.

“Mobile gives us user, place and time in addition to the
transaction/interaction data which provide a tremen-
dous amount of data around how a consumer interacts
with brands and retailers,” Mr. Madden said.

“The best thing merchants can do is not waste that op-
portunity to learn more about their customers,” he said.

“Build a measurement plan that helps us understand
the effectiveness of your marketing activities, while also
helping us better understand the customers’ needs.”

Eliminating silos
One of the biggest challenges that most merchants face


solutions that are capable of tracking a given consumer
across any channel they happen to be present in,” said
Michael Ricci, vice president of digital and product mar-
keting at Webtrends.

Several trends are also driving the need for better mobile
analytics, including a move toward hybrid HTML5 apps,
the effect of tablets on the mobile shopping experience
and growing interest in responsive design.

“We’re also witnessing a huge move towards hybrid
apps that in turn drives a need for solid measurement
approaches – SDK or otherwise – where metrics can be
accurately tracked,” Mr. Ricci said. “The vast majority of
solutions in the marketplace struggle very badly to mea-
sure hybrid apps and that’s why we created our hybrid
SDK to make this process simple for app developers.

“We’re seeing more and more of our mcommerce cus-
tomers appreciate just how vital the tablet is to the
mobile shopping experience and develop apps that are
tailored towards this form factor,” he said “We expect to
see much more of this in 2013 and also the beginning of
a move towards responsive design.”

Now that many merchants have a little history behind
them when it comes to creating mobile campaigns, they
are recognizing that they need to be able to optimize
their efforts more effectively going forward if they want
to create the kind of relevant experiences that drive
higher repeat visits and fuel sales.

when it comes to mobile analytics is that mobile has “Measurement and analytics are squarely in focus for
created many data silos, which makes the process of un- 2013 for any player in the mobile commerce space,” Mr.
derstanding a given customer that much harder. Ricci said.

Today, most marketers’ mobile data is broken into silos “We’ve witnessed a large trend taking place where these
for mobile Web, applications, SMS, QR codes, location- marketers are getting very serious about making mobile
based programs and display advertising. analytics one of their top strategic priorities,” he said.

However, as merchants start to embrace multichannel “Marketers are coming to understand that solid mea-
analytics solutions, they will be able to get a better view surement is critically important to forging coherent
of customers. strategies, evolving user experience, optimizing sites
“We’ve witnessed most successful mcommerce provid- and apps, driving higher conversions and ultimately
ers move aggressively towards multichannel analytics increasing ROI.”


APPLICATIONS
App discoverability will still be an ongoing obstacle for mobile marketers
By Rimma Kats

D
iscoverability will continue to become increasingly merchandise their store, they need to build their digi-
important as more mobile applications are added tal properties with the customer, design and usability in
to app stores daily. Standing out from the crowd- mind,” she said.
ed app stores will become an even bigger challenge for
brands in 2013. “A one-size solution wouldn’t fly when building a new
store, so I can’t help but wonder why it continues to be
With so many apps available, it is very hard for market- seen as OK when building a digital storefront?”
ers to be noticed. The problem is even greater for brands
that are encouraging consumers to download their mo- App revolution
bile apps to make purchases from them. There is more traction and metrics, as well as case
studies available for brands to make decisions about
“In 2013, users will be more selective about which apps
they chose to download, screens have gotten clut-
tered and users are becoming more picky with which
apps make the cut,” said Kunal Gupta, CEO of Polar
Mobile, Toronto.

“I would recommend that more time be spent on the
marketing of apps to drive downloads as well as in-
creased engagement,” he said. “For mobile commerce
apps especially, brands want users to return again and
again to their apps.

“Integration into larger marketing campaigns – like tele-
vision ads and social media campaigns – is a way this
can be managed.”

Key strategy
Mobile apps continue to gain traction as more users
turn to them for everything from ordering dinner to their
holiday shopping.

Industry experts believe that customer demand will drive
brands and companies to create more innovative, us-
able and dynamic apps that can make these experiences
more simplified.

“I suspect that many brands will continue to use cookie-
cutter platform solutions that fall short on user experi-
ence,” said Melody Adhami, president and chief operat-
ing officer of Plastic Mobile, Toronto.

“Brands need to understand that in the same way they

mobile apps. And without doubt, 2013 will bring about a Ratio Interactive. “The biggest challenge we see for 2013
lot more players into the space. is for consumers to trust mobile commerce the way they
do ecommerce today. The good news is it’s a step, not a
To achieve success, marketers must look at their custom- leap, for this to happen.
ers and see if they are asking for mobile. If the answer
is yes, companies need to look towards building a digi- “We believe in the shift from using mobile to inform and
tal commerce strategy that includes mobile. From there, search to transactions in 2013 in a big way,” he said.
marketers must build an engaging mobile app that in- “There will be broader usage, increased capabilities and
centivizes their customers to shop. cross-platform support.

