During a recent vacation, I took some time to adjust my focal length to more of a macro view of the frenetic mobile local space. After a couple of weeks of 2011 year-end wraps, you may be over top-ten lists, but hopefully a forward-looking set of prognostications still has some value. After all, speculation is what analysts do best (or worst). BIA/Kelsey published a longer paid report last week, but here are highlights for Street Fight readers:
1. Pay Day: The biggest leaders in mobile local usage (i.e. Yelp, Foursquare), will start to monetize their apps for the first time. That will include some of the things Foursquare GM Evan Cohen discussed at October’s Street Fight Summit: charging merchants for managing location-based campaigns. This is something they’ve erstwhile provided for free to drive adoption. Facebook will also begin to monetize mobile apps and sites via sponsored stories.
2. Act Local: U.S. mobile ad revenues will grow 50 percent over 2011, reaching $1.6 billion in 2012. But as I highlighted in my last column, the dollar share attributed to location-targeted ads will begin to tip the scale. This will be driven by growth of mobile local search (now 40 percent of all Google mobile searches); Advertiser evolution to follow that growth; and higher performing location targeted ads that drive premium rates.
3. The end of the check-in as we know it: Before the pitchforks come out, I’m not saying the check-in will go away. But in its current form, adoption will plateau. In order to keep early adopters engaged and to expand to more of a mainstream market, check-ins will be more automatic (governed by algorithmic and manually-set behavior tracking). We’re already seeing it with Foursquare Radar, Shopkick, and things like Placecast‘s ShopAlerts. These will be the models for mobile check-in features in 2012.
4. Social Sharing: the new Black: The “check-in” of 2012 will be social sharing. By that I mean it will be the popular mobile feature that everyone chases, integrates and mimics. But instead of just location and status, it will include more multimedia rich content like photos (Instagram) songs (Soundtracking) and granular sentiment (Oink). These will each reach 30 million users in 2012, driven partly by deeper Facebook integration.
5. Let’s Make a Deal: As local daily deals migrate to mobile, they’ll drop the “daily” (i.e. Groupon Now, Living Social Instant, Foursquare Specials, etc.). Better targeting and personalization will replace deep discounts as the user “hook”. That will result in more favorable margins for merchants, thus increasing attractiveness in lots of local verticals. All of this will cause the local deals market to expand (but at a smaller rate as it matures).
6. Pay Up: There’s fierce competition among mobile payment standards at early stages. Those that emerge in the short term will be similar to what Foursquare did with AMEX in tying deals to a credit card account. Deal redemption and tracking will happen through good old credit card transactions. This reduces adoption barriers for users and merchants. PayPal will also be one to watch, due to its installed base, brand equity, and eBay’s continued shopping spree to “close the local loop” (WHERE, Milo, RedLaser, etc.). Square will integrate more merchant tools to run and track deals and ad campaigns.
7. Just Browsing: The mobile web’s growth rate will accelerate and eventually outrun that of apps. HTML5’s quality (improved mobile websites) and quantity (cheaper and more scalable than apps) will compel developers. Users will follow as a more optimized and inviting mobile web results. This will lead to an increase search’s share of mobile ad revenues.
8. Make Yourself heard: To the chagrin of many “killer-happy” industry watchers, Siri will not be a Google killer. In fact, voice search (which Google also supports and develops) will end up benefiting Google and others by boosting mobile search query volume. Siri’s true value will be realized when Apple expands it to more partners and/or releases an API. Competitors will be driven to raise the bar (read: Android), not to mention integration in other form factors like in-auto, television, and OTT systems like xBox.
9. Local Produce: Speaking of Apple, its increasing friction with Google and its acquisition of C3 point to its own impending local mapping and navigation standard for iOS. It will include advanced mapping features such as 3D aerial imagery. This will also establish a beachhead in local, by delivering ads within maps; or through tighter integration of mapping and local calls to action in iAd ad units.
10. Tablet Market Catches Fire: The tablet market will shake out with iPad at high end (61.5% current market share according to IDC) and the Kindle fire at the low end (and don’t count out the Nook Color). Amazon’s content business frees its reliance on hardware margins, thus positioning the Kindle Fire as a loss leader that considerably undercuts the market at $199. Android based tablets won’t be able to compete on price at the low end and quality at the high end. Many will follow their netbook forebears int0 the grave.
In such a fast-paced and rapidly evolving market segment (or the collision of many segments), I’ve likely missed a few points. Honorable mentions go to augmented reality and QR codes for their future-looking innovations, though they won’t get off the ground in 2012.
And what about NFC? Will it reach critical mass in 2012 or was eBay CEO John Donahoe right in calling it “Not For Commerce”? Its barriers to adoption will be tough to get around at consumer and merchant levels, but it’s also hard to bet against the giants backing it (read: Google).
One certainty is the pace of innovation at the intersection of mobile and local (not to mention social). By the time this column publishes next month, a few of these predictions could even be proven right or wrong. You can call me out then… I’ll deny everything of course.
Mike Boland is senior analyst at BIA/Kelsey, where he heads up the firm’s mobile local coverage. Previously, he was a tech journalist for Forbes, Red Herring, Business 2.0 and others.
Image courtesy of Flickr user vestman.