Big Data - the coming revolution

Big Data is rapidly becoming the latest big thing in computing. The issue for us all is that its impact will be far beyond the world of computing and will effect every aspect of our lives from retail to health and everything in between. Static databases are becoming dynamic sources of unimaginable insight. The amount of structured and unstructured data that is being produced is just phenomenal. Where once databases were being compiled by user input into structured forms that companies used to provide basic trend and financial information, now we are met with terabytes of unstructured data being accumulated and stored as a result of machine generated interactions whether its in every transaction through supermarket terminals to every image stored by the millions of CCTV cameras that have proliferated in our public and private spaces. What has changed is that the cost of storage has plummeted and combined with the infinite connectivity offered by the Internet, stored data has just snowballed.

With the advent of free database search tools developed by Google such as Hadoop and MapReduce it has become possible for machines to begin to analyse this huge warehouse of unstructured data. Hadoop is a free, Java-based programming framework that supports the processing of large data sets in a distributed computing environment and MapReduce is a programming model and an associated implementation for processing and generating large data sets with a parallel, distributed algorithm on a cluster. These tools enable almost anyone to begin to analyse their data for hidden insights into their business activity or the world around them. More importantly,Big Data has the potential to alter the economics of some of our most important industries.. A recent report by McKinsey suggested that if US health care could use big data creatively and effectively to drive efficiency and quality, the potential value from data in the sector could be more than $300 billion in value every year, two-thirds of which would be in the form of reducing national health care expenditures by about 8 percent. Furthermore they suggested that in the private sector, a retailer using big data to the full has the potential to increase its operating margin by more than 60 percent.  In the public sector, across the developed economies of Europe, government administration could save more than €100 billion ($149 billion) in operational efficiency improvements alone by using big data.

These are figures that should make every CEO, Politician and citizen sit up and take notice.  Big Data has enormous power to change the lives of everyone it touches in ways we cannot begin to understand as yet.

In addition, whilst in the past the analysis and evaluation of data-sets was the preserve of the expert, that is also changing as computers increasingly take on the task of analysis and evaluation and learning.  Computers are not only evaluating the data, they are increasingly "learning" how to improve and and extend our understanding of what the data means.  For example, a computer was given the task of analyzing a vast database of cancer biopsy results and duly endeavored to identify twelve key traits that might suggest cancerous cells.  The issue was that only nine traits had been previously identified in the published medical literature.  The use of machine  evaluating Big Data had moved the science of medical diagnosis on significantly and in doing so potentially advanced our detection of cancer and improving survival rates.

So Big Data cannot be ignored by anyone and the trend is to enable access to such tools to a wider and wider audience enabling every business and public sector body the opportunity to benefit from this key aspect of the third industrial revolution.

Is there a downside? Well the primary impact in the medium term will be to render unemployed many of the professional classes once seen as having jobs for life.  Big Data has the potential to impact on highly skilled job roles which had relied upon experience and expertise built up over many years.  For example, taking the cancer biopsy analysis a stage further, computers will be able to calculate radiology treatment quicker and more accurately for treatment than a highly trained and experienced consultant radiologist.  On the other hand there has already identified an enormous of shortage of data analysts to drive this Big Data revolution.  One thing is clear, where industrial automation and IT capabilities eliminated manual labour and secretarial jobs in the 1980's and 1990's, it will be the highly skilled white collared jobs of consultants across a range of professions in medicine, banking, insurance and engineering which will become vulnerable to Big Data.

Equally there is no going back, just as with previous industrial revolutions the genie is out of the bottle and we need to adapt to take advantage of the opportunities offered by these developments.

Google to institute only pay if viewed!

Fraud has plagued the on-line advertising market since its initiation. Back in 2009, Click Forensics estimated that for advertisers and ad networks, 14.1% of the clicks on their ads were bogus, and costs them money.

All PPC (pay per click) ad providers are keen to combat click fraud and have sophisticated methods for doing so although it still represents a significant proportion of their income since it is the advertiser who will always end up paying.

 However, on Thursday (13th December 2013) Google announced that it was introducing a new system to deal with how ads are viewed and consequently charged for. “If you are an advertiser and a human being didn’t see your ad, then frankly nothing else matters,” said Neal Mohan, Google’s vice-president of display advertising products at Google. “If you are a marketer, why pay if a human being did not see the ad?”

The global on-line advertising industry is worth $117bn and it is estimated that as many as half of the digital ads that marketers buy are not seen at all, with a large portion only being viewed if a website user scrolls all the way down to the bottom of a web page. This issue of how effective advertising is has always been an issue for all forms of advertising be it TV of Bill Posters.

