Published 12th March

Mobile is starting to come of age as a marketing channel. Advertising based on location is set to be one of the most valuable and highly contested sectors. Traditional media owners and directory publishers appear to be slow off the mark – despite being in a space they have the ability to own. Is there a real danger that they could miss the boat? – The race is far from won.

In the space of just a couple of months mobile advertising has certainly hit the headlines. First, acquisitions – of Admob by Google, Quattro Wireless by Apple, AdMarvel by Opera –  then additional funding of Millennial Media led by New Enterprise Associates and Glam Media led by Aeris Capital.

Almost overnight the attention has turned from fixed online advertising to mobile. A personal device that enables marketing to an audience of one is seen as the Holy Grail of advertising, the next Frontier to conquer.  Some big players have clearly shown their intentions to try to dominate – more may soon follow.

A controversial report by US research agency Interactive Data Corp (IDC), estimated the total 2009 US mobile advertising spend at around $290m based on total page impressions. Millennial Media holding 18% ($51m), Admob 14% ($40m), Google 10% ($28m) and Quattro Wireless in 6^th position with 7% ($21m) share of spend.

Frenzy has been around the players with high volume inventory – those that deliver huge volumes of page impressions and therefore deemed those with market share. It was reported that Glam Media receive 160 million monthly visits to the sites they control or represent, resulting in some 2.5 billion page views. The part I find interesting is that almost certainly this is not actually where the battle will be fought.

BRING ON THE FIGHT

The key battle ground will be around ‘Local’, advertising predominantly based on location. This is where the riches will lie. Google has been clear about its interest in local online mobile content. In its fourth-quarter earnings call, the company described local mobile advertising as a “huge” opportunity.

The ambition brings with it a whole new challenge. The location aspect makes it infinitely more difficult to deliver relevant advertising. The opportunity to target is hugely powerful, yet the room for error in message slim. Get it wrong and the advertising performance significantly diminishes.

If you go Local – targeting is key, generic advertising is out and highly tactical advertising in. Managing targeting at the required level will prove challenging for many of the existing players – a real potential thorn in the side – and instantly render today’s high volume and market share irrelevant. Local brings demand for a totally new set of skills, a whole new meaning of context and relevance to advertising.

CONTEXT OF ‘LOCAL’

If you mention ‘Mobile’ and ‘Local’ in the same sentence two scenarios spring to mind – ‘where I am now’ or ‘where I am going to be’.  A common mistake is to assume your current location is important – often it is not. Mobile is about ‘mobile’, it is about roaming. Understanding location is a key part in any service offering as it helps define what is relevant and what is not. Handling location is far more challenging than many believe. Why is this?

In the UK alone, there are over 30,000 recognised locations – even before you take into account synonyms, postcodes and street names. Linking them together in a meaningful way is not that easy; what postcodes or streets fall into London’s West End or Soho? The taxonomy is complex. The attribute of location and importantly the relationship between each key to get right – otherwise the service will deliver meaningless results and fail in the consumers eyes.

Combine a location element, or attribute and the size of the inventory balloons. Current mobile advertising companies work on serving relevant Ads based on generic attributes such as; country, mobile network, handset type, time of day or theme of the page content. Location changes the whole relevance, potentially down to a micro level, and brings with it a very different set of management challenges.

MANAGING RELEVANCE

Advertising is ultimately content and people will pay with their attention. Structure of the content is important – as with the fixed online environment – mobile is a pull medium. Provide enough information to attract, influence and help inform the decision or action.

‘Local’ at a micro level – very rich content – can be very challenging to deliver and scale. Local at a macro level – comprehensive content – can be challenging to deliver added value and differentiation.  Content gives a service credibility, interest and value but only if there is a valid reason why it is being presented at that point in time.

For many people there is a perception that their mobile activity costs money, poorly targeted content slows down the response and interferes with the user experience. The screen is simply too small to second guess. Get it wrong and the consequences can be severe and instant. Relevance – a clear reason for displaying the content is essential.  

A local business service; e.g. a pizza restaurant nearby means exactly that, not one 15 miles away because that business happens to pay a premium. A location based social network service a volume of places that people can check-in to, not ones that just a handful of power users have entered or are sponsored. A Local guide service must have all the places of interest for a town or city, not ones in the surrounding area as that happens to be the only information available or only those that cost money to enter. Why?

The perception of relevance is enhanced when:

• consumer is offered greater choice
• consumer is empowered to select from a range of options
• due diligence is the consumer’s responsibility

A result; satisfaction levels and propensity to revisit or re-engage are much greater. The offer of choice brings with it a need for a critical mass of content or foundation. Challenging to grasp from day one.

FORMING FOUNDATION

A local service truly becomes useful when it has mass market appeal. Whether it is linked to a single street, district, town or city is largely irrelevant. The credibility of any local service is likely to be judged on an area that a consumer is familiar – if positive, trust will be instilled.

Shopping guide needs a number of stores and their adverts, not just one or two. A social guide a choice of bars and clubs and their promotions. A core and consistent level of content is a must, any service needs a foundation. A critical mass of content, or adverts, is required to offer a consumer value. The ability to attract, influence and help inform the decision or action – the ability to offer choice.

