Last year, every consumer brand seemed to be building an iPhone application. Towards the end of 2009, they began to say, 'We have an iPhone application. Now what?" For many, the answer seems to be "mobile Web." The open question is "how." I'll be publishing an in-depth study on how with my colleague Brian Walker, going into more depth on the implications of commerce for mobile Web builds. One of the strategic questions that must be answered first is, "do I build a mobile Web site for all devices (= long tail)?" or "do I have a more tiered approach with custom development for the handful of devices (short tail) which drive most of my traffic and a more automated approach for all the other devices (long tail)?" Good questions.
There are some good sources of information online. AdMob and Millennial Media publish monthly reports based on ad requests they see. Netbiscuits just published a white paper with a lot of good data.
First, how long is the long tail? According to the Netbiscuits white paper, it was 2,496 devices in February 2010. How short is the short tail (= 50% of the traffic)? In February 2010, only 12 devices. What is the number one device in each report? Yes, the iPhone -- or now iOS 4 platform. In terms of global traffic, Netbiscuits put Apple first with 36% of traffic while AdMob's numbers for Apple were a bit lower at 33%.
Most of the news this morning at WWDC was around iPhone 4 and iOS 4. Will leave the new device and platform play to my colleague Charles Golvin. I can't wait to get one of the new phones . . . very slick as it looks like a mini iPad in a modified format.
iAd . . . $60M committed for the second half of 2010. Initial advertisers include: AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever, and The Walt Disney Studios.
Pretty impressive. How do they get to $60M? Rumor is that the minimum buy-in is $1M, but it goes up from there. They claim to have 50% of mobile ad market share according to a J.P. Morgan study. I think it is a bold claim unless this is purely the media spend and doesn't include creative. Our number is comparable -- but without creative. Advertisers can count on the buzz surrounding iAd's launch on July 1. That alone may justify the initial buy. These initial advertisers are a smart bunch. A few million dollars isn't much to any one of them, but these are sizeable buys for mobile.
I think there are a lot of interesting questions to be answered. Many will be "wait and see," but here's my wishlist:
- What do I get for $1M+ in mobile advertising? Am I buying creative, development, ads, and analytics?
- How much targeting do I get?
- Is it performance-based? Or CPMs?
- What will work well on the i OS4 devices? Branding? Or, will the ads leverage context -- the context of how, where, and when I use these devices? Will the ads drive me to online purchases or into a nearby store to make a purchase?
- How much control do I get over where my ads are placed?
I get this question a lot from clients, and I saw a good example today so . . . I thought I'd share. How should we promote our services? Should we use TV? Online? Banner ads on cell phones? What is most effective? The high-level answer is "yes." Most of our clients are pursuing using their existing media -- whether it is ATMs in the case of Bank of America, the Web site for Walgreens, or TV ads by ESPN. Many are also using banner ads on the devices with which their devices are compatible. For example, they buy iPhone ads because the audience is right, and they can connect into the App Store on the application page.
Was watching ESPN this morning and saw a commercial advertising mobile TV in preparation for the World Cup.
What they did right and what I liked:
1) Used their existing media (TV) to promote mobile services. They also used an "event" (= World Cup) as a catalyst to promote their mobile TV service. With the World Cup being played in South Africa, there will be games at night, during the work day, and at many other times when people are unable to sit in front of their TVs.
2) The ad on TV gave the viewer context. "When would I use this application?" "Where would I use this application?" The TV ad shows the person switching on mobile video when he gets out of bed, is in the bathroom brushing his teeth, parking his car, and at work. They also demonstrate the quality of the application with zoomed-in views of the video service.
When the Apple iPhone App Store launched a couple of years ago, we saw a flurry of marketing applications released. Some were exceptional. Many were average. iPhone apps were "hot," and consumer brands rushed to build them. They were somewhat expensive with most of the return based on press mentions and buzz. Brands felt that the perception of tech-savviness generated by the presence of an iPhone application would enhance their brand. I think they were right, but soon consumers began to expect iPhone applications. Initally, the iPhone didn't offer much reach. The iPod touch helped build the numbers. Apple's most recent announcement put total sales at over 80 million. Pretty good.