 Now Google intends to introduce an approach called Active View. Google's new Active View offering is based on an emerging industry standard called IAB/3MS, which states that an ad is only “viewable” if more than 50 per cent of it is visible on the screen for one second or longer. Advertisers will be able to see a report of how many viewable impressions they have received for any given campaign, and this data can be used to inform future campaigns. The Active View system ensures that if your ad is buried "below the fold" and doesn't get seen then you will not be billed and if your on-line ad has been seen for at least one second then you will be billed for that impression.

I have always been rather sceptical about the value of such viewed ads which do not have any "call to action" and certainly attempts to at least bill for a viewing by a human being is a step in the right direction, but it really doesn't make for very effective use of ones advertising dollar, pound or euro. Billing for ads that didn't get seen in the past was always a very dodgy practice and this approach should have been introduced a long time ago. Whilst this may not be click fraud, I do think it continues to call into question the billions spent on adverts which are just about brand awareness on-line and fail to trigger a genuine sales lead. Maybe advertisers and agencies placing the ads need to think rather more carefully about what they are attempting to achieve with their on-line campaigns.

This is a good start, but Google and the other major on-line players need to go much further to clean up this industry and ensure advertisers get the value for money they pay for.

Further reporting:-
Financial Times , The Daily Telegraph , BBC

Google Announces New Search Algorithm

Google has just announced their new search algorithm, codenamed Hummingbird.  It is the first major upgrade for three years and is a major step towards semantic web search.

Launched quietly about a month ago, the new algorithm affects about 90% of Google searches. The update is designed to provide more accurate results when faced with natural prose questions from web searchers according to senior vice president of search Amit Singhal.

Google stressed that a new algorithm is important as users expect more natural and conversational interactions with a search engine - for example, using their voice to speak requests into mobile phones, smart watches and other wearable technology.

Hummingbird is focused more on ranking information based on a more intelligent understanding of search requests, unlike its predecessor, Caffeine, which was targeted at better indexing of websites.

 “We just changed Google's engines mid-flight - again” Amit Singhal Senior VP, Google Search.

It is more capable of understanding concepts and the relationships between them rather than simply words, which leads to more fluid interactions. In that sense, it is an extension of Google's "Knowledge Graph" concept introduced last year aimed at making interactions more human.

In one example, shown at the presentation, a Google executive showed off a voice search through her mobile phone, asking for pictures of the Eiffel Tower. After the pictures appeared, she then asked how tall it was. After Google correctly spoke back the correct answer, she then asked "show me pictures of the construction" - at which point a list of images appeared.

SEO just the same – Content is king!

As regards developing successful SEO programmes, really very little has changed.  In order to be successful in SEO the key is still to create relevant and interesting content that delivers real value for their consumers. 

However, a subtle change in how the algorithm views the content is happening whereby the new Google’s ranking algorithm focuses on the context of where content appears against search queries rather than traditional keyword matching.  Hummingbird tries to match documents based on the underlying user intent.  

The key to successful SEO will thus require much better content editing and site writing to ensure that the content is answering a question not just stuffing as many keywords and phrases a text will take.  The semantic web is coming of age with a search engine to match.

iOS Continues to dominate mobile market for mobile ads, but for how long?

Most recent reports suggest that Apple's iOS continues to dominate the mobile advertising market in terms of impressions and revenue generation delivering almost 44% of all ad impressions and almost 50% of revenue (Figure 1).  The mobile market is increasingly looking like a two horse race between Apple iOS and Android and whilst on the face of it Apple continues to dominate, the decline of any alternative operating system other than Android suggests that in the near term Android will soon pass iOS as it becomes the de-facto alternative operation system.

Traffic share (mobile phone OS)

OS Share	% of Traffic	% of Revenue
Android	31.24%	28.08%
Phone	30.58%	27.76%
Tablet	0.66%	0.32%
iOS	43.75%	49.36%
IPhone	30.88%	36.44%
iPad	8.04%	10.21%
iTouch	4.83%	2.71%
RIM	3.37%	5.41%
Symbian	5.16%	1.56%
Windows	0.26%	0.30%
Other	16.21%	15.27%

Source: Opera  mediaworks

The challenge presented by Android is strengthening as Google and its partners increase the rate of innovation.  Apple is clearly showing signs of innovation fatigue.  A recent report by Goldman Sachs pointed to several concerns, including “delayed product cycles, supply chain difficulties, product price erosion, and a slower pace of product innovation.” Apple’s ability to continue innovating at the breakneck pace it maintained over the past few years remains a major concern.  The recent performance of Google Play surpassing Apple's App Store downloads particularly in emerging markets underline the direction of travel.

