The Mobile Internet Giant

How the Mobile Internet

is Disrupting Our World

Bell Pottinger Group

1st July 2009

Introduction and Summary

To paraphrase, some of us achieve innovation and some have innovation thrust upon

us.

We believe that a stream of innovations in and around mobile phones has created a

new entity in the world of communications, often referrer to as “mobile internet”.

And whether you regard your self as a communicator, a marketer, a politician, or just

someone who likes to keep up to date, we believe that this is a topic worth attending

to. It is being thrust upon us.

In our view, the term “mobile phone” doesn’t really capture what these devices are

about any more.

And while the phrase “mobile internet” hints that something interesting happened

when people started accessing the internet wherever they were, even this suggests

that if you “get” the internet then you will “get” this new thing. This may be a too

casual response.

We have written this paper to explore what “mobile internet” is all about and to

offer a few suggestions as to how to deal with this new “giant” thrusting him self into

your professional life.

The cheat sheet goes as follows

- the numbers show it’s big already

- understand the iPhone phenomenon and you’ll understand most of this

- it’s not just another channel for your messages

- it is a place where “classical” marketing can flourish

- to really “get it” you need to start splashing around, so get yourself a

“smart phone”, download some “apps” and join in

We believe that the Mobile Giant is a major innovation and one that presents major

opportunities for our own innovations. As such, we welcome him into the

Communications Village and look forward to a fruitful new era . But, let us go back

to the beginning of the story…..

Contents

Section one:

The evidence for the Giant

1. There might be Giants!

2. The gestation of the Giant

3. The iPhone : the first born and the Apple of our eye

4. The Mobile Internet Giant : measure it in billions not millions

Section two:

Living with the Giant

5. Why we are all afraid of the Giant

6. Befriending the Giant : tales of kinship, community and noble service

7. Eating the Giant one bite at a time

8. The future of the Giant

9. Fear, greed or friendship : living with the Giant happily ever after

Section One:

The Evidence

1. There Might be Giants!

There is an old saying that technology may change but the nature of people does not. On the whole, this means that we don’t have to respond to every “big new thing” that comes crashing into our world. Whether as business people, communicators or citizens it Is more than likely that when the fuss has died down, we can all carry on doing pretty much what we have always done.

But, once in a while a real titan of a technology will come striding into our world and irresistibly change the way we live, do business and communicate. It may not happen over night but once he is in town, we really do need to pay attention.

The car was one of them. Television another. The internet has proven to be a third.

So what of mobile phones?

Lifestyle accessory of the 80’s yuppie, mobiles have been a mass phenomenon for a while and had their various effects on culture over the last two decades. But the question for today is whether a new wave of technology in and around mobile phones is creating a major disruption to our world?

Disruptions past and presentCar

(1920’s)

FreewaysSuburbs

TeenagersYouth

culture

TV (late 30’s)

AdvertisingBrands

Junk foodObesity

PC/Internet(late 90’s)

GlobalisationCredit CrunchBNP revival

?

Mobile Internet

(late 00’s)

(e.g.) Twitter ??

???????

What’s that coming over the hill? Is it a (mobile) giant approaching?

It is our view that a combination of affordable, feature-rich smart phones, “all you can eat” mobile internet deals, common industry standards and a surge of creativity (e.g. in the creation of “apps”) are coming together into a giant that we will all have to reckon with.

Many a new technology is over-hyped (personal hovercraft anyone?) but no one realised what was to come when the first Model T Ford rolled off the production lines. To be sure, one of the problems with these world changing giants is that their impact does not become clear until well after their release, typically 10 or more years. But we are not going to sit on the fence and get stomped: we think this is a biggie.

One of the problems here is that “it” doesn’t have an agreed name like other phenomenon such as “Web 2.0” or “going green”. The “mobile internet”, the “smart phone revolution” or “mobile marketing” all get part of it but not all. So we will describe him as “The Giant” until a universal label emerges.

Like the giants of myth and fable, this particular giant is strong and powerful but maybe not aware of his own strength. Like the Cyclops he is something to be respected, feared even. Like the giant from Jack and the Beanstalk, he is certainly surrounded by gold that nimble adventurers have avariciously noticed. And like the Big Friendly Giant or the Jolly Green Giant, he could be a force for good, if handled in the right way.