“We see continued growth in both volume of apps, as “It is important to support all relevant platforms for your
well as the quality of the user experiences available in market, increase testing to ensure quality and provide
the market,” said Russ Whitman, chief strategy officer of users excellent support to build trust.”

BANKING

Mobile’s popularity challenges banks to keep features fresh
By Chantal Tode

C
onsumers will continue to embrace mobile bank- “Mobile banking will continue to grow as a mission-
ing this year because of its ease, putting pres- critical application on every mobile phone,” said Drew
sure on banks to stay ahead of the curve with the Sievers, CEO of mFoundry, San Francisco. “The need to be
latest features. connected to your money is universal and mobile bank-
ing is a bank’s best channel.
Most of the larger banks and many mid- and small-sized
ones now offer customers at least some basic mobile “Mobile banking will continue to evolve rapidly, adding
banking features. However, banks will need to start look- new money movement and payment features all year
ing at upgrading their mobile services with features such long,” he said.
as remote deposit capture, bill pay and integration with
existing loyalty programs if they are to stay relevant to “Consumers are getting used to seeing robust new fea-
consumers’ increasingly sophisticated use of mobile. tures that help them save money so we fully expect the
trend to continue in 2013. Banks that can deliver these
valuable features will retain their customer base and
drive new revenue as well.”

Mobile payments groundwork
Remote deposit capture capabilities were introduced by
many of the larger banks in 2012 and there is likely to
be a big expansion of this service in the coming year as
more banks join in.

The service enables users to snap a photo of a check with
a smartphone to deposit it into an account.

“In the next 12 months, remote deposit capture will be
included in the applications provided by some of the big-
ger regional banks, and customer use of RDC will increase
as awareness spreads,” said Dave Kaminsky, emerging
technologies analyst at Mercator Advisory Group, May-
nard, MA.

Coupled with the growing availability of remote bill pay
features and person-to-person payments, banks will be-
gin to lay the groundwork for mobile payments by getting
consumers comfortable with using their smartphones as
a payment device.

While a few banks have already introduced mobile pay-
ments offerings, in 2013 most are likely to begin to eval-
uate a proprietary or third-party wallet in the near term
as a means to enable point-of-sale payments.

channels, such as with POS payments and ATM access
via mobile.

“We foresee three primary challenges for providers: sup-
porting the overall business case for mobile given the
near-term expenses and lack of direct revenue oppor-
tunities, managing the diverse mobile platform require-
ments, and keeping up the feature and functionality
arms race,” Mr. Crawford said.

Another trend likely to gain steam this year is the avail-
ability of personal financial management tools in mobile
applications.

Banks should also keep security a primary focus, as the
mobile platform is developing at a rapid pace, resulting
in new opportunities for hackers and fraudsters.

“Mercator expects some financial institutions to intro-
duce certain elements of personal financial management
in their mobile applications, likely first focusing on spend
tracking as opposed to budgeting tools,” Mercator’s Mr.
Kaminsky said. “The expectation is that while this intro-
duction will take place in 2013, significant uptake will
not take place until 2014 or ‘15.”

“It’s important for banks to utilize multifactor authenti-
cation, encryption, transaction limits and any other rea-
sonable security functions that are possible,” he said.
As they continue down the mobile commerce/payments
path, banks are also likely to enable existing loyalty and
rewards programs via mobile to begin to establish a mo-
bile commerce value proposition for customers.

Additionally, they will evaluate the potential for a broad-
er mobile-offers program to compete with non-payments
players that are offering wallets, payments and other
banking products via mobile, per Jeff Crawford, senior
consultant at First Annapolis Consulting, Linthicum, MD.

Omni-channel approach
Banks are also likely to shift to a more omni-channel ap-
proach so they can maintain a consistent look and feel
across channels. With this goal in mind, many will begin
exploring opportunities to integrate mobile and physical

CARRIER NETWORKS

2013 a pivotal year for wireless carriers, mobile commerce
By Chantal Tode

W
hile mcommerce and mobile payments are
taking off, wireless carriers are treading care-
fully as they look for ways to insert themselves
into the equation. And as growth and competition accel-
erate, 2013 could be a pivotal year in determining how
big a role carriers will ultimately play.

Last year, Isis launched a mobile wallet – a joint venture
of AT&T, Verizon Wireless and T-Mobile USA – and it was
one of the first big moves by carriers in the United States
in mobile commerce.

However, with their access to existing relationships with
tens of millions of mobile subscribers and their access to
real-time usage data, there is significant growth poten-
tial for carriers in the mobile commerce space.

“I think operators are going to play a bigger role in mo-
bile commerce in 2013,” said Lara Albert, vice president
of global marketing for Globys, Seattle. “By leveraging
their existing relationships with millions of subscribers
and unique access to real-time usage data, carriers will
not only support commerce via their networks and de-
vices, but proactively drive mobile commerce adoption.