Take a directory publisher, Yell in the UK boasts over 2.3 million business listings – basic core and structured content, they currently have over 200,000 searchable online advertisers – depth of differentiating content.  Surely a perfect foundation to deliver critical mass linked to location from day one.

I have seen a number of services recently come to market that just don’t realistically have anything to offer in terms of basic or depth of content, instantly getting knocked by consumers. Sure critical mass can be achieved in different ways – existing, created or sourced – it just needs to be there. But almost as important to reflect, critical mass does not need to mean everything in one go, too much can distract and hinder consumer experience – a balanced position is essential.

BOAT HAS NOT SAILED

Defining and building a reliable content foundation with the depth needed to serve relevant content (and adverts) based on location will prove extremely challenging, for some potentially a step too far. For most new comers without the expertise it is certainly likely to take time as they learn the ropes. If traditional media players get moving in the right direction this all could play into their hands.

They don’t have much time and certainly can’t afford to continue to hang about. uLocate Communications, in the US, believe they have already recognised the deficiency in the current mobile advertising environment. They recently launched Where Ads^TM product, a hyper-local network, pulls together local ad providers that work in other mediums, such as directory services, coupons, event sources, and other aggregation services.

Partnerships will be increasingly important. Even for the traditional players it is unlikely that they will excel alone. The recent pairing of directory publisher DexOne and Yelp in the US, I believe testament that neither potentially has the critical mass and appeal to succeed in isolation.

Strategic partnering has the ability to bring a new dimension to the offer and support real revenues, how to bring the right components together to deliver value to the consumer will require knowledge and focus. The right partnering will also likely support far greater returns for those emerging players with big ambitions in mobile – especially with those who have a track record of making money.

MONEY MAKERS

Surprising for many will be that online the traditional media owners and directory publishers are typically some of the most efficient at converting consumer activity into revenue.

Take Pages Jaunes, directory publisher in France; in 2009 online they delivered 885 million visits and online revenues of Euro 461 million. Equivalent value Euro 0.52 per visit – a staggering conversion to value. Then think the number of searches conducted on Google versus the actual revenue delivered – nowhere near the same conversion rate.

No other organisations even potentially come close to the traditional media owners and directory publishers at converting actual activity to value. They have great strengths in this field – infrastructure, sales teams and existing customers to target.

In the fixed online the traditional media owners and directory publishers have been very slow off the mark – struggling to play catch-up. This cannot afford to be the case in mobile they have to be clear favourites to start to build significant value from the local environment. Most need now to get the right people into the mix to help them understand the opportunity and help evolve their businesses to deliver.

TAKEAWAY

Context, relevance, critical mass and content quality all key components to succeeding in the local mobile space. So who is going to win out? Many are too quick to make judgement having seemingly written off the traditional media owners and directory publishers, who in their eyes they appear to be slow off the mark.

To the contrary, many are beginning their move having started to develop mobile services and applications. Mobile is going to be very different to fixed online – a new set of rules exist.

For the traditional media players is about seeing the opportunity, accelerating their efforts whilst staying focused on delivering to their core strengths, not getting distracted by the hype of mobile. It is about bringing the very different expertise required to take them into mobile. (In a previous post I talk about why there is a need for experts).

The traditional players have the ability to lead, not play catch-up. The odds should be stacked against the new mobile advertising players.

For the big mobile advertising players the challenge is to go local – will not be as easy as some may think – they need to ensure that they have the very different expertise required to take them local.

The fight could be well and truly on.

Indigo 102, a strategic consultancy with a focus on media and mobility and a deep understanding of the local space. If you would like to know more about Indigo 102’s activities you can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102). 

Published 9th March

This week the Carnival of the Mobilists #214 – the weekly line-up of the best blogs and bloggers on all things mobile – comes to us via Andy Favell at mobiThinking.

It is fascinating to watch how the digital revolution; and now mobile and m-commerce, impacts different sectors, take gaming, where the business has struck gold, while in publishing, the book people can’t be sure if they’re all going to live happily ever after.

• First to publishing: as newcomer to the Carnival, Peta Andersen, of literary blog ILBNH, considers mobile’s impact on the book world, as Penguin examines how people might read books on tablet computers, such as Apple’s new iPad.
• Next to casinos (which, together with all gaming companies, are getting into mobile in a big way) as Mobyaffiliates’ James Coops (also of MJelly fame) has posted an information-packed guide to affiliate marketing and the mobile casino sector.
• If health is your thing, then the 3G Doctor, David Doherty, has provided an extensive clinic of everything mHealth related from Mobile World Congress, as he points out that this year was the first time MWC has given mHealth a proper billing.
• And finally to banking, where Jose Colucci at the Mobile Strategy blog, points out that mobile banking will only succeed through partnerships with other service providers – a great opportunity to mobile tech specialists to hit the big time.

 Sticking with money matters, here are a trio of interesting posts on mobile payments.

