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Mobile Media: Future of Mobile media powered by Applications

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Mobile Media: Future of Mobile media powered by Applications

  1. 1. __________________ Role of Mobile Applications as Next Gen Media Perspective paper Manas Ganguly 1
  2. 2. Background Close to 5.3 billion people around the world globally access their world of communications through Mobiles1. A well researched study in India documents that there are more mobiles in India, than toilets2. Mobiles in social development are truly becoming an integral part of social and economic development as researched and documented by social studies in India which indicate a GDP increase of .6%-1.2% for every 10% increase in mobile penetration3. Mobiles will be the internet delivery medium to a vast majority of global population and yet it will also be medium for experience delivery. Mobiles will enable value creation, collaboration, co-creation in real time, for the next billion internet users. The increasing connection between physical devices and online services will drive new applications and interfaces that will consume personal data and turn it into useful, personal, social, visual and tangible benefits for users as well as businesses. In effect, Mobiles will gradually become media devices over and above voice and data communication devices. Businesses and brands will look to new ways of engagement with and influencing customers through branded mobile applications. Applications are the face and feature of Mobile internet going forward4. Mobile Applications will combine advantages of mobility to user behavior, context, social layers, discoverability and platforms such as location based services, payment mechanisms, augmented reality, profiling and recommendation mechanisms and more to deliver experiences unique, relevant and contextually adept to users. Thus the role of mobile based applications gradually evolves into mobile media. Advertisers, Corporates, Businesses, Governments and other profit and non-profit organizations will seek to leverage the mobile media to engage their customers with user-relevant experiences. While Applications based on utilities5 could roughly be defined as Mobile Media 0.5, Contextual App-vertising6 (Advertising through Apps) is possibly Mobile Media 1.0. Applications providing branded experiences which are contextually relevant and targetted will take engagement levels between brands and consumers to a hitherto-unknown and undefined level which is defined as Mobile Media 2.0. The market for mobile-media has been embryonic till date, but that will rapidly change as trendsetting companies/organizations will focus on products and services that benefit from the unique characteristics of mobile applications. As this growth surge happens, mobile media will take its place alongside ATL, BTL, TTL as a significant media channel in its own right. Mobile media as an advertising channel will surpass Web 2.0 and app centric advertising will become content, almost entirely. Advertisers will, within 2-5 years, massively convert to mobile, location-aware, targeted, opted-in, social and user-distributed ads; from 1% of their budgets to at least 1/3 of their total advertising budget. Advertising will become ContVertising7. Google expects revenue windfalls of 10X scale of what they are today, in 5 years, driven by mobile and video. 2
  3. 3. Web 2.0 and Mobile Media: Impact on Advertisers How many large and reputed organizations would you know of which don’t have a Facebook page or haven’t FBed a campaign? Is their a single brand which exists today without a web-site? The hugely popular Pepsi “Change the Game” and Vodafone “ZooZoo” have huge Facebook presence. Pepsi has a million “fans” on the Pepsi FB page. Dell made $6.5 million last year selling hardware thru Twitter-engagement8. Around 20% of the conversation in Twitter is brand based9 i.e some or the other brand gets discussed either positively or negatively The bottom-line for corporates and businesses is that a delay in engaging through mobile media could mean missing out on the5th P: People10 Given the prodigious expansion of reach in mobile internet, it will not be very long before brands and businesses would need to establish their presence on mobile as well. This presence will run deeper than just the mobile site. It would include creating brand awareness, user talk back and communication with the brand, brand led utility tools, brand-user engagement and experience and a holistic branded media experience at a later stage. The delivery of this branded experience will be through the branded applications. This thus opens up a new channel/media for brands to engage customers and advertise. Going forward this would be one of the fastest growing media channels for brands will nearly 33% of marketing monies being apportioned to mobile application led advertisements in a 5 year horizon. ____________________________________ Brand Applications will be the key to delivery of branded experience on mobile 3
  4. 4. Evolution of Mobile Applications Apps was declared the word of the year 2010 by American Dialect Society11.Today it is difficult to say whether the popularity of smartphones is driving mobile apps usage, or vice versa. There were about 90 Mobile application stores till 3Q, 2010 and the number today is around 150. There is significant money in the mobile applications markets. Even though 80% of apps downloaded are free, global revenues from apps reached $11billion in 2010. Almost all analysts agree that apps download and monetization will grow by factors of 4X-9X in the next 4-5 years horizon. This increase in the revenues generated by app downloads and usage will be supplemented by innovative services and business models built around mobile apps. These services will evolve quickly in the coming years and add an important new dynamic to the apps businesses. Majority of the new monetization would come from advertising and associated services delivered by apps centered around and relevant to the user. 2010 2011 Downloads 47% 38% Advertisements 11% 17% In-app Purchases 8% 31% Upgrades .3% 2% Did not monetize (Branding 33.3% 13% only) While the monetization of Apps through the Brands and Advertisements would see a decline in 2011 vis-à- vis 2010, it would emerge as a strong revenue stream in the near term horizon as Apps evolve from “Just Apps” to “experience providers”. Data from www.readwriteweb.com20 Principally, apps have started evolving as domain differentiators. Apps as we know now are more devices led differentiating mechanisms. The best examples hereon are the different apps stores: Apple, Ovi, Android, Blackberry, WebOS, Windows-Phone 7 and more. These are being used by OEMs to differentiate and brag about their devices. The principal intent here is to build direct customer relationships and create device stickiness for their brand of devices. Massive app proliferation has forced Telecom Operators, ISPs and Content aggregators to read this trend in a new light. Apps are being leveraged by service providers to build relationships with end-users by providing key associated services and avoiding becoming a dumb pipe. Thus, the next round of apps stores will be around network or carrier differentiation. 4
  5. 5. Vodafone, AT&T, Verizon, Opera, Airtel, Aircel, Orange and other carriers are stepping up ambitious investments in the apps space. A trend that is also emerging is apps as a channel differentiator. Retailers and e-tailers such as Amazon12 and Best Buy are now becoming very important players as customers are looking to these domains, to provide a broad array of services, devices, applications, content which is device and platform agnostic. Independence and trusted third party status is a powerful value proposition The App as a channel model leverages key assets of the retail platform: choice of products and services, equity in the e-commerce space, security, value, platforms that can effectively support search, discovery, download and payment mechanisms. There is a lot of competitive action that is already under way as Social collective buying13 emerges as mainstream. Services such as Foursquare, Google Latitude, Facebook Places, LivingSocial, Yahoo Local and Groupon are wholly dependent on location based features based out of an application delivery experience14. Mobile Applications emerging as a marketing channel will not only redefine Monetization basics but will also change effort, thoughts and spends behind Mobile as Marketing medium. 5
  6. 6. Mobile applications as media channel ICICI Bank has introduced an Android based application which is a suit of banking utility services which provides one touch/click mobile banking solutions to its consumers15. Debenhams has launched a mobile app which lets its visitors catalogue, view and ear- mark sale-dates and prices16. Groupon and LivingSocial will be announcing their Android based apps for collective buying based on location specificity of deals14. Formula 1 recently unveiled an App to follow its races, cars, teams and drivers along with venue booking services for the F1 die-hards18. Times of India has launched an App to add another dimension to its media streams. It now straddles Mobile apart from the print and web channels19. Mobile media is coming of age in matured