So, as his shadow looms over us, to understand him a bit more we need to ask “where did he come from”?

The Time Line of Mobile (UK)Ernie Wise makes first

call on a Vodafone

Text message service

launched

E-mail and web service

available

Camera phones

launched

Arrival of hi-speed 3G

iPhone

App Store

OVI from Nokia

1985 1995 1999 2000 2003 2007 2008 2009

2. The Gestation of the Giant

For all disruptive technology “giants” it takes a decade or so for the various

components to gather together. So for the “interweb” to boom we needed cheap

hardware, widely available broad band access, a mass publication of content

(commercial and amateur), a way of handling money securely, the software to link it

all up (and more beside) before the thing really took off. These giants are complex

organisms, made up of several “organs” that do take a while to evolve.

The anatomy of two giantsSMARTPHONESCheap powerful

hardware ALL YOU CANEAT DATA PLANSWidely available

broad band access

APP STORESMass publication of

content (commercial and amateur)

CREDIT CARDS,BILLING

A way of handlingmoney securely

OPEN OPERATINGSYSTEMS

The software to link it all up

iPhone FANS ETC.Some keen “geeks”

to pioneer it

The Mobile Internet

The anatomy of two giantsCheap powerful

hardware

Widely available broad band access

Mass publication of content (commercial

and amateur)

A way of handlingmoney securely

The software to link it all up

Some keen “geeks”to pioneer it

The PC Internet

So what is the mobile Giant made up of?

1. Powerful hardware. While smart phones with powerful processors and

slick PC like software have been around for a few years, it is only now that they are

starting to hit the mainstream with high specs for low prices. Much like broadband

compared to dial-up, this step change in performance will rapidly become the

market norm.

2. Easy to use software. While clever software has been around for a

while only recently have people started to put stuff onto their own phones. In

recent history, apart from ringtones or songs, putting new stuff into your device has

been something that you do on your PC, your iPod, or your Nintendo DS but not your

phone. You wouldn’t want to mess it up! Now, with the arrival of trustworthy “apps

stores”, all that downloading behaviour from other categories is transferring across

to mobile phones.

3. An engaged creative community. As with all technological

innovations, at the beginning the engineers are in charge. Smart phones may have

been able to do amazing things but, you had to be a bit of a geek to make them

perform. Now the creative people - who are more interested in connecting humans

rather than wires - have taken over and created a lot of what engineers call

“usability” but you and I might call fun. Not only has this happened within the phone

companies but also elsewhere. Creative software writers (whether pro or amateur)

have spotted a new platform for their talents. And the creative elements of the

marketing community have also noticed the opportunity to engage people in a new

way.

4. Consumer friendly business models. The convention has been

that the more you use your mobile, whether for voice or texts the more you pay. So

people were used to limiting their usage. The first set of mobile internet deals

worked the same way with companies charging by volume and “consumers” limiting

their consumption. But new business models are being tried that encourage people

to hugely increase what they consume – for a relatively cheap flat fee – and seek to

make money from the surge of activity that results. Money can be made from selling

software (or “apps”), advertising space, commissions on sales but the point for the

consumer is that they can now consume (seemingly) freely. As with the TV or the

internet-connected PC, this “free” price point results in a huge surge of

consumption, and the emergence of a new culture, a giant one at that.

All of these four phenomena have been visible to careful observers for years. What

is happening right now is that not only are each of them hitting the masses in their

own domain, but that the four are interacting with each other to create the “perfect

storm”:

The phones are powerful enough to carry the “software” that is

being generated by the creative community that is being

lapped up by users who are willing to pay for better phones and

do more things with them thus creating even more commercial

interest etc. etc.

The Perfect Storm of 2008Powerful hardware(A PersonalComputer)

Easy to use software (Apple not IBM)

Engaged creative community (not Engineers)

Consumer friendly business models (e.g. “all you can eat”broad band)

To put it another way, some brilliant engineers had been tinkering away up in their

castle laboratory for years. As Dr Frankenstein always new, with the right strike of

lightening the monster could come to life at any moment.

