Mobile Fix – What they weren’t talking about in Barcelona

Simon Andrews, founder of the full service mobile agency addictive!, on the things they missed at the Mobile World Congress…

We were disappointed not be able to make the usual pilgrimage to Mobile World Congress in Barcelona this week – but watching the news from the event mitigated this. There just wasn’t much real news… there was lots of talk about devices and some interesting keynotes but not much to write home about.

This is largely because the companies that drive the mobile space now – GAFA – didn’t really show up. Yes, Google was there with an interesting talk from Eric Schmidt and lots of noise from Android. And Facebook did a keynote where they talked of their support for standardising mobile web standards – using HTML5 Core Mobile Web platform. We learnt that mobile web is bigger for Facebook than Apple and Android combined and they intend to use mobile web to drive discovery and download of mobile web apps.

They also talked more about how their platform for mobile payments, using peoples phone bills, which neatly avoids having to pay anything to Apple. We knew lots of this already but the talk is worth watching for the detail.

“Facebook would have been a mobile application if the technology had been available when Mark Zuckerberg was building it in his dorm room.”

Amazon weren’t in Barcelona and neither was Apple. But Apple did get a lot of attention when they announced a new event next week – at exactly the same time as Eric Schmidt was kicking off his keynote.

The device announcements were spiced up by the presence of two Chinese brands with big ambitions. Huawei had a huge stand and announced two very impressive handsets – as well as showing off lots of very impressive technology they have developed themselves. They are going to be a big player. As are ZTE, who announced eight devices. They are already the fourth largest handset manufacturer in the world through lots of unbranded phones.

The big problem all the device manufacturers have is that all the phones look the same now. Before the iPhone there were huge variations in phones – different sizes, different screens and even different colours. Post iPhone, they all like iPhones.

We think that phones have arrived at the same point as TVs – all of which now look the same too, leading to commoditisation and falling margins. People now decide to buy the largest screen they can afford and will look for tier-two brands as they believe they’re all the same. In response Samsung and LG are trying to balance playing at the cheap end of the market with the new innovations like 3D and connected TVs – which is why we don’t believe that Apple won’t enter this market… they’ll focus on the set top box.

But the big news of the week happened elsewhere…

Facebook held their advertiser event in New York and announced their long anticipated new formats. Now brands get to have a timeline too, along with new ways to spread their content across Facebook – including within the news feed of their fans.

And we finally learnt how Facebook intend to plug the mobile gap in their revenue – Sponsored Stories are coming to your mobile newsfeed. In a similar way to Twitter advertising, brands can now get onto the 450 million mobiles used to access Facebook.

All advertisers need to do now is produce content that adds value; content that is useful or entertaining.

The FT has a good piece suggesting that Facebook is rewriting the rules of Adland – focusing on the very lucrative support network that has emerged to help brands make the most of Facebook. In this weeks results WPP makes the point that while in most marketing spend the media owner takes a much higher proportion of revenue than the agency, in social (and mobile) its closer to 50 50.

Talking about the results WPPs Martin Sorrell told the FT that;

Sorrell predicts @WPP client spend will top $2bn with Google in 2012, Facebook double to $400m, Twitter “will grow significantly this year”

That sounds a lot doesn’t it. But the total media spend of WPP is around $73.5 billion. So the most dominant digital media companies are getting just 3% of spend. We have some way to go yet.

Google continues to make news for privacy issues. Its new privacy policy came into force yesterday and they were all over the news explaining it. But regulators are circling and it is crucial for Google to be able to use all the data they can to target advertising. Although they can and do go a liitle too far sometimes – I find my iPhone keeps announcing that more of my photos have been added to Google+ using Instant Upload. While it may be a useful service I never agreed this and it seems tricky to turn off.

Amazon may well start to come under some scrutiny on privacy as they use data on their customers to build an advertising business. In the US they buy inventory on sites they know their customers visit and serve ads based on their knowledge of the customer. They have hired senior ad sales people and are now offering this media to other advertisers.

Our industry needs to get smarter at explaining how it works and what the benefits are to people – and to make sure people know how to exercise control if they want to.

What they should have been talking about in Barcelona?

Last week we mentioned that the fall in SMS, due to people using web based messaging, was leaving a $14 billion hole in operator revenues. With other lucrative revenue streams like roaming coming under pressure, operators need to find new ways of making money. This was acknowledged in Barcelona and there is talk of new services – but little detail.

We believe operators have a fantastic opportunity to leverage their user base by offering converged services that make the most of their networks and the smartphones they subsidise.

So why isn’t Everything Everywhere launching a service where there customers can see where their friends go? Imagine taking lessons from FourSquare, Gowalla and the rest and create a mass market service for people to share their locations. Build in ways that Everything Everywhere customers can invite their friends on other networks, but reducing the utility for non customers. So on a night out their customers can find their friends and share where they are and where they are going next. Layer on offers from bars, clubs and cinemas and you have a social tool that can drive revenue and reduce churn. And give those on other networks a compelling reason to switch. Diageo did this sort of thing 10 years too early with NightFly.

Why doesn’t O2 develop a smartphone based loyalty scheme for small shops? Sign up to the service and invite your customers to check in every time they visit, motivated by offers from the shops. The shops have a way to communicate with their most valuable customers who benefit from offers and news. The data is hugely valuable for targeted advertising and it’s a good way to develop a userbase for the imminent wallet. Square is going to do this if they don’t.

Couldn’t Vodafone introduce a mobile cab finding service for their customers? Signing up cab firms around the country and enabling customers to click one button to announce their location, and have cab firms bid for their business. And of course people are encouraged to pay using their phone –  sending a text to add the cost to their phone bill. But we could just let Addison Lee Uber and Hailo develop this market.

What about 3 giving their customers the tools to build a crowd sourced map of the UK, leaving reviews and comments on all sorts of places that their friends can use when trying to decide where to eat, drink or shop. Or should we just leave that to Yelp?

These sorts of service would differentiate an operator more effectively than their latest 30 second TVC. They would drive revenues and help reduce churn. And they are a natural extension of the current business model.

I’m told the argument against these sort of initiatives is that they would work better if available to everyone, rather than just customers of one network. Which is true, but we have an emerging industry that is largely about peddling these sort of ideas just to customers of one device manufacturer. And the three big operators each have around twice as many customers as Apple does in the UK.

Many of these services have huge potential outside of early adopters and operators are perfectly positioned to help them cross the chasm.

Operators have a huge opportunity and its time for them to step up – or just accept the role of being a dumb pipe. We’re happy to help.

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