This rebalancing of the market suggests that in the longer term the Android market is set to become the most important mobile advertising market.

The Appscape

Here are a number of interesting facts concerning the growth of mobile marketing and in particular the App market.

• Apple Apps – 700,000 (Nov 2012)
• Android Apps – 700,000 (Nov 2012)
• Microsoft – 120,000 (Dec 2012)
• 37mins the average time spent on apps per day
• Mobile apps will grow from a $6 billion industry today to $55.7 billion industry by 2015 (Forrester)
• The average Android smartphone user has downloaded 44 apps onto their phone
• 53% of American cellphone users now have a smartphone
• 38% of people who use social media on mobile devices cite general browsing as their main activity

The rapid growth of Android apps is very impressive, having caught up with Apple so quickly and will undoubtedly pass Apple in 2013.  The fact that Apple apply rigid "quality control" as to which apps make it on to the iPhone and Google pretty much set a minimum compliance approach cannot be the only reason Android has blossomed since Microsoft has failed to grow in quite the same way.  Apple need to decide whether they are going to carry denying other smartphone users the chance to use the Apple IOS and ultimately see the market they have owned slowly (or maybe not so slowly) eroded by Android as they did twenty years ago during the PC wars.

iPhone 5 Decline in face Samsung Challenge?

Sales of the iPhone 5 appear to be slowing dramatically in the UK and around the world. In what seems like a bid to drum up sales, for the first time I can recall, my mobile provider is making unsolicited calls to remind that I am due an upgrade and have the opportunity of getting my hands on an iPhone 5 as part of my package.  Previous it appeared I needed to be best friends with the chairman of the mobile operator to get such an offer.   Furthermore, according to the Wall Street Journal, Apple has cut an iPhone 5 display manufacturing order by half citing "weaker-than-expected demand." The display order, which was targeted for the January to March quarter, was cut along with other key component manufacturing in December.

Given the crowded marketplace that the smartphone arena has become, it is only good business that there should be changes to manufacturing orders.  However, this data seems to confirm that globally, Samsung is beginning to get the upper hand in sales of smartphones in head-on competition with Apple.  With 1.3 billion smartphones in use worldwide by end of 2012 and 465 million Android smartphones sold in 2012. Google’s operating system has now captured a 66% global market share.  Samsung has used the Android OS to drive sales with their latest smartphone the Galaxy SIII with shipments estimated to be 18 million units for the third quarter of 2012, while smartphone and overall mobile device shipments are projected at 59 million and 106 million units respectively.

Apple is rumoured to be accelerating the launch of the iPhone 6 to combat this growing Korean threat and thus it is of little surprise that they are ramping down iPhone 5 production to make way for a newer model.  Clearly being sued by Apple is good commercial business for Samsung since it has crystallized the belief that the once mighty Apple may have a worthy competitor in the form of Samsung.  Litigation can have unexpected consequences and certainly it seems it may be the case that Apples lawyers are better at marketing Samsung's products than helping their own side win.

Guess who will ultimately pay Amazon’s UK Taxes?

The recent moral crusade waged by the Press to get the major American Corporations such as Starbucks, Amazon and Google to pay more tax may seem at first sight entirely laudable.  Previous campaigns by Occupy Wall Street to embarrass the likes of Vodafone and Top Shop to pay more tax have had little effect.  Certainly the press didn’t seem that interested in pursuing Sir Philip Green as much as they seem to wish to pillory Google.  Maybe we are only affronted by foreign companies that appear to be ripping off the state and are quite happy for home grown companies such as Arcadia and Vodafone to avoid their share of the tax burden.

In truth, none of the companies are to blame.  Rather the issue lies not with the smart accountants exercising their abilities to save businesses millions of pounds in tax, but rather in the labyrinthine tax system Government have evolved not only domestically, but internationally.  Government not only use the tax system to generate income to spend on the defence of the Realm and the NHS but they also use it to achieve certain strategic and tactical objectives such as encouraging investment by foreign nationals to create jobs.  Equally foreign powers user their tax systems to attract companies to their jurisdictions.