The strange thing is that the lightening has arguably already stuck the laboratory.

Some say it hit in 2008.

Perhaps the monster is already alive: the iPhone.

2008: the iPhone is born

• iPhone 3G• Apps store

3. The iPhone: The first born and the Apple of our eye

In our opinion, the arrival of the iPhone and crucially the Apps Store was the start of

this new era even if to an engineer’s eye the iPhone is an ugly piece of kit (even the

second version had poor battery life, a weak camera, no video camera and would

break all too easily if dropped or even sat on. The 3rd version addresses all this).

But the point is that it only had to be just good enough on the inside to make what

was happening on the outside to be amazing. Much like the young Madonna (in

1983, an unexceptional dancer in NY) the secret of Apple’s iPhone was that they

made the most of what they had with sheer creativity, determination and daring.

iPhone Strengths and WeaknessesEngineering Weaknesses• Poor battery*• Weak camera• No video*• Breaks easily• Locks up• Over hyped!

(*solved 19.7.09)

Commercial Strengths• Creative• Daring• Persistent• Consistent• “Cool”• A new category

“The iPhone is an internet-connected multimedia smartphone designed and marketed by Apple Inc.Since its minimal hardware interface lacks a physical keyboard, the multi-touch screen renders a virtual keyboard when necessary. The iPhone functions as a camera phone (also including text messaging and visual voicemail), a portable media player (equivalent to an iPod), and an Internetclient (with email, web browsing, and local Wi-Fi connectivity)”. (Source : Wikipedia)

Several things have come together with the iPhone all of which are illustrative of the

four points made above:

It is a device designed by creative people that also functions as a phone. Its Apple-

inspired software gives it a usability that is a step change for the industry. It is also

hooked up to the apps store, an even more user friendly version of Apple’s highly

popular iTunes store. Press one button on the “home page” of your iPhone and you

are straight into the new behaviour of putting extras on your phone/device.

Continuing through the ingredients of the perfect storm, Apple have made it easy for

creative software writers to write, publish and even make money from their apps.

And rather than employ these people it has created a self-supporting “ecosystem”

that is growing at a huge rate.

Apple/iPhone = Madonna?

Objects of desire. But who owns who? Who keeps control?

The iPhone developer community stares at all the apps they have made

And finally, apart from Apple making large revenue from publishing apps it has

encouraged its partners to offer “all you can eat” internet access packages with the

result that 80% of iPhone owners use more than 10 of the integrated features.

Now while it is important to note that iPhone sales numbers are quite small, on an

industry basis what is significant is that it has caught the attention of some very

influential people. While as one wag put it “98% of creative directors have an

iPhone, but only 2% of real people do” suddenly mobile marketing is cool, hot and

the place to experiment.

We are not predicting that the iPhone will be the run away winner in this new

market. Companies with “better” phones are starting to match its usability, launch

their own apps stores, create their own communities of developers and build

packages around internet use not talk time.

But the significance of the iPhone is that it is living proof of the dictum that “the

future is here already, it’s just not evenly distributed yet”. Where the iPhone treads,

other giants will follow.

So looking at the whole phenomenon just how big is this thing so far, and how big is

it going to get?

4. The Mobile internet giant: Measure it in billions not millions

As Apple boasted in May 2009, from a standing start, and in less than 9 months

iPhone users had downloaded a billion apps.

Now in these post credit crunch bail out days it is hard to remember what a million,

billion or even a trillion feels like. So to give this some human scale what those

billion downloads represented was

an average of 50 applications per iPhone, and even allowing for the majority

of them being a bit rubbish, that’s a lot of immersion and play time in this new

tool/toy. No wonder creative directors are getting into this medium

despite most of them being free and Apple only taking a 30% cut on paid for

apps, this created a new revenue stream of c.$100 million for Apple, which

instantly becomes a sizeable business division in its own right. It can only be a

Market Leader

Smart Phone Generation

few short years before this is a $billion business and larger than some of their

other divisions.

with 25,000 or so developers getting an infusion of $70 million or so into their

ecosystem (which is an average of $4,000 a head, albeit skewed heavily) it is

unsurprising that mobile apps is where a lot of entrepreneurs want to be. This is

just the start up phase and already people are earning revenues (unlike the

dotcom boom, we might note.)

All this has happened prior to players like Nokia or Google bringing their (presumably

massive) catch-up plays on line,, and with an iPhone user base no larger than the

population of Australia. Clearly apps, on their own, are going to create a multi billion

phenomenon whether we are counting sales, users, suppliers or revenues.

The counter argument to this is that a lot of the applications are trivial, frequently

deleted and not worth 99c (iFart anyone?). And it is true that after a while people

tend to use only a core set of new applications. Is the boom an illusion?

This is rather short sighted.

When the personal computer first came along many programmes were published

but people mainly used them for word processing, spreadsheets and e-mail. But

that didn’t stop what was to come next.

The PC and Microsoft OfficePre-internet PC

3 or 4 things ?

Web PC

Dozens of things

As the web boomed and the real cultural impact of the PC was felt it was also the

case that 99% (99.9%? 99.99%?) of web pages were junk. But that didn’t stop

Google, Amazon, Yahoo and many others from creating massive businesses within

the chaos (arguably it was the fact that there was so much chaos that allowed them

to create value) and change our world forever.

And again with Web 2.0, when blogs, YouTube, other social media and all the other

user generated content came along, most of it was messy, dumb and pointless. But it

didn’t stop Facebook becoming huge or changing the way communities talked to

each other. And as we go to press the Twitter revolution is only just leaving the

news headlines.

The problem is that whenever a new medium comes along it is always seen as

puerile by the established, incumbent media and its patrons. Even books and opera

were seen as retrograde steps when they first appeared.

So we need to be careful of only seeing the messy, smelly, billowing smoke of a

billion apps and missing underneath what is the white hot heat of a cultural

revolution.

Again to put some numbers on this Americans passively watched 200 billion hours

TV between them last year. If just 10% of them switched just 10% of their time to

doing something a bit more interactive and interesting on their mobiles then there

will be 2 billions hours of something new going on in the USA. To scale that, it is

estimated that the massive edifice that is Wikipedia took about 100 million hours of

collective effort to produce. So “10% diverting 10%” could create 20 Wikipedias just

from Americans.

Perhaps a better way to understand what is going on is to look at the behaviours of

this small vanguard of smart phone users and in particular iPhone users. How have

they changed?

Depending on where you draw the line, smartphones represent around 10-20% of

the market albeit growing rapidly. Within that the iPhone has only a 10% share

although iPhone users represent 33% of all mobile internet traffic suggesting that

their behaviour represents the future of the market.

The average mobile internet user in America spends about an hour a week “on-line”

and while this is growing fast it does not sound a lot. But probably the key difference

between the first generation of mobile phone users and smart phone users

(especially iPhone users) is the sheer number of things that the latter do with them

whether on-line or later.

So to take typical UK (non-smart) mobile users, all of them call and text, about half of

them do something with photos and a quarter of them play music. With a few other

bits and bobs this adds up to around 3 uses per user.

But your average iPhone user will be much more likely to use the photo and music

capability and then in addition will probably be accessing news, checking the

weather, using social networking sites, checking e-mail, playing games, using the

satnav mapping service, doing on-line searches and using many more idiosyncratic

info services for stock prices, train times or restaurant reviews . Typically they will

have found 6 to 9 uses for their phones. Importantly “telephony” is one of the least

of these.

Regular Phone and Smart PhonesStandard Mobile Phone• Voice• Text• Maybe photos• Maybe e-mail (business users)

About 3 uses

Smart Phone• Photos• Music• Weather• E-mail• News• Stock prices• Social networks• Reviewing pre-purchase• Finding restaurants• Searching• Playing games

• (and a bit of voice and text)

Dozens of uses

We see this jump from 3 uses to 9 uses as a very obvious step change and it probably

represents the future of the Giant for all of us. It is the equivalent of going from a

world where you are can only use the Microsoft Office programmes on your PC

(Word, Excel, Outlook and PowerPoint) to one where you can go anywhere and do

anything on the world wide web. For most of us, this has been transformational.

……………….

This rapid evolution of a new mobile internet culture is happening all around the

world. And just to illustrate the variety and vigour of the emerging flora and fauna

of this Epoch it is worth checking out some of the more striking ecosystems around

this increasingly mobile world:

China. As ever, with China the story is about huge numbers and rapid

industrialisation. As of 2007 there were more than half a billion mobile users in

China with a huge industry supplying cheaper and cheaper phones to this country

(and indeed the world). As in other fields China will start to shift from being a

recipient of technology and a mass supplier of components to become a cultural

leader in its own right. For example ABI research predicts that by 2011 there will be

more mobile banking users in China than any other country.

Global Hot Spots

Hard Selling

Soft Selling

Skipping ageneration

Culture Shifting

Democratising

Competing

India. By the end of 2007 there were 220 million subscribers with intense

competition amongst operators (6 companies have more than 20 million subscribers

each). Given Indian entrepreneurs track record of harnessing the power of the web

(on a global basis) it is a safe bet that an innovation as disruptive as the outsourced

customer service centre will come from this country and so increase the impact of

the Mobile Giant on the global economy.

Africa. The striking thing about the African experience is how the Mobile

Internet is allowing a whole tranche of users to skip a generation of technology and

participate, via their mobiles, in the modern digitised economy. For example in

South Africa – the most developed market on the continent – there are twice as

many mobile internet users as PC-internet users. Even more far reaching could be

the way that the “unbanked” are using their mobiles to make and receive payments,

potentially bringing a billion people up to a new level of economic behaviour.

USA. If we look to the largest commercial market and take just the first wave of

mobile marketing “advertising” (messaging, banner ads and search) this is forecast

by Neilson to grow from $800 million in 2007 to $3.6 billion by 2010. In addition to

this expenditure, many new types of mobile marketing techniques will come along to

create a multi billion “mobile marketing” sector. The sheer wealth and

competitiveness of the American economy will continue to impact on the world as it

disseminates innovation in mobile banking, marketing practice, software or business

models.

UK. While the UK has some interesting numbers the more striking characteristic of

the market is the emphasis on the “soft sell” amongst the marketing community. If

the USA is home to the hard sell (e.g. intrusive banner ads and text spam) then the

UK is the spiritual home to the soft sell. So typically, the UK creative community is

seeking subtle, lateral and consumer-oriented ways of using mobile to build brands,

sell product and hence is generating some of the most interesting case studies.

Japan is the ultimate outlier and oddball in this market. The difficult thing is to

guess which behaviours from Japan’s 100 million users will spread around the world

and which ones will prove to be idiosyncratic to this unique culture. So with that

framework in mind, sort through the following: huge mobile internet use, as much

use by older consumers as the young generation, handset saturation, obsession with

taking and sharing pictures, use of QR codes (data rich “bar codes”), earthquake alert

apps, text messaging in decline, majority prefer mobile internet over “fixed”

internet, 12-19 year old school girls using the mobile internet most.

To conclude, which ever way you measure the Mobile Giant, it adds up to a billion

dollar, billion person, billion app phenomenon. It is a cultural, commercial and

communication force of massive power.

Ignore it at your peril….we will all have to learn to live with it.

Section Two:

Living with the giant

5. Why we are all afraid of the giant

As we have shown above, this thing is already pretty big, will get a lot bigger and is

disrupting a lot of established parts of our culture. If something is that big then it is

likely to feel quite “threatening” to a lot of people. If so, then we can predict a

certain sequence of reactions to it. Psychologists call this sequence: denial, anger,

fear, bargaining, transformation.

In this section we will show a route through this sequence to “transformation” and

hence personal and/or professional happiness.

………………….

Denial is of course always an option and can be easily rationalised in this case: the

revolution is not widespread (iPhones are only 2% of the market), the new

behaviours can be dismissed as trivial by serious people (Twitter anyone?) and can

be dismissed as a teenage-driven fad (take my kids… no I mean it: take my kids, and

their phones with them). As we have argued above, this is a short sighted view.

