Mobile reached a tipping point in 2014 as it solidified its position as one of the most disruptive technologies for businesses in decades. Not since the advent of the Internet, has a technology forced businesses to rethink completely how they win, serve and retain customers. Mobile has completely shifted consumer expectations. Today, consumers expect to get anything they need immediately, in context. Forrester refers to this as the mobile mind shift.
Forrester believes that, in 2015, the gap will increase between leaders and laggards. Leaders will use mobile to transform both their customer experience and their business. They will anticipate the needs of their customers and engage them at exactly the right moment with the right content and services. Forrester refers to these moments as mobile moments. Doing so will require massive spending in the tens if not hundreds of millions of dollars to put the infrastructure, technology, processes and organization in place to engage consumers in their mobile moments.
Most companies will fall short. They have a myopic view of mobile. Why?
Treat mobile has a squeezed down version of a PC experience or a portion of their digital strategy. Why? That is how they are organized and goaled. As a result, they fail to optimize the use of mobile for their overall business. Second, they fail to serve the needs of customers.
As the hub of our offline and online experiences, mobile interactions are a powerful catalyst for contextual marketing. The untapped opportunity in mobile for marketers will be to get an extremely granular understanding of their customers, then anticipate their expectations, and develop unique insights to power better marketing across all channels, not just mobile.
Few Marketers Make The Most Of The New Customer Data Gold Mine
Because smartphones are the hub of our offline and online experiences, they generate valuable insights for contextual data-driven marketing. However, the majority of marketers are not yet ready to exploit the convergence between mobile and big data.
Short Term: Engage Your Customers In Real Time In Their Mobile Moments
Harnessing and extracting actionable insights from this unprecedented wealth of customer data will enable marketers to serve customers in their mobile moments on a channel where they will increasingly spend the majority of their digital time.
Long Term: Power Better Marketing Initiatives Beyond The Mobile Channel
Mobile is more than simply another digital channel. Marketing leaders should combine mobile data with other sources of customer intelligence to get a deeper understanding of customers, anticipate their expectations, and act on these insights to improve all marketing initiatives.
Is this the long-awaited year of mobile? Last week, Facebook announced that its quarterly profits had more than doubled, driven in large part by mobile; 62% of Facebook’s ad revenue now comes from advertising on mobile devices. Forrester forecasts that mobile will be the fastest-growing digital marketing category in 2014, increasing 47% in 2013 over the prior year. And Forrester believes that we are witnessing a mobile mind shift — “the expectation that I can get what I want in my immediate context and moments of need.”
But mobile’s marketing moment has not yet arrived. While consumers continue the rapid shift to mobile, marketers have not yet realized mobile’s brand building potential — because for too many marketers, mobile remains a tactical underfunded offshoot disconnected from a CMO's brand building efforts. This is a missed opportunity.
Marketing needs a mobile mind shift. To harness the power of mobile, marketers must start with the experience they want customers to have with their brand, not the technology. Then determine what role mobile can play in delivering, improving, or even reinventing that experience — by creating, anticipating, or addressing a customer's mobile moment. Because the new battleground for customers is the mobile moment — the instant in which a customer has a want or need — Forrester has identified three types of mobile marketing moments.
I’ll be curious to hear if there is a business strategy update, but I don’t think we’ll have more insights on what “unbundling the big blue app” really means. I think one possible option is that social data and contextual identity will be the layer on top of Facebook’s new social conglomerate.
I personally will be looking more specifically for an update on mobile app installs. There's no doubt that Facebook has disrupted the app marketing space by becoming a key player in app discovery — which is the key driver behind its mobile ad revenues.
A growing and significant part of this business comes from direct marketers looking to drive app installs, primarily from gaming and other businesses that are increasingly dependent on mobile, such as travel and retail companies. These players know the lifetime value of their apps and have calculated how much they can spend to drive each app download and still have a positive return on investment (ROI). But marketers in more-traditional businesses or who are pursuing other marketing goals should pay close attention to the unique attributes of their mobile social users and optimize their social strategies to engage them.
According to Reuters, Japanese messaging app Line has filed for an IPO valued at over $10 billion.
No doubt the space is heating up. Competition is increasing. Facebook acquired WhatsApp for $19 billion. Japanese Internet giant Rakuten purchased Viber for $900 million. More recently, Kakao Corp (the maker of KakaoTalk, South Korea’s top messaging service and a direct competitor to Line) and Daum (one of South Korea’s largest Internet portals) announced they would merge through an equity swap, creating a company with about $2.9 billion market capitalization!
To put all this activity in perspective, I recently published a new piece of research explaining how messaging apps are morphing into new media portals and are becoming the new face of social.
WeChat is jockeying to become a global digital platform, thanks to the deep pockets of its parent company, the Chinese Internet giant Tencent. The other Chinese Internet giant, Alibaba, which recently invested $280 million in Tango, could also connect the dots between its commerce, payment, media, and social capabilities.
Soon to have 500 million registered online users, Line is definitely a key player in the space. The money to be raised will help in developing the already significant international expansion and further develop the positioning of Line as a “smartphone life platform.” The majority of the $335 million in revenue generated in 2013 came from games and about 20% from stickers — “emoticons on steroids,” as my colleague Julie Ask called them.
Japanese consumers are among the most mobile-savvy in the world: They were shopping, banking, and gaming on mobile phones long before consumers in other nations. The Japanese mobile ecosystem used to be unique; telecom operators specified to Japanese handset manufacturers the design of services to implement on multimedia phones. This is changing in an app world.
