mobilestance 2009 mobile predictions sm2Peer into Mobilestance’s Proprietary Crystal Ball!

Well it’s that time of year again… when pundits and publishers large and small exploit the slow end-of-year news cycle to recap the old and forecast the new.  Here at mobilestance it’s a extra-special time of year… as it was nearly one year ago when we formally “came out” of beta with our 2007 Recap piece and spammed it out to our publisher’s 3,000 +  email address book.  Ahh… memories!

This year, rather than spend the next thousand words rehashing what was undoubtedly the most exciting year in mobile since the advent of the crazy frog ringtone, we decided instead to take the easy way out and peer ahead to future…   casting our lot into a sea of like-minded posts from across the blogosphere.

So what will occur in 2009 at the intersection of Mobile and Marketing?  Will location become (as Dan @ Organic so eloquently put it in a recent Facebook status) “just another input”?  Will MMS finally become interoperable between carriers and ShortCodes, and finally emerge as a realistic marketing vehicle?  Will a wave of consolidation sweep the industry, as smaller independent mobile agencies, technology vendors and ad networks become casualties of the “great recession”?   Will newly legislated digital privacy-controls arrive just in time to kill the mobile web?  And of course the big question on everyone’s minds: Will mobile finally jump from the backwater of marketing budgets known as “emerging,” grow some legs, ditch the tail, and finally walk upon solid (budgetary) ground?

So read on then, fearless time shifters… and arm yourself for the ensuing complexities that will envelope our fledgling industry in the coming year!