“The key will be in their ability to identify and monitor
individual customer behavior in ways that allow them to
act in the right context to encourage more transacting
via mobile,” she said.

“With the promise of mobile commerce comes the ex-
pectation of a faster, easier and better transaction ex-
perience – and a big factor in delivering against these
expectations is expediting the discovery of the enhanced pable of layering on security and prioritization capabili-
experience. By continually monitoring behaviors to en- ties that can allow a more efficient, secure transaction.
able a relevant experience at the right time, carriers will
leverage new forms of customer engagement to acceler- Already, carriers are leveraging their capabilities around
ate mobile transacting.” behavioral analysis and real-time decisions to influence
specific behavior, whether it is stimulating usage, en-
Leveraging control couraging higher spend or migrating customers to high-
There is an opportunity for wireless carriers to have a er-value service plans.
defining role in the way mobile commerce develops be-
cause they run the actual networks and therefore are ca- Additionally, late last year, AT&T and Verizon also jumped

focused on support and
protection,” he said. “If
they can offer custom-
ers a safe, trusted way
to pay through their
network, they will be
successful as the mo-
bile commerce trend
takes over.

“This need for protection
and support will likely
bring companies like Visa
into the space which
will lead to more com-
petition or the potential
for partnerships.”

While there is no doubt
that mobile commerce
and mobile payments are
into the daily deals space with mobile-offers services taking off, the carrier role in this market is not guaran-
that leverage their customer data to deliver more per- teed. However, with growth accelerating quickly in this
sonalized deals. space, carriers will need to act fast if they are to carve
out a place for themselves.
“Mobile payments are real-time transactions where
there’s a need to be quick and received correctly,” said “We’ve seen a lot of proprietary solutions that are gain-
Andrew Till, senior vice president of smartphones and ing tractions with delivering the right experience and
consumer electronics at Symphony Teleca. making sure they are a trusted brand,” Mr. Till said. “It
remains to be seen what carriers will do to stay relevant
“Carriers have so much control, they will find a way to and monetize on this trend.”
monetize that in 2013,” he said.

Building trust
However, wireless carriers will need to work together
to standardize their efforts if they are to gain enough
adoption of their mobile commerce solution to play a
meaningful role.

Carriers also need to work on building trust with
their customers.

“People trust Apple,” Mr. Till said. “They’re willing to give
them their credit card details on their iPhone or iPad at
any given time.
“To build this sort of trust, carriers will need to be laser-

CONTENT

Stronger mobile content experiences will be in demand in 2013
By Chantal Tode

A
s merchants seek to push mobile commerce to businesses will need to leverage augmented reality, rich
the next level in 2013, content strategies will media advertising and other content strategies to keep
have to become more sophisticated to be able to up with consumers.
tell the rich product stories that drive sales.
“Similar to merchants in a brick-and-mortar environ-
Bricks-and-mortar, as well as online retailers, recognize ment, telling a story on the phone or tablet will increas-
the need for strong content strategies so that custom- ingly play an important role in selling goods,” said Harry
ers can experience a product and discover an emotion- Kargman, founder/CEO of Kargo, New York.
al need for it. So far, merchants’ initial stabs at mobile
content have varied in quality, but going forward, these “I believe the best retail experiences on the phone will
involve some type of rich media advertising or content
creation or video to immerse the user around the story
of the product,” he said.

“It makes sense that content will be a key driver in the
mobile commerce experience and it is only a matter of
time before retailers get the plumbing working around
the transaction and then want to create a content expe-
rience around their products.”

Embracing new technologies
In 2013, it will no longer be enough to have simple prod-
uct images and information available for mobile users or
to have a text-messaging program in place.

As consumers become comfortable using their smart-
phones and tablets, merchants are going to become
more sophisticated in their use of mobile.

Merchants will need to leverage the whole array of mo-
bile channels available to them, such as video and aug-
mented reality, to create the best user experience.

Staying up to date with the latest advancements in the
technology will also be important. For example, making
sure mobile content is compatible with Apple’s Passbook
has quickly become a priority for many.

“A merchant using augmented reality or interactive video
can better display the angles or perspectives of a product
or outfit, and consumers are going to demand this type
of experience from all of their merchants in 2013,” said

“Retailers should ask, ‘How does my mobile content fit
into the overall experience, including in-store kiosks, at
the point-of-sale as well as the Web experience?’” Mr.
Hildahl said. “Looking back at 2012, it’s clear that orga-
nizations are realizing that mobile can drive this mul-
tichannel, multi-platform experience for the consumer.

“It’s worth mentioning that merchants will also have to
figure out how to integrate mobile within their employee
base in 2013,” he said. “For example, merchants could
arm sales floor employees with mobile applications that
make the customer experience better.”