How a Therapist Might See It…

Denial

Anger

Fear

Bargaining

Transformation

Fairly easy to get through

A common hiccup?

Worth getting to!

Anger and/or Fear are a common reaction to a fast changing, turbulent world. All of us are probably only just coming to grips with the “digital revolution” whether in commerce, communications or elsewhere. In addition, from around 2006 or so we were told we had to upgrade our digital thinking for a “Web 2.0” world. And now, while we are struggling to adapt to all that, we are told that a new phenomenon – the Mobile Giant – demands our immediate and urgent attention!

But even if they are understandable responses, given the pressure nonetheless anger or fear are not productive states for a professional.

Bargaining is one of the most common responses to the Mobile Giant, in particular people saying “I won’t treat it as something completely new but I will treat it as a new channel or medium”. We believe this to be a partial and incomplete response to the Giant. Better than nothing, perhaps, but self-limiting.

The fate for all new media is that at first they are used in the same way as the previous media. Thus early e-commerce consisted of placing “banner ads” in front of masses of “eyeballs”. Only later did Google show us that consumer driven search was where the big money lay.

So a lot of marketers are prepared to strike a bargain with the new medium and use it as a new space to put banner ads up (much as one would on a PC screen) or a new place to send/text messages to (much as one would send e-mails). Similarly, retailers can be tempted to see it as another route to market: a place to capture attention, offer deals and carry out transactions.

The New Channel/Medium Fallacy

“Now I can sell with texts as well as e-mails”Mr Spam “Now I can put banner

ads on all their screens”Mr Interrupt

“ Now they can buy stuff from me all the time”Mr Flog It

“ I’ll use it as long as I can behave as normal”Mr Bargain

While adapting old techniques to the new medium/channel will have a role in the

new world order, we believe that using mobile only in this way is missing the point a

lot. As such, if used badly then things could go wrong for the “advertiser”. But in any

case they don’t tap into the real potential of “mobile”. There are several reasons for

this:

Highly Interactive. Responding to a text or clicking on a banner ad might

be an e-marketers’ idea of interactivity. But the interactive features that are more

“user-useful” include it being a device that knows where you are (and possibly who

else is near you), updates timely local information (e.g. latest match times and line

ups), can use photos to gather or send info easily (e.g. photo a book cover and get an

instant internet review), provide audible sound bites of foreign languages, and much

more beside. These are not devices with marketing response mechanisms built-in,

but multi-sensory personal assistants. This is new.

Intimacy. While people do have a strong relationship with their PC(s) and TV(s)

there is nothing quite as intimate as your mobile. It lives in your pocket, you cradle it

next to your face, it contains your most intimate data, losing it is very traumatic. On

the whole people don’t like sharing their devices. This should send some warning

signals to those who regard it as another channel to push stuff down or as a place to

put your intrusive ads and “special” offers. The “consumer” may not see things that

way about this particular “medium”. This is new.

Contextual. Part of the new intimacy is that internet mobiles can help you

most at the place of your need and at the time of your need. They are like intelligent

Personal Assistants who know where you are and what is going on around you. The

risk here is that they are perceived as a dumb channel/medium to put any old

“content” on. Context can often be more important than content. E.g. suppose you

had just used your phone to redeem your free Harry Potter cinema tickets, and then

just as you walk out of the screening your phone asks you if you enjoyed the film,

asks you if you want to know when the DVD is coming out and, if so, tells you which

local retailers are offering the best deals. Here the content of these messages

matters but “Context is King”. This is new.

Data/personalisation. Much of the digital revolution is underpinned

by the back wash of data that digital media generate. Somewhere within this ocean

of data is the opportunity for personalisation. But there is also the creepy (as far as

the consumer is concerned) sensation of being cyber-stalked by brands who seem to

know a bit too much about you. Either way this is not the same thing as using

someone’s CACI code for a DM shot. It is potentially much more than that. And that’s

new.

