The Changing Paradigm for Entertainment

“As it searches for the right digital business models, the media and entertainment industry is striving to reinvent itself…” says Accenture, in their newly released report on the state of the entertainment industry, This Time It’s Personal.  What a timely follow-up read to the Mobile Mandala blog post earlier this month examining some reasons why mobile is not yet fully integrated into the entertainment industry?” 

It prompted me to take a new look at that question. 

But this time, rather than take a mobile perspective on the entertainment industry, I wanted to take an entertainment industry perspective on mobile and other forms of digital content distribution and content consumption.  At a fifty thousand foot level, I was interested to identify some key drivers that have fundamentally changed from the pre-digital era (say 1995) that may have prompted this need for reinvention. Three immediately came to mind.

The Entertainment Experience

The locus of control over the entertainment experience is rapidly shifting from a ‘producer only’ model, to more of a hybrid ‘producer/consumer’ or in some cases ‘consumer driven’ model.  Certainly the shift has been far less dramatic in feature films and most dramatic in entertainment models that were incubated in the computer, mobile and online environment, such as gaming and now social gaming.  But, the tide is changing even in television driven programming – with consumer text and phone voting, online videos and other real-time consumer input – as well as other forms of reality programming.

Part of the change has also manifest itself in the emerging transition from a completed and locked-in production that is transmit over the broadcast environment to a more organic, dynamic entertainment experience that is modified in real-time with viewer or user input.  Again, internet-based gaming and other user generated or manipulated content applications are the most obvious.  In television, the recent Grammy Awards using real-time voting results to determine which song Bon Jovi would perform is a nascent example.

Monetization

Entertainment revenues have always been a combination of direct revenues (consumers pay for the entertainment experience) and indirect revenues (advertisers pay for the right to have their message seen or heard by consumers who are enjoying an entertainment experience).  With the migration of the entertainment experience to mobile and the computer based internet, consumers have been far more willing to pay directly for and with the immediate response possible in these mediums.  Social gaming certainly has provided impetus for monetizing this change as have smart phone applications.  The corresponding drop in advertising, particularly local advertising, has only accentuated the shift in the focus on monetization of potential revenue sources.

Another related change is the shift in cash flow from delayed payments to more real-time revenue generation.  Revenue from entertainment has been traditionally received after the content has been created and when it is experienced in its finished form. Ticket sales, DVD/CD sales and advertising on broadcast television/cable and radio are some examples.  With the advent of interactive response on digital media, content has begun to be monetized as an evolving work in progress that can be changed, manipulated and altered through control allocated to consumers.  Producer and user-created content experiences, monetized through freemium, up sell, web-based, user-generated content revenue models are prime examples of this evolving trend.

Platform Exposure

Traditionally, media has been premiered on one platform and then repurposed to other platforms to maximize the revenue windows for the monetization of content.  Digital media distribution was originally viewed as a promotional vehicle to support the sequential window-specific monetization strategy.  The ability to create significant monetization (and the potential for cannibalization) from the new digital distribution strategies has caused a re-evaluation in the existing model for platform exposure. 

The potential for simultaneous platform exposure has begun to take hold as content creators have begun to segment branded content for each platform and leveraged the unique content consumption patterns for each platform.  Mobile applications, for example, provide a completely different branded content experience (with incremental revenue potential) from traditionally distributed content platforms.

So, it is not surprising that “Sixty-five percent of executives believe the main source of future revenue growth will be new platforms/ways of delivering content,” according to the Accenture study. 

Yet, the study states “the principal hurdles they face in their efforts to transform their businesses are organizational issues, ahead of financial and market issues.”  Why? Because “businesses and their workforces have grown accustomed to particular business models, processes and ways of working, and are reluctant to take risks to change these into something new and less familiar.”

How appropriate then, that a long ago forgotten content source from the 1950s, could provide inspiration to the entertainment industry as it ‘strives to reinvent itself’.  Pogo, the central character in the 27 year running comic strip of the same name, once famously stated…

“We have met the enemy and he is us.”

Monetizing Passion

Blog Post Update (January 15, 2010)

SEND A MESSAGE & SAVE A LIFE

DONATE $10 TO RED CROSS HAITI RELIEF

TEXT HAITI TO 90999

And with those 83 characters, mGive mobilized thousands of people in less than 48 hours to give over $5 million via text message to Haitian relief via the Red Cross.

The tragedy in Haiti is truly overwhelming, as is our collective will to help.  This outpouring of immediate response is not something I initially envisioned when I wrote the post below about passion and how it can be monetized. But certainly, we as a society are passionate about helping those in need. The immediacy of our response via SMS will be remembered as a watershed event not only in its capacity to help, but in our capability to immediately monetize response to causes which touch our hearts.

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This is not a post about porn.  But, it is a post about passion.  And some thoughts about how to monetize it in an age of digital immediacy.

 “All humanity is passion; without passion, religion, history, novels, art would be ineffectual”

–  Honore De Balzac          French novelist (1799-1850)

 

 “Ambition is so powerful a passion in the human breast, that however high we reach, we are never satisfied”

–  Niccolo Machiavelli       Italian philosopher (1469-1527)

For most of us, passion is a driver behind some aspect of our life. Whether it is what we do in our work or what we do in our life, passion is relentlessly present and often, universally consuming. 

Passion is powerful.  Passion is intense.  Passion is immediate. 

The ability to digitally provide the immediacy of satisfying passion is one of the greatest opportunities for purveyors of digital commerce and practitioners of digital marketing.

You don’t agree?  Check out Zynga Game Network, the maker of Farmville, part of the recent social gaming phenomenon where companies capitalize upon the player’s passion for the game (and passion for social validation and stature) by offering them the ability to “buy” virtual currency” to improve their performance and experience.  This is the same company that sold more virtual tractors per day than real tractors are sold in the U.S. in a year.  They just received $180 million from Digital Sky Technologies in December giving it a valuation likely to be at least $1.5 billion and possibly upwards of $3 billion. Not bad for a company that has only been around 2 ½ years with an estimated $250 million in revenues and over 100 million players per month.

Oh by the way, one of Zynga’s competitors, Playfish, was purchased by Electronic Arts in November for $275 million in cash plus $25 million in equity and $100 million in earn-outs.

Flirtomatic generates approximately $12 ARPU per month from predominantly working class people who have a passion for flirting on their mobile phone. And, even more interesting, the site is not about dating or actually being set up to meet people, the activity is all about the passion for repartee between the sexes – the back and forth, the interaction and the joy of flirting.

How do you jump on the monetizing passion bandwagon?  Identify the passions that drive your brand, product or service, target the audience that craves the experience that feeds their passion, stoke the fires of that passion, and above all, take advantage of interactive digital media to provide those with passion the information they crave, and the ability to act and receive some degree of immediate satisfaction. Especially on that very personal, highly interactive, communication ecosystem that is with us all the time and gives us the ability to immediately respond and engage wherever we are – the mobile phone.  

Your brand, product or service doesn’t lend itself to a revenue model like Zynga, Playfish, or Flirtomatic?  No problem.  Your passion play doesn’t have to be a direct revenue channel like those companies.  It can be a marketing vehicle to drive those with passion to you.

Trendwatching recently released its “Ten Crucial Consumer Trends for 2010”.  What was #7 on the list?  Tracking and Alerting. It is part of a mega trend they identified as InfoLust or ‘consumers lusting after relevant information’ (That’s their definition – how could I not include the word ‘lust’ in a post about passion?).