Mobilestance’s Top 10 Mobile Marketing Predictions for 2009

  1. 2009 Will be the Year of Mobile.   After many false starts the Long Joke will finally end… and Mobile will finally have its moment in the sun.  With the rising popularity of smartphones; the lower cost of mobile data; and the pervasiveness of mobile broadband, internet and other “beyond voice” services, Mobile (with a capital “M”) will finally achieve critical mass in the US – and agencies, brands and business infrastructure providers alike will finally start paying attention with the purse strings.
  2. 2009 Won’t be the Year of Mobile.  What would a mobile marketing prognostication piece be without some conflicting signals?  Call it hedging my bets… but I just couldn’t resist punching up the contradiction that is the current state of mobile marketing.   Sure, everything I said in the previous ‘graph is dead on… the crystal ball is crystal clear on that.  But will that make 2009 “The Year of Mobile?” Hardly.  Sure, mobile has made some great strides of late in terms of its effectiveness as a marketing channel, and there is NO doubt that will come even farther, faster in 2009.  But sorry kids, it simply will not find its way out of the “emerging” bucket when it comes to budgeting.  No, the “Year of Mobile” can only be declared after we see dedicated “mobile” advertising, CRM and/or marketing budgets… or (at a minimum) a substantive breakout from a larger “digital” line… and with 2009 shaping up to the second coming of the “Flight to ROI” of 2002 (warning: pdf link) , we’ve probably got until 2010 until we can finally herald the end of the Long Joke. In the meantime there’s still plenty for Mobile Marketers to do – namely, hone our skills and prepare ourselves for when the money spigot really opens up in 2010.
  3. Mobile Search Comes of Age.   OK, enough with the levity… let’s get into some serious forecasting. If there’s one thing we’ve learned about mobile usage in ’08, it’s that smartphones = search volume.  While previously a mere academic curiosity, this correlation will show real legs in ’09, as legions of iPhoners, Crackberry Addicts and the like will continue take to mobile search like a longshoreman on a bender (read: heavy consumption punctuated with colorful language) .  We’ve already witnessed both Google and Yahoo fine tuning their mobile search products – albeit in very different ways – and in 2009 we will see the beginnings of a real business emerge in this sector. Watch for the leading engines and agencies make a major mobile plays in ’09, as both will look to the sector to help sustain revenue growth and counter the “leveling off” of the (once interstellar) growth trajectory of “traditional” online paid search and/or SEM – as both (especially the former) begin to show early signs of maturation.
  4. Mobile Video (finally) Gets Interesting.  Along with search, the other interesting affect that comes with increased smartphone penetration is increased consumption of mobile video.  I say “interesting” as in “somewhat viable” or “worth experimenting with”- which should not be interpreted as “it’s going to explode” (or even that I’m reasonably bullish on the channel).  No… while I’ve been a mobile video hater for many years for reasons too numerous to count, we’ll see enough scale in 2009 to merit some testing… as after all, leveraging the moving image remains (arguably) the most effective method by which one can influence consumer behavior.
  5. Apples Grow on Trees… While Android Picks up Steam.  A no brainer that simply cannot be ignored… and the importance of which cannot be overstated.  Most likely, Apple will successfully keep its momentum into ’09 by rolling out popular, yet evolutionary iPhone models (think new colors and modestly increased storage capacity/performance, rather than new form factors or revolutionary new features or price points).  Android will likely see a bigger increase in Mobile OS share (albeit from a smaller base) than Apple, as Samsung (Spring) and Motorola (Fall) roll out hot new handsets utilizing the Open Source mobile OS.  And speaking of Open Source, it will be interesting to see if the (reasonably) open Android starts “out innovating” Apple’s proprietary mobile OS when it comes to features and applications.  As it is we’re still waiting for Google to integrate a working commerce model (safe money is on Google Checkout… duh!)  into the Android Marketplace so that developers will have an easier time charging consumers for applications (expected Spring, 2009) – so it might be awhile before developers truly embrace Android as tightly as they have with the iPhone SDK.  Our prediction:  in 2009 Android will become the “hip incubator” for mobile application and/or OS innovation… with Apple and/or independent iPhone developers skimming the cream and co-opting the most interesting ideas of the bunch.
  6. Biggest Losers of 2008: Motorola, Palm and Sprint Stay Alive.  Notable for their ability to keep breathing, the “Crap Pack” of ’08 will not kick the bucket as so many are predicting.  Sprint will slowly turn the corner in ’09 under Dan Hesse’s steady hand (is it us, or is anyone else getting a “Fred Thompson” vibe from his gently reassuring, speak-directly-into-the-camera series of commercials?), making incremental customer support improvements and leaning on that “Clearwire Thing” to leapfrog ahead in the bandwidth arms race (see “Wi-Max Casts Wide Shadow” below for more on this).  The great recession saved Motorola’s Wireless business, as the venerable Schamburg, Illinois red ink factory likely found no suitable suitors.  Now the company is forced to do what it does best… crank out a hit product to save the company – which we believe we’ll see in the form of a swank Android handset sometime late next year.  Until then Moto will occupy itself by doing the other things it does best: bleeding market share and taking on further debt… which brings us to our last lovable looser, Palm.  The fact that Elevation Partners decided to invest $100MM to keep Palm afloat just last month proves that there’s somebody out there for everybody… no matter how unsightly, aged, infirm or otherwise unappealing.  Seriously, we’re not entirely sure know how much lifespan $100MM buys Palm, but we’re betting 18 months, at best.
  7. Cash Poor Mobile Start-ups Get Snapped Up by Web, Traditional Media Players.  Another obvious one that needed to be said: the credit crunch / recession combo will start claiming casualties among the most vulnerable in the mobile sector, while traditional media giants and other web firms lacking mobile chops go bargain hunting.  Specifically, the time might be right for WPP’s 24/7 RealMedia to formally acquire one of their partner mobile ad networks (such as JumpTap or Millennial), should the opportunity present itself.  On the Cable side both Comcast and Time Warner have already made big bets on wireless with their Clearwire investments… yet neither have much else to leverage here in the form of inventory of other mobile-ready assets. A mobile video acquisition for each of these players on the order of a Rhythm NewMedia or Transpera might just be in the cards.
  8. WiMax Casts Wide Shadow.  While 2008 was all Apple and Google, newly-formed Clearwire (not to be confused with the “old” Clearwire, which had the same management yet different investors – a confusing situation that deserves a dedicated posting of its own) quietly rolled out what we believe to be the first real mobile broadband network in the US… (OK, well in Baltmore, MD – but heck, it’s a start!).  As Clearwire partner Sprint Wireless brings new WiMax hardware to market, and  the high speed service rolls into new markets like Portland and Chicago in 2009, look to Verizon Wireless and AT&T to fall all over themselves to attempt to bring their competitive 4G “LTE” (Long Term Evolution)  product to market by the end of the year.  It’s a moot point if Clearwire ever really rolls out a national WiMax network, or instead (like many are predicting) runs out of cash sometime in 2009 (prediction: cash-laden Clearwire partners Intel and Google will pony up an additional round of investment in the network while cash strapped partners Comcast and Time Warner sit this round out – slowing, but ultimately sustaining, Clearwire’s national rollout) what matters most is that Clearwire and WiMax is giving the industry a huge kick in the pants… and with this we’ll finally get the true mobile broadband experience we’ve all been waiting for.  Cue the brass band!
  9. MMS Gets its Act Together (Just in Time to Become Totally Irrelevant).   It’s no secret that MMS never really caught on with the public… and even when the carriers got their act together in 2006 and brought cross-carrier MMS interoperability online, the bloom was already nearly off the rose, as it were.  Marketing applications remained uber-niche, as lack MMS support for cross-carrier short codes left brands with two, equally unappealing options (e.g. the use of either a ten digit phone number or an email address in the primary Call-to-Action).   Still, while some consumers are giving the “Most Morbid Service” a second chance, the last nail in the coffin may have come from Apple, when it shafted the technology by not supporting it on the iPhone.   Now it seems the CSCA , along with their strong-armed cousin, NeuStar, are working with the US carriers to bring MMS support to intercarrer (common) ShortCodes… which, if achieved, would greatly expand the effectiveness of the channel as a marketing medium.  The question is, will this work be completed before the technology becomes altogether irrelevant?  Perhaps… although no one (including us) is betting on it.
  10. Application “Bubble” Doesn’t Burst… Yet.   A minor one, but just squeaks into our Top 10 (take that, “Privacy Concerns!”).   First, in order to predict that a bubble won’t burst, you need to prove the existance of a bubble.  Case in point: iFart (point proven!).  Now just when will the “App Bubble” burst?  Well, it would seem that in order to “burst”, the bubble would first need to achieve maximum volume, which won’t happen until iPhone and similar “ReallySmartPhones(TM)” achieve critical mass (we’re thinking 15-20% penetration) – and that’s not happening for at least a year or two – even in the rosiest of scenarios.  Still, for all the whooplaa around “+300MM iPhone app downloads in the first six months of app store,” some have acutely pointed out that the iPhone app growth curve has already started to flatten out.  That said… we’re likely to see a whole new crop of iFarts-like hits in 2009 – and needless to say Mobilestance awaits on baited breath.