So just how much is George Osborne missing out on.  So let us examine the case of Google.  Last year Google paid £6m on revenue of £395m. However, the UK is the largest online ad market in Europe and Google is the largest player in that market and given that Google’s EMEA (Europe, Middle East and Africa)  operations generated €12.5bn (£10.1bn), the Google’s UK turnover was in the region of $4bn (£2.5bn) and paid just £6m in corporation tax.  Google has located its European headquarters in Dublin where Google Dublin employs 2,500 employees to take advantage of Ireland’s favourable capital arrangements and consolidates its ad revenue through this subsidiary. Google Ireland had pre-tax profit of just €24.3m last year on turnover of €12.5bn.  Google’s consolidated accounts suggest a different picture of earnings generated by their operations of $11.7bn on just under $38bn turnover.  This suggests the true profit contribution from Europe should be in the region of $3.85bn.  By the same logic, the earnings contribution for the UK market would have been $1.2bn or approximately £800m profit or equivalent to £208m in Corporation Tax.  So there we have it, the UK Treasury is missing out on just over £200m in corporation tax.  Given that Google employ just 1,500 people in the UK there can hardly be said to be a jobs bonus whereby we are getting significant PAYE revenues instead.

Amazon is a somewhat different case.  Amazon is the largest on-line retailer in the world and has come to dominate the market.  However, in the UK, Amazon generated sales of £3.35bn, 25% of Amazon's sales outside of the US and paid just £1.8m in Corporation Tax to the UK Treasury.  However, in fairness to Amazon they have created 15,000 jobs in the UK, which is ten times that created by Google, and make a far smaller margin on sales of the many products they ship from Books to Microwaves.  Equally those 15,000 employees are significant payroll taxes and Amazon continues to invest heavily in the UK infrastructure.  Yes Amazon the Luxembourg holding company rouse, but I believe their contribution to the country is far greater than Google’s.

Harmonisation of the European Union’s Tax laws as regards companies and individuals would eliminate many of these distortions and clamping down on the BVI (British Virgin Island) corporations would also eliminate many of the tax loop holes that multi-national companies take advantage of.  However, these are probably a step too far for most UK based politicians and unlikely to occur.  

The HMRC could go toe-to-toe with these multinationals and try and get more out of them.  However, the most likely outcome is the cost of all these activities will eventually be borne by the consuming public through increased prices.  Years ago we used to consider that the same cost of a good in the US compared to the UK was on the basis what cost $100 in New York cost £100 in London.  Much of this Atlantic Margin has been eroded by the Internet and in no small part in the role taken by both Amazon and Google.  So I would not necessarily jump to the conclusion that we would be better off if the HMRC managed to get more out of the likes of Amazon and Google. 

Can you Google the Economy?

With over a billion searches a day, Google is arguably one the wonders of the modern world.  Search for almost anything and you will be returned tens of thousands, if not millions of results in a fraction of a second.  Recent studies are now suggesting that search patterns can tells us more than just the cheapest source of the must have gadget or who was the lead character in ‘Bonanza’.

Internet advertisers have long understood the power of search to establish trends in usage and demand for products and services to produce instantaneous views of economic activity known as ‘nowcasting’, but recent research is considering whether these trends in web activity can actually provide an accurate forecast of what is happening in the economy.

If you think that your random search for a suitable Christmas gift for your partner is of little interest to anyone other than yourself, think again!  Last year no lesser august body than the Bank of England reviewed all the recent studies on Google search activity to understand whether there was any validity in the proposition that economic forecasts could be based on our search behaviour.

In particular, the Bank homed in on two particular areas of interest in order to consider search as a suitable allegory for an accurate economic forecast.  They focused on unemployment and the housing market, both areas which are frequently quoted a real world factors related to economic activity.  They found that Internet search data have a number of appealing properties as economic indicators. They are extremely timely and cover a potentially vast sample of respondents (approximately 50% of the adult population in the United Kingdom now use the internet every day). In contrast to most traditional survey methods, they are collected as a by-product of normal activity, rather than requiring individuals or firms to respond to survey questions after the event. This can avoid problems associated with non-response or inaccurate responses. And it also means that information is continually collected on a wider range of issues, rather than just on a few pre-determined questions. As a result, search data can help analyse issues that arise unexpectedly.

Although it remains early days, this analysis suggests that internet search data contain valuable information for analysis of unemployment and house prices. These applications treated the search data in a similar manner to existing surveys in conducting standard regression analysis. However, internet search data also has the potential to answer different sorts of questions to existing indicators. Such data has the particular advantage that it can help analyse issues that arise unexpectedly at short notice. Whereas survey data must be consciously collected based on pre-determined questions whereas internet data is collected based on behaviour at the a particular time and trend data going back into the recent past helps to flesh out our understanding.  Such data is generally generated without engendering any form of bias that studies and surveys often find it difficult to avoid.  Equally the idle musings of millions of internet users may well provide a great deal of ‘noise’ which obscures the key trends.