• One of the hurdles to contactless payment by mobile is the lack of devices that support Near Field Communication (NFC) in many countries, including the USA and Canada. David Eads at Mobile Strategy Partners considers the impact of NFC Stickers, as a big trial kicks off in Canada.
• Barbara Ballard at Little Springs Design provides a good backgrounder as she examines: making micropayments work.
• The interrelationship between mobile advertising and mobile payments is the subject of Raj Singh’s blog as he ponders cloud-based payment systems (such as PayPal), payment details on the device or the possibility that paid-for content providers, such as Apple’s iTunes, might want to become the next mobile wallet.

Meet the consumer:

• This week at Communities Dominate Brands, Tomi Ahonen turns his attention to data and how much more mobile phones tell marketers about consumers than any other media.

Going mobile – two views:

•  Good news: lots of companies going mobile; bad news: lots of mobile services with no purpose or value – so concludes Indigo 102’s Martin Wilson in Why run before you walk?. Who could he be referring to? We need to know.
• A dramatic rise in mobile boarding passes in the past year has David Murphy at Mobile Marketing Magazine (in his Carnival debut) pondering whether this is the first of many stories with eye-watering percentage growth rates to come.

Are App developers getting a raw deal from App Stores?

• What developers want and why by MSearchGroove’s Peggy Anne Salz considers how App Stores can provide a better service to developers, with a feedback mechanism, more say in how apps are marketed etc… oh, and they want to make some money, please.

Sticking with the techie stuff:

• Noting that the iPad continues Apple’s tradition of releasing mobile devices that do not support Flash, Francisco Kattan offers his hypothesis on: why Steve Jobs will never put Adobe Flash on iPhone OS devices.
  Is Windows Phone 7, launched at MWC, the culmination of, or did it replace Microsoft’s long-awaited Windows Mobile 7? At Mopocket, Mordy Gilden investigates in Photon- the Windows Mobile UI that could have been.
• Ajit Jaokar of Open Gardens is researching mobile cloud computing – “Anywhere anytime secure data access” – and associated security issues. He offers a definition, resources and invites contributions.

And because no week would be complete without a piece on the Google/Apple War:

•  Cian O Sullivan of GoMo News ponders Google’s recently-awarded location-based advertising patents. (Note these patents were filed seven years ago).

There’s no best blog this week, instead here is a question for the week:

• Should a mobile handset be used for making calls? An overheard conversation in a restaurant encourages Tsahi Levent-Levi to raise the question.

Thanks to all of the mobilists for the brimming inbox of excellent submissions this week. Sorry to all of those who didn’t make it in this time – due to the number of submissions, we were forced to play by the rules, i.e. no blogs more than a week old and to limit the number of Apple-fan blogs.

 Mobilists old and new make sure you submit your blog (mobilists@googlemail.com) for Carnival #215 hosted at MJelly.

If you missed it please also see Carnival #213 over at WIP.

Published 2nd March

The DUST has settled from this 2010’s mighty industry event – Mobile World Congress (MWC) in Barcelona – yet a FRENETIC interest in EVERYTHING mobile remains. Mobile the HOT topic and a MUST have.

For many ORGANISATIONS it almost seems that if mobile is not on the AGENDA someone is going to be held RESPONSIBLE. The result we are seeing a STREAM of services launching – many with no real PURPOSE, offering no real VALUE.

Rather than ADDING to the ecosystem they are actually potentially causing DAMAGE. They are turning consumers AWAY and WASTING large sums of money in the process. The low RETENTION levels amongst users of applications and services [reported by Flurry analytics] testament.

ORGANISATIONS need to understand that mobile is VERY different. The DEVICE; personal, a communication medium, lifestyle orientated….CONSUMER; perceives to be paying, never reads a manual, typically wants something, patience and tolerance is far less.

STRATEGY needs to be returned to the forefront. Forget the COOL, the PLATFORM, the TECHNOLOGY, the DEVICE – they come later, at the point of EXECUTION. The important part is to get the OFFER, the consumer PROPOSITION right FIRST.

It APPEARS many organisations have be SUBSUMED by the technology and are SUFFERING as a result. For many they NEED to get SPECIALISTS in to help understand the channel and HOW they can deliver VALUE. To capitalise in the FIXED-ONLINE environment most have developed SPECIALIST teams – mobile should be NO different.

Mobile has the potential to be a far BIGGER opportunity for many organisations than the fixed-online environment REPRESENTS, even today. For those that WANT to succeed they should SEEK support from those that really UNDERSTAND the channel.

Image from from Cobrasoft at Stock.xchng

Published 23rd February

Good review from Strand Consult on MWC 2010.

Once again over 49,000 people with a unique relationship to the mobile industry were gathered in Barcelona for the Mobile World Congress. There is no doubt that the conference has been a great success – when you put that many people in such a small space, from an industry that is so dynamic, the result will be a very special energy that cannot be described, but needs to be experienced.

The Mobile World Congress has many traditions and the combination of gaining industry knowledge, the possibility of meeting colleagues from all over the world, and the social events, results in almost all participants leaving Barcelona much wiser, much more tired and with a great many opportunities to develop and expand their business.