Well folks… there you have it – our top 10 predictions for 2009.  Feel free to leave a comment if you feel we’ve missed something… or if you just want to throw some gasoline on the fire… and check back with us throughout the year as we continue to chronicle this thing we call Mobile.

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google-mobile-logo-copy.jpg Google’s Newfound Strategic Advantage in US 4G Market Goes Largely Overlooked.

While coverage of last week’s WiMax Mega-Deal largely focused on how the new venture would affect Sprint, Clearwire, and its largest investors (Comcast and Intel), there was strangely little attention payed to the tremendous up-side Google stands to reap from its relatively minor investment of “only” $500 million (as compared to Comcast’s $1.05 billion, Intel’s $1 billion and Time Warner’s $550 million investments).

With little fanfare, the WSJ reported that “Google will become the preferred software developer on the WiMax network, meaning its search service would be the default on new mobile devices.” Additionally, Sprint “agreed to put Google’s mobile operating system, Android, in some Sprint phones.” While the second point is not that surprising (Sprint, as well as Intel, are both members of the Android-focused Open Handset Alliance), the first point may have tremendous impact on the long term landscape of the US mobile search market.

Historically, the major US carriers have been reluctant to grant Google access to their customers, resulting in the search giant’s well-documented difficulties in penetrating the domestic on deck Mobile Search market. Now, as WiMax is likely years ahead of competing domestic 4G technologies such as LTE, Google sits atop a de facto mobile search monopoly in the US wireless broadband space (3G services, while a significant improvement from their predecessors, can hardly be deemed a true “broadband” product experience).

This is a tremendous strategic advantage that may extend beyond mobile search into other highly lucrative areas such as mapping, email, and perhaps event streaming video (YouTube), depending on what Google’s position as the venture’s “preferred software developer” ultimately means. True, consumers will likley be free to navigate to and/or download competitive services from the likes of Yahoo!, MSN and even IAC, but we all know that the majority of users will be content using the default services preloaded on the device.

Google’s advantageous position is further enhanced by the venture’s aggressive cable system partners (Comcast, Time Warner and Bright House), who view the platform as the ultimate response to the “quad-play” service bundles currently offered by Verizon FIOS and AT&T U-verse. The cable companies are locked in a no-holds-barred, block-by-block, all out war with the telcos, and no one should doubt the MSO‘s willingness to fiercely market their advantage in wireless broadband. Google, of course, will profoundly benefit from these marketing efforts.

All told, the real value of Google’s first mover advantage in the domestic 4G space will be their opportunity to define their mobile brand in the best of environments, while Yahoo! and company must more or less wait for AT&T and Verizon Wireless to roll out their LTE networks – content with their standard 3G-based services that will no doubt seem primitive in comparison to Google’s souped-up WiMax products.

mobilestance world of WAPcraft warcraft GFXThis week was marked by an extraordinary series of high profile Mobile Web developments… which, when viewed in aggregate, were seen by many as evidence that the nascent channel has finally reached an inflection point.

All three major areas of the mobile web “ecosystem” (carriers, publishers and advertisers) announced significant site launches, partnerships and traffic milestones, including several blue-chip advertisers and content publishers such as American Airlines, YouTube, Yahoo!, NBC, ABC, A&E and the New York Times.

Despite these encouraging developments, several notable marketplace events served to point out the shortcomings of the emerging mobile web space, including a reminder of a glaring limitation of the mobile web from a metrics and reporting standpoint, as well as accounts of a public tirade involving nearly the entire mobile value chain – from one of the mobile industry’s more prominent (and animated) executives.

A busy week in the World of WAPcraft to be sure… here’s some of the major highlights:

  • Carriers. Last week’s most significant Mobile Web development came from AT&T Mobility, who announced a strategic alliance with Yahoo! whereby the internet giant will begin serving ads on the carrier’s “MEdia Net” mobile portal. Under the terms of the agreement, Yahoo! and AT&T will divide up the on-deck advertising inventory for sale and/or for internal use. Additionally, AT&T ‘s yellowpages.com will now power local search on both AT&T’s Mobile and Wireline Web properties. AT&T has not yet announced when these changes will take affect.

    AT&T Mobility’s move follows earlier moves by Sprint and Verizon Wireless. Collectively, the three carriers represent approximately 78% of the US mobile market. T-Mobile, the last of the “big four” US carriers without an on-deck mobile advertising play, has tied up with Yahoo! to serve ads on its UK “Web’n’Walk”mobile portal. Clearly the announcement from AT&T Mobility would inhibit T-Mobile’s ability to expand their Yahoo! relationship here in the US.