Some retailers will need to overcome a variety of issues
before they can up their game in mobile content. These
may include acquiring the technical know-how to sup-
port rich media and custom ad campaigns on both the
advertising and mobile Web fronts.

However, the stakes are high and dealing with these is-
sues will become imperative in 2013.

“Many chief digital officers set the high level strate-
gies and roll out Web sites with mobile style sheets
only to find that key features and day-to-day mainte-
nance and capabilities don’t exactly align,” Kargo’s Mr.
Kargman said.

“This will continue to be a growing problem until retail-
ers and content providers realize that mobile-focused ad
Bjorn Hidahl, vice president of product management at serving and content creation is very important to suc-
Kony, Orlando, FL. cess,” he said.

“Merchants should put together a strategy to embrace
these new technologies now, making sure they can meet
consumer demand while also taking into account new
hardware requirements and operating system updates at
a total cost of ownership that makes sense for the com-
pany,” he said.

Driving multichannel experiences
One of the issues that merchants will increasingly face is
how to integrate mobile into their multichannel strate-
gies, including making content relevant across channels.
Merchants should also consider how mobile can be used
to supply employees with relevant content.

EMAIL

Mobile commerce emails to get a lift with loyalty
By Lauren Johnson

W
ith the growth in mobile commerce programs allow the recipient to store it in his Passbook and then be
in the past year, expect to see mobile loyalty automatically reminded to redeem it when he is within
play a particularly strong role in email. the vicinity of the store.”

The launch of mobile commerce loyalty programs such as Mobile loyalty
Apple’s Passbook in 2012 gave marketers a way to com- Mobile is increasingly taking up a bigger piece of online
bine loyalty into all of their mobile channels. In 2013, revenue for retailers and brands.
marketers will increasingly apply the technology to mul-
tichannel campaigns. Thereby, including loyalty initiatives that combine mo-
bile and email, brands can incentivize users to shop from
“Apple’s Passbook and Passbook-like features on Android their mobile devices.
smartphones are the next logical progression of mobile
email,” said Manny Ju, director of product management More often than not, mobile users are looking to instant-
at BlueHornet Networks, San Diego. ly take an action as they read an email.

“Email marketing has a long and rich tradition for loy- In the case of Apple’s Passbook, being able to store and
alty programs, coupons and offers,” he said. “Passbook geo-target an offer is a great way to make email cam-
enables email marketers to continue this tradition with paigns more interactive.
a modern twist.
Additionally, Mr. Ju expects more brands to use respon-
“They can send a coupon attached to a loyalty email and sive design in email layouts.
Location will also
play a key role in how
marketers can seg-
ment an email list into
tailored campaigns.

Similarly, marketers will
also break apart smart-
phone and tablet email
campaigns. Calls-to-ac-
tion on these campaigns
will also be differenti-
ated — for example, a
tablet-specific email
might focus on online
commerce more than a
campaign designed to
drive in-store traffic via
a smartphone.

“I believe email market-

ing is an integral component of the overall shopping ex- marketing strategy.
perience,” Mr. Ju said.
First, marketers need to look at their data to understand
“As mobile-enabled commerce continues its meteoric which devices consumers are using most often to check
growth rate, so will mobile-friendly email,” he said. their email.

“Most importantly, remember that email is only one in- Once a company understands which devices their cus-
tegral component of commerce. Do not just stop with tomers open email on most frequently, testing keywords,
mobile email. The mobile experience that starts with the send times and content is crucial.
email must absolutely be carried through to the landing
page, the Web site, the shopping cart and finally to the “After seeing the return on investment, advanced mar-
payment page.” keters will integrate advertising, SMS, social applica-
tions and Web sites, abandoning disparate marketing
Cross-channel emails programs for fully integrated cross-channel programs,”
With consumers increasingly turning to their mobile de- Mr. Talyor said.
vices to open email, savvy retailers and brands will de-
velop tailored, flexible email campaigns in 2013 to grab
consumers’ attentions while on the go.

In fact, some marketers are seeing more than 30 percent
of their email campaigns opened on mobile devices, ac-
cording to ExactTarget.

Moreover, marketers will load these campaigns with ac-
tion-driven features that let users take an action directly.

“Our research has found more than half of consumers
use their smartphones to check email several times per
day, while 29 percent of consumers report they check
email constantly throughout the day,” said R.J. Taly-
or, vice president of mobile products at ExactTarget,
Indianapolis, IN.
“With the continued growth of mobile devices, market-
ers must respect the variety of experiences and deliver
consistent experiences across platforms,” he said.

“2012 marked the first time smartphone sales outpaced
PC sales for, according to Canalys. What does all of this
mean for mobile email in 2013? It is time to develop
flexible, mobile-optimized email templates and start
testing innovative and imaginative campaigns unique to
your brand.”