The Leadership Summit

The leadership Summit is held each year. This is where both operators and politicians meet and talk about the challenges within the industry. This year there was a great deal of focus on the Telco industry and how the industry can help the environment. One thing that was debated is why the industry was not visible at all at COP15 in Copenhagen? From Strand Consult’s point of view here in Copenhagen, we can only agree with the criticism.

Despite the fact that we published a number of research notes about this subject: http://www.strandreports.com/sw3722.asp and tried to get some key people within the GSMA to act before COP15, we were unsuccessful in getting the industry to participate at COP15. It is really embarrassing that the one industry in the whole world that can help the environment the most was totally invisible at COP15.

We hope that the GSMA has learned something from this and that they will in the future use more energy on making political leaders aware about the fact that the Telco industry is the industry that can help the environment the most – we have the key to solving many of the world’s problems.

A year with many exciting product announcements – and then there was Nokia…

Every year many exciting new products are announced and 2010 was no exception. We saw many new devices, new OS’s, lots of new services and a wide selection of news about more less advanced hardware.

One company that disappointed this year was Nokia. Not only did they choose to move their chaotic press meeting to ONCE the Institute for the Blind, their event was split into two parts; the launch of Meego and a repetition of the many product announcements from Nokia during the past year.

By launching Meego in cooperation with Intel, it appears that Nokia is trying to create increased volume for their Linux platform and QT – their service platform. One could say that Nokia wants to function on many devices with the same platform, so it needs to be possible to develop services that function across these platforms.

There is nothing wrong with Nokia’s strategy. They have understood the only way to beat Microsoft, Google and Apple is to do it through volume – get the platform to more devices, “However, they have not realized that it’s not about getting on many platforms, it’s about making something the consumer likes. Bees don’t head for the biggest garden; they head for the most beautiful flowers”

Looking through the other announcements from Nokia during the MWC, the biggest news was that Nokia actually had almost nothing to announce. When you take into consideration the size and position of Nokia in this industry and then take a look at how they handled MWC 2010, the word that springs to mind is embarrassing. It is impressive that Nokia had the guts to make such a spectacle of themselves in front of that many industry employees – 2010 was the year when Nokia lost a great deal of their street respect.

Some people would claim that despite the fact that Nokia will sell 550 million phones in 2010, they are in fact in the middle of a deep crisis – not a financial crisis, but a management crisis. A wise man asked me what it would take to get Nokia back on track and my answer was that Nokia needs a man like Tom Ford – someone who is not Finnish. Perhaps many of you do not know Tom Ford: http://en.wikipedia.org/wiki/Tom_Ford#Gucci_creative_director_.281994.E2.80.932004.29

Tom Ford was employed in 1994 to revitalise Gucci and was so successful that their revenue increased by 90% in just the first year.

Just like the fashion industry, Nokia needs people that can sell tickets like Steve Jobs, Eric Schmidt, Steve Ballmer etc.

The conference – the path to knowledge, entertainment and…

The speakers at this year’s conference once again ranged from very exciting to rather boring. On the whole, most people could learn a great deal from the conference, but some of the speakers ought to have checked their predecessors’ presentations before addressing this year’s almost 4000 participants.

This year, Vodafone’s CEO Vittorio Colao spoke, replacing Arun Sarin who spoke 2 years ago. Strand Consult is well-known for stating our opinion and we were probably a little tough on Arun Sarin 3 years ago when we accused him of not being competent enough to run Vodafone. http://www.strandreports.com/sw2513.asp. On the other hand we could see that he was not here this year and someone else was on the podium. Like his predecessor, Vittorio Colao did not speak the truth about what Vodafone should really do, but instead said what he believed the stock market would like to hear about Vodafone’s plans. It is amazing how many people in this industry are focused on stating what they believe the financial analysts would like to hear, rather than creating results that would please their shareholders. Vittorio Colao’s presentation was fine, but it didn’t touch on the massive challenges that Vodafone is currently facing in a number of countries including the UK, Germany, India, Spain etc etc.

We also heard Ben Verwaayen, CEO of Alcatel-Lucent. He was one of many that complained about the absence of the industry at COP15. He gave a fine presentation, but also appeared to be a man in charge of a market player that is at the top of the list of companies that ought to consolidate. At the same time he is boss of the company that is finding it difficult to get an American and French organisation to converge. In our opinion, ALU is a company with many engaged and competent employees, but at the same time a company who most probably are their own largest competitor.

The presentation from Mike Lazaridis from RIM in Canada was one of the presentations that should not have been on the programme. There is no doubt that RIM is doing well, but Mike Lazaridis’ presentation was so US-centric that it was embarrassing. The man on the podium knew a great deal about the North American market, but clearly documented that his knowledge about the rest of the world’s 4 billion mobile customers is very limited. We believe that this attitude is probably the reason why Blackberry is having difficulty on a number of markets in amongst other places Europe.

One of the recurring speakers at the conference is Rob Conway. Last year he focused on the universal charger, but this year his focus moved away from the environment and over to education with the slogan “One goal education for all”. There is no doubt that this goal is important, on the other hand we have difficulty seeing how the mobile industry can contribute in this area apart from being charitable in selected countries. We do not believe that M-learning will solve the current global problem that many children do not learn to read, write and add and subtract.

