Transcript Preliminary Results from Market Drivers Survey For VoiceGenie

Advertising and the Telephone:
The Next Generation of Telemedia
SpeechTEK West
February 2007
Dan Miller, Sr. Analyst
Agenda
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Introduction
Overall Concept – Assisted Search
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Definition
Learning from legacy DA
Revenue models
Major Trends
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Advertiser receptivity
Reaching the mobile masses
User scenarios and use cases
Future developments
© 2007 Opus Research, Inc.
Advertising and the Phone
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My Background
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Founded Opus Research in 1985 focusing on
‘telemedia’ and ‘teleservices’
Coined ‘Conversational Access Technologies’
(CAT) to capture elegant combinations of
automated speech, enhanced routing and
associated business logic
Focus on industry analysis and strategy
consulting to infrastructure providers, service
providers and their customers
© 2007 Opus Research, Inc.
Advertising and the Phone
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Strategic Direction: Assisted
Search
Queries
Voice Gateway
“intelligent transfer”
Ads &
Coupons
Note: Callers
ask questions.
Automated system
resolves query or
transfers to agent if
unable to. Agents have
access to listings and
Web Services.
Broadband IP
Promos
Web
Services
DA
Application
Listings
© 2007 Opus Research, Inc.
Advertising and the Phone
Search
Engines
Driving
Directions
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The Automated DA Legacy
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Enhanced query response
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Below 7% of calls
Leveraging Web 2.0, LBS, non-directory data
Impact of local search options
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Desktop Web access
Wireless Web (WAP 2.0)
“Connected” speech processing
SMS response
Two-way SMS
© 2007 Opus Research, Inc.
Advertising and the Phone
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Existing Revenue Models
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Greeting Advertisement
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Transfer/Connect Fee
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Advertisers pay premium to pre-empt a query
Historically a bad idea
Electronic Coupon (text message)
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“Signed Advertisers” pay a fee for direct connection
Rates range from $1.00 to $30 (or more online)
Conversion rates fall in a range of 7% to 12% (per Jingle)
Promotional Spots – “Switch Pitches”
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Branding
Parallels tile ads on Web
$0.35 is what market bears
Participating merchants can offer electronic promotions via SMS
Rates as little as $0.06 per message (involve minimums)
Pay-Per-Connect
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Service provider charges variable rates (from $1 to $35 and above) for
delivering a live, interested buyer to a service provider.
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 6
Free 411 Competitors
Service Definition
Technology
Providers
Content and
Advertisers
Comments
1-800-Free411
Jingle Networks
Toll-free dial-up access
to automated DA, live
agent transfer,
(originally included call
completion)
Nuance (voice
processing); LiveOps
(live agent handling,
telemarketing)
Ingenio, Insider Pages,
ServiceMagic
Raised $26 million in
venture capital; claims
9 million calls per
month (unaudited),
growing 30%/mo.
1-800-411Metro
InFreeDA
[defunctpurchased by
AT&T]
Toll-free dial-up access
to advertisement
followed by live agent
DA, SMS delivery of
number an option
NuComm Int’l (live
agent handling)
San Francisco Local
Retailers – Yellow Cab,
Pier 39, Hougasian
Flowers; National:
ChemDry, Mr. Rooter,
Dominos
Raised over $5 million
in venture funding;
accelerated national
expansion
1-800-411SAVE
(self titled)
(beta) Toll-free access in
San Francisco Bay Area
to automated system,
transfer to live operator,
advertisement played
before query response
Excell Services (live
agent handling);
proprietary system
for call completion
and merchant billing
ServiceMagic for local
services vendors, Web
site has multiple
electronic coupon
offers
Web-centric offering
with multiple links to
online coupons and
bargains
1-800-SANDIEGO
Local. toll-free access to
audio advertising and
live agent.
Employs live agents
Pizza Hut
Founded April 2002; in
2005 started expansion
within California
© 2007 Opus Research, Inc.
Advertising and the Phone
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General Advertiser Receptivity
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High interest in “mobile” buyers
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Awareness of attractive demographics and
growth
Anticipating new payment modalities
Inventory is growing
Several options emerging
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Ad-supported DA
Speech-enabled search engines (520-FIND)
Web services adding phones
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 8
What’s Working in Ad Sales
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Very little direct sales for “free DA”
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Telesales (e.g. Jingle)
Web-based bidding site
Syndication/aggregation (à la InsiderPages)
Search engine extension
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Google, Yahoo!, MSN “mobile”
Enhanced IYP model
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 9
Conversion and Call-Throughs
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Reported CTRs (vary considerably by
category):
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Jingle: 4% - 6% “average conversion rates” (calls
to advertisers), range from 3.4% to 21.9%
Ingenio: reports a high of more than 20% in free
DA context and many in single digits. Generally,
better rates in DA environment than online
VoiceStar: Online PPCall industry range is 7% to
12% at the high end
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 10
Online Advertising Today: In
Context
Comparison of Media Spending ($ Billions)
$60
$56.6
$47.9
$50
Local ad spending = up to $147 billion
$40
$35.0
$30
$21.7
$18.9
$20
$15.0
$12.9
$12.4
$10
$7.8
$6.2
$0
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Source: Interactive Advertising Bureau/PricewaterhouseCoopers (2006)
© 2007 Opus Research, Inc.