Additionally, more marketers will see a return on invest-
ment from mobile in 2013, meaning that mobile and
email will increasingly be weaved into a multichannel


GAMING

Rewards-based mobile advertising takes shape in 2013
By Lauren Johnson

O
ver the past year, marketers have increasingly
incorporated advertising into mobile games as a
way to target a specific group of users. However,
in 2013 more brands will need to look at in-application
advertising to increase monetization efforts.

In 2012, brands relied on mobile advertising to give mo-
bile gamers. In addition to incorporating different ad-
vertising models, brands will also need to think of more
compelling ways to create content that keeps users
coming back.

“Game developers will find it more and more difficult
to get their games discovered because of the sheer
amount of noise,” said Brian Wong, founder/CEO of Kiip,
San Francisco.

“The answers will lie in the battleground around the
source of the app distribution — the app stores,” he said.
“Right now Google, Apple, Microsoft and Amazon all
have their own turf and are defending it. Those four are
going to either overcomplicate or simplify things.”

Mobile engagement
In 2012, Kiip rolled out partnerships with brands includ-
ing Skittles and Pepsi that let users unlock achievements
and offers within mobile apps.

Results from a campaign last year with Pepsi’s Propel
Zero Water showed how in-app advertising offers mar-
keters more insight into their initiatives than a click- from their favorite brands.
through rate.
According to Mr. Wong, mobile gaming will focus around
The Pepsi campaign increased brand awareness by 28 three areas in 2013 — discovery, retention and quality.
percent for the Propel Zero Water brand.
Similar to other app-based marketing, discovery is still
Additionally, there was a 51 percent purchase intent in- an issue in the space.
crease, and roughly 72 percent of users said that they
were going to consider Propel Zero the next time they Not only are marketers challenged to get users to down-
were going to buy enhanced water. load an app, they also have to create a great game that
keeps users opening the app repeatedly.
As consumers continue to use mobile games, they will
increasingly expect to be offered incentives for playing Additionally, marketers need to think about ways to not

only acquire users but also focus on quality users, per ing environment, and it’s a horrible user experience
Mr. Wong. for the 98 percent of users who won’t pay for con-
tent. We think there’s an enormous opportunity to
“Game developers have been so obsessed with acquir- for brands to embrace advertising that rewards users
ing users and the industry has quickly aligned itself to with access to content or rewards for engaging with
deliver the demand,” Mr. Wong said. their ads.”

“This means a ton of undifferentiated services sell in- With consumers turning to their mobile devices more to
stalls without regard to the quality of the user behind play quick games when they have a break in time dur-
that install,” he said. ing the day, marketers need to be focusing on how to
provide value for the users that repeatedly use apps, per
“As a result, there is a lingering cliff out there in the hori-
Mr. Clifford.
zon that some developers will begin to drive over. This cliff
is the realization that it’s less about scrambling to buy Mobile opportunity
more and more installs – but rather how to keep the users According to Projjol Banerjea, vice president of market-
that have decided to play your games in the first place.” ing and talent at SponsorPay, Berlin, acquisition and
monetization will continue to be challenges for mobile
Death of the banner? game marketers and developers in 2013.
Many of the in-app advertising models that brands are
experimenting with are full-page units, which some ex- “On the acquisition side, the app stores and marketplaces
perts say points to the need for more engaging ads in are inundated with developers competing for user atten-
mobile games versus banner ads. tion,” Mr. Banerjea said.

Many industry experts believe that banner ads may be “App and game discovery is still a domain that’s largely
losing steam with creative and formats that do not take unsolved and consequently presents massive opportu-
advantage of the size of a mobile screen. nity,” he said.

In many cases, banner ads cram the same creative from “The freemium model that’s prevalent in the industry
desktop campaigns into a smaller-sized screen. also comes with its challenge of average monetization
rates that are in the single digits.”
Depending on a marketer’s goal, campaigns need to have
a consumer-first approach in order to entice users via Although games continue to be a top app category, it is a
mobile advertising. challenge to keep a user’s attention, meaning that many
mobile games have a short longevity.
“For brand advertisers, the opportunity to emotionally
connect with consumers through play is huge and the Additionally, consumers will continue to use multiple
audience is enormous,” said Bill Clifford, chief revenue screens in 2013 to digest content, meaning that mar-
officer at SessionM, Boston. keters will need to create experiences that flow across
screens in order to grab a user’s attention.
“Too many game developers subscribe to a model of pep-
pering users with banner ads and interstitials at a high “In 2013, we expect consumers to place increas-
frequency until consumers get so irritated they choose to ing demands on games publishers to deliver persis-
pay to not see ads,” he said. tent experiences across different platforms, both mo-
bile – smartphone and tablets – as well as online,” Mr.
“That’s not conducive to a healthy brand-build- Banerjea said.