Two years ago, consumers mostly used their cell phones for communication. They also listened to some music and got a bit of weather, traffic and news. Now ... they do just about anything. They shop. They research products. They blog. They look up recipes. Are they doing so in large numbers? No, not yet. Consumers are a lot more likely to do more complex tasks on smartphones like the iPhone. The stakes are much higher for marketers - the potential return is higher with the ability to generate real leads and sales.
Here we are in 2010. Apple recently announced sales of 1 million iPads. Forrester believes that number will at least triple by year end. Apple has launched the iAd platform and promised consumers an engaging media experience that will include advertising, but not be disrupted by it. iAd includes the iPhone platform. iPads add another dimension or canvas that will unleash advertiser/agency creativity. We are now seeing our first marketing (first perhaps) and commerce (secondary?) applications. They are engaging. They offer rich media. They are interactive. They offer opportunities to link to videos, music, social networking sites, and shopping.
I just returned home from a trip to Bangkok and Bhutan. Civil unrest in Bangkok kept me from wandering as much as I would have liked. I had a lot of opportunity in Bhutan, however, to wander about and talk to people. As a bit of a background, Bhutan is a land-locked country bordered mostly by India to the south and China to the north. Much of the northern portion where we traveled is covered by mountains, so wireless is the primary infrastructure for communications. The average annual income is about $1,300, so they are not a wealthy nation. They've only been allowed access to TV and the Internet for about 10 years.
A consumer brand might argue that in a country where the annual income is only $1,300 and little infrastructure exists for the import of goods, there isn't much point in marketing -- let alone a digital marketing strategy that includes mobile. Countries like these are opening up, however, and their wealth is growing. Personal care products and Coca-Cola was on the shelves in most of the small shops we passed. In a country where cell phones certainly outnumber PCs and cellular connections (even if prepaid) must outnumber fixed, mobile has to be part of the mix.
Teenagers had cell phones. One of my guides had a Nokia N73 and the other had a Nokia Xpress Music. These aren't dumb or cheap text-only phones. They have high-resolution screens and are capable of music, videos and Internet. (My guide was checking and posting to Facebook DAILY.) Monks had cell phones. Women selling vegetables in open-air markets had cell phones.
I've just had the chance in the past few hours to really play with the device. I find myself smiling each time a new SMS bubble pops up. I love it. I also like seeing my friends' faces on my phone. I love being able to navigate my content and messages via my friends. Loved how easy it was to set up my email, Facebook, and Twitter. Packaging rocks ... and is recyclable. What is subtle in this device, in my opinion, is how intuitive the UI is. The UI looks and feels similar to others I have seen, but I was able to pick up this phone and use it without reading the instructions.
My colleague Charles Golvin will provide a more in-depth analysis of the device itself.
From a social networking/media perspective, the KIN is a good start, but I hope to see more with upcoming releases, especially around helping people build their social graph. I don't put this burden on Microsoft alone, but on the industry and all handset manufacturers. The content we create needs more meta data or labels. We need logic to mesh this content together and navigate through it. It's great that I can navigate to my friends' status and messages through my contacts (and KIN's UI is a lot of fun). I also want to navigate through my photos and location. Location should be table stakes for photo/status/review (restaurant/bar) content and the logic shouldn't flow in just one direction. Based on my location (simple location or map), I want to see who is nearby or what restaurants my friends liked. Navigating through my friends, I want to see what restaurants they liked. I want to group photos by location. I want to group photos by friends. These are just a few examples. With every product and service developed, one can't have everything. There are cost, time and design trade-offs. I completely understand that the KIN and DROID and others couldn't get everything done in v1.0. I look forward to the next version.
I stopped down to RIM's WES (5,000 enterprise mobile pros, ISVs, and carriers) conference in Orlando yesterday. The company's been taking heat lately from Wall Street analysts who seem more interested in watching iPhones rise than tracking BlackBerry units shipped. What you as an information & knowledge management professional should care about is if RIM will be a strong partner in the future. At the conference, I saw six things that give me great confidence that RIM is future-proofing companies' investments in the BlackBerry platform:
BES Express is basic BES for $0. And it's good enough for most employees in most industries. RIM says it's taking off, with 55,000 downloads of the server software since March. And according to RIM, it's designed to scale out to enterprise levels.