However, without doubt the internet and associated social media reflect the pulse of today’s society and as such reflect our collective social mood. People learn what others are thinking and express what they themselves are thinking by posting and promoting their thoughts and opinions on websites like Twitter, Facebook, and on blogs. People reveal what is on their minds by querying topics on search engines and together create a learning process and a continuous feedback loop, whereby people form, express, and reveal expectations in real-time.

If the revealed expectations derived from Google Trends suggest genuine predictive power for future outcomes, then the symbiotic nature of social media and internet search behaviour suggests that these channels may facilitate self-fulfilling prophecies and if the predicted outcomes relate to economic events, then analysis of Google’s search trends can become important tool for the Bank of England to gauge and manage inflation expectations.

Amazon to side step Phorm!

In an increasingly heated debate over privacy, Amazon UK has stated that it will not allow the online advertising system of Phorm to scan its web pages to produce targeted ads.

 

Amazon is one of the most popular sites in the UK and indeed worldwide and its decision to block behavioural targeting of the type promoted by Phorm is a huge blow to the approach and will no doubt influence other major sites such as eBay to review their policy. 

 

This decision will be a major embarrassment to BT who had hoped to roll out Phorm’s technology later this year under the name Webwise.  Both BT and Phorm have come under fire from privacy campaigners over the the “secret” trials that BT conducted last year.

 

In a statement, Amazon UK said: "We have contacted Webwise requesting that we opt out for all of our domains."  The company declined to comment further on the reasons behind its decision.

 

In response, Phorm said: "There is a process in place to allow publishers to contact Phorm and opt out of the system, but we do not comment on individual cases."

 

Last month the Open Rights Group wrote to the chief privacy officers at Microsoft, Google/Youtube, Facebook, AOL/Bebo, Yahoo, Amazon and Ebay urging them to opt-out of Phorm. Amazon is the first company to give any sort of response at all but are unlikely to be the last.

 

Earlier this week the European Commission said it was starting legal action against the UK over its data protection laws in relation to Phorm's technology.  The European Commission has described the technology as an "interception" of user data and wants UK law to reflect more explicitly the need for consent from users in order for the service to be implemented.

 

Given the recent announcement of Google to introduce their own form of behavioural tracking on to users search queries, it will be interesting to see whether Amazon et al decide that they wish to avoid all forms of intrusive targeting and whether the EU will take on the behemoth Google.

Google in attempt to grab the Twitterati

It is reported by Techcrunch, that Google is in "late stage" talks to acquire microblogging service Twitter.  Twitter is the micro-blogging phenomenon that lets people known as the Twitterati, post short 140-character messages. Other users subscribe to follow the stream of these tweets from acquaintances and, increasingly, companies and celebrities. After an unpleasant rocky period when the company's servers frequently were crushed under the strain of the service, the Twitter has experienced tremendous growth.

As Google's tries to find an alternative cash cow as successful as their core technology of search they have been increasingly buying up new and exciting opportunities. Twitter would seem to be its latest attempt to break its dependence on search and search related advertising.  In common with the likes of News International and eBay, Google are keen to exploit the online activity of social networking and instant messaging/communications.  Facebook, which attempted to acquire Twitter in 2008, is the best example of just how rich a medium the Internet can become for social interactions. However, social sites have had a hard time showing they can generate revenue and profits as well and recent numbers from MySpace suggest that News International’s ownership is not seen as attractive to either users or key staff.

 

Twitter isn't just about sharing with friends, though. It's increasingly about search as well. Twitter has been working to elevate the prominence of search, which can give a near-real-time window into what's on the mind of innumerable users.  This fits in well with Google’s desire to be able to track our every thought and deliver a relevant ad to fit our stream of consciousness.

 

If Google does manage to capture Twitter will the Twitterati appreciate Google using their twittering to generate profits based on a “better matching of results with what people are actually seeking”.

 

MySpace is out there as an example of how users react when a big corporate wish to exploit their fun.  There is always an alternative and Google may find that the Twitterati just cannot be bought.

Google didn't immediately respond to a request for comment.

Additional Reporting: Techcrunch

Call to close Google Street View

The director of Privacy International, Simon Davies, is lobbying the Information Commissioner to close Google Street View until the company sorts out privacy-related issues.

The ICO has received a formal complaint based on the the fact that more than 200 reports from members of the public that were identified through Street View, which is a feature of Google Maps.

Before Street View was launched last year, the ICO laid a number of ground rules to which Google said it has abided. But Simon Davies considers that Street View has caused "clear embarrassment and damage" to many Britons.

The ICO, Davies continued, "never grasped the gravity of how a benign piece of legislation could affect ordinary lives" and prompted PI to ask for the system to be "switched off while an investigation is completed".

