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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del52.jpgDeloitte is sharing some “interesting” numbers from their new “The State of Media Democracy” survey. Billed as a “‘reality check’ on how American consumers between 13 and 75 years of age are using media and technology today – and what they want in the future,” the study reserves a special section for mobile entitled “Cell Phones as Entertainment” as it breaks down consumption of user-generated, traditional and mobile media across four key generations: Millennials (13 – 24), Gen X (25-41), Baby Boomers (25-41) and Matures (61-75).

Some highlights from the piece:

  • “Cell Phones are Surging as Entertainment Devices.” (Yes I said “Hype” for a reason). 36% of US mobile users surveyed stated that they use their mobile phone for “entertainment” (up from 24% in just six months). The Millennials reported the highest activity in this area, with 62% reporting mobile entertainment usage (up from 46% in six months), with Gen X second at 47% usage (up from 29% in six months). It’s not entirely clear how Deloitte is defining “entertainment” (they don’t define this in their release), but surely cannot be referring to video services, or even downloadable music – as these numbers are seriously at odds with nearly most (if not all) major research data covering this market. Perhaps “Entertainment” is referring to gaming, video, music, and “entertainment-related” mobile web usage. Question: If I’m talking on my mobile and my friend tells me a joke, does that count as “Cell Phone Entertainment?”
  • Both Millennials and Gen X’ers display nearly identically activity in mobile internet usage, at 45% and 46%, respectively. Again, these numbers seem very high when viewed against similar studies and other industry data from “mobile specialist” research firms like M:Metrics and Nielsen Mobile (Telephia)
  • Mobile “picture taking” on the rise. 63% of mobile users reported using a mobile phones for photo capture; 80% of Millenials and 75% of Gen X. These numbers seem somewhat elevated but in general seem realistic and corroborated by similar studies and marketplace observations.

Overall, I must say that I am extremely skeptical of Deloitte’s latest findings, an opinion shared by others in the US mobile marketing space. Both Carlo Longino of mocoNews and Steve Smith of MediaPost cast similar doubt on the validity of some of the numbers reported in the survey, primarily concerning the dubious claims concerning US mobile video penetration (20%? – is that a typo?!). Ultimately, the fact that the Deloitte survey promotes data consistently and significantly above earlier findings would suggest a overenthusiastic (to use a nice word) research bias, and whether intentional or not – unfortunately puts all of its findings into doubt.

mobilestance 2007 year in reviewThe slow news week after Christmas is notorious for the oft-derided “year in X” reports, but rather than take time exploring the value of such “Remembrance(s) of Things (less than a year) Past,” mobilestance.com would like to take the time to indulge in our own year end recap of the most notable US Mobile Marketing developments in 2007 (and yes, the illustration on the left depicts “Old Man 2007″ knowingly handing an iPhone to “Baby New Year 2008″).

And what a year 2007 has been. Between the flurry of VC and M&A activity, the reality of a declining global ringtone market and the re-orgs that followed, the explosion of ad supported business models, growth in consumer use of key mobile data services, notable marketplace exits, divestitures and bankruptcies, new entrants in the wireless space (yes, I’m talking about Apple here), and the aggressive moves on the part of the internet portals (most notably Google, but also Yahoo and even AOL and IAC), 2007 may yet be remembered as the year mobile finally “happened” -much to the delight of the Business 2.0 crowd.

After reviewing the list please take a second and weigh in on what you feel was the most important Mobile Marketing event of ’07 by participating in the poll at the end of the piece. Also, since 2007 was such a busy year no doubt there’s plenty more that could be added to this list… that said feel free to leave a comment if you’d like to add some additional insight or if you feel something crucial has been overlooked.

Thanks much… and now without further delay, mobilestance.com proudly presents “The 2007 US Mobile Marketing Game Changers.”