BlackBerry 6 is the OS that you've been waiting for. While the mobile world was going WebKit browser, RIM was still Java-only. They've fixed that in the next version of the operating system, due out in Q3 2010. See the video clip for a sneak peak: http://www.youtube.com/watch?v=DlO8KMv7Bx4. It has a much better browser, better touchscreen features, and a cleaner interface. And with RIM's participation in Adobe's open screens initiative, I expect to see Flash support as well, something iPhone doesn't have.
The Pearl 3G and a new Bold prove that RIM understands fashion and usability. Frankly, these devices are gorgeous. I've always loved the Pearl, but I got tired of the Edge network. With the Pearl 3G, and its optical track pad, 3G, Wi-Fi, better screen, it's a beauty with brains. And it fits into my pocket in a way that the iPhone just doesn't.
RIM's carrier-focus means it will get the attention that you need in every market. 175 carriers. Enough said.
I had the opportunity to go to the KIN launch today. My colleague Charles Golvin has a full take here.
I loved the social networking features on the phone (and the graphical interface with the "spot" though I'd need a change-up on noises). This isn't the first phone we've seen where the experience is centered on my friends and my contacts, but they keep getting better. We argued (see report) long ago as many did that the cell phone should be the hub of one's social graph and not simply an application on the handset. The KIN comes close and does many things well including:
- Offers status updates inside of my contact profiles which are "live" on my homescreen
- Allows the user to post photos directly from the phone
- Tags photos with location
- Allows me to choose one of many communication channels within profile (many options, but not my full list)
- Builds an online journal of my photos, videos, messages and contacts (looks to me a lot like the concept Nokia tried with their life blog application a while back)
What it is missing, but I suspect is in development:
- Tags (meta data) that allow me to build a richer social graph by tagging my photos with contacts, groups, trips, etc.
- Ability to help me find my friends
- Location tags integrated into maps that connect me to my friends' favorite restaurants, bookstores, etc. - or more generally their content - could also be photos, videos and posts
It has the potential to be more valuable than inventory on many phones.
People who own smartphone devices are more active on their cell phones than your typical cell phone owner. For simpler tasks like SMS, they are moderately more active. For more complex tasks such as shopping, using maps, banking or doing product research they are significantly more active. iPhone users are some of the most active smartphone users when it comes to commerce-related activities.
Advertisers have held back on spending more on mobile marketing for many reasons. One of the primary reasons has been their inability to demonstrate the effectiveness of the medium or calculate an ROI. It gets a lot easier to calculate the ROI when consumers are buying items or using services such has mobile banking to deposit checks. Consumers are spending real money. My colleague Sucharita Mulpuru will be working on a mobile commerce forecast later this year. Anecdotally, we saw consumers spend in the hundreds of thousands of dollars with individual merchants/hotels/restaurants in 2009. We're likely to see run rates in the low millions for a few companies within a few industries by the end of this year.
The more consumers spend, the more advertisers will be motivated to spend. Consumer product and service companies will invest in mobile services such as "find the nearest," consumer reviews, available inventory, etc. to support commerce-related activities. The greater the supply of services (of great services), the more adoption and usage we'll see among consumers. Then consumers will spend more because the experiences will be convenient - it'll be easy to buy books or toothpaste.
For those of you unable to attend, I will summarize some of the content that I presented on SAP’s overall growth and innovation strategy. SAP has a double-barreled product strategy focused on Growth and Innovation.
The Growth strategy rests heavily on the current Business Suite, which includes the core ERP product that is used by approximately 30,000 companies worldwide. SAP claims that it touches 60 percent of the world’s business transactions, which is hard to validate but not all that hard to believe. The main revenue source today is Support, which comprises 50% of the total revenues of the company at more than 5 billion Euros annually, and it grew by 15% in 2009. Other growth engines include: