BIA/Kelsey is out with my new paper on the status of card-linked offers, which is based on detailed discussions with 14 leaders of the card linking ecosystem, including credit card firms, tech vendors, payment processors, publishers and merchants. Most of the respondents are members of The CardLinx Association. Card-linked offers are promotions based on transactions made on credit cards, debit cards, or loyalty programs. They represent an unprecedented level of media attribution.

This week, I presented report highlights to The CardLinx Association’s Mobile Summit in San Mateo. Among the findings: universal agreement that card linking is seeing momentum among merchants; that some budgets for card-linked offers have begun to move from experimental to seven-figure spending; and that many key categories are participating, including Quick Service and Fast Casual restaurants, specialty retail and subscription services.

Challenges remain, however. Once seen in simple terms as a successor to the prepaid model pioneered by Groupon and Living Social, there have been some slow-downs in the business. As Coupons.com SVP Bruce Sattley noted at The CardLinx Summit, “There is not as much fervor among retailers as I would have thought a year ago.”

Clearly, the ultimate success of card-linked offers will be linked to better coordination among the various segments of the CLO ecosystem; the development of a constant stream of attractive offers; greater awareness of CLOs; the elimination of structural sales blockages; and the development of industry standards for card-linked transactions.

More information about the report, including purchase information, may be accessed here.

The post New BIA/Kelsey Report Shows Momentum for Card-Linked Offers appeared first on BIA/Kelsey - Local Media Watch.

Mobile payments won’t take over the universe in 2015, as the tech media would have you believe. But it will have a noticeable impact on our favorite new topic: On demand local services (ODLS), a la Uber.

That’s where mobile payments’ physical barriers (i.e. point of sale compatibility) don’t exist. Think of it like in-app payments but for local services fulfilled offline — everything from walking your dog to getting a ride somewhere.

Apple Pay could unleash this already quickly developing area by creating a single point of entry for payment authentication. That makes it easier than dealing with separate payment systems for several ODLS apps.

We tackled this topic in the opening analyst roundtable of our Interactive Local Media conference last month in San Francisco. The video is below for the mobile payments segment. The rest of the roundtable is coming soon.

The post Conference Roundtable: The State of Mobile Payments appeared first on BIA/Kelsey - Local Media Watch.

We continue to see a shift from active search to passive discovery as smartphone usage itself grows. That’s especially true with local search, given that portability, location awareness and use case are more conducive to push-based content.

The ways in which this overall concept continue to evolve (and implications for advertisers) was the theme of a presentation I gave last week at Mobile Marketer’s FirstLook conference in New York. It’s being driven further by adjacent topics like mobile payments and push notifications.

One important area of this discussion is Google Now: the search giant’s most important and under-recognized initiative. It gets some recognition but not commensurate with the level to which it will determine Google’s ability to play in this discovery-based mobile world.

I plan to make my entire presentation (slides and voiceover) available here this week. In the meantime, you can read Mobile Marketer’s own coverage of the presentation. I’ve pasted a teaser and embedded video below, and the rest of the article can be read on Mobile Marketer.

NEW YORK – An analyst at Mobile Marketer’s Mobile FirstLook: Strategy 2015 conference said he expects Google Now to step up its use of targeted push notifications as search becomes more mobile application- and discovery-based to meet consumer demand for faster, more personal service.

The session, “Search: How Mobile is Redefining Search Across Smartphones and Tablets,” focused on how Google, rethinking its business model in the mobile context, as consumers searching via maps and voice commands, expect results to be instantaneous, local and clickable to a mobile site or phone number.

“Like Google does with a lot of things, I’m convinced Google Now will be more personalizing and pushing, really targeting messaging to users,” said Michael Boland, senior analyst and vice president of content with BIA/Kelsey.

“Google actually does the market a favor by experimenting on the scale it can do,” he said. “But it’s really worth watching for anyone interested in this kind of world of push-based notifications and more mobile signals to really get in front of users in more intuitive ways.”

Read the rest.