Trendwatching identifies a great example of using passion to literally drive business – Curtis Kimball’s mobile Crème Brûlée Cart. Launched in San Francisco in early August 2009, the mobile crème brûlée cart has attracted more than 8,000 Twitter followers, who rely on his tweets to find out exactly where he’ll be, and what flavors are on the menu, so they can satisfy their passions for crème brûlée. The same type of concept can easily be applied to SMS.

The Long Tail was a wakeup call, in part, to the effects of the digital and virtual elimination of the geographical limitations of space.  With the mobile phone’s omnipresence in our lives, we now have a further reduction in the limitations of time.  And for those of us who feel the ‘right now’ urgency to satisfy our passions, the mobile phone is always with us, wherever we go.

French novelist George Sand once wrote “the capacity for passion is both cruel and divine.”  At least now, we have a more immediate way to seek satisfaction.

App Stores are so ‘1980s’

As an old decade ends and another begins, it is only natural to look back and reflect.  One of the biggest trends of my lifetime has been the demise of the mass media broadcast and general print medium and the rise of the niche cable channels and specialized print publications.  Since the 1980s, the networks have seen their share of audience usurped by specialized cable channels and the general interest publications of the 1950s have been replaced by narrow interest publications of the 1980s, 90s and the millennium.

 So why is content discovery and distribution in the mobile application market still a function of 1980s one size fits all app stores? 

Mobile apps are truly the latest and greatest invention of the highly personalized, narrowcast digital medium known as the mobile phone, and yet the app store still clings to a decades old mass distribution model ruled by quantity and impersonal discovery.  Adding further frustration, in order to download the latest niche app, mobilistas have to leave the niche content and focused social experience they may be enjoying and jump over to the generic big box app warehouse to get their niche app. 

Not very user friendly.

So, let’s make sure we have this straight. In an era where the social experience seems to greatly influence the commerce experience, big box app warehouses are designed to keep mobile consumers who wish to utilize social media to discover new apps outside the front door – at least until they are ready to stop talking.  Once inside the big box app warehouse, all mobile consumers need to be quiet and just read the preapproved language describing each app.

I thought the latest and greatest digital commerce experiences were supposed to be better than the brick and mortar experiences!  Can you imagine how many people would shop at a brick and mortar store if there were ‘no talking’ signs posted all over? 

There is a reason why mountain climbers are happy to spend more money for more products at a mountaineering store than at a generic sports equipment warehouse.  It’s about the communal and social experience that furthers the enjoyment of mountaineering – not to mention the ease of being able to find all of the great mountaineering products in one placed specifically designed to satisfy their needs. 

Why is the app discovery and distribution model so archaic…or at least so 1980s?

Just like in the real world, there is a time and a place for big box stores.  As my wife says, there is no better place to buy socks than Target.  So, for the dictionary app, some great phone games, and other general apps, I think the big box app warehouses work fine.

But on behalf of all mountaineers, quilters, airplane pilots and everyone else with a specialized interest, I have a request. 

Give us some specialized app stores with vibrant social communities to enhance our love for our niche activities and allow us to participate with our community in a place where we can discover, buy, share and enjoy those apps together.

Will Mobile Phones Change Retail Forever?

There was a lot of passionate response to the post a few weeks ago “Will Mobile Phones Replace In-Store Retail Salespeople”.  Even more reason that these three announcements this week caught my eye:

• The Aberdeen Group published a report  that stated in 2008, the total of digital signage market revenue stood at $766 million and is expected to reach $2.2 billion by 2014, growing at a healthy CAGR of 20%.
• The London Daily Mirror reported   according to unnamed sources that Nokia is planning to begin rolling out embedded NFC (near field communications) kits into its entire line of Symbian phones beginning Q3, 2010.  The Finnish giant already has NFC in selected handsets, such as the 6216 Classic.
• Malaysian manufacturer Fonelabs  will produce two million low cost (under $100) NFC enabled phones in 2010 

What do these three items have to do with retail?  First, just as a refresher, Near Field Communication (NFC)  is “a short-range high frequency wireless communication technology which enables the exchange of data between devices over about a 10 centimeter (around 4 inches) distance.”  In other words, if you have an NFC enabled phone and opt-in, your mobile phone will be able to communicate with another proximate electronic device automatically. 

The types of applications for NFC on mobile are numerous:

• Electronic payments – swipe your phone and make a payment without a credit card.  NFC technology is already being used in Japan in more than 30,000 stores. Users can place $50 amounts, for example, into their smart phones to make payments or even use them in smart vending machines.
• Mobile ticketing on public transportation – swipe your phone on readers placed in buses, airlines, and trains
• Electronic keys – swipe your phone and open hotel doors or your house door
• Smart posters – use your phone to read RFID tags on billboards and other signs to receive additional information and to let the “billboard” know you are there

Smart posters is the one that I find particularly intriguing. 

Let’s imagine for a second, that you walk into your favorite bookstore where you have purchased many titless in the past.  With your permission, as you walk past an internal electronic billboard, you allow the billboard to communicate with your phone.  Instantly, the billboard scans your past purchases and recommends new books to you that you might enjoy reading.  Or even better, a scanner reads your phone as you walk in and sends you an SMS with a customized offer to you for a discount on items you purchase that day as an opted-in frequent customer.

It’s kind of like going into your favorite pub where everyone knows your name.  Of course, downsides such as privacy cannot be underestimated (but, that is why it has to be on an opt-in basis). Imagine, though, how much more effective it would be to having a customized sales experience.  In clothing stores, sales people can know what you like, know your size, know if it is in-stock, and immediately bring you customized selection of new items.  Out of stock items could be posted to your customer ID and custom SMS messages could be automatically sent to let you know when the item is back in-store.

For the retailer, NFC gives unprecedented real time monitoring of consumer behavior in-store that could lead to better consumer in-store experiences – more accurate preference tracking of target audiences for better merchandise selection, display and pricing, and an ideal feedback channel for more detailed research.  Individually, salespeople could be more effective in providing consumers with more meaningful in-store experiences if they are familiar with their past interactions.

Will mobile phones replace in-store retail salespeople?  The consensus opinion from that last post was no, but it surely will change the playing field in a substantial way. The impending mobile NFC introductions are yet another way that the retail experience of the 21^st century will never be the same.

Mobile Mandala will resume publishing on January 3, 2010.  Happy Holidays and Happy New Year.

Will Mobile Phones Replace In-Store Retail Salespeople?

Mobile phones have to be one of the best on the spot, at the moment, information retrieval resources of all time.  How many times have you seen disagreements settled immediately, courtesy of a quick iPhone web research query?  Well, it looks like some companies are ready to capitalize upon our penchant for instant research about things that interest us.

Let’s flash back to a recent industry panel where a senior Best Buy executive said “The right information at the point of impulse increases desired consumer’s behavior, sales, profits and customer satisfaction.”  That sure sounds like a description of one of Best Buy’s best in-store salespeople helping out customers standing next to the latest electronic gizmo in one of their stores. 

It isn’t. 

The conference was a mobile conference and the speaker was the senior manager of marketing and emerging capabilities at Best Buy.  She was talking about using mobile phones – not salespeople – as the information source at the point of impulse. I guess there is nothing like a little recession to make retailers think a little harder about how utilize our collective penchant for using our mobile phones for quick research projects and potentially saving some money in labor costs in the process.    