  • Publishers. This week witnessed an abundance of mobile website launches and/or relaunches from many of the larger content providers. YouTube announced the launch of its new Mobile Web site (m.youtube.com), as well as a new J2ME application (supported on Nokia 6110, 6120, E65, N73, N95 and Sony Ericsson k800 and w880). NBC announced the launch of 40 new WAP sites (as well as 3 new mobile video channels), including dedicated mobile web sites for NBC programs such as 30 Rock, ER, Friday Night Lights and Saturday Night Live. Not to be outdone, ABC News announced that its mobile site (m.abcnews.com) would be providing “real time” US presidential election results, although Mobile Marketer reports that ABC refreshes its mobile website content [only] on an hourly basis.

    On the cable side, A&E Television announced the launch of mobile the A&E Network portal (mobile.aetv.com), as well as dedicated sites for The History Channel (mobile.history.com) and The Biography Channel (mobile.biography.com). The A&E mobile sites feature fairly standard mobile web fare, including “What’s on Tonight”, “Program Descriptions and Photos”, “Fan Polls and Trivia Games” and “Downloadable Wallpapers and Ring Tones.”

    Finally, moconews.net reported that the New York Times mobile website is now generating an average of 10MM page impressions per month, a 600% year-over-year traffic increase.

  • Advertisers. American Airlines announced the launch an extravagant new mobile web site that is sure to raise the bar for mobile websites in the airline category. The site utilizes a common URL approach (www.aa.com), which automatically redirects mobile users to device-appropriate site versions (although mobile users have the option of reverting to the full HTML site, an option that hopefully will soon become a standard feature on most mobile websites). Currently the AA.com mobile site features include the ability for users to “check in for a flight, view their itinerary, check schedules, check the status of their flights, get information on destinations, weather or airports and contact American Airlines.”

    Future AA.com mobile enhancements targeted for a Spring ’08 launch include the ability for users to “book flights, change their reservations, view fare specials, request upgrades and enroll in” American’s AAdvantage loyalty program. Additionally, the carrier states that “many pages also will be viewable in Spanish.”

  • Criticism. UK SEO provider AccuraCast cast a spotlight on Google’s inability to effectively track conversions generated from AdWords Mobile. The challenge faced by Google is that its ability to track conversions relies on either Java script (embedded on a publisher’s page) or tracking cookies – technologies not supported by most (if not all, in the case of Java) mobile web browsers. To its credit, Google acknowledges its system’s shortcomings, noting that “conversion rate, cost-per-conversion, cost-per-transaction and value/click are adjusted to reflect only those sites from which we can track conversions.”

    In lighter news, this week at the AlwaysOn Media event in New York City Cyriac Roeding, SVP of CBS mobile, unleashed a public rant against the complexity and inherent dysfunction of the mobile ecosystem. Apparently no one was spared from Teutonic executive’s assault on the mobile industry; From the carriers (there’s too many of them! lack of technology standards! too many pricing options! too many service packages! poor marketing!) to the publishers and handset manufacturers (poor usability! content poorly organized!) and even the advertisers themselves! (they don’t understand mobile or the value it brings!). While attendees reported that Mr. Reoding’s “marketplace observations” were greeted with wild applause, mobilestance finds it ironic that the current Chairman of the Mobile Marketing Association Board of Directors would choose to publicly rebuke, ridicule and embarrass nearly all of the organization’s members.

Analysis: While development of the mobile web ecosystem seems to be accelerating, it remains to be seen if a critical mass has been achieved – both in terms of users – as well as content. Still, all the major players in the space (carriers, content publishers, and advertisers) are taking the necessary steps to advance the channel towards reaching the seemingly inevitable goal of mainstream use. That said, it is clear that several prominent hurdles (most notably usability issues such as UI and network speeds, as well as the inability to cookie most mobile devices) still stand in the way of large scale consumer adoption and commercial exploitation of the mobile web.