LEGAL/PRIVACY

Privacy a bigger concern as regulation grows
By Chantal Tode

M
erchants pursuing a mobile strategy will once to-date on the new rules. Mobile applications are also a
again need to tread carefully when it comes to growing area of focus for regulators, so merchants and
protecting the privacy of consumers and ensur- marketers would do well to have their privacy policies
ing their mobile marketing programs are in compliance. prominently placed in their apps.

With new guidelines from the Federal Trade Commission “Look for increased scrutiny regulation and enforcement
coming into effect in 2013 that explicitly address mobile actions concerning data collection and use practices re-
and protecting children’s privacy, any merchants mar- lating to mobile devices and tablets,” said Linda Gold-
keting to children will need to make sure they are up- stein, chair and partner at Manatt, Phelps and Phillips
LLP, New York. “The disclosure of data collection and use
practices by e-merchants and others have been found to
be wholly inadequate by the FTC and other regulators,”
she said.

“While the FTC has been largely focused on the lack of
disclosures provided for children’s apps on mobile devic-
es and tablets in violation of COPPA, California Attorney
General Kamala Harris has targeted all app owners that
fail to provide users with adequate disclosure of their
privacy policy, as violating of California law,” she said.

“Marketers looking to market to kids through their mo-
bile and tablet devices will certainly face increased scru-
tiny and challenges in 2013 and in the years to come.”

Governance could grow
The FTC also recently released some non-binding guide-
lines related to privacy for mobile marketers that point
to some of the concerns that the agency has.

Of particular not is that the FTC says mobile platforms
should consider offering a Do Not Track mechanism that
would enable smartphone users to choose to prevent
tracking by ad networks or other third parties as they
navigate among apps on their phones.

With concern on the part of regulators and privacy advo-
cates growing over how many parties are collecting data
from devices and what kind of data they are collecting,
Ms. Goldstein expects there will be more bills seeking to
govern mobile privacy in 2013, with some perhaps gain-
ing more traction than in the past.


Already, one marketer – Delta Air Lines – has been sued eral Communications Commission both ruled last year
by the California attorney general’s office over claims that text messages sent to confirm that someone has
related to a lack of privacy controls for its mobile app. requested to opt out of a text messaging program are
Additionally, the FTC has warned that it is launching not unlawful. As a result, this may put an end to lawsuits
multiple investigations to determine whether certain claiming such messages violate the Telephone Consumer
companies violated legal requirements. Protection Act, which have been expensive and cast a lot
of uncertainty in the industry.
“Companies that develop or market apps need to think
about privacy issues in the early stages of developing However, these developments do not eliminate the need
an app,” said Gonzalo Mon, attorney with Kelley Drye for merchants to carefully review their text messaging
& Warren LLP, Washington. “For example, developers programs, particularly their opt-in procedures – to en-
should generally collect only the information they need sure they are in compliance with existing laws.
in order for an app to function.
“In particular, merchants should ensure that they get ex-
“Next, developers should work with their legal team to press opt-in consent before they send text messages to
draft a privacy policy,” he said. consumers,” Mr. Mon said.

“The policy should accurately reflect what information “Merchants should be careful to ensure that the terms
is collected through the app and how that information and conditions of their mobile programs accurately re-
is used. flect how the programs will run,” he said. “Some market-
ers have gotten sued over even minor deviations.”
“Finally, developers must ensure that consumers can read
the privacy policy before they download the app. If a
company fails to take these steps, it could quickly find it-
self in the midst of a lawsuit or regulatory investigation.”

Data deluge
As consumers continue to embrace mobile for a variety
of daily activities, the sheer volume of data that is being
collected about users will become a growing concern,
as well. Data security could take on more importance
for merchants as the legal and reputational stakes for
breaches increase.

“Look for merchants to migrate to cloud providers for
their hosting services, in order to take advantage of new-
er technologies, economies of scale and cost efficiencies,
while reducing internal overhead costs,” Ms. Goldstein
said. “Merchants that embrace these technologies might
seek to use these efforts to their competitive advantage.”

Other developments in 2012 are also likely to change the
legal landscape in 2013 for mobile marketers.

On the positive front, a California court and the Fed-


MULTICHANNEL RETAIL SUPPORT

Mobile opportunities outweigh any negatives for merchants
By Chantal Tode

G
ift shoppers who embraced mobile for exclusive holiday season when it came to mobile, with users em-
offers and added convenience will be looking for bracing their smartphones and tablets to shop in re-
more similar experiences in 2013 and retailers cord numbers. As a result, savvy merchants will be
would be wise to provide them. This means moving be- looking for how to continue drive mobile use in 2013
yond the initial first steps in mobile and delivering more even as overall sales slog along because of ongoing
personalized mobile experiences at scale to help support economic challenges.
multichannel retail strategies.
“Retailers have really only gone through Mobile 1.0, on
Retailers had a lot to be happy about during the 2012 both the app and the Web side, and this holiday season
will reflect some early adopters of 2.0 – more focus on
personalization and localized content,” said Nikki Baird,
managing partner at RSR Research, Miami, FL. “I think
that will be the big trend for 2013.