Here’s how it works:  Using the mobile phone, customers can request information about any product on demand in a Best Buy store with a call to action on a product fact tag in store. What a great idea for consumers (no more pesky sales people asking ‘how can I help you’) and what a great idea for Best Buy (cut a little payroll here and there as the idea takes hold – I know, I know, not one salesperson will be fired as a result of this technological advance which is solely dedicated to the betterment of our customers:)

The truth is that we are already moving more and more to a self-service environment, anyway.  Why not leverage the mobile phone to eliminate cost, bring down prices, reduce the frustration in trying to flag down elusive salespeople to ask questions, and give us another excuse to have fun looking up info on our mobiles?  It sure makes sense to me.

So, let’s take this one step further. 

What if retailers gave us the opportunity to engage in interactive texting?  Think of all the time we waste, and frustration we accumulate, in big box stores feeling like we always have to muscle in to get a little service.  Wouldn’t it have been a lot easier to just text in the question via mobile phone?  Then, get an answer and re-text our next question?

Why stop at electronics stores? What a great way for bookstores to compete with online retailers – just text in the title you are looking for and receive information on whether or not it is in-stock and where it can be found. 

And, how great would it be to have self service mobile Q&A on the new car lot?  I don’t really like all of the sales pressure from those pushy car salespeople and now I can avoid it once and for all.  For good measure, I could just text the offers and counteroffers back and forth and never have to talk to them in person!

The best application, though, would be in high end department and apparel stores.  After trying on the overpriced designer suit, I could text in the question “How does it look?” I guarantee the response will be the same as if I had asked an in-store salesperson (who could actually see me in the suit) the same question.

On second thought, text messaging just can’t replace the sincerity of those baby blue eyes telling me I how good I look, even if they don’t really mean it.

Always With Me, Wherever I Go (Part 2)

When my Dad was nine years old, he would tell his mother he was spending the day with a friend, leave the house to ride the New York City subway all over the city and return after dark.  His mother didn’t know where he was, or how to get a hold of him.  After my sophmore year in college, I spent the better part of a summer travelling all over Europe, also without giving my parents any information about how to reach me if they needed to.  

How times have changed.  We now all have electronic tethers to our families, our businesses, and virtually anyone else who has our mobile phone numbers.  We are always connected, at all times.  Our mobile is always with us, wherever we go.

One aspect of mobile, which is getting increased notice, is the utility of being able to receive immediate SMS messages with important information at any location and at any juncture in our day.  I remember calling into my parents every now and then from Europe, sometimes after waiting for an hour at a public international phone in a European city, for the sole purpose of making sure everything back home was OK.  There was a certain discomfort in not being able to be reached in case of an emergency.  Once I knew things were fine, I could go on with my trip emotionally unencumbered. 

 Now, we can be reached anytime, and virtually anywhere – and that has the potential to change our lives significantly for the better.

Dan Jones, the VP, Channel Development at Smart Reply, gave me a great example the other day of how the utility of ‘always with me, wherever I go’ is currently being used to our advantage.  His firm is working with the Center for Disease Control to give Americans the latest up-to-date information on the swine flu via mobile.  After texting HEALTH to 87000 and answering three quick demographic questions, I can receive H1N1 swine flu alerts and other related health info about three times per week.  Since I gave my zip code, I would think they could also send me local swine flu info (like when and where the vaccine can be accessed in my community), as well.  So far, since September 8, they have received over 12,000 registrants (70% from their website, 25% from the Smart Reply network, and 5% from other sources, including Facebook, MySpace and other social networking sites – the percentage from social networking certainly should be higher!) and the service is provided in English and Spanish.  Interestingly, 43% of the subscribers to this text service are 35-54 years old.

There are so many uses for push alerts that improve the utility of our lives that it amazes me that this area has not been pursued more aggressively.  Many of us have already used the airline flight status alerts on our mobile phones, but how many of us would sign up for push alerts to your mobile phone like these, if they were available?:

•  Traffic status alerts customized for our specific commute home
• Police, fire, natural disaster and other up-to-the-minute safety alert info for our local area (that sure would have been useful in the Southern California fires last year!)
• FDA recalls for food products purchased at local markets (through supermarket loyalty clubs, many have your phone number and which items you purchased in their database!)
• Impending service call alerts from cable, phone, and utility companies (so you don’t have to wait at home for the duration of the dreaded four to eight hour window)

Push alerts to the mobile phone can even be helpful for more mundane daily utility items such as daily medication reminders and refill alerts, bill payment and membership renewal reminders and on the spot notification when a table is ready at a restaurant.

As parents and as marketers, we know the value of being able to reach others wherever they are, at any moment of the day.  But as a consumer, I would like to get much more utility information pushed onto my phone to improve the quality of my life. 

I’m glad the airlines figured out that aggressive promotion of this mobile utility would bolster the perception of their industry.  And it’s good that government is getting more active about using the mobile phone to help us with dealing with the swine flu.

But I’m sure that there is, and there could be, much more. 

What other really useful utility push SMS programs are currently available? And more importantly, who isn’t pushing the utility of our mobile phones, and should be?

Don’t Put The Email Shoe on the Mobile Foot

 “Mobile Marketing Is Stupid, But Only For People Who Make It Stupid”

I really like that line.  It was the last line of a brilliant blog post  about the overabundance of stupidity in the mobile space.  It’s from Jared Reitzin, the CEO of Mobile Storm.  And yes, he and his company have a vested interest in what he writes.

But you know what… he’s right.  Here is the two part sentence in his post that caught my eye:

“Those who think mobile marketing is stupid only do so because they treat it like email…” 

I can’t tell you how many times I have had my technology clients’ potential mobile messaging campaigns ultimately left on the cutting room floor because the brand’s opt-in list was “too small”.  As if quantity was the top indicator of a successful campaign!  When it comes to mobile devices, the paradigm of email marketing is the blast from the past.  It is that one-way broadcast of usually unrequested messages that take advantage of few if any of the native advantages of the mobile experience and usually negatively taint the overall perception of mobile marketing.

Just pause for a moment with this statistic from Jared’s post – 95% of all text messages are read within in four minutes.  Have we ever run across any other messaging medium that is so personal that it has commanded such an immediate response?  And that is where the opportunity of mobile advertising (and the threat of a consumer backlash) begins.  We, as marketers, simply have to get it right.

Certainly we have been negatively conditioned to the large quantity of email that is spam.  And of course, we have been negatively conditioned to the advertising breaks on television or radio.  Yet, we still immediately read text messages as soon as we hear the ping or feel the buzz.  And that is where the promise of mobile resonates the strongest – in the ability to give consumers the type of messages they want, when they want them.  It is the opportunity to narrowcast content of interest to that user, after they have double-opted in to receive those messages, rather than broadcasting non-requested messages to broad swaths of audience, that will allow consumers to confidently respond to that ping rather than begin to resent it.

…and don’t understand that mobile is about loyalty.” 

There is a reason why the carriers promote unlimited programs to your ‘five faves’ or your ‘circle of friends’ or your ‘friends and family’.  It is because mobile is about loyalty and familiarity and repetitive, interactive contact with trusted sources on the other end of the wireless communication loop.  Mobile is appropriate for this smaller circle of friends – think the favorites button on your iPhone or other handset.

It makes sense to promote loyalty on a very personal medium where we as users are behaviorally accustomed to interacting with people and other sources we trust. 

Try this experiment:  Take a look at all the calls you made or received in the last week.  Or, take a look at all of the texts you sent or received. Take note of which numbers were called or texted most frequently.  Look at the total amount of time you spent with those most frequent numbers.  Now, that is loyalty.  Imagine if you could extend that behavioral pattern of loyalty to your brand.

And, of course, you can. 

Make sure the message is consistent with the expectations your audience has of mobile messages.  Make sure your message adds value to their lives in a way not possible without the mobile medium.  Utilize narrative structure when possible to mirror the native communication prevalent on the medium.  Make the incentives of receiving a text on their phone outweigh the inconvenience. 

But, don’t force the email paradigm onto the mobile messaging paradigm.  Mobile messaging needs to get off on the right foot in the consumer’s mind.  And that won’t happen if its growth is stunted inside an ill-fitting email shoe.

I like Jared’s definition of why mobile customers can generate tremendous loyalty. If they are “willing to have their day interrupted as their pockets buzz” with your message, they will be your best customers.

And I would take a smaller collection of those loyal customers, over a ream of paper with email addresses, any day.

 

Hope For Mobile Advertising?

Marketers are starting to embrace the right elements

Many of the comments that have come in response to recent Mobile Mandala posts gave the comment author’s well reasoned opinions as to why mobile advertising has not taken off in a big way.  But, the underlying current, no matter what the comment author’s opinion, was the poignant question of whether we as a mobile marketing and advertising community will ever get it right.  Will we ever rise above the trees and take a real good look at the whole forest?  Will we ever stop putting our head down and blindly charging forward, and finally raise our head up so we can intelligently move forward?

Well, the recent 2009 Netsize Mobile Marketing survey landed on my desk with a very welcome thud (or more accurately, downloaded with a very welcome ping).  After all, the results seemed to reinforce and address ten weeks of incessant posts, and some incredibly insightful reader comments  regarding why mobile advertising has not reached its potential.

The overall premise of why mobile advertising has not reached its potential is that marketers have not truly recognized the the mobile phone’s unique position in the media universe as a very personal, highly interactive communication ecosystem.  The Netsize survey of the opinions of senior mobile executives seemed to recognize these principles in its findings:

Very Personal – Because of the personal nature of the mobile device, consumers are more receptive to marketing messages that are consistent with how they normally send and receive messages in this personal space.

• One-way broadcast style SMS messaging is expected to go down (57% to 52%) and two way SMS messaging is expected to go up (40% to 46%) as marketers recognize the prevalence of interactivity in consumer’s daily interactions
• MMS messaging involving pictures or video is expected to double (11% to 22%) as marketers recognize that people like communicating to each other on their mobile phones with images and that may also be a great way to engage with their company’s message
• Use of the mobile phone for retention and loyalty campaigns is expected to grow (43% to 64%) as marketers recognize that consumers prefer to receive messaging from people (or companies) they know and like rather than from strangers

 Highly Interactive – Most time spent on the mobile phone involves some type of an interactive activity whether it is communicating back and forth via voice and SMS, while playing with a game or interacting with an app. 

• One-way broadcast style banner ads are expected to stay stagnant (25% to 26%) and more interactive branded applications are expected to rise dramatically (23% to 35%)
• Prompting of consumer response via coupons, barcodes and QR codes is expected to increase (20% to 31%)

Communication Ecosystem – The mobile phone has developed, and is continually developing, behavioral mores and cultural norms that have very serious implications for marketers.  Violate one of those norms, and the consequences can be severe. 

• The two inhibitors to mobile advertising and mobile marketing that most concerned executives were the quality and validity of the opt-in database and concerns over regulation and consumer backlash.
• Transactional communication (purchase notifications, crisis management, etc) is expected to rise (27% to 37%) as marketers recognize that consumers view their phone as ways to keep abreast of important information that affects their lives in a tangible way on a day-to-day basis

Perhaps most importantly and most encouragingly, the survey reported that one third of the senior mobile executives who responded reported that they lacked the skills to define and deploy an effective mobile marketing strategy.  Why is that encouraging?  Because the first step to seeking and acquiring knowledge, is the acknowledgement that you need it.

“The beginning of knowledge is the discovery of something you do not understand”

–        Frank Herbert (science fiction novelist; wrote “Dune” series)

Flirting With Success

As I write this, I am in the midst of a cross country, big city jaunt on behalf of one of my mobile technology clients.  We are presenting to about three conference rooms per day of buttoned-up (and not so buttoned-up) marketing, advertising and technology executives.  The one thing they have in common, though, is that when the meeting starts, most place their iPhones, Blackberries and assorted other smart phones on the conference room table.

What a stark contrast to a conversation I had just last week in a San Francisco tenderloin district bar with an executive of the mobile web site Flirtomatic.  I remember a few of the comments he made as he explained why his site was continuing to successfully build its revenue base and further its run of profitability.  First, he told me of his Freemium model, where access is free and consumers buy additional ‘tokens’ to in order to experience an even greater level of fun, interactivity and enjoyment on the site.

Here’s an example.  Since the site is about flirting, not dating or actually being set up to meet people, the activity is all about the back and forth, the interaction and the joy of flirting.  Sometimes, however, a shy person may want to participate, but not know how.  Flirtomatic has a solution for that.  The shy guy can buy a basket of tokens and use some of those tokens to get access to a few ‘flirt bombs’.  Flirt bombs are prewritten flirting messages that he can send to twenty or more girls with whom he would like to flirt.

This executive shared with me a somewhat ribald example of a flirt bomb.  Having a similar reaction to many of my smart phone carrying friends, I replied that I wasn’t sure any girls would appreciate that type of message, let alone respond to it.  He said over 30% of flirt bombs of that nature generate a positive response!  Really????

The conversation continued.  Over 50% of his audience in the UK uses their mobile phone as their only access to the internet.

I think you misspoke, I replied.  You must have meant a statistic more like 50% of the audience didn’t have landlines.  Oh no, he assured me.  Most of his audience does not own a Mac or PC.  Most of his audience works an hourly job.  Most of his audience is part of the working class or lower classes.

How do you get revenue with such a downscale audience, I asked.  That isn’t an issue, he replied, because his overall monthly ARPU is on average, $12 per month.

Well, that woke me up out of my smartphone induced haze of mobile apps and video downloads and buttoned up conference rooms and high minded talk about big numbers from the advances of technology and the future of mobile.

Mobile today consists of primarily of feature phones and the masses of people who use them.  And the people who have those feature phones may not have as much money as their smart phone toting counterparts across town or across the continent, but they are willing to spend the money they have for an enjoyable experience and the realization of value.

There seems to be quite a business in giving people what they want, when they want it and the way they want it, on the mobile device they already have.

I’m not sure I’ll bring that up while sitting at the next smart phone laden conference table in the next big city tomorrow…or maybe, I just might.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #1    All Of Us

Group M released some statistics last month that projected mobile to comprise one half of 1% of total global advertising expenditures in 2009.  It is projected to be about .8% in 2010.  On the other hand, television advertising expenditures were projected to be about 38% of total global advertising expenditures in 2009 and 39% in 2010.

Compare that to a Samsung Mobile study earlier this month that was published in the Chicago Tribune that states that the average Chicago cell phone user spends three hours a day chatting or sending text, picture and video messages.  And to a March 2009 study by the Nielsen’s Council for Research intelligence that found that the average American spends just over five hours watching television per day.

Aren’t you just amazed by what a small percentage mobile advertising is of total worldwide advertising expenditures and what a large percentage of time we spend on mobile devices when compared to time spent on other media.  Why the difference? 

I suspect that one reason is because we as marketers spend a disproportionately large amount of time thinking about what we want to tell consumers and how we want to tell it, and a disproportionately small amount of time focusing on how they want to receive that information and the unique characteristics of the medium upon which it is received.  I also suspect that it is because we are afraid to try something new with this new medium of mobile.

In order to be successful with communicating brand, product and service information on mobile, we need to garner and act upon a better understanding of how people receive information, engage with that information and forge relationships specifically on the mobile phone.  And, then we need to change our way of marketing on mobile to take advantage of this new insight.

The mobile phone is a very personal, highly interactive, communication ecosystem.  We need to develop marketing and advertising that recognizes the uniqueness and manifestations of each of those terms.

Very Personal            63% of mobile phone users agreed with the statement that “My phone is very personal to me”.  Certainly very few consumers would ever agree with that statement if it referenced their television or their radio.  Marketers need to take the personal nature of the mobile phone into account when designing campaigns so that the consumer receives the message on the device in the same way they like to receive other messages in their personal space.

Highly Interactive      Most time spent on the mobile phone is while involved in an interactive activity whether it is communicating back and forth via voice and SMS, while playing with a game or interacting with an app.  Yet, today, most advertising on the mobile phone toady is still of the one-way broadcast variety via mobile banners or SMS.  Marketers need to take the ability to create interactivity to a whole new level in order to be more effective on the mobile phone.

Communication Ecosystem                    The mobile phone has developed, and is continually developing, behavioral mores and cultural norms that have very serious implications for marketers.  Violate one of those norms, and the consequences can be severe. 

Yet, marketers continue to treat the mobile phone as yet another screen to “repurpose content” or as a quick campaign add-on to “target a hard to reach audience”.  It will be the brands that focus on actively leveraging the behavioral use patterns of the mobile phone and their attendant cultural norms that will succeed.

I recall the old saying that “You’ll never get fired for buying IBM” which meant that people concerned about their jobs were less likely to get fired for taking the safe road.  And certainly, with today’s uncertain employment environment it is very tempting to continue to market on mobile with the tried and true SMS messaging as well as mobile banners and of course, race into the creation of in-app campaigns.  Clients (or employers), the reasoning goes, are less likely to fire you for doing the types of campaigns they are used to seeing with their competitors.

But while each of those types of campaigns can be successful in the right circumstances, are they going to be most successful on mobile with your brand and your message?  Perhaps your message could be more successfully received by embracing mobile’s new paradigm.  Perhaps by being open to the new possibilities available in mobile, your efforts will pave the way to allow the medium to garner its rightful percentage of global advertising rather than the de minimus amount it has today.

So here’s our challenge:  Be among the first to embrace the paradigm change of mobile, even if there is an associated cost or an associated risk.  Imagine if we were the first to embrace a new thought, a new marketing idea, a new advertising business model, or new hardware or software innovation – not because we followed the crowd, but because we understood that with the risk of being first to say yes, comes all of the rewards of being a new leader in our industry.

                           “The policy of being cautious is the greatest risk of all”   

                                                   — Jawaharial Nehru   

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #2    Ride the Horse in the Direction it is Going

Some time ago, I was frustrated by my inability to solve a particularly vexing problem.  I continually felt as if I was trying to force a ‘square peg’ solution into the ‘round hole’ problem.  I consulted with a trusted advisor who gave me this advice “Try to ride the horse in the direction it is going”.  Or, in other words, don’t force things.  More specifically, do not try to impose even a great solution into an environment in which any solution, not specifically designed for that environment, is bound to fail.

I believe the same advice is appropriate for mobile.  Consumers have already begun to determine behavioral and usage patterns for their mobile phones based upon the native characteristics specific to mobile phones.  When marketers and advertisers import other media solutions not designed for the mobile environment, into the mobile environment, it is the same as trying to get a horse determined to get back to the barn, to turn around.  It is frustrating for the mobile phone consumer and it just doesn’t produce the best possible results.

This Mobile Mandala will examine two marketing approaches (among others) for the mobile phone which are consistent with consumer behavioral usage patterns of mobile phones today.  Mobile marketers should consider these uses as part of an overall cross-media marketing campaign.

The mobile phone has become a medium of immediacy. 

While SMS outbound messaging is effective for lead generation under certain circumstances, the mobile phone excels as a response vehicle in nearly all circumstances.  It is always with you, wherever you go.  It is ready and waiting for you to respond to any stimulus.  Consumers are completely conditioned to respond immediately to most sounds, messages and stimuli emanating out of their mobile phone or to use their phone to respond immediately to other stimuli received through other media.  No wonder a recent study said that the average time it takes to report a lost wallet is 2-4 hours and the average time it takes to report a lost mobile phone is 20 minutes!

But this doesn’t mean that the lead generation needs to come through the phone.  Other media are better for the broadcast nature of lead generation.  But no other medium is better for the immediate and compulsive nature of response generation than the mobile phone. Marketers who give consumers an opportunity to use their phones for responses are maximizing the consumer’s behavioral attributes of the mobile phone to their advantage.

The mobile phone has become a medium of relationships. 

Over the years, consumers have been behaviorally conditioned to use the phone as an interactive communication medium.  First through landlines, then through mobile phone voice, and later through mobile phone text and IM, consumers have been communicating with others through the back and forth exchange of thoughts, ideas and banter that characterize human interaction.  This interaction very often is key to the development and furtherance of longer term relationships.

Brands and marketers who utilize relationships as a vital component of customer retention and a driver of long term revenue would be wise to consider focusing on the mobile phone and the development and use of opted-in mobile lists.  By giving consumers an opportunity to use their phones for continuity campaigns and longer term relationship development, marketers are maximizing the mobile phone’s behavioral advantage to their benefit.

The immediacy of consumer response and increased levels of consumer relationship development are only two aspects of a multi-pronged consumer campaign.  TV, Radio, billboard and the internet are very effective at some aspects of securing consumer awareness, trial and use.  Mobile is very effective at others.  The best marketers and advertisers have the wisdom to know the differences, and the expertise to choose the best reasons for affixing their saddle upon the mobile horse.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason # 3    Always With Me, Wherever I Go

A few years ago, I had dinner with a somewhat overweight friend and the conversation reverted to the rather tired topic of dieting. “I’m done with dieting,” he declared with a wry smile, “I don’t want to lose my belly, it’s my best friend – it’s always with me, wherever I go.”  I quickly took my mobile phone out of my pocket, pointed to it, and laughed,” If that is the criteria for a best friend, this is your new best friend!”

“It’s always with me, wherever I go”

That statement really summarizes an important aspect of the magic and uniqueness of the mobile phone.  We’ve discussed in this blog how the first part of that statement, “always with me”, has contributed to the highly personal nature of this interactive communication ecosystem.

Now, what about the second part, “wherever I go”?

The concept of being able to identify where people and their phones are located at any given time has augmented a whole industry of location based services (LBS).  A significant share of the discussion regarding mobile in the industry centers on the tradeoff between the consumer advantages of allowing their location to be known, with the offsetting privacy concerns that result.

I remember earlier LBS models were about creating the “killer app” for LBS. People spoke wistfully about how a national coffee shop would be able to find out that you were walking or driving nearby and could send you a coupon on your mobile phone for a discount so you could impulsively stop in.  Of course, it would all be via opt-in.

Now, it seems like there is an LBS capable add-on being developed for almost every application from photo sharing sites to social networking sites to a myriad of iPhone apps.  Of course, these are all opt-in too.

But is opt-in enough for location awareness? Particularly when it comes to advertising, marketing and commercial uses?

Double opt-in provides an adequate level of privacy and permission necessary for consumers to receive ongoing mobile messaging via email, text or voice.  But adding location awareness to messaging ramps the opt-in into a whole new level of privacy intrusion as it now involves the additional elements of location and time.  While I may love receiving messages from my favorite retail store, I may not want to receive the message at the moment I am rushing to an appointment, simply because of my location at that particular moment.

Perhaps advertisers and marketers need to consider giving up even more control as it pertains to advertising and marketing via LBS mobile messaging.  In particular, rather than broadcasting messages to opted-in users who are in a specific location, I would suggest narrow-casting messages to opted-in users in a specific location who would need to opt-in again for each and every new LBS generated message.  In essence – consumer generated narrowcasting.

This isn’t a new concept.  In fact, after opening the Yelp application on an iPhone, the consumer is directed to select a particular type of service (restaurant, gas station, etc) they want to find that is near their location. 

Let’s review that process… Each and every time, the user needs to make a decision to open the Yelp application.  Each and every time, the user also needs to make a decision to find out about a particular retail establishment or service. Yelp even goes one additional step further in also specifically asking for a consumer’s permission to use their location the first few times they use the service.  That’s a lot of opt-ins for each individual use, and yet Yelp is still quite popular on mobile.

Advertisers can choose to advertise on these types of applications.  Starbucks and Papa Johns announced recently that they were advertising on GeoVector Corp.’s World Surfer application which enables consumers to point their phones in a particular direction to search for retail establishments and other locations.

What a frightening prospect for advertisers and marketers!  We are not accustomed to allowing consumers to have so much control!  It was bad enough when Mobile Mandala suggested we move from broadcasting to narrowcasting on mobile. Now, this blog is suggesting that we move from narrowcasting to user-generated narrowcasting as it pertains to LBS generated messages. Why?

The mobile phone is a very personal device, unlike a billboard, a television or a PC.  Consumers can choose to drive past a billboard or walk away from their TVs and our PCs.  But they don’t want to choose to walk away from their mobile phone.

That’s why their mobile phone is always with them, wherever they go. 

And while consumers feel it is OK to narrowcast messages to their phones after they opt-in initially, it is not OK to use that phone (and that past opt-in) to find out where they are for the purpose of narrowcasting messages to them.  That is just too invasive.

The hard truth is that most consumers just don’t want you to physically find them.  They would much rather find you.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #4    Tell Me a Story

My daughter came home from college this weekend and proudly informed me that she gets, on average, five to ten text messages per day about parties occurring on any given evening in and around campus. I asked how many phone calls per day she gets about parties.  The answer – none.

Why?  In her world, invitations to parties are merely information.  Information is best conveyed via text.  “Why would I want to talk to someone about a party coming up.  What else is there to say?”  In essence, after receiving a one-way information transfer, she has received all the content she needs and there is no additional reason to engage.

She went on further to say that the only time she picks up the phone to talk, is if there is a story involved.   While she can either phone or text back and forth to engage in a story, she feels that with a story, she has something to which the other party can respond.  Stories contain the type of content where the reaction of the listener adds to the story experience, and makes it richer and more emotionally engaging for both the storyteller and the listener.  

Mobile is good at communicating both one-way information transfer as well as content for emotional engagement, provided that it is used in the right way.  SMS marketers will tell you that using the words “free”, “discount”, and “% or $ off” are very effective at transferring compelling, transactional-based information that will motivate a sale. In the right context, that type of information by itself can motivate an action.

But what about when factual and transactional-based information alone cannot prompt the desired action?  How about when a more involved level of emotional engagement is necessary to motivate a particular action, or for the successful continuation of an entertainment or brand-based relationship?

When the start or continuation of a personal, emotional engagement with a customer is required – especially on the mobile phone – consider the use of ‘story’ as a means to achieve that engagement.

The mobile phone is a highly personal device where most people use it to interactively communicate with each other.  And the predominant form of that communication is narrative.  “We seem to have no other way of describing “lived time” save in the form of narrative.  Narrative imitates life, life imitates narrative” (Jerome Bruner Ph.D., Social Research magazine, September 2004).

So why not use narrative or story to emotionally engage your mobile audience since that is how they engage each other already. There is no behavioral change.  No adjustment to how the information is received, processed, or interpreted. No difference in the a priori expectation that they will interact with that information. And most importantly, narrative and story are very natural to every consumer’s existing organic mobile phone experience.

Story does not have to be confined to an aural experience either.  The mobile phone is a two-way communication device with a wide range of options for interactive messages from text to sounds to visual and moving images. Any one of them, or combination of them, can be used to communicate the message via story.

Robert Dickman, in a 2003 article published by the Society of Organizational Learning and the Massachusetts Institute of Technology, defined a story as “a fact wrapped in an emotion that can compel us to take action.” 

 What a great recipe for brand engagement.  Tell us a story.  Give us the facts and the emotions that compel us to take action, in the same way we take action every day – on a medium on which we are very comfortable interacting with narrative.  With our friends.  With our family.  And now, with your story and your message.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #5   Don’t Break Up With My Brand

Back when I was dating, the cardinal rule was to never phone after the first date until at least three days had passed.  The phone was too personal for such a quick contact and you could be seen as too aggressive or worse, too desperate.

Times have changed.  Now it is OK to use your phone for contact immediately after the first date, provided you don’t speak into it.  Texting something pithy or witty that night, or the following day, can often be viewed as a positive addition to the dating experience. 

Now let’s move to the end of the relationship.  Breaking up over the phone is not as good as breaking up in person, but not nearly as bad as – OMG! – breaking up via text.  Same phone.  Same message. Completely different level of cultural acceptability.

We respond to text messages faster than emails, and BBMs faster than texts.  Same Phone. Same message. Same textual appearance.  Different accepted practice.

 It is OK to whip out the phone (among some dining parties) at a restaurant to perform certain tasks – like looking up a sticking point in the conversation – but not others, like answering an email or playing a game. Same phone.  Same amount of time “away” from the conversation.  Different effect on your friends.

The list goes on and on.  What is it about the mobile phone that generates this long list of rules and practices that is not present on our other media?

The mobile phone is not “the third screen.”  It is a very personal, interactive, communication ecosystem of which the screen is just one visual component.  The mobile phone has developed, and is continually developing, behavioral mores and cultural norms that have very serious implications for marketers.  Violate one of those norms, and the consequences can be severe. 

Marketers who continue to treat the mobile phone as yet another screen to “repurpose content” or as a quick campaign add-on to “target a hard to reach audience”, do so at their peril.  It will be the brands that actively leverage the behavioral use patterns of the mobile phone and their attendant cultural norms that will succeed.

Marshall McLuhan said “The medium is the message” and he couldn’t be more right as it pertains to the mobile phone.  The emerging customs, lifestyle behaviors and prevailing standards associated with the use of the mobile phone are unique, real and significant. 

When mobile-specific behavior and culture is taken into account, the mobile phone shines as a brilliant addition to a well crafted overall brand marketing strategy – witness AT&T and American Idol. 

When ignored, it can have the potential to undo the hard earned trust of the very same brand.  AT&T found that out when it violated customer privacy expectations by using the American Idol list.  And worst of all, most of the customers who chose to break up with the AT&T brand as a result, didn’t even bother to inform them by sending a text.

  http://digg.com/tech_news/Mobile_Mandala

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #6   This Time it’s Personal

The big news in California this week was how State Assemblyman Mike Duvall boasted about his sexual exploits to a fellow Assemblyman while his microphone was still on.  The resulting video has become a YouTube hit and Mr. Duvall promptly resigned.  Clearly, Mr. Duvall was not expecting to broadcast his comments.  They were obviously personal, private and meant only for the ear to which they were spoken.

In fact, think about the last time you whispered in someone’s ear.  Were those comments ones that you wanted broadcast around the room?  Probably not.

Without a doubt, there is a time and a venue for comments that are meant to be broadcast to a wide audience and time and a venue for comments that are meant to be narrowcast to a smaller audience, perhaps consisting of only one person. 

Just as importantly, there are venues that are most appropriate for broadcasting, and venues that are most appropriate for narrowcasting.  Television is most appropriate for broadcasting. Someone’s ear is most appropriate for narrowcasting. 

The mobile phone is also most appropriate for narrowcasting – and not just because it spends most of its time next to someone’s ear.

More often than not, the mobile phone is perceived as a personal device and a private medium.  According to a 2007 Consumer Cell Phone Usage Poll conducted by Harris Interactive, 63% of mobile phone users agreed with the statement that “My phone is very personal to me”.  Certainly very few consumers would ever agree with that statement if it referenced their television or their radio.

Yet, marketers and advertisers continue to treat the mobile phone as a venue to broadcast advertising messages rather than a venue to narrowcast advertising messages.

But if we study the behavioral patterns and attitudes towards phone usage, impersonal broadcast messages are not what consumers want on their mobile phone.

According to a 2008 research study from International Academy of Business and Economics, a consumers’ attitude towards advertising is affected by the belief that “the mobile phone is a highly personal communication tool of the user”. That same study concluded that “mobile advertising was expected to be an important communication channel with consumers, but the study reveals that consumers hold unfavorable attitudes towards this new advertising medium.”

Why?  Perhaps, because the broadcast advertising model is not as effective in a highly personal space, like a mobile phone.

For mobile advertising to stair step to the next level of success, the mobile marketing community needs to embrace the concept of narrowcasting, and begin to utilize those emerging technologies that enable narrowcasting on the mobile phone.

In addition, the structure of the advertising or marketing message to the mobile phone user should be one that leans more on the persuasive elements prevalent in a narrowcasting appeal, rather than messaging content more appropriate for a larger audience.  

There is a significant difference between narrowcasting and broadcasting venues.  And, a significant difference in the messages that are appropriate for both.  Today, the cost to brands and mobile marketers in not recognizing that difference is merely an opportunity cost.  For Assemblyman Mike Duvall, the cost was far more tangible.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #7   Let’s Get Engaged

Last weekend, we were hanging pictures while moving my daughter into her college dorm when the question of the day was asked again – “is that straight”?  Of course, six pairs of eyes were needed to survey the top of the poster, compare it to the horizontal line in the ceiling, and then all announce different conclusions – higher to the right, no lower on the left – until a voice of reason emerged. “Let me get out my level app”.  Lo and behold, the iPhone came out, the level app appeared, and there was no longer any question if the picture was straight.  Wow, another dorm crisis solved.

I was just amazed at the usefulness of that app, the speed at which it solved our crisis, and how thankful we were to have found it at that moment.   No wonder, the app has surfaced as such a revolution, in the evolution of this device that we had previously used solely as a mobile phone.

Of course, my revelation is not a new one – particularly to the legions of developers and marketers who have been rapidly designing, programming and releasing apps over the last year.  By now, virtually every brand has its own app or has one on the drawing boards.

If we as marketers are looking for consumer engagement (which I define as a deeper level of interactive involvement with the brand), certainly the app has become a golden path towards that engagement,

What a surprise it must have been, then, to see the Pinch Media study last February that stated that the vast majority of apps downloaded from the App Store are in use by less than 5% of consumers one month after downloading.  In fact, according to the same study, just 20% of consumers even return to run a free application again the day after it’s downloaded. As time goes on, that decline continues, eventually nearing zero after three months.

That has to be pretty sobering news for any brand after spending five and often six figures on a new app and all the attendant promotion.

So how can marketers effectively engage their consumers on an ongoing basis with apps that have staying power?  David Ogilvy famously said that “I know that 50% of my advertising works, but I just don’t know which 50%.”   The same can be said for apps;  we know that 5% have staying power, how can we predict if our app will be among the 5%?

There is one sure way to know. 

Just look at the free apps in your space with already demonstrated staying power, and sponsor those apps.  The last time I checked, Home Depot (or any other home improvement store) had not sponsored that level app – and we have used it at least three more times in the past two weeks!

I think back to how that level app solved my need, at our family’s moment of need.  I think back to how grateful we would have been to Home Depot, had they sponsored that app.  Imagine how much more engaged I would have been with the Home Depot brand because each time I used the level app, I would be reminded that my problem was solved thanks to Home Depot.  And, guess which home improvement store would be first on my list the next time I had a home improvement need?

Sometimes the best ideas are the simplest.  Find free apps in your space that already work and repeatedly engage.  Use the power of those apps to engage for you.

Do you want long lasting engagement for your brand?  There’s an app for that – and someone else has already done the development!

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #8: The “It” Girl

Recently, I was reminded of the definition of the “It” Girl from high school “All the guys want to date her, all the girls want to be her”. The second half of this definition had always fascinated me.  What does it mean to be someone else? 

Perhaps it means to experience what they experience, to hear what they hear, and to do what they do. At a deeper level, it might mean to get into the mindset of that person, to think what they think, to want what they want and to need what they need.

Hey, from a marketer’s perspective, I want to be an “It” girl, too.  As a matter of fact, I want to be all 65 million guys and girls from 18-34.  How incredible would it be as a marketer, to get into their mindsets, think what they think, and know what they want and need?  

And not from a broad targeted demographic standpoint, either. But, on a very granular one-to-one level.  I want to know what each one of them thinks, wants and needs.  Not in general, but at this very moment. 

And, to go a step further, I want to tell each one of them, in customized language that I know will resonate differently with each one of them, why they would absolutely love my product or service.  And I want to be able to change that language an hour from now, when a new stimulus causes them to think, or want or need differently.

My daughter can do exactly that right now.  She can tell me at any point in time, on any day, where her five closest friends are, what they are doing, and in most cases what they are concerned about, want or need that exact moment.  How does she know?  Her friends are in constant contact, on their mobile phones, at all times.

The mobile phone is probably the closest proxy for being the “It” girl as we have ever seen.  Yet, as marketers, we don’t really think about it that way.  Why don’t we leverage the mobile phone’s full potential to connect people who want and need things at a particular moment with the exact things they want or need at that moment?