Education is handled by building schools, having teachers that can teach and ensuring parents have the ability and willingness to send their children to school to learn. We have difficulty understanding how mobile telephones and M-learning can solve the massive problems that many countries have in this area and we believe the mobile industry can primarily help by sponsoring projects and by helping draw attention to a very large problem.

At the same time it was fantastic seeing her Majesty Queen Rania Al Abdullah of Jordan come and speak of her visions regarding http://www.join1goal.org . There is no doubt that Queen Rania  Al Abdullah really wants to push things forward, her passion and engagement could be felt right at the back of the hall. On the other hand there is a certain risk that she will end up being the exponent of the GSMA’s share of a campaign that will not reach much further than to a press release during MWC. We sincerely hope that the GSMA’s share in ”One goal Education for all ”   bears fruit for those that currently do not have access to basic education around the world.

This year’s best presentation – indeed one of the best presentations in many years – was from Google’s CEO Eric Schmidt, who together with a number of his employees elegantly and humbly told a bit about Google’s involvement in the mobile industry. This message could be divided into three parts, mobile first, Google is the mobile operator’s best friend and Google’s many initiatives will result in operators having many future business opportunities.

Strand Consult is one of the companies that have a slightly sceptical view regarding Google. We believe that Google has its own agenda regarding the broadband market – which is to ensure that as many people as possible invest as much money as possible in broadband, whereby competition will become so tough that prices become extremely low. Simply put, we believe that Google would prefer that operators are dumb pipes that only deliver connectivity to their customers.

Again this year, John Strand asked the questions that are in many people’s minds, but that few actually ask when facing an industry leader like Eric Schmidt; whether Google would prefer operators to be dumb pipes and whether Google is willing to invest in infrastructure? Eric Schmidt deserves respect for holding his own in the middle of the lion’s den and answering these questions. He answered that on the one hand Google did not want to interfere in the operator’s business models, but that they did not perceive operators as dumb pipes and that Google does not want to invest in infrastructure.

Some may say that those answers were predictable, on the other hand there was no doubt that Google has a very clear strategy and that anybody who thinks that Google will invest in infrastructure is not naïve – he is stupid. You can see Eric Schmidt’s presentation here: http://www.mobileworldlive.com/?login=1&ret=/tv.asp?id=183 and decide for yourself what Google thinks about those that are currently making enormous investments in our society.

The presentation by Ho Soo Lee from Samsung was exciting. You have to respect a telephone manufacturer that sells 220 million phones a year and there is no doubt that Bada is a dark horse on the Smartphone market. The fact that Samsung sells many mobile phones and has a good platform means that it is up to Samsung themselves to decide how successful Bada will become on the Smartphone market.

Nokia’s dream of Meego running on many platforms is fine, on the other hand Samsung already manufacturers many devices including TVs, PCs, mobiles and even fridges. If future devices are going to run on the same platform, then Samsung and Sony are in a significantly stronger starting position than Nokia.

 The war over the mobile operating system

At the MWC, many people were talking about the OS war. Here at Strand Consult we do not believe there is an OS war, not least because the Smartphone market is only 15% of the total handset market. All we are currently seeing is how the price of hardware in mobile phones has been decreasing, which it will continue to do. In practice this means that you can produce a Smartphone for around 100 USD. The result is the market for mobile phones with advanced operating systems is exploding – but not due to an increased customer demand for Smartphone’s, but because the handset manufacturers are shipping inexpensive phones with an OS replacement.

Nokia is replacing series 40 with Symbian, Samsung is replacing their OS with Bada and a market player like SonyEricsson is launching X10 and X10 Mini that resembles the W995 but where the X10 Mini runs the Android platform. This is resulting in that many of last year’s mobile phones that were categorised as feature phones, will be Smartphone’s next year – and solely due to the handset manufacturers’ OS replacement.

Many market players want to have the dominating OS, but right now the deciding factor is who has the greatest distribution power. This will result in either the company with the largest volume from their own production (Nokia, Apple and Samsung) or the company with most partners (Android and Windows Mobile) winning in the long term.

But right now there is only one winner – and that is the consumer – because none of the market players (except Nokia) are large enough to reach anything close to a dominating position. In the long term there will most probably be two dominating OS, perhaps Symbian, possibly Android, or someone completely different. We believe we will see a fragmented market with 10-12 OS running on the many devices being sold around the world.

On the services side there was a great deal of talk about Apps and we can only refer to our research note about App Stores www.strandreports.com/sw3729.asp. We believe that this market is far more complex and not just about the number of Apps available, but about having the correct services in demand by customers. This was one of the central subjects in Hugh Bradlow from Telstra’s presentation and it was refreshing to hear a man that viewed operators as a shopping centre and thereby using the comparison that Strand Consult has been using for many years when describing how we believe mobile operators should do business in the future.

During his presentation, Hugh Bradlow touched on the many other challenges we are facing, including the challenges in connection with ensuring standardisation of handset APIs, which will have a central role on the future services market. There is no doubt that Telstra is focused on the more complex real world, than the world that many simply describe as a “war” between a number of OS and some App Stores.