markets such as US with nearly 47% of mobile subscribers using mobile media (browsed the mobile web, accessed applications or downloaded content)21. This is up 7.6% against 2009 attributable to smartphone adoption, 3G/4G device ownership, and ubiquitous data plans, all of which facilitate the consumption of mobile media. Evolution of Mobile Applications Network/ OEM/ Device Channel Branded Applications as Carrier Differentiators Differentiators Applications Media Channel Differentiators 1st Gen Application 2nd Gen Application 3rd Gen Application 4th Gen Application 5th Gen Application 2010 2011 This Graphic is a representation of evolution of Apps as enablers for different domains. The apps listed earlier in this section are Branded applications and we are already seeing a movement towards branded applications. The culmination of Apps as a media channel for sponsors and advertisers is the next step in this evolution. 6
  7. 7. As commerce migrates from the electronic to mobile, these utility apps stated earlier will be instrumental in driving traffic, disseminating information, engaging customers in the branded app experience. This is the plain vanilla function of a mobile application in mobile media space. However, the fifth evolution of mobile apps will be centred around the user, functioning as a media channel for brand experiences to be delivered to users. For instance a LBS and Layar20 based travel app could profile a user and not only suggest him places, travel routes, hotels, travel plans and itinerary but also could point the traveler to like minded travel groups, collective buying, on-spot travel guides, hire-a-service and local marquees for a holistic travel experience22. Or for a car buying experience, apps could help in choosing the car, its color and other technicalities, dealerships. In addition it could suggest the interiors, leather and electronic accessories/fitments, car loan and car insurance, car registration and more. In effect the whole user journey could be mapped on apps and critical user needs could be translated to monetization opportunities23. Flip it over to the brand, and this would thus become a channel both for media delivery and experience delivery for the user. One would require a lot of “engines” running silently behind the app and in the server such as LAYAR, LBS, Analytics, Profiling and Recommendation engines, Shopping Carts, 2D scanners, RFID, NFC, Banner-ad serving templates, Virtual Buying, Templated Applications deliveries, Collective buying, Search, Ad servicing algorithms, Mobile payment mechanisms and more to deliver the brand experience on the mobile. Features of Mobile Apps as a Media Platform • Transaction Capabilities • Targeting/ Personalization Capabilities • Social merchandizing Capabilities • Provision for business and campaign management • New user engagement models • Multi-device and multi-screen presence • Building Brand Experience, Engagement and intimacy 7
  8. 8. Mobile Applications as Media/Advertisement Channels: Beyond Advertising 2.0 Mobile Applications will evolve as a parallel marketing channel23 which would enable, enrich, engage and make a richer experience of the purchase cycle, from awareness, consideration, conversion, loyalty and service and measuring the metrics of the marketing efforts. Being able to measure the effectiveness and RoI of application led marketing campaigns could be another key to its acceptance as a media channel. Initially, most of the mobile-led marketing campaigns delivered through applications will focus on branding and user-generated content in support of existing marketing initiatives. That is the creating just a level of awareness with mobile-apps and creating a presence in mobile space. Media Properties Typical What Mobile Apps as a Marketing channel enable Marketing Activities Creating Branding Creates Mobile as a new Broader environment for Awareness promoting a brand Content Creation Apps as a forum for social/viral and often user generated content Invoking Traffic Mobile complements the existing digital mediums and Common Customer Experience Consideration Generation creates additional ways to drive traffic to own site, mobile and social network presence Engagement Applications to engage potential customers and deliver user –relevant and customized feed to each individual user. Innovation/ Proactive customer engagement in product/service/ system Ideation innovation Conversion Lead Generation New mechanisms for targeting and incentivizing potential customers. On ground engagement with consumer in terms of location and context aware services Purchase m-commerce channel Decision Building unique buying propositions through the video and other experiential process Purchases as a process of continuous user-brand engagement at every stage Creating Loyalty/Service - Advocacy Deeper connection with users throughout the AIDA process, purchases and consumption processes Interactive activations to market/sell the brand Mechanisms for community based buying Measurement Rich demographic and socio-graphic data for effective real time customer engagement with the brands Mobile apps as a media channel would have many properties and support a lot of marketing activities. The table above is a representation of the versatility of Apps in delivery of branded media networks to users/consumers. 8