Community Conversations. Clearly these devices are still useful for

talking to people. But they also are adding to the considerable momentum of social

media. Given the ease with which, for example, you can upload a photo of what you

are doing and where you are doing it, it is no surprise that the Facebook App is

proving so popular. And, as marketers have discovered, word of mouth communities

can be a major asset or a reputational minefield depending on how they are treated.

“Social media” are still quite new and this accelerates it.

Holistic. Because these devices (at least in theory) can interact with all other

media and your immediate context, some have seen them as a tool which de-

fragments media. If it “all” can be gathered, sifted and sorted by these devices then

it could become your uber-medium, a sort of “mouse” that you click on the real

world to find the stuff you want. This may be an over optimistic point of view but it

does hint at the radical changes that these devices may bring to us all. This, if true,

would be new.The Six New Characteristics

1. Interactive: in several ways2. Intimate: the Personal Computer3. Contextual: context is king4. Data rich: they know where you are5. Community linked: Web 2.0 again 6. Holistic: de-fragmentation?

It is about more than texts and banner ads

So this “thing” does seem to be more than just “another” channel or “another”

medium. It seems to be something that in being so interactive-intimate-contextual-

data-rich-community-connected-holistic, then to release the true value it needs to

be treated as a “thing in itself”. Hence, it is a false bargain to just try to “add it on to

the media schedule” and/or “distribution points”.

Given that there are going to be a lot of people using them, a lot of the time, to do a

lot of things, then all this adds up to a giant of some power. With this giant amongst

us, how are commercial entities dealing with him, for good or for bad?

6. Befriending the giant: Tales of kinship, community and noble service

A few years ago, when “social media” came along, there was much to be learnt from

the perils of fake blogs (Flogs), embarrassing corporate blogs (Clogs?) , astro-turfing

(Walmart, most memorably) and embarrassing on-line videos (e.g. Kryptonite

locks).Unlike with Web 2.0, so far there are not many stories of people getting it

horribly wrong in the mobile area.

We suggest, that although the giant’s horde of gold must be attracting a lot of greed,

marketers are being fairly cautious, if we are to go by the lack of user blowback

visible. Even mobile spam is not quite the menace it was expected to be.

Perhaps, the only “disasters” occurring here are that of marketing campaigns sinking

without trace, with the only real loss being that of marketing money and marketing

reputations. We believe that it is only a matter of time before some major

reputational error will be made, but so far the mobile world is only full of good news.

One of the best ways of understanding what you can do with the Giant is to absorb

these case studies (see later for our other tips). But first it is worth noting the

similarities between the case studies. These we might take as the emerging

principles of “mobile engagement” (a term we prefer to “mobile marketing”).

Clear objective setting. All marketing case studies are written up as

careful, logical processes whereas a lot of real life creative marketing, especially in

emerging media is a lot more chaotic than that. Nonetheless, even if a project

started with the thought of “hey, lets do an app” at some point in each process some

one has asked “why are we doing this precisely, apart from it being really cool?”

Segmentation. Related to this, each idea has a clear target audience in mind

with specific attitudes, behaviours, mobile usage pattern and actual kit. Not all

mobiles or mobile users are alike and as with all good marketing, a clear sense of

who the thing was for, seems to be a requirement.

Creativity. What the designers seem to have done is combined a good

understanding of a human need, and met that with some novel application or

combination of applications. What we don’t know is whether they started with the

app and found a need or the other way round. But all of these ideas feel like they

have a creative, human sensibility behind them rather than just a technicians wiring

plan.

Utility. In each case what is served up to people is something that is useful – they

have built something of value rather than created a clever way of “saying

something”. Sometimes the utility will be transitory like a quick joke, while others

will be more permanent like a good guide book. But the trick seems to be to build

something useful and weave your message or brand into that. This is sometimes

described as a “branded utility”.

Understanding limitations. The technology is not perfect and, in

particular, not everyone has the same phone package with the same capabilities.

Indeed at the moment , a lucky few are on “personal helicopters” while most are

stuck in regular cars down below. Best practice from the technology end seems to

be to make sure you allow enough time to adapt the creative idea if it needs to work

on multiple platforms.