 The conferences many presentations showed that the future handset and services market is far more complex than often described by the media. Just the significance of OneAPI which we described in our report http://www.strandreports.com/sw4045.asp requires a great deal of attention from the whole industry and service providers during the coming years.

The GSMA announced that 24 operators will cooperate on a wholesale model for Apps. The problem is that they could not announce when they would actually do this or what business model they would use. In our experience this looks very similar to the many press releases and we have seen through the years that never get past the drawing board. We can’t help remembering http://www.omtp.org, that was launched in 2004 and that never became the success predicted by many at the time.

Mobile broadband – higher speeds and lower prices

The mobile broadband market is exploding and it is not just the number of customers that is exploding, but also the connection speed they are being offered. This year Huawei demonstrated their 600 Mb mobile broadband and Ericsson demonstrated 1 GB. These are of course laboratory experiments using LTE, but do indicate the direction of the mobile broadband market.

There was a great deal of focus at the conference on the many new network devices that function via mobile operators, but unfortunately too little focus on the significance of these devices for operators if the radio transmitter in some of these devices is the same quality as in the iPhone. We believe one of the largest challenges that operators face is that there will be numerous new types of devices on the market in the future built into machines and gadgets, and that there is a significant risk that operators will experience large network problems if the radio malfunctions in even a small number of these devices.

There was also some talk about femto cells (UMA is dead) and many of the market players in the femto cell area now admit that femto cells is not something you give to all broadband customers, but rather a tool that can help solve certain types of indoor courage problems in selected areas. The findings that emerged are the same as the findings we published in our report about the mobile broadband market http://www.strandreports.com/sw3293.asp.

There was unfortunately far too little focus on how to add value on top of the mobile broadband products that operators are selling at increasingly cheaper prices. Where will they find new revenue streams and what is going to create growth and help change operators from becoming dumb pipes to intelligent pipes? We believe that OneAPI is one of many answers to that question and we hope that the GSMA and the operators involved can increase the number of APIs at a faster pace than we have seen so far.

In our report http://www.strandreports.com/sw4045.asp we have described how we see the mobile world. Let’s see what happens at next years MWC – we think we will see a much greater focus on OneAPI.

The bottom line is…

All in all it has been a very exciting week in Barcelona and many of us left a little more confused than we were when we arrived – on the other hand that is why we keep coming back to the MWC. We believe that 2010 most probably will be remembered for being one of the years with the least slide-ware and most focus on the world we live in and the market our customers are a part of.

We believe that the financial crisis has made many people focus on areas with guaranteed cash flow and where a serious effort can make a difference. We hope that everyone who visited Barcelona had as much fun and excitement as we did and we would like to take this opportunity to send a special thanks to all those that hosted a number of exciting and beneficial social evening events. The MWC is not only the place to gather knowledge, but also to meet exciting people in relaxed surroundings.

The report: http://www.strandreports.dk/sw4121.asp

Published 5th February

Key for Traditional media owners to succeed in THE NEW NEW Media world is to determine their unique strenghts and essential characteristics and then focus.

If the relevant organisations can understand their unique strengths and the essential characteristics to their offer then there is the possibility of mapping a sustainable future. Digital has changed the landscape for good; time is fast ticking away for the traditional media owners to seriously get on board. (Post: The changing face of media).

Take newspaper publishers. For a long time, newspapers have not been only about “news”; nor have they been only on paper. They have been about selection and quality content; they have signposted other sources of information.

For newspapers, there are certain areas where each has strengths. Focus needs to be brought firmly back to these strengths, other areas stimulating wider engagement, discovery or back-fill.

The new digital technologies can and should empower individual journalists, helping redefine what a journalist is and what skills they need – and which consumers can support in the role. (Post: Changing shape of content). Responsibility for value needs to pass to the writer, as the new sales (or preferred ‘engagement’) agents they need to be tasked to deliver the returns.

Different models can and will co-exist, paywalls potentially one of them. The key will be to deliver content that has a perceived value, achieves distribution and engagement. Then the revenue can flow.

Take directory publishers. For a long time directories have not just been about “business listings”, nor have they been only on paper. They have been about comprehensive and quality local content; they have provided guidance on selecting the purchase.

For directory publishers, there are certain areas where they have strengths. Again focus needs to be brought firmly back to these strengths, other elements and features supporting the purchase decision, consumer action or discovery and engagement.

Different models can and will co-exist. The key will be to deliver a tangible value to the businesses or organisation spending money, to enhance their potential to be discovered, increase sales or support consumer interaction.

The challenges facing both are not dissimilar.

To succeed, traditional media owners need to rethink radically not only their business models, but also how they manage their businesses; they need to overhaul outdated organisational structures; they need to consider how they relate to all their employees, to third-party providers of content and services, and to individuals with whom they may have no contractual arrangement whatsoever.

Most crucially, they need to rethink how they relate to their communities of readers, subscribers, and users, when they know next to nothing about members of their digital audience. They need to identify their most loyal users and then work harder to meet their individual needs.

First instance, they need to embrace THE NEW NEW Media world – many still have not. They need to get people involved that understand the new world and importantly what it is going to take to transform their organisations. The Telegraph Media Group (TMG) is one of the traditional players to publically recognise that a radical shift is required.