  9. 9. The second phase of mobile-app based marketing efforts would be to engage potential customers and deliver user –relevant and customized feed to each individual user for targeting new products, lead generation and building a dialogue with the customer. This will combine the benefits of social media to create a larger advocacy for the brand. _____________________________________________________________ User Needs  Journeys  Experience Mobile-Applications will become main-stream as the real life consumer behavior is replicated across in a simulated environments across the internet The engagement and experiential models would become richer and offer more experience to create deeper connection with users throughout the AIDA process, purchases and consumption processes. Interactive activations would be served up to market/sell the brand often to a community of users. Leads can be significantly enhanced by new mechanisms and engines for targeting, data gathering, profiling and recommending “likes” and “interests” to user communities. A deeper level of engagement would encompass the role of engines as invisible applications and intelligent agents which would dive greater depths of engagement for the user as well as the media sponsor. A list of 17 such engines which could be used as wrappers enriching media experience around an application has been provided earlier. Concepts such as social-shopping-buying, mobile community building and group- ideation are higher order derivatives of mobile-application-media led marketing which would happen once the efficacy of the “application as a media channels” is established. Mobile-apps as a branded medium is destined to become the biggest ad delivery platform in the next 7-10 years and the growth of mobile branded experiences (the least of which is advertising) will exceed the TV and Internet medium both in reach and revenues. While mobile ads will become more compelling and engaging, it will not kill older media like TV, Print or Internet as each will adjust to the newest medium. _____________________________________________________________ Brands will use apps to drive hundreds of millions of dollars in sales. Apps will become a core revenue generator for businesses. 9
  10. 10. Getting Started: The Imperatives For many companies, mobile media represents a new channel with much to learn and master. There are four imperatives that every company should keep in mind: Imperative 1: Jump in soon and learn by doing Imperative 2: Develop a strategy for Mobile Imperative 3: Define what the customer experience should be and the data required from the user: Imperative 4: Integrate mobile-application media channel into an overall multi channel strategy. Conclusion With 752 million mobile subscribers in India24, mobiles have become embedded in the fabric of everyday life for millions of consumers. Companies will seek to find ways to leverage these online relationships for commercial gain. Mobile-Applications promise to be the next generation media channel: individualized, customized and relevant, even while mobile are becoming the next generation e-commerce engines. Marketers and strategists are smart to feel a sense of urgency in understanding and experimenting with direct commerce within these platforms; early movers will have a solid foundation on which to build their business and brands as the application platform evolves. As always, learning what doesn’t work will be as important as learning what does. Each step along the path to purchase – generating awareness, enticing customers to purchase, cultivating loyalty presents its own opportunities. Companies are considering targeted efforts all along this path, while integrating applications as a part of the over- arching multi-channel media strategy. Developing an integrated and comprehensive strategy for gathering customer data and mining it for insights, imagining new methods for customers to discover, experience, decide and buy together and building a compelling customer experience will be essential to succeed in this new era of application led mobile media channels 10