The post Presentation: Where Are We in the Migration of Search to Discovery? appeared first on BIA/Kelsey - Local Media Watch.

The emergence of geo-targeting and mobile payment and wallet technologies has meant that we talk a lot less about the future of “advertising” than “marketing.” All this was crystal clear this week at the third annual edition of Money2020 in Las Vegas, a showcase for payment innovations, and a major boomtown, too. Attendance climbed from 4,000 attendees in 2013 to 7,500 attendees this year. Next year, the show will move to much larger quarters at The Venetian, and add a European edition.

BIA/Kelsey participated in this year’s festivities by presenting new research into card linking trends during a special offsite session hosted by The Cardlinx Association.

ApplePay – not part of the program, incidentally — was clearly the big driver of this year’s event, rebuilding momentum lost from earlier efforts by Google Wallet and others. As Visa President Ryan McInerney noted, the high awareness of ApplePay generally, and its use of tokenization has brought a real sense that payment technologies have moved beyond credit card account numbers towards high impulse and efficient transactions.

It will also help open the door to a new generation of payments, promotions and services – even if many features, such as NFC contactless payments, won’t be in widespread use for several years.
Kicking off the show, McKinsey & Co.’s Philip Bruno and Kausik Rajgopal highlighted six major payment themes. These included:

1. Point of Sale evolution
2. Payment security
3. Crypto-currency
4. Globalization of commerce
5. New credit models
6. New partnerships and acquisitions

Things are happening very fast in this space, noted Bruno. It was just 17 years ago that ecommerce began. It has now crossed the trillion dollar mark.

American Express CEO Kenneth Chennault, during an opening interview, said that when it comes down to payment innovation, it all comes down to one thing: Merchants want to grow sales. Does the innovation “help merchants meet customer needs?” he asked. “Do they provide incentives for changing customer behavior?”

Chennault expressed confidence that Amex, for one, is providing marketing insights that “allow us to provide different types of promotions and offers to drive more business. Not just acceptance, but engagement,” he emphasized.

Other industry leaders also spoke about appealing to merchant needs. Heartland Payments CEO Bob Carr, for instance, said that they key thing with payment innovations is not to give advantages to a merchant’s best customers without disintermediating merchant margins. “The problem with othwerwise useful sites like OpenTable and GrubHub is that they disintermediate margins,” he said.

The post Money2020: ApplePay Drives Mega Event appeared first on BIA/Kelsey - Local Media Watch.

We’ve made no secret about bearish attitudes toward Apple Pay; owing mostly to user acclimation and POS implementation challenges. It requires network effect to gain the scale necessary for any two-sided marketplace to work. It’s a classic local chicken & egg challenge.

But most of the variables we’ve examined are for Apple Pay’s use with offline retail check out. Since using (and loving) Apple Pay all over town, I’ve been reminded of a lower-barrier play; in-app payments to “order ahead” or summon offline local services, a la Uber.

This is different than in-app payments as they’re currently known — mostly used to order virtual goods (games), songs, or m-commerce (i.e. Amazon).  A much larger opportunity is offline, given that e-commerce is only 7 percent of U.S. retail spending. The rest is offline.

Meanwhile, on demand local services (ODLS) are exploding in attention and investment. This not only includes Uber but myriad “Uber for xyz” companies for everything you can imagine in local services: dog walking, Ikea assembly, drug delivery, etc..

Could ODLS house the near-term opportunity — dare we say “killer app” —  for Apple Pay? While the physical POS logistics take longer to fall into place, Apple Pay’s functionality is a nice match for the ODLS use case, including touch ID, speed and security.

The benefit also boils down to Apple Pay’s position as a unification layer. As ODLS usage grows and apps become more fragmented, that unification layer’s need grows with it.  It will solve a real pain point in having a single, secure and trusted payment authentication engine.

And it won’t just be ODLS apps. As noted, “order ahead” is a growing retail app feature that likewise requires speed and security. PayPal has done this for a while, Starbucks just announced it (as we predicted), and it will be table stakes for retail apps in 2015.