“Also, there will be better integration of mobile into the
in-store experience, whether that is through simple sig-
nage and QR codes or more sophisticated WiFi or app-
enabled interactions, she said.

Scaling up
Merchants conducted a lot of tests in mobile in 2012 to
learn about how best to engage these consumers. How-
ever, in 2013 merchants will need to roll out their mobile
campaigns on a regional and national basis.

One of the opportunities merchants have with mobile is
the emergence of the mobile wallet and the impact it is
having on traditional print mailers and weekly circulars.

Merchants are also likely to focus on mobile coupons,
as they can be relatively easily deployed and shoppers
like them.

“The things that have been presented in a physical
way are now really moving into digital as something
that is readily available and stored on a smartphone
or redeemed in-store,” said Stephen Burke, vice presi-
dent of the mobile practice at Resource Interactive,
Columbus, OH.

“Safeway and Kroger are making progress in this area,
while others are integrating with Apple Passbook or have
standalone wallets that they create,” he said.

Cross-department cooperation “If retailers implement some of the in-store tracking
Actual mobile payments may still be a little further down measures that they seem to be contemplating right now,
the pipeline for merchants because of the complexities there may be a huge privacy blow-up or at least debate
involved and the need to invest in infrastructure, a step in 2013 – how much retailers can and should track, and
many will be reluctant to take until it becomes clearer what they can or should do with the information they
which mobile payments offerings are likely to dominate. collect,” RSR Research’s Ms. Baird said.

“The smartphone as a payment vehicle is probably a year Advantage of showrooming
or two away in the U.S. market for more than relatively Overall, merchants will recognize that the oppor-
small purchases such as a coffee or a cheeseburger,” Mr. tunities in mobile far outweigh any negatives there
Burke said. might be.

The coming year could also see merchants put a bigger For example, there was a lot of focus last year on shop-
focus on advertising in mobile as a way to drive traffic to pers using their smartphones in stores to compare prices
either a bricks-and-mortar store or a digital storefront. – or showrooming.

Merchants face several challenges in broadening their “Everybody is clear that a smartphone-wielding consum-
mobile strategies, including the need to bring together er is a positive opportunity and not an negative opportu-
representatives from across several different depart- nity,” Resource Interactive’s Mr. Burke said.
ments and getting them to work together.
“The opportunity to take advantage of showrooming is
However, as merchants increasingly recognize the need becoming evident to retailers and they are up to the
for customer-driven experiences, they are growing num- challenge,” he said.
bers of examples of marketers taking the steps to drive
this kind of cooperation. “For example, in clothing retailers have the advan-
tage of immediacy – what is available now – and can
Another challenge they face is measurement, such as compete effectively.”
how does a mobile im-
pression lead to a physi-
cal sale, how do you trick
this and which depart-
ment gets the credit for
the sale.

Merchants also increas-
ingly need to be sure they
are focusing on privacy is-
sues as it relates to mo-
bile. For example, in-store
tracking strategies are be-
ing closely considered by
some retailers as a way
to learn more about con-
sumers’ in-store shopping
habits, but could raise pri-
vacy concerns for some.

MARKETING

Privacy, measurement to continue to challenge location-based marketing
By Lauren Johnson

W
ith more consumers using their mobile devices with the idea of forking over personal information, it is
to receive contextual and relevant advertis- crucial that there is an exchange in getting consumers’
ing, location-based advertising will be an area information, per Ms. Ho.
for marketers to eye in 2013. However, there will still
be plenty of challenges including location and measure- “In the consumers’ eyes, this exchange is their personal
ment that may hold the industry back. location information in exchange for more targeted and
relevant content or information,” Ms. Ho said.
Privacy, measurement will continue to challenge loca-
tion-based marketing “When this balance is maintained, advertisers will ben-
efit by seeing strong performance of their ads,” she said.
With more consumers using their mobile devices to
receive contextual and relevant advertising, location-
based advertising will be an area for marketers to eye
in 2013. However, there will still be plenty of challenges
including location and measurement that may hold the
industry back.

New technologies such as Apple’s Passbook and mobile
wallets were set up in 2012 that will help kick location-
based marketing into gear in 2013. Although there are
challenges, marketers can expect to see more redeem-
able mobile coupons and offers that are tied to a loca-
tion in 2013.

“In 2013, we will start to see a shift to more perfor-
mance-based mobile ad strategies now that some of the
early mobile advertisers have blazed the trail to show
that real commerce activity can be driven from mobile
devices,” said Monica Ho, vice president of marketing at
xAd, New York.

“In the past year, we have seen a noticeable shift in
campaign focus from overall reach and awareness cam-
paigns to campaigns centered around the redemption
of locally-focused offers and promotions or other local
commerce-based actions that go well beyond just the
initial ad click,” she said.