At issue is what Google promised the ICO when it gave permission for the service to operate in the UK.  He demanded that Google would blur faces and registration plates. However it didn't.

Many of the issues quoted have been trivial, but in at least one case, Google snapped a woman who had moved house to escape a violent partner, but who was recognisable outside her new home. In another, two work colleagues were shown in a compromising position and suffered embarrassment when the snap circulated at their workplace.

Was this a innocent mistake on Google’s part or was the Information Commissioner a little trusting in that Google would do what they said they would do?  Whatever the case, it is time that ICO started to take privacy on the web seriously and take action to safeguard our civil liberties.

Privacy fears grow - Are Government and Industry ignoring civil liberties

Google’s Street View service has contributed massively to the concerns of privacy on the internet.  Not only content with publishing views of individuals going about their legitimate business on line, Google recent announcement to use our search activity on their search engine to target advertisements takes the privacy debate to a new level.

Search information is valuable, allowing firms neatly to target ads to a person’s interests to generate billions in additional advertising revenue. Google, the industry leader, stores personal information for 18 months, and they are not alone as Microsoft’s search engine, Yahoo and AOL all retain search requests for 13 months.

But they are not the only people retaining information.  Today’s revelations by the Joseph Rowntree Reform Trust, that a quarter of all government databases are illegal and should be scrapped or redesigned, throws into sharp relief the amount of information that is now available for a whole range of purposes.

The Trust says that storing information leads to vulnerable people, such as young black men, single parents and children, being victimised.

It says the UK's "database state" wastes billions from the public purse and often breaches human rights laws.

But the government says the report contains "no substantive evidence" on which to base its conclusions. A Ministry of Justice spokesman said the government was "never losing sight" of its obligations under the data protection and human rights acts.

"It takes its responsibilities seriously and will consider any concerns carefully, adapting existing safeguards where necessary," he added.

The government spends £16bn a year on databases and plans to spend a further £105bn on projects over five years but does not know the precise number of the "thousands" of systems it operates, the trust claims.

In the wake of numerous data loss scandals, the cross-party trust - which campaigns for civil liberties and social justice - examined 46 public sector systems.

It said 11 were "almost certainly" illegal under human rights or data protection laws.

And what is the Information Commissioner, Richard Thomas, doing about this? Well apparently nothing.  Maybe it is time for the Commissioner to start to earn his salary and start a formal investigation as to exactly what is being stored and retained by both Government and Industry. 

The trouble with civil liberties is that you don’t miss them until they are gone!

Google Android paid for apps opens in the UK

Paid for applications will be available to UK Android owners from today, T-Mobile has announced.

For the first time, Android developers will be able to set their own prices for their apps. Previously, only free apps could be made available through the Android Market app store.

Speaking at an Android developer event, Regan Whitehead, mobile internet category manager at T-Mobile UK, said: "When users click on the Android Marketplace icon in the morning there will be a wide selection of paid apps on the market," including offerings from EA Sports and Activision.

Content on the Android Market is rated by users - in a similar fashion to YouTube - so developers who slap a high price tag on their app risk pricing it out of the market, according to Richard Warmsley, head of entertainment and internet at T-Mobile UK.

The store is like "eBay - developers are posting up their apps, they're setting the price, customers are rating independently and choosing what they want to have so it's an open market approach," he said.

The widespread interest in the potential of application marketplaces is hardly surprising, since  Apple revealed last year that it earned $30m in sales of iPhone apps in the first month after launching the App Store.

According to Maani Safa, head of mobile at The Telegraph Media Group, the newspaper's app - which was initially launched on Android - took about four times as long to port it over to the iPhone.

"Apple just make you jump through hoops," he claimed.

Because of these hoops, Safa said the company is "using Android as a trailblazer" - any app it creates will be launched first on Android and then ported over to other platforms because of the difficulties he had working with Apple

"Say you have a commercial deal in place and you want an application to go live on day X with an Android version. You create the application, you click on publish and literally within 10 seconds it's live in the application store, you call up the commercial partner and you tell them it's live ready to go. With the Apple version, you tell them it's date X - it gets to four days before, [Apple] gives you a call and says 'oh, by the way it's not going to go live for another two weeks'. 'Why?' 'It just isn't'."

There are currently more than 1,000 free apps available for Android.

T-Mobile's Warmsley said the top 10 apps downloaded on the G1 since its October 2008 launch are The Weather Channel, MySpace Mobile, ShopSavvy, Daily Horoscope, Free Dictionary Org, Ringdroid, Backgrounds, Barcode Scanner and Save MMS.