What a lost opportunity – at least until someone figures out a way to do it.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #9: Old Wine in New Bottles

Earlier in my career, I was the head of Walt Disney Records.  In our audio archives, we had a truly wonderful and timeless collection of children’s music that represented most of the nursery rhymes, word games and standard songs that parents loved singing to, and with, their kids.  One of our product managers came up with the idea of repackaging that music in a more contemporary CD case and reselling it to a whole new generation of parents.  He called the strategy “Old Wine in New Bottles” as the older recordings were high quality, and the new packaging for the CD was necessary because no one purchased cassette tapes anymore.

While an effective strategy for compact discs (that collection went on to sell millions of copies), “Old Wine in New Bottles” has been a less than effective strategy when it comes to new media.  Back in the mid-1900s, when television started to catch on, programming executives were trying to figure out what people would enjoy watching in the new medium.  The initial solution was to repackage old popular radio personalities and radio shows for the TV set.  So, the new TV audiences were treated to watching the talking heads of radio hosts, in essence, doing visual radio shows. 

That didn’t go over very well.

We now realize that the television has a number of unique attributes that radio doesn’t have – among them, the ability to actually see something. Doesn’t it seem so simple, now?  Don’t you just wonder how the early TV execs could be so blind what is unique about TV, and the need to design programming to take advantage of those attributes?  Of course, new industry executives are much smarter now and would not make that mistake again.

Think again. 

Think to the repurposed television content, concepts and programming constructs that made its way to the computer and Internet 1.0.  And think about how they didn’t work either. Why?  The internet had a number of unique attributes that television didn’t have – among them, the ability to actually engage in a two-way interactive experience rather than a one-way broadcast experience.

So that brings us to mobile.  And, the temptation to put “Old Wine in the Mobile Bottle” is still too strong for many of our colleagues to ignore, despite the fact that the mobile device has a rather lengthy list of attributes (and limitations) that are not prevalent on the computer. And with mobile, we are not just talking about programming content and models for content, but also developing creative advertising executions and models, revenue models, and unique mobile experiences that are only possible and can be best monetized on the mobile phone. 

The mobile app is among the first of those paradigm changing examples.  And what a great success it has been, so far. 

When the entire mobile advertising industry begins to innovate as well, and take advantage of the uniqueness that is mobile, then we will begin to see the extent of mobile advertising’s potential.  Until then, make sure you enjoy your wine from its original bottle.

Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #10: Read My Lips

At the 1988 Republican National Convention, George HW Bush, then a candidate for the presidency, spoke the famous line “Read My Lips:  No New Taxes”.  Unfortunately for Bush, he did not read his own lips, raised taxes during his first term to reduce the national budget deficit, and subsequently lost his bid for reelection.

In the mobile space, we also fail to read the significance of the millions of mobile users’ lips and texts in the mobile ecosystem at our peril. 

Yes, we have all breathlessly read all the latest trend data:

• According to the July 22, 2009 Pew Wireless Internet Study,
  •  81 percent of U.S. cell phone users admitted to using their phone, at one time, for something other than making a voice call
  • 19 percent of Americans surf the Net on their mobile device on a daily basis – up from 11 percent in 2007 (that’s 73% over two years!)
  • Cell phone users are more than twice as likely to send a text on the average day as do anything else (except talk)

And, as a result, we continue to redouble our efforts to create iPhone applications and mobile web banners in response.  And, of course, we continue to send contests, promotions and other advertisements over our SMS ad networks.

Trend data helps predict tomorrow.  But, if we want mobile advertising to be successful today, why don’t we pay attention to the 270 million pairs of lips in the United States that communicate over the mobile phone – the vast majority by voice and 44% (Pew) using SMS text.

Today the overwhelming majority of people with mobile phones use it to communicate with each other. Interactive communication is the most predominant, most consistent, and most active use of the mobile phone today.

Yet, we do not utilize those moments of interactive communication to inform people of products, services and opportunities. No, instead, we create another mode of opted-in one-way communication via the cell phone – one way, from us to them, with an opportunity to give us a predetermined response, if they choose. “Mobile ad networks represent, by far, the largest sub-sector within mobile advertising” according to the May 2009 report by the Magna Group at MediaBrands. 

Certainly, mobile ad networks have been successful, and will continue to be successful, for the right clients with the right campaign.  I have recommended SMS based advertising campaigns to some of my clients and they have worked extraordinarily well. 

But, is no one in our mobile ecosystem reading the statistics about how people are actually using their phones?  As an industry, why are we not also tapping into the primary use of the phone today – interactive communication – for advertising purposes?

The question we need to begin asking is how we can create advertising that people want to receive as part of their daily interactive communication activity.  While they are talking and while they are texting to friends, family and other contacts, how can we leverage the personalized and contextualized process of interactive communication to help inform people of products, services and opportunities that appeal specifically to them at that particular moment in time?

Will it require new technology?  Probably.

Will it require new business models?  Probably.

So??????????

For mobile advertising to reach its potential, we need to be less conscious of what we want to tell people and more conscious of what their lips are saying and their fingers are typing.  It is in that specific moment of interactive, one-on-one communication that our messages can resonate the loudest and have the greatest impact on those we wish to reach.

Stuck in the Sand

While in Tibet a few weeks ago, I had the opportunity to view an actual sand mandala.  As you might know, the Dalai Lama is well known for creating large and elaborate mandalas from colored sand.  Although usually created by a team of monks, sand mandalas can use millions and millions of grains of sand and take weeks to finish. They are absolutely beautiful to see in their intricacy and large scale. Yet, despite all of the time and effort expended to create this unique and beautiful work of art, once a sand mandala has been completed, it is ritualistically destroyed.  This ceremonial destruction is carried out to tangibly symbolize the transitory state of material life. 

It certainly puts some perspective on all of the well researched and documented thought that has gone into creating the many wireless industry paradigms we have all embraced over the years.  As the wireless ecosystem has developed, what seemed like sustainable paradigms only months earlier, are summarily discarded as more advanced technology and newer business models emerge.  The transitory state of wireless life, indeed!

We have travelled from the religious battles between TDMA and CDMA in the 1990s to LTE vs. WiMAX today. In 1995 the average GSM customer sent 0.4 text messages per month.  In the second quarter of 2008, the typical subscriber sent or received 357 text messages, compared with 204 phone calls. Apple introduced the app store a little more than one year ago.  A year later, over 1.5 Billion apps had been downloaded.

The paradigms for wireless success have been created and destroyed, morphed and changed, tweaked and deconstructed more times, in less elapsed time, than in virtually any other modern industry.  Today’s paradigm for wireless success has a good chance of becoming tomorrow’s forgotten business model.

Imagine taking a team of people and creating something significant and meaningful only to deliberately destroy it when it was completed like the Buddhist monks do with sand mandalas.  But isn’t that what we should do when circumstances, technology, competition or business model changes make what we created no longer as relevant or as profitable? 

If so, then why is our first response always to resist?  Why can’t we be the first to embrace paradigm change, even if there is an associated cost or an associated risk? 

Take a moment, and let’s just imagine if we did.  Imagine if we were the first to embrace a new thought, a new idea, a new advertising business model, or new hardware or software innovation – not because we had to, but because we understood that with the risk of being first to say yes, comes all of the rewards of being a new leader in our industry.

“There are those who look at things the way they are, and ask why.  I dream of things that never were, and ask why not?”  — Robert F. Kennedy