As background, one of our biggest objections to the exuberance over mobile payments is that paying with a credit card ain’t broke. Most mobile payments are a “solution in search of a problem.” So winners will be those that solve real pain points, like skipping store lines.

With this in mind, Apple Pay could eventually dominate POS transactions, but it will take longer than everyone thinks. Meaningful iPhone 6 penetration alone will take about a year, not to mention the larger challenge of retail POS compatibility. And each holds the other back.

The question is whether or not the ODLS opportunity exists in the nearer term for Apple Pay. And that will be answered by the volume of ODLS usage. If consumers end up using these apps frequently, the fragmented volume of disparate transactions will compel Apple Pay.

But if the usage isn’t as robust, will Apple Pay be again addressing a pain point that doesn’t exist? The over-under for local apps usage that compels a unification layer is probably around 7.  BIA/Kelsey data peg regular local shopping app usage at 3.4 per user. Is that enough?

That average could ratchet up with the ODLS movement. Apple Pay — benefiting from ODLS growth — could itself drive that growth with a more attractive use case, and Apple’s classic halo effect. If anyone can move adjacent markets and user behavior like that, it’s Apple.

This will be a key topic for BIA/Kelsey in 2015, and at our Interactive Local Media conference next month (12/3 – 12/5) in San Francisco.

The post What Will Be Apple Pay's Local Killer App? appeared first on BIA/Kelsey - Local Media Watch.

We’ve made no secret about bearish attitudes toward Apple Pay; owing mostly to user acclimation and POS implementation challenges. It requires network effect to gain the scale necessary for any two-sided marketplace to work. It’s a classic local chicken & egg challenge.

But most of the variables we’ve examined are for Apple Pay’s use with offline retail check out. Since using (and loving) Apple Pay all over town, I’ve been reminded of a lower-barrier play; in-app payments to “order ahead” or summon offline local services, a la Uber.

This is different than in-app payments as they’re currently known — mostly used to order virtual goods (games), songs, or m-commerce (i.e. Amazon).  A much larger opportunity is offline, given that e-commerce is only 7 percent of U.S. retail spending. The rest is offline.

Meanwhile, on demand local services (ODLS) are exploding in attention and investment. This not only includes Uber but myriad “Uber for xyz” companies for everything you can imagine in local services: dog walking, Ikea assembly, drug delivery, etc..

Could ODLS house the near-term opportunity — dare we say “killer app” —  for Apple Pay? While the physical POS logistics take longer to fall into place, Apple Pay’s functionality is a nice match for the ODLS use case, including touch ID, speed and security.

The benefit also boils down to Apple Pay’s position as a unification layer. As ODLS usage grows and apps become more fragmented, that unification layer’s need grows with it.  It will solve a real pain point in having a single, secure and trusted payment authentication engine.

And it won’t just be ODLS apps. As noted, “order ahead” is a growing retail app feature that likewise requires speed and security. PayPal has done this for a while, Starbucks just announced it (as we predicted), and it will be table stakes for retail apps in 2015.

As background, one of our biggest objections to the exuberance over mobile payments is that paying with a credit card ain’t broke. Most mobile payments are a “solution in search of a problem.” So winners will be those that solve real pain points, like skipping store lines.

With this in mind, Apple Pay could eventually dominate POS transactions, but it will take longer than everyone thinks. Meaningful iPhone 6 penetration alone will take about a year, not to mention the larger challenge of retail POS compatibility. And each holds the other back.

The question is whether or not the ODLS opportunity exists in the nearer term for Apple Pay. And that will be answered by the volume of ODLS usage. If consumers end up using these apps frequently, the fragmented volume of disparate transactions will compel Apple Pay.

But if the usage isn’t as robust, will Apple Pay be again addressing a pain point that doesn’t exist? The over-under for local apps usage that compels a unification layer is probably around 7.  BIA/Kelsey data peg regular local shopping app usage at 3.4 per user. Is that enough?