Watchful eyes
Despite the opportunities, experts agree that privacy will
be an issue with location-based campaigns in 2013.

Although consumers are becoming more comfortable

In return, publishers can expect to see higher CPMs with privacy,” said Darrin Clement, CEO of Maponics, White
location-enabled traffic. River Junction, VT.

Location-based ads also need to work on better mea- “Challenges will be how to how to keep this balance in
surement, per Ms. Ho. check,” he said.

For marketers to see a more complete picture of location- For example, letting users set zones such where purchase
based advertising, marketers need to make sure that they intent is high — such as in shopping malls — where they
are getting location data and enough of it to scale larger want to receive ads will be key.
campaigns.
“People don’t want to be ad-attacked every time they
More than brand building walk by a retailer,” Mr. Clement said.
Some experts say that there will be a shift towards more
ROI-based campaigns versus brand-building initiatives “They need the ability to customize their experience,” he
in 2013. said. “What they really want are apps that allow them to
set preferences.”
In 2013, marketers will increasingly combine mobile and
location on redeemable offers and coupons in campaigns Mobile education
that close the loop on sales. In 2013, more marketers will incorporate mobile into
their marketing mix, according to Greg Hallinan, chief
The introduction of Apple’s Passbook and the advance- marketing officer of Verve Wireless, Encinitas, CA.
ment of mobile payments in 2012 will fuel the growth of
location-based offers and coupon redemption in 2013. Additionally, marketers will increasingly look at how
mobile can be used in a multichannel way as consum-
Not only will these offers help marketers better track ini- ers continue to rely on their handsets as a primary
tiatives, it will also help educate consumers on the value communication tool.
of interacting with mobile marketing.
For example, mobile has traditionally been viewed as the
For example, using predictive location that anticipates third screen to grab a consumer’s attention while watch-
where a user is headed to serve a relevant ad or retarget- ing television.
ing a user by common behavior in a particular area are
two trends on the horizon for 2013, per Ms. Ho. However, recent research shows that mobile is in-
creasingly becoming the first screen that users go to,
According to a forecast from BIA/Kelsey, 58 percent of whether it is to watch video clips or interacting with
all mobile advertising spend will be location-focused by advertising content.
2016, showing the shift that the industry will likely take
in 2013. According to Mr. Hallinan, retailers in particular are well
suited for location-based campaigns because they can
Take control target users with both the top and bottom of the pur-
As marketers are able to leverage more relevant informa- chase funnel.
tion about consumers, marketers will be able to make
location-based campaigns more specific and tailored. “I think definitions and organic agency knowledge will
continue to be a challenge in the early part of the year as
“A big opportunity will be control — marketers will have brands and their agencies determine how best to deploy
greater control of who they reach and where they reach mobile at scale and discover what works for their specific
them, and consumers will have greater control of their brands,” Mr. Hallinan said.

MUSIC

Music industry split on subscription and library-based revenue streams
By Lauren Johnson

I
n 2013, there will be a continued shift to more sub- the new paradigm that many music fans don’t necessar-
scription-based music streaming services. However, ily need to own their music anymore,” said Brian Colbert,
there is also still a place for personal music libraries. vice president of mobile at Pandora, Oakland, CA.

As smartphones and tablets continue to be used by con- “Whether it is streaming radio or an all-you-eat subscrip-
sumers’ main device during the day, marketers will con- tion model, the digital music landscape is experiencing
tinue to find new ways to target groups of engaged us- another seismic shift, similar to how digital downloads
ers. In fact, some experts argue that the smartphone will changed the industry a decade ago,” he said.
be become a primary screen in 2013.
“What’s encouraging from a music perspective is
“On the music front, the industry is trying to adjust to that smartphones are becoming the first screen for
music lovers.”

Music free-for-all
In 2012, the music space continued to heat up with com-
panies including Pandora, Spotify and Rdio all clamoring
for the attention of mobile users.

These companies also increasingly used their mobile
products to lure in brands to help monetize content.

For example, Spotify rolled out a free radio feature to its
mobile app to let users stream music by genres.

Brands including Red Bull, McDonald’s and Macy’s all
ran campaigns on Spotify’s mobile applications in 2012.

Specifically, there is a growing need from market-
ers to tie advertising campaigns to commerce as con-
sumers become more comfortable shopping from
their handsets.

“Pandora saw a huge spike in mobile shopping and pur-
chases after Thanksgiving weekend and that trend will
only continue into 2013 as retailers mobilize their Web
sites and checkout processes,” Mr. Colbert said.

Additionally, tablets will continue to prove themselves
as commerce-drivers with better browsing experiences
than smartphones, per the Pandora executive.

“Lastly, concerns over credit card security seem to be
easing as consumers get more comfortable making larger

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