Under the guidance of editor-in-chief Will Lewis, TMG are transfering the digital parts of the old organisition into a new entrepreneurial digital venture – dubbed the Euston Project -  in order to “capitalise on cutting edge ideas” and “drive new revenue streams”. Their target clearly stated as a move to turn TMG, or a significant chunk of it, from a media company into a digital company. For many an approach of isolating ’digital’ is what is really going to be required to potentially succeed – others should follow this lead.

One thing that is for sure for traditional media owners to succeed, it is going to be a tough and long journey – but they need to get moving.

 At Indigo102 we can support in helping develop digital strategy and in particular define how mobile can play a valuable part, and then helping to deliver - we demonstrate the ways you can get better results without necessarily investing more.

(Image: binaural-beat-digital-drug by digitalbob8 from flickr.com) 

Published 14th January

The frenzy has started as organisations jostle for a position in the mobile application hall of fame – ‘Local’ is shaping up to be one of the most hotly contested areas. What is it really going to take to make a mark and how ‘Local’ can you go?

The Apple strap-line resonates – “There is an App for that” – however creating an application does not mean a business will prevail. Many organisations seem to overlook the value part of the process – how are they going to deliver a sustainable model? Not one that relies heavily on investor generosity.

Who is going to ‘use’ the application and who is going to give you the ‘money’? Sounds obvious until you look to some of the fixed online giants – Facebook, Twitter and YouTube – who have huge usage, amazing associated price tags, but have yet to find a way to get anyone to give them real money. All now seek the revenue model –  a challenge as none want to upset the value chain that has given them their success. Making money would have been a far easier process if it had been defined from the outset.

In terms of ‘Local’ this should be obvious – consumers will use and businesses will give money. (If only life was that simple!)

Need for consumers

Setting distribution and marketing aside businesses need to focus on the offer. To get a consumer to use an application it has to offer something they actually want - utility is essential. Without utility a consumer will simply not come back. Analytics firm Flurry recently reported that on average a consumer uses a single mobile application an impressive 6.7 times a week, but also that over 70% of consumers stop using an application after just 60 days. Retention levels of around 30% are clearly not ideal when looking to build a sustainable business. This is especially true when you consider the application environment is becoming ever more crowded.

In a post recently I discussed how the outcome of the service interaction is so important – the consumer action is usually why they came. Recognising ‘what’ a consumer wants to do? is one of the most important components to deliver against. For Local the ‘what’ – call, book, buy, visit or simply provide information – is so important. A successful outcome will encourage a consumer to come back.

Context of ‘Local’

A critical mass of content is essential. A local service becomes useful when it has mass market appeal. Whether it is linked to a single street, district, town or city is largely irrelevant. A shopping guide needs all the stores, not just one or two, a Social guide all the bars and clubs. A core and consistent level of content is a must. Local information typically means a fixed location, building or business. The best historical players in this space are the Yellow Pages publishers as they have the basic details of all businesses – name, address and telephone number. Their challenge is that there are no attributes linked, reviews and comments, images – simply no life. 

It is possible to create or obtain core content, you just need to factor in cost and consistency. As this will form the basis of the Local offer it is important to get it right – otherwise consumers will simply not come back.

How ‘Local’ can you go?

Mobile and Local, two scenarios spring to mind – ‘where I am now’ or ‘where I am going to be’. A common mistake that many location based services make is to assume your current location is important – often it is not. Mobile is about ‘mobile’, it is about roaming. Understanding location is a key part in any service offering as it helps define what is relevant and what is not. This is far more challenging than many believe.

Local at a micro level means content – very rich content – which can be very challenging to deliver and scale. Local at a macro level – comprehensive content – can be challenging to deliver added value and differentiation. The credibility of a Local service will be judged on an area that a consumer is familiar - if positive trust will be instilled. To deliver a truly compelling and encompassing local service from scratch is likely to be a tall order for any organisation. Partnerships that add value and enhance the offer can and should play a valuable role. Whatever the offer, the service needs to evolve and do so in a timely manner to keep consumer interest and engagement. Strategy should reflect all these elements.

Show me the money

Once Usage has climbed to great heights attempts to deliver commercial value begin. It is unlikely that this will come from Users – they have become very reluctant to pay for anything in the digital environment – so businesses become a focal point. Commercial development needs to support delivering an actual return to a business, ideally with no impact on the application utility or usability.

Seeking money from businesses is a challenge and it is a very crowded market and a difficult one to gain a foothold in as there are very established players. Large businesses deal through agencies, small businesses don’t have the time. There are ways the key is to know how to use them for advantage.

Published 12th January

Retention of users and usage frequency will become far more important for mobile services and should be central to mobile strategy for many organisations as they start to attempt to deliver real value from mobile.  

Last week I posted about the shocking reality of the retention levels of Apple and Android Applications. Analytics company Flurry recently reporting that some 70% of users do not return to a service after just 60 days. Despite the poor retention level, those that do continue to use services average a very respectable frequency of 6.7 uses per week -  showing loyalty does pay.