That average could ratchet up with the ODLS movement. Apple Pay — benefiting from ODLS growth — could itself drive that growth with a more attractive use case, and Apple’s classic halo effect. If anyone can move adjacent markets and user behavior like that, it’s Apple.

This will be a key topic for BIA/Kelsey in 2015, and at our Interactive Local Media conference next month (12/3 – 12/5) in San Francisco.

The post What Will Be Apple Pay’s Local Killer App? appeared first on BIA/Kelsey - Local Media Watch.

Phone-based digital payments haven’t really taken off – in part, because they aren’t much easier to use than credit/debt cards. You’ve still got to take them out of your pocket.
The notable exception is the phenomenon of My Starbucks Rewards loyalty program, which now has 10 million Starbucks customers actively using the mobile app, twice the number of a year ago.

But if “wearables” take off – i.e. smart watches and to a lesser extent, glasses – there could be rapid growth. In fact, payments are the most practical smartwatch feature (aside from telling the time.)

LevelUp leader Seth Priebatsch told Marketwatch that has always been his vision. The company currently provides an Android app, which automatically asks users if they’d like to pay by using the App when they are near favorite merchants.

“What we really always dreamed of was being the largest smartwatch payment network,” said Priebatsch, noting that LevelUp already claims 1.5 million smart phone users, who can pay at 14,000 locations. With wearables, the sky is the limit (perhaps).

Seth Preibatsch talks with Mark Fratrik at a recent BIA/Kelsey conference

The post LevelUp Banks on Smart Watch Adoption for Payments appeared first on BIA/Kelsey - Local Media Watch.

Twitter has made a bold move to go beyond advertising by adding performance marketing to its portfolio via the purchase of CardSpring, the San Francisco-based startup. The acquisition price has not been announced. CardSpring had raised $10 Million since its launch in 2011.

One of the big tech challenges in the payments space has been to remake the credit/debit card to a “digital receipt” product that can not only process sales, but also leverage specific SKU information, location and customer behavior to add coupons, loyalty points, events and other ewallet items. That’s the challenge that Netscape Vet Eckart Walther gave himself several years ago in launching CardSpring with several others. The company has been positioned as a value add – some would say “middle man” — to both financial institutions and publishers providing marketing solutions for brands and SMBs.

CardSpring’s ambitious goal has been to enable merchants to write their own promotions; distribute them over CardSpring’s publisher network; and redeem and analyze the deal on their Point of Sales. The service’s “near” real-time analytics can show merchants where their redeemed promotions are coming from and what they bought.

CardSpring first got on the map via a 2012 partnership with payments leader First Data to provide check-in promotions at certain venues. More recently, it has also begun integrating with VeriFone’s POS network to enable developers to build their own card-linked services.

The launch of CardSpring Connect in September, 2013 – described as “Google Analytics for the retail world” was a milestone for the company. Foursquare and MOGL are among the most significant publishers providing CardSpring Connect to at least some of their merchant advertisers. Others include Thanx, Roximity, Moblico and OnStripe.

Twitter’s acquisition of CardSpring makes sense to us as Twitter positions itself as a real time marketing channel, and also a “common carrier” that can work widely across the board with key players in the space. This is consistent with CardSpring’s general positioning. The sale of CardSpring itself also suggests that it has been a difficult effort for an independent company to enlist partners for a middle man solution. It has also been difficult to differentiate itself among several other players providing similar features.

BIA/Kelsey looks deep at the SMB Loyalty and Data Space at Leading in Local: SMB Digital Marketing Sept. 22-24 in New Orleans, with such featured speakers as Groupon’s Dan Roarty, Perka’s Rob Bethge and Mercury Payment’s Randy Clark. You can register here.

The post Twitter Acquires CardSpring; Enters SMB Loyalty and Data Space appeared first on BIA/Kelsey - Local Media Watch.

GoDaddy, continuing to rev up its expanding SMB platform as its IPO nears, has launched “Get Paid”, an online and mobile payments service.

Get Paid lets Go Daddy’s base of 12 million customers – many of them SMBs – accept credit cards, debit cards, eChecks and PayPal transfers. The service has been developed in partnerships with PayPal, Dwolla and Stripe.