  1. Google Steps it up. Not content to merely sit on the sidelines and play by the rules set forth by the US carriers, the search giant spent much of 2007 re-writing the rules of the US wireless industry. With their conspicuous “open access” lobbying effort, leadership in the Open Handset Alliance, the launch of their open Android platform, and their plans to enter the upcoming 700 MHz US wireless spectrum auction has a legitimate player, Google has stirred the 2007 US wireless pot like no other single corporate entity. While it remains to be seen as what will ultimately come of its aggressive moves in the space (although it seems Google has single-handily forced the biggest hole to date in Verizon’s vaunted walled garden) , it is clear that Google is determined to usher in a far more flexible (read: marketer-friendly) US wireless marketplace… a market that will likely be a boon to innovative third party mobile application developers, hybridized business models, and – most importantly – accelerate consumer adoption of “beyond voice” mobile services.
  2. The Rise of MMS. 2007 was the year that US consumers finally got behind MMS in large numbers, exiting news for marketers not satisfied with the simple Joys of Text. In November of 2007 the MMA reported 33% of all US mobile phone users reporting monthly use of “Picture and/or Video Messaging” – that’s up dramatically from a paltry 16% in 2006. In the younger demographic segments the numbers are even more attractive, with monthly usage peaking in the 18-24 year old group at an astounding 55%. So what does this mean? Bottom line, now that MMS has reached critical mass in the US marketers are free to (finally) capitalize on the expanded interactive and multimedia prowess of the enhanced messaging channel. The possibilities are endless… everything from moblogging, MMS-based couponing, photo contests, video alerts, pattern recognition, html email-type CRM communications and so much more. Sure, there’s nothing actually new with all of these tactics… but now we’re talking about the difference between MMS-based marketing campaigns with real ROI back to the brands, versus the eternally frustrating”test campaigns” of earlier years.
  3. Enter the iPhone. So much has has already been written on the sleek Apple device that it’s become extremely difficult to assess its actual impact. Never mind the recent eye-popping stats released on the iPhone’s disproportionate share of the overall browsing universe, or recent efforts (while fascinating and seemingly quite worthwhile) by marketers to leverage the device to deliver hypertargeted messaging to the forward-leaning, early-adopting, free-with-the-dollars demographic. No, the real impact of the device lies in it serving as a “showroom model” for the full potential of the mobile marketing channel. An independently sold (from the carriers, mind you) Wi-Fi/GSM hybrid with a beautiful touch screen, snappy web browser (snail-like AT&T EDGE network speeds notwithstanding), usable video, music and photo management options… and coming in February, a public SDK for the development of third party applications and a (rumored) flash plug-in for the device’s browser – a first for the “mobile” web (and hey just because it’s the holidays let’s not get into a debate on what is or is not actually the “mobile” web – for now let’s just go with it). It’s amazing how quickly the standard for what is “possible” in mobile has been raised since the release of the iPhone less than six months ago – and how what once passed for cutting edge has so rapidly become not simply dated, but altogether irrelevant. More than any other event in the mobile marketing industry’s short history, the entrance of the iPhone has fueled a frenzy of interest in the space – both from brands and agencies alike. The motivational equivalent of the ‘69 moon landing… with all the junior rocket scientists that followed.
  4. Mobile Advertising Comes of Age. After a few years of luring in the shadows of the mobile marketing industry, the mobile advertising market became incredibly hot in 2007, punctuated by major acquisitions by leading interactive and mobile firms, as well as a dizzying array of venture-fueled deals in the space. The two leaders in the nascent mobile advertising industry, Third Screen Media and Enpocket were promptly acquired by AOL and Nokia, respectively – while Microsoft, once again outmaneuvered in the interactive ad firm acquisitions game, was forced to settle on European Mobile Ad Firm Screen Tonic. The remaining independent mobile ad firms were also firing on all cylinders, with Amobee, Millennial Media, AdMob, Greystripe, and Quattro Wireless all expanding on the heels of fresh investment capital raised in ‘07. Newspaper giant Gannett made a major investment in SMS-based ad firm 4INFO, while Google and Yahoo played a bit of small ball (we can gut Google a little slack here… they’ve been busy rewriting the rulebook for much of the rest of the mobile industry after all). The former taking the much anticipated step of expanding AdSense into the “mobile web,” while Yahoo! announced mobile publisher services and plans to integrate mobile inventory into their Panama ad platform. As for the internet display advertising giants, DoubleClick (soon to be Google) launched their publisher platform, while aQuantitative’s Accipiter Unit (now owned by Microsoft) tied up with NYC-based MoPhap to bring mobile capabilities to their publisher-side interactive ad serving platform. Add daily press releases by major web publishers bringing mobile inventory online, and I think you get this picture: 2007 was the year that nearly everybody in the space simply had to have a mobile adverting play. Sure, there was a bit of herd mentality going on, and no doubt we’re in for… shall we say, a bit of a “correction” in the coming years (this kind of activity surely cannot be sustained indefinitely) – but regardless, the business and technological systems are now in place for brands to reach out and communicate directly with consumers via the mobile handset. Keep in mind this is very different than previous (primarily SMS-based) mobile marketing activity that simply leveraged mobile as a direct response channel activating other forms of media such as television, print and radio (as so eloquently described by Jeff Minsky of OMD in a then accurate but increasingly outdated assessment of the channel – sorry Jeff, but I couldn’t take that one lying down!). Using mobile as a broadcast-type media may be a bit controversial to some, but as long as there remains checks and balances with regard to consumer privacy (yes, the carriers seem to be pulling their weight here, although some needed to be prodded a bit on the subject) an effective system of reaching consumers via their mobile devices should flourish in the months, years and decades to come.

 

Reader Poll – 2007 Mobile Marketing Game Changers

What was the biggest game changer in ‘07?

  • Enter the iPhone (50%, 24 Votes)
  • Mobile Advertising Comes of Age (33%, 16 Votes)
  • None of the Above (10%, 5 Votes)
  • Google Steps it Up (4%, 2 Votes)
  • The Rise of MMS (2%, 1 Votes)

Total Voters: 48

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Starting December 20th, print ads for Wine Enthusiast running in the WSJ will incorporate SnapTell’s “Snap.Send.Get” technology, reports Mobile Marketer.

The promotional mechanic is very simple and works as follows: Readers “snapping a picture” with their mobile phone and sending it to SnapTell (presumably via email or MMS) will “receive 15 percent off of any purchase on www.wineenthusiast.com.” It is not clear how the discount offer will be returned to consumers, but it is likely to be delivered via SMS in the form of a promo code to be redeemed on the Wine Enthusiast website.

If all of this is sounding at all familiar, it should. Boston-based Mobot, one of the first companies to activate the mobile pattern recognition space in the US, has been powering similar campaigns for Jane Magazine, Vibe and Elle Girl since 2005. What makes the WSJ SnapTell campaign significant is that (to my knowledge) this is the first MMS-based campaign to launch in the US targeted to an audience over 35 years of age. Could it be that recent studies indicating the rising popularity of MMS in the US are to be believed?

One of the reasons that SnapTell’s solution is attractive to marketers is that consumers can engage with these campaigns without first having to download a separate mobile application to transcode and/or identify the pattern to be recognized. The idea behind both Mobot and SnapTell is that all a consumer has to do is send an MMS or email an image to their servers to engage with a campaign; all images / patterns are identified on the server-side. The upside to this approach is that most handsets now have cameras integrated into the device, greatly increasing the potental reach of the tactic.

On the flipside, decoding the image on the server inherently builds lag time into the experience, and response times can be further impacted by message delays on the carrier side. The QR code mechanic, where the image (in this case a one or two dimensional barcode) is decoded on the handset rather than on the server, has been shown to greatly reduce these latencies, providing a much better user experience. However, since most handsets do not (yet) come with reloaded barcode readers (and trying to get consumers to download applications on their own is a fairly challenging task to say the least), the impact of domestic QR campaigns remains limited to an extremely small install-base.

eMarketer, in a somewhat misleading article entitled “Few Answer Mobile Marketing Call,” is reporting what most of us in the industry feel on a daily basis. Despite all the hype, all the bullish forecasts, trumped up press releases… case studies and industry events, mobile marketing is still has a long way to go as a marketing and advertising channel.

I say “somewhat misleading” because, as although the article cites MMA data that revealed only five percent of Americans reported engaging in a mobile marketing activity in 2007 (up from two percent in 2006), the response rate of such campaigns was as astronomical twelve percent. This compares well with response rates of other direct channels, such as telemarketing (7.2 – 5.6%), direct mail (2.3 – 1.2%) and email (.85 – %).

What was that again about “Few Answering the Call” of mobile campaigns?

Also highlighted in the report was the rapid growth of picture messaging in the US, due in no small part to the intercarrier MMS agreements hammered out by all major US carriers in the latter half of 2005 and early 2006. Similarly, SMS messaging didn’t really take off in the US until intercarrier text messaging was made possible in 2003. The final piece of the MMS Marketing puzzle remains the (lack of) availability of intercarrier SMS Short Codes. Currently the call to action for most MMS campaigns in the US remains an akward email point of entry – awkward because most non-smartphone users have difficulty multi-tapping out the “@” sign. In a statement accompanying the MMA study, Gene Keenan, Vice President of Mobile at Isobar and former traveling chef to the Grateful Dead, indicated he is also bullish on photo messaging-related marketing campaigns 2008, stating that he “expect[s] to see some very innovative campaigns this coming year using picture phoning.”