The retention figure indicates applications have in effect degraded into a series of “one-off offers”. If this continues, for many organisations the numbers will simply not add up to a sustainable business model. And to re-engage a consumer for a second time is infinitely harder and far more costly.

Why is this happening? I believe this is due to the continued attention around platforms - iPhone, Android, Bada, Microsoft etc. – is distracting many organisations. To the extent that delivering an Application has seemingly become more important than the actual offer. The result is many services fail to deliver to consumer expectation and their interest is rapidly lost.

This poses the question - If only service providers could increase retention levels and maintain frequency of usage?

This is achievable but requires a slightly different thought process.

The reason consumers return to a service is because it offers something that is useful. Typically a consumer when mobile wants something, usually now – patience and tolerance is reduced. The outcome of the service interaction is so important – the consumer action is more than likely why they came in the first place. Recognise ‘what’ a consumer wants to do? This is one of the most important components to deliver against.   

A second area – determine ’why’ the offer is relevant to ensure the service delivers. Often more is less, just because elements flourish in a fixed online environment does not mean they will in mobile. The offering should be defined strategically and designed to evolve, this will support ongoing engagement and retention.  

Once the ‘what’ and ‘why’  are defined the ‘how’ to deliver  becomes important - an enabler that brings a service to life. The ability to deliver services to your audience; the format of those services, the platforms they operate, the priority and scheduling of development, the investment required, then become part of the mobile strategy jigsaw.

Reversing the process in this way – what, why and then how – ensures a focus on the consumer, rather than become embroiled in the ‘cool’ factor trap of mobile that we see many fall in to today. Get this right and improved retention levels and usage will result. This will in turn support the delivery of real value.

Published 5th January

Apple has announced that its App Store has now generated more than three billion downloads. News flying around about the partnership of Comscore and Flurry has brought something quite alarming into the open; iPhone and Android Applications for many organisations actually today represent a very poor investment.

Why? Retention of users to iPhone and Android applications appears to be far worse than many would expect – many seemingly don’t get far past the 30 day or one month mark. In the stats published by Flurry, after 2 months an average of just 32% of applications are still being used, after 3 months just 25%. The worst performing category is listed as ‘lifestyle’ with a retention rate of just 5% after 3 months. (See table below).

This really should not be the case. It raises some serious issues. Clearly many are failing to recognise the ‘mobile’ element of the service offering; understand the core principles of mobile and dynamics of digital. Services are being brought to the market with no strategic view towards evolution and ongoing consumer engagement.

For the organisations that we support this level of consumer retention would simply not be acceptable. Organisations typically spending 000’s of dollars on services wish to see a level of return on their investment. For most these returns will not be delivered in days, but weeks and years. Many want to establish sustainable business models, not here today gone tomorrow plays.

Flurry collects mobile application data from approximately two out of every three iPhone and Android devices. Each month, the company aggregates application usage data from over 1 billion end-user sessions across more than 50 million unique handsets from more than 200 countries. Over 10,000 developers have chosen to integrate Flurry Analytics within their applications.

A releated post: Mobile strategy – iPhone should factor but certainly not dominate.

Published 18th December

I earlier came across an article titled ‘Is 2010 going to be the year of the greatest battle yet, Android v iPhone?’. I have taken the decision not to share as in short, No it is not!

It is amazing to see so many supposed intelligent people being taken in by the iPhone and now the Android fantasy. A fantasy is exactly what it is – an inability to reflect the current market and a complete speculation about the future.  RIM, Nokia and Symbian going to go away and the world is going to be iPhone and Android – based on what evidence?

Sadly these fantasies seem to have been cemented by individuals that have invested time, effort or money into iPhone/Android, or have had a poor experience with their rivals in the past.

Looking at the mMetrics statistics for the US is quite revealing. In October 2009, Android devices have less than 0.5% market share and the iPhone around 3.7%. In other countries the story is similar. Neither have dominant positions. As I have suggested before, Mobile strategy – iPhone should factor but certainly not dominate, considering actual market share the iPhone receives a disproportionate amount of attention from the media, mobile industry and businesses alike. To counter those that will now come out and state that iPhone users dominate the mobile web usage, by volume of pages yes but by numbers of users no. According to AT&T, 4% of their iPhone users account for almost 60% of their total iPhone mobile web usage. In real terms just 350,000 are therefore significant users, out of a US mobile installed base of some 260 million that is not particularly impressive.

What is for certain is that both Apple and Google will make a further in road in to the mobile space in 2010 and onwards. But is the battle going to be focused only on these two. Certainly not! The way Google is reportedly going to be approaching the market, directly selling to consumers, in my view can only play into one organisation’s hands. If a consumer was to start to accept the real cost of a mobile device, without any subsidies or at least not linked to a mobile operator, this will change the playing field. The door could be firmly open to an organisation like Microsoft. Without question they have some serious work to do to get their Windows Mobile platform fit for purpose. But simply loosening the controlling grip of the mobile operators on the type of devices and distribution should play right in to the hands of an organisation such as Microsoft.  

Oh and Nokia, RIM and others are sure not to lie down and sit back and watch from the sidelines. So 2010 is unlikely to be a two horse race.