Currently, the G1 is only one model of Android phone is available in the UK and is exclusive to T-Mobile. Vodafone has just announced last month that they will begin shipping the HTC Magic Android compatible phone shortly. The phone will be available in the UK, Spain, France, and Germany.  

As regards the G1, T-Mobile's Warmsley said he was unable to put a figure on the number sold in the UK to date, but said that while "it's not a million", in a typical week T-Mobile's current sales rate of the G1 is 70 per cent of the iPhone's sales rate. O2 claims to have shipped more than a million iPhones in the UK.

The typical G1 user is a 32-year-old male, likely to be living in London or the South East - although there are also G1 'hotspots' in Leicester and Nottingham, according to Warmsley.

Additional Reporting from Silicon.com

Another Googly hits GMail

Following on from last months Google Search problems, users of Google's popular e-mail service, Gmail, were hit by an outage yesterday.  The service went offline at 0930 GMT with Google saying it was "working hard to resolve this problem".  The problem covered both their general consumers and the paid for business users.  Professional users of Google mail are covered by a service level agreement that promises to be 99.9% operational in any calendar month.  To put that commitment in context, GMail could be down up to 72 hours per month and still meet their commitments! Most commercial email services are run on 99.999% or 5 nines availablity or just 72 minutes of unplanned downtime per month.

According to comScore there are more that 113 million users of Google’s “GMail” service worldwide.  In a statement, Google said "a number of users" were having problems with Google Mail. The problem wasn’t universal with some users unaware of the problems. Users accessing GMail through a third-party email clients configured to send and receive e-mail using the IMAP email protocol were unaffected.

Outages are nothing new to email services and all Google’s competitors have had similar experiences as they developed and certainly Google has invested significantly in their Gmail infrastructure.   According to Google, its e-mail service suffered an average of 10 to 15 minutes of downtime per month in 2008.  The last major outage was in August 2008 when users were unable to use Google Mail for "a couple of hours".

According to comScore, Google has the world's third most popular web mail service behind Hotmail with 283 million users and Yahoo with 274 million e-mail users.

Google will need to improve their target availability if they are to offer the GMail service as a credible alternative to competitive email services.

Time to cut the Internet Bureaucracy.

I am frequently struck by how Internet businesses seem to grow staff numbers on an exponential basis. Employing new people - preferably MBA types and under 35 - in endless non-jobs with little or no impact on the creation of new and exciting areas.  

Yahoo! are a interesting example.  Anybody who comes into contact with that organisation can see that at least 50% of their 15,000 staff could be made redundant and the underlying business would not suffer.  They are hugely overmanned and it seems that the management is either too inexperienced to see how to change things or view a the number of direct reports relates to the bonus they can demand.

Take Google, they now employ over 20,000 people worldwide.  The only business line that is really driving the revenue of the business is the original search business and the associated AdSense revenue.  Today the product is much the same and just as brilliant as it was when I met with Brin and Page when the company had just 7 employees back in 1999.  I suspect that percentage of today's 20,000 employees directly involved in that search and AdSense business line is fewer than 10% of the total workforce.  A friend of mine was telling me about a meeting he recently had with Google.  A recently appointed Director spent 45 minutes trying to explain precisely what her roles and responsibilities were within the company.  Anyone who takes 45 minutes to communicate such a basic aspect of their job is probably trying to desperately cover up the fact it is a non-job.  The same stories can be found in Yahoo!, Microsoft, and eBay.

The major Internet business have frequently fallen into the same trap that ultimately caused the demise of major telcos, steel companies and car manufactures back in the 1980s.  They failed to understand their markets and had grown into huge bureaucracies. This recession maybe a good time for the major Internet businesses to look critically at their businesses and start to cut the deadwood and also look to fund the brightest of their exiting alumni to start new businesses and generate real dividends.

Has Rich Media Advertising come of age?

Following on my comments on the future of ITV and their multimedia future post Friends Reunited, I thought I might take a look at the state of rich media advertising and how it is developing.

On a recent assignment I was tasked to develop a revenue model that would support a free-to-air Internet TV service.  Most of the models in place utilised versions of Google’s Adsense, but I felt that the user would be unlikely to click on such ads and so I started to look at rich media advertising such as ad-rollers of various types such as this pre-roller ad for the Jaguar XF.

Future revenue will be as a result of a user driven addressable advertising model whereby income is derived from the advertising model powering the Internet today.  Rich media addressable advertising is a new class of advertising currently being deployed across the internet and it makes extensive use of video traditionally associated with the TV and Cinema advertising and extends the capability of the internet to enable users to interact with the advert offering numerous opportunities for advertisers to extend the contact with an interested party.