Myspace launched a free, ad-supported mobile website today (mobile.myspace.com), this according to both moconews and MobiAd. From what I understand the site soft-launched a few months ago, so this new announcement must be the official “hard” launch, although the site still says “beta” in masthead (the Google affect, no doubt). The move comes after the launch of the subscription-based myspace mobile J2ME client on AT&T and Helio about a year ago.

From a user experience perspective, the site works well and is quite snappy in my testing on a Verizon Blackberry 8830. That said, the Ford Focus ad displayed was not optimized for my handset. It could be that the 8830 was not recognized by the ad server and therefore defaulted to the 215 x 34 ad size (instead of the 305 x 64 that should have been served), although it’s far more likely that myspace’s mobile ad server is simply not optimizing ad delivery based on the device, as the 8830 is a highly popular handset and would therefore be included in any decent device library, including WURFL. Additionally, after many page refreshes the Ford ad is the only unit shown, indicating that either the site doesn’t permit advertiser session / frequency capping, or that this campaign simply isn’t using it (perhaps Ford is the only advertiser on myspace mobile at this time?).

Fox Interactive Media’s mobile partner on the advertising-side is Boston Baltimore-based Millennial Media, who is handling both the ad serving for myspace mobile (as well as most other FIM mobile sites) via their MYDAS server, as well as repping the inventory directly to advertisers and agencies. Currently they are serving banners basically an ROS basis, although I am told plans are in the works to bring advanced demographic, geographic and psychographic targeting online “in the coming year” – all based on user registration data. While advanced targeting is attractive from a planning / efficiency standpoint, in my view ad targeting becomes less relevant that overall reach (at least until the mobile web’s scale reaches critical mass)… and in myspace’s case, what I’d really like to see from them is a targeting option that can restrict an ad rotation to pages that do not contain user generated content, for obvious reasons.

So much has been written in the last week or so following the announcement by Verizon Wireless that they would be opening up their network to handsets sold by third parties, and that they would be streamlining the (currently) painstaking process of third party application development.

Most have focused on the reactionary nature of Verizon’s move, that it was simply a defensive move to counter the coming Android threat, AT&T’s iPhone, as well as to satisfy the new FCC rules governing the upcoming Spectrum Auction… rules also pushed through in large part to Google’s marginally-successful Congressional lobbying efforts. In general, the bulk of the coverage from the mainstream media and major industry blogs have largely written off Verizon’s move as a token gesture that will have little impact on the market for at least the next several years. In many ways these publications are correct, yet clearly they have missed the larger picture.

But to the mobile marketing community, as well as the marketing community at large, the shift represents the beginnings of a long-awaited shift towards a working Mobile Marketing system. I say “working” because the current environment of carrier-specific technology standards and business practices makes for an overly-fragmented, cumbersome system that seems counter its own ends. Divergent carrier technologies notwithstanding, the idea that third-party developers can now publish applications on the Verizon network without having to be “approved” by the carrier is a watershed moment in US mobile marketing, opening up roughly 25% of the marketplace that was, until now, more or less unreachable to the “free to the end user,” advertising-supported model.

For US consumers, innovative and (just as important) inexpensive (handset and/or ad-supported) mobile applications will become far more commonplace, as handset manufacturers will now have the freedom of preloading applications that consumers (rather than the carriers) are interested in using. While these handsets will inherently carry a higher MSRP due to the lack of carrier subsidy, it is my prediction that pricing for “non-carrier subsidized” / D2C handsets will ultimately not become a barrier to purchase, as consumers will value the benefit of getting the handset they (actually) want, rather than being forced into the handset the carrier wants them to have.

Change is a beautiful thing.

google_wireless_logoNo one really expects that they will actually win the bid, or even wants to… why then is Google engaging in this escapade?

a) to further push open standards, so as to aid in Android penetration?
b) to aggregivate Verizon, AT&T, T-Mobile and others?
c) world domination, FUD-style

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