  11. 11. Endlines  2010 has been a landmark year in terms of apps-usage, evolution of apps and mobile-media usage  The mobile-app consumption is growing strongly  Smartphones are key drivers of audience, usage and advertising  Tablets, e-book readers and other connected devices redefining “mobile”  Mobile-media usage through Applications is becoming a daily activity  Applications are increasingly becoming a transactional channel  Brands will feature as significant stakeholders in migration of apps to mobile- media  Mobile applications will be the companions or concierges in user journeys starting from awareness to purchase, loyalty/ advocacy, group buying, talk-back and more.  The app delivery, discoverability and user experience will be critical in determining the app reach and stickiness in the media context.  App delivery across multitude of screens: TV, Mobile, Web and even car dashboards will help establish app-ubiquity References 1. International telecommunications union- ICT facts and figures: The world in 2010. http://www.itu.int/ITU-D/ict/material/FactsFigures2010.pdf. Release: 27th January 2011 2. India has more mobile phones than toilets: UN Report. (Telegraph UK). http://www.telegraph.co.uk/news/worldnews/asia/india/7593567/India-has-more- mobile-phones-than-toilets-UN-report.html 3. Excerpts from Vodafone-Africa Policy paper published in 2005: http://www.vodafone.com/content/dam/vodafone/about/public_policy/policy_pap ers/public_policy_series_2.pdf and Deloitte study for lowering mobile taxes to boost usage and growth: http://www.deloitte.com/view/en_GB/uk/news/press- release/4e47f0b2326fb110VgnVCM100000ba42f00aRCRD.htm 4. Apps: The new face of Internet (Ronnie05’s blog). http://t.co/L1OofUQ 5. Mobile Applications evolving into utilities: Mobile marketer and Chris Cunningham http://www.mobilemarketer.com/cms/opinion/columns/2386.html 6. Mobile Marketing: Is “App-vertising” the answer? AdAge Digital and Garrick Schmitt. http://adage.com/article/digitalnext/mobile-marketing-app-vertising- answer/136622/ 7. Contextual Advertising: Definition by PCMag http://www.pcmag.com/encyclopedia_term/0,2542,t=contextual+marketing&i=56 351,00.asp; Description and explanation by Wikipedia http://en.wikipedia.org/wiki/Contextual_advertising; Article at Harvard Business Review by David Kenny and John Marshall. http://hbswk.hbs.edu/archive/2124.html 11
  12. 12. 8. Adam Ostrow, “Dell rides Twitter to $6.5 million in Sales”, Mashable.com, December 9, 2009, http://www.mashable.com/2009/dell-twitter-sales/ 9. One in Five Tweets is Brand related: Pen state university. http://www.marketingcharts.com/interactive/one-in-five-tweets-is-brand-related- 10404/ 10. People: The 5th P of marketing: Kinesis. http://www.kinesis- cem.com/Insights/Fifth-P.html 11. Linguists Vote App word of the year: GMA news http://www.gmanews.tv/story/210090/world/linguists-vote-app-word-of-the-year 12. Profiling the Amazon Apps store (Ronnie05’s Blog) http://t.co/y93uuFq; Strengths and weaknesses of Amazon App store (Ronnie05’s blog) http://t.co/ZiRC0ZK; 13. Future of Local Commerce: Collective Buying (Ronnie05’s Blog) Part I http://t.co/6Npdxd5 14. Future of Loval Commerce: Collective Buying (Ronnie05’s Blog) Part II http://t.co/vTeAp91 15. ICICI mobile banking application iMobile: FoneArena and Varun Krish. http://www.fonearena.com/blog/802/icici-mobile-banking-application- imobile.html 16. Debenhams embraces Android and Nokia: GoMo News: http://www.gomonews.com/debenhams-finally-embraces-android%E2%80%A6- and-nokia/ 17. 2011 Mobile trends, according to developers (Read Write Web): http://www.readwriteweb.com/mobile/2011/01/2011-mobile-trends.php 18. Formula 1 2011: Official App coming to iOS and Android.http://www.product- reviews.net/2011/03/14/formula1-com-2011-official-app-coming-to-ios-and- android/ 19. Times of India launches Android App: AndroidOS.in. http://androidos.in/2011/03/times-of-india-launches-android-app/ 20. Augmented Reality: How it works? (Ronnie05’s blog) 2011 Mobile trends, according to developers (Read Write Web): http://www.readwriteweb.com/mobile/2011/01/2011-mobile-trends.php 21. The ComScore 2010 Mobile Year in Review: February 2011 22. Apps: The news face of Internet (Ronnie’s Blog) http://t.co/L1OofUQ 23. Evolution of App Stores: Putting the brands perspective to monetizing apps stores. (Ronnie05’s Blog) http://t.co/44Ooan5 24. India reaches 787 million telecom subscribers… Mobile subscribers stand at 752 million! (India Business Blog) http://trak.in/tags/business/2011/02/11/indian- telecom-subscribers-growth-december/ 12

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