?

GoDaddy will offer Get Paid service in three service tiers starting at $4/month and going up to $15/month depending on the configuration of features like expense tracking; connecting bank accounts; and other accounting integrations.

GoDaddy’s decision to integrate payments in their service offerings is because they did not have an existing product that allowed their customers to get paid for their products and services. In the press release, SVP of Applications Steven Aldrich said,”when we heard from customers that they want to offer their clients more ways to pay, we set out to create a best-in-class solution to ensure easy access to all the tools they need to collect payments quickly and efficiently.”

GoDaddy already offered other financial services for small businesses in the form?of accounting and billing, so the addition of payments should tie in well to the existing services. The combination of a payment tool and existing financial and business management systems can be very powerful when it comes to tracking and measuring sales for ROI purposes.

The post GoDaddy Enters The Payment Arena appeared first on BIA/Kelsey - Local Media Watch.

Mobile payments continue to be an exciting area of innovation we’re watching closely. But there’s still a question whether there’s a bit of over-excitement. Given that paying with cash and credit card isn’t really broken, are many mobile payment offerings a “solution in search of a problem?”.

The answer is yes and no. But what needs to happen for any successful mobile technology is a considerable value exchange that will cause users to switch what is a very entrenched habit. Not only is payment behavior very habitual, but it’s something where security and comfort levels are vital.

People aren’t going to jump on board just because it’s a shiny new thing: It’s going to need much greater “value exchange”. Give me something better than the proposition of leaving my credit cards at home. The atomic weight of a credit card was never a pain point, so why does it need replacing?

We’re starting to see better offers in exchange for users’ mobile payment adoption. Starbucks continues to roll out features to save time for users, which is a tangible reward. Paypal is likewise thinking in these terms with “order ahead” and “skip the line” functionality. And Apple is a sleeping giant here.

I covered this concept in my monthly Street Fight column last week. You can check out the excerpt below and the full article here. This will continue to be a big topic for us, including at our Atlanta Leading in Local conference in just three weeks. Email me for a discount code (mbolandATbiakelsey.com).

Payment Technology: If it Ain’t Broke… Start an Entire Industry to Fix it.

Mobile payments is an exciting area of cultural and technological disruption, and at the same time a solution in search of a problem. Somewhere in all the excitement, we seem to have forgotten that paying for things with cash or credit card ain’t broke.

We’ve been covering mobile payments closely on this blog and many other places because it’s endemic to local commerce. Compared with m-commerce (i.e. Amazon Mobile), we’re talking about the emerging area of paying for physical goods in physical stores with your phone.

Or in some cases the mobile device isn’t on the user end but on the merchant end. That’s where we see things like Square and PayPal Here, which truly are disruptive technologies that democratize credit card acceptance among a huge swath of very small businesses (VSBs).

But notice how those few examples are the biggest success stories in what’s become known as “mobile payments.” One seldom-cited reason for this success is because they haven’t asked the user to change behavior. In other words, it’s still just a good old fashioned credit card swipe.

Compare that with many mobile payment technologies that ask the user to jump through a bunch of hoops to set up accounts. Once set up, the value proposition includes having a wallet that is lighter by the atomic weight of a Visa card. Or a loyalty program to get a free small coffee once a month.

Near field communication (NFC) is another example. Besides being held back by chicken-and-egg implementation challenges (device and POS compatibility, network effect, etc.), the value proposition was never that great to begin with: Tap your phone instead of swipe a card.

Add to all of this the fact that payments is a very entrenched habit for which comfort levels, security, and acclimation are paramount. Changing habits in such areas isn’t going to happen through marginal offers; it will require sizable incentives. For example, saving time. Lots of time.

That’s where Starbucks is moving. It has been the poster child of mobile payments by using its brand to put the practice on the map and to acclimate users. Continue reading.

The post Mobile Payments: Offer Me Something Better Than a Thinner Wallet appeared first on BIA/Kelsey - Local Media Watch.