Advertising and the Phone
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Current U.S. Online Spending:
Where’s the Money?
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Categories:
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Paid search: $5.1 billion (41%)
Display advertising (incl. video): $4.3 billion (34%)
Classifieds revenue: $2.1 billion (17%)
Sector:
 Consumer-related marketing (largest segment: $6.4b)
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Retail – 47%
Automotive – 20%
Leisure (travel, hotel & hospitality) – 14%
Entertainment (music, film & TV entertainment) – 10%
CPG – 5%
After consumer-related: Financial Services ($1.5b), Computerrelated ads ($1.6b), Telecom ($800m) and ‘Media’ ($700m)
Source: Interactive Advertising Bureau/PricewaterhouseCoopers (2006)
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 12
Local Search Revenues*:
2006 Estimated Distribution
All Others,
2%
Google,
45%
IYP
Industry,
34%
Source: Sterling Market Intelligence (4/06)
*Does not include online local display or classified advertising
© 2007 Opus Research, Inc.
Yahoo!
(Search)
19%
Advertising and the Phone
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Tactics to Attract More Advertisers
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Detect, reinforce and grow use cases
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Mash-ups
Social networks
Promotions and discounts
Leverage search engines
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“Assisted Search” is the concept
Add Web 2.0 components
Objective: leverage broader base of online
advertisers
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 14
Some Quick Facts about
Wireless
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More mobile phones than fixed-lines or PCs:
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More mobile phones globally than landlines (incl. U.S.): approx.
2.5b wireless subs globally
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There are 207.9 million mobile phone users in the U.S. (69% of the
U.S population) and almost 400 million in China
U.S. users want local content, not music/video:
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75% or more not interested in video on mobile phones
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69% or more not interested in music on mobile phones
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Local content (e.g., traffic, weather, maps) top desired content on
mobile phones
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But mobile data user experience “not ready for prime time”
Source: TNS Telecoms (2005), RBC Capital Markets (2006), Pew Internet & American Life (2006)
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 15
Mobile Offers and Couponing
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Coupons are “offers” or “discounts”
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Well-understood offline precursor
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Motivate consumer action in mobile environments
Attract new participants into network
79% of the U.S. population uses coupons (per Promotion
Marketing Assoc.)
38% of U.S. purchasing decisions influenced by coupons
(Mediamark Research)
Current offers:
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Jingle (e.g. “switch pitch”)
Cellfire
Mobiqa
ValPak (via wireless Web access to site)
Others
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 16
User Scenarios
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Tellme Mobile
 Promotes personalization, voice or text input
 SMS texting of numbers
 Local shopping modules
VSearch
 VoiceSignal and InfoNXX
 Embedded Speech front-end to enhanced DA
InfoSpace Local Search (WAP 2.0)
 Category search merges products, services and directory
 Single source for maps, directions, ticketing
 Integrates “what’s nearby?” and “who’s nearby?”
 Click-to-Connect “pay-per-connect”
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 17
More User Scenarios
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HelloYellow
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Category Search
AT&T 1-800-YELLOWPAGES
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“Free” DA
Advertising Management (Apptera)
Automated Speech (Nuance)
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 18
What’s Working/What’s Not
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Working
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“Free” offers for now
SMS response
Rudimentary personalization (e.g. Tellme)
Customer service with service delivery
Bundled offering (Jingle’s sales tactic)
Not Working (yet)
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Profitable “free DA”
“Switch Pitches”
Branding opportunities using speech
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 19
Next up: Video
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Video offers potential for subscriber revenues; 69% of
U.S. adults have watched online video and 5% of those
who watch online video have paid for content (on
annualized basis):
 $10 or less: 21%
 $11-$20: 30%
 $21-$30: 7%
 $31-$50: 27%
Forecasts predict well over $1.5 billion in online videorelated revenues by 2010 from premium content;
advertising-model more likely to take hold
Source: IDC (2006); Online Publishers Assn (2006)
© 2007 Opus Research, Inc.
Advertising and the Phone
Page 20
Thanks!
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Contact info:
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Opus Research
330 Townsend Street, Suite 201
San Francisco, CA 94107
Dan Miller: [email protected]
415 904-7666
© 2007 Opus Research, Inc.
Advertising and the Phone
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