Indeed, the mobile market is opening up quickly to the smartphone app ecosystem. While Japan is a mobile-centric society, smartphone adoption has lagged behind other major markets. Many international brands launched their first mCommerce initiatives in Japan several years ago, but the market subsequently disappeared from the innovation radar due to the US-centric smartphone app ecosystem. But this is changing. It is time to take another look at Japan to uncover how the nation is combining innovation and scale as its market embraces smartphone apps.
More than a decade ago, I had the opportunity to work with NTT DoCoMo to introduce i-mode — the mobile multimedia service in France. At that time, Japan was clearly two to three years ahead of the rest of the mobile world. The Japanese market — and more specifically, the i-mode business model — is rumored to have inspired Steve Jobs to launch the Apple App Store. After that, Silicon Valley became the new source of innovation and inspiration for mobile marketers. Now that the app ecosystem has come full circle, marketers should again consider mobile marketing in Japan, benefiting from a more open ecosystem to distribute their apps and engage with Japanese customers. I recently spent a full week in Japan, and it is fascinating to see the relationship people have with mobile phones over there.
There are lots of lessons to learn from the likes of Rakuten, Line, Felica, Softbank, or NTT DoCoMo and from a mature ecosystem of mobile contactless and connective-tissue technologies.
Facebook, the social media giant that has already made a large dent in the mobile ad ecosystem, today showed it has no plans to stop the momentum: Welcome, Audience Network.
Before today, there were already several factors working in Facebook’s favor: its reach among avid social users, its engaged and captive audience, and its trove of affinity data, which my colleague Nate Elliott talks more about in his blog post here.
After its Audience Network announcement today, Facebook is breaking the application of its tools and its data out of its own silo, and this could benefit several players:
Other developers and publishers could make more money by offering Facebook data-infused mobile ads.
Advertisers can dip into Facebook’s rich affinity data to target their ads across other mobile properties.
And of course, Facebook itself just extended its potential revenue base and faces a new competitive set with the likes of Google AdMob and MIllennialMedia.
William Hill PLC, one of the world's leading betting and gaming companies and trusted UK high-street brand, has recently undergone a significant strategy review. The strategic changes came in response to the fact that more and more of its customers want to engage with the company via digital and increasingly also via mobile platforms — which at Forrester we refer to as the mobile mind shift.
In this new business context, William Hill now focuses on three main initiatives for expansion: 1) develop a wider product range, 2) encourage greater multichannel usage, and 3) increase internationalisation. To better understand how it is tackling these business priorities and, in particular, how the firm is driving multichannel usage by delivering visible value (and in context), we invited Kristof Fahy, William Hill’s Chief Marketing Officer to deliver a keynote presentation at Forrester's Forum For Marketing Leaders in London coming up on May 13-14.
In the run-up to the Forum, Kristof was kind enough to answer a few questions to provide a sneak preview to the content from his speech. I hope you enjoy his responses as much as I did, and I look forward to seeing many of you in London!
Q. You’ve led marketing efforts at a wide variety of companies, from big and established brands like Orange and BlackBerry to challengers like Yahoo. Are there key things that all brands—regardless of size and industry—should be doing today to stay relevant and top of mind in our hyper-connected, multi-channel world?
At the beginning of the year in our yearly mobile predictions report, my colleague Julie Ask and I made the following call: "mobile will affect more than just your digital operations — it will transform your entire business. 2014 will be the year that companies increase investments to transform their businesses with mobile as a focal point." McDonald’s France is a great example of such a trend.
In France, you can now order a Big Mac anytime, anywhere on your smartphone, tablet, or desktop and pick it up later at any of 1,200 McDonald’s restaurants. But mobile ordering and in-store pick up are just the first steps of a broader and more ambitious strategy: differentiating McDonald’s brand experience and powering a future relationship marketing platform by enabling direct behavioral customer insights. Although it started with a mobile ordering and payment app nationwide, McDonald’s France aims to transform all points of customer engagement by building a platform to extend new services to loyal customers and evolving the entire organization.
Despite a less mature mobile ecosystem and lower mobile usage than in the US, McDonald’s France was the first subsidiary of McDonald’s to launch a mobile ordering offering at scale. Such an ordering service is only at pilot stage in the US. France is McDonald’s second-biggest market after the United States, with €4.35 billion in turnover in 2012. Most other countries had piloted mobile payments so far. With more than 16 million members, McDonald’s Japan mobile couponing and in-store contactless payment services is the only other mobile service for McDonald’s (and the vast majority of brands) that has scaled massively, but it does not yet offer the same value.
3. 70% of MAU use the service daily (Source: TechCrunch)
4. WhatsApp offers users in Europe, Brazil and other emerging markets (= net new audience) (Source: Gravity/Techcrunch)
5. Nearly 200 minutes of usage each week (Source: Mobidia)
6. Facebook gets how to monetize mobile through paid advertising without wrecking the user experience. (In Q4 2013 they crossed over from 49% of revenue from mobile to 53% from a base of 945M mobile monthly active users) Source: Facebook, TechCrunch
Why $16B to $19B? I am not a financial analyst, but here are a few thoughts:
- Facebook generated $1.37B in mobile revenue in Q4 2013 on a base of 945M users ... annualized that is $5.80/MAU (monthly active user)
- WhatsApp already generates $1/user for a chunk of their users through a subscription fee (less fee to app store?)
- If WhatsApp users can be monetized at the same value, that adds another 50% approximately in mobile ad revenue
- Facebook reported 914 minutes of use on mobile per month in 2013 (Source: allthingsd.com)