Rich media advertising provides addressable, accountable television advertising solutions that enable the delivery of targeted messages and engage viewers through interactivity. This advertising solution improves the overall effectiveness of advertising campaigns while providing true accountability through real-time reach measurement.

The New Advertising Model

Consider the advertising model from simple pre-roller advertisements which are shown whilst applications are loading and simple pay per click advertising for the purposes of building the revenue model.  Pricing for rich media vary, but ads such as a 20 second pre-roller ad is approximately £12.50 CPM. 

The IPA TouchPoints Survey in July 2008 indicated that the current consumer usage of broadband access is 34 hours per month in the UK per subscriber and according to a May 2008 Report from Forrester, typical online video viewing is achieving average levels of 4 hours per month per user.  Over a 4 hour period a Internet/TV viewer is forecast to view ten 20 second pre rollers.  For 100,000 users, this would equate to £50,000 in advertising income per week.  Pre-rollers are the cheapest form of video rich media ads available.  Longer 30s and 60s linear ads, mid-rollers and end rollers generate higher levels of CPM income.  In the US, Microsoft is experimenting with running 60s mid-roller ad breaks for every 15 minutes of video viewed.  High advertising rates are being generated by the likes of Navic Networks (recently acquired by Microsoft) who are providing a range of interactive TV ads powered by web capabilities enabling users to respond to ads and make requests and provide feedback on content.  Internet/TV advertising pricing is currently at a higher level than corresponding standard Internet advertising as it is being treated as an extension of TV advertising which is historically very expensive per viewer compared to the Internet.

Pay per click (PPC) advertising provided by Google has been tried with internet video applications such as RooTV.  These PPC ads currently attract and average click price of around 40p per click on Google and 29p per click on Yahoo!  Click through rate (CTR) is dependent on subject matter and targeting. However, I would suggest that for the purposes of modelling use a CTR of 2% which is equivalent to current run of site rates across PPC advertising and the lower Yahoo! rate of 29p per click.

Addressable Advertising solutions help advertisers to reach the full potential of television advertising and improve the overall effectiveness of campaigns. These solutions allow advertisers to target groups of viewers using overlays on 30-second, 60-second, targeted video, or long-form advertising using any or a combination of the following: Request for Information (RFI), Telescoping, Viewer Polls, or Targeted Information Overlays.

Request for Information (RFI) & Fulfilment

RFI overlays are targeted, interactive enhancements that invite viewers to elect to receive more information on a product or service. RFIs generate highly qualified leads and provide the most targeted and direct connection with digital cable viewers. Advertisers are able to send coupons, product samples or brochures to self-selected viewers.

Telescoping

Telescoping is also known as linking to long-form advertising and bridges both linear and on-demand advertising by connecting customers with enhanced product information and enabling direct ecommerce.  Interactive overlays allow viewers to link directly to long-form VOD content such as the Jag ad above.  Telescoping combines the reach of linear advertising with the one-on-one nature of interactive on-demand content.

Telescoping brings together targeted interactive overlays with 30-and 60-second roller ads pushing viewers into longer more in-depth information about the advertised product or service.  Telescoping to VOD solution addresses one of the biggest challenges facing advertisers today that of implementing VOD advertisements without having viewers’ access content through a complex click through process.  By clicking on an interactive prompt, viewers are linked directly to the long-form video advertising content without the risk of them losing interest while navigating menus.

Viewer Polling

Poll overlays are graphical, interactive enhancements that are designed to engage viewers while obtaining their interests and opinions through viewer self-segmentation. Viewers use their existing remote controls to respond to questions posed in the overlay. Poll results are recorded, compiled, and electronically communicated back to the advertiser and can then be used to define targets for subsequent advertising campaigns.

Targeted Impressions/Spot Tags

Targeted Impressions are non-interactive overlays that enable advertisers to update their spots with time-sensitive information, address or phone number of the nearest location, product/service specials, etc.  Using targeted impressions, advertisers can customise a single spot for different groups of targeted viewers.

Conclusion

Rich media advertising combines with Internet TV content now offers a powerful new advertising medium for traditional broadcasters to extract a whole range of new advertising revenues to support their transition away from declining broadcast advertising.  The increase in efficiency of TV based advertising for delivering relevant messages to targeted viewers has huge additional benefits and allows the broadcaster to target new advertisers who have not traditionally tried TV advertising due to the high cost and unaccountability.  Rich Media Advertising has clearly come of age and so will the major Broadcasters be able to move from the dying big budget ad spend to this form of accountable advertising?  Time will tell and probably very soon!