Integration. Marketing is in the business of meeting needs and creating

positive associations for brands. However, there are many ways of doing that. Thus

several of the campaigns have integrated the mobile element with other marketing

tools. What is unique to these case studies is that the mobile element may be the

central or pivotal piece but other media are deployed around it to make it come

alive.

Forgiving attitudes to ROI. In almost all cases, numbers are quoted

whether of unique visitors, apps uploaded, click thru generated etc. etc. What is

currently absent is a connection of these intermediate variables to actual revenues

generated and hence on to pay back calculations and ROI measures. However, this is

a common characteristic of new media due, perhaps as “digital” is seen to operate at

the experimental and, maybe even speculative end of the marketing investment

spectrum. No doubt this will change with time.

We have selected case studies that are ambitious in showing what is possible with

mobile rather than shining examples of ROI. In some cases the numbers achieved

suggest that the commissioners of the project will need to see it as part of the

learning curve rather than an instant hit. Similarly, some of the delivery may be a bit

clunky but the intent and ambition is what we find interesting.

Four Case Studies

1. The Fanta “Sound Stealth System” beautifully illustrates the

principle of building something that people might find useful and hence want to

share with their friends.

The idea was to subvert the ultra high pitched teen-repellent technology that

some shops had installed and instead create a communication system that only

teens could hear. Particular sounds have particular meanings (e.g. cool, loser,

lets get out of here) and hence create a secret language.

The significance of this idea is that it uses the sound capability of mobiles

combined with the privacy of the mobile keyboard/screen to create a very

targeted “branded utility” that understands where, how and why a particular

sub-culture of people use their devices.

2. The Guinness “Passport to Greatness” app is part guide

book, part phrase book, part joke book and all mobile.

The idea was to help the 20,000 or so English speaking Rugby fans arriving in

Hong Kong for the 2008 Rugby 7’s. Obvious features are the maps, the match

schedules, updated team news etc. A bit more advanced was the use of geo-

location services to help you find a pint of Guinness. But the stand out feature

was the way, at a touch of a button, it would say in Cantonese vital phrases like

“take me to a bar with a Guinness tap, please” and “could I tackle you, please,

young lady?”.

The significance of this idea is that it takes a number of standard travel features,

enhances them with the unique capabilities of a smart phone and packages them

up with wit and style.

3. The Obama 08 App for the iPod and iTouch clearly

understood that the new politics relies on mobilising grass roots support.

Apart from obvious features like briefing sheets for key policies and news

updates, you could also download persuasive videos/ads to show to your

wavering friends and family while at the dinner table, right at the crucial point in

the debate. But perhaps most cunningly, it also prompted you to call your

friends who lived in the key swing states by cross referencing the data in your

address book with central opinion polls.

The significance of this idea is that it uses all the data and content that is out

there (briefing sheets, ads, contact numbers etc) and uses the mobile to “de-

fragment” them to create a powerful one-person canvassing machine.

4. The My Newham.Mobi site is starting to bring the power of the

internet to the citizens of inner London to the place where they need it most: out

on their streets.

Built on the back of existing Newham Council and Transport for London websites

it brings maps, route planners and travel updates to any mobile phone user

where they need it : while they are travelling. More ambitiously it lets you report

graffiti and fly tipping where and when you find it and, of course, it lists all the

addresses, opening times and details of the council services you might need.

Although this service is a work in progress and is necessarily targeted at the low

end user (your average iPhone user would probably like to just text in a geo-

tagged photo of the graffiti rather than fill in an on-screen form) its significance is

that it shows how mobiles can be a win-win for councillors and citizens: the

citizen gets the information “to hand” where and when they want it, the council

can spend less on call centres and public information campaigns.

However, a defining characteristic of these case studies is that they are operating

at the level of “thousands” when, as we calculated earlier, this phenomenon has

the potential to engage “billions”. So from now one, the case studies to look out

for are, perhaps, the ones that split this difference: the ones that deliver millions.

Then we can truly say the Giant is amongst us.

7.

Eating the Giant one bite at a time

As the joke goes “How do you eat an elephant? One bite at a time!”

And so with this giant. Here then, we offer a series of digestible bites that make sure

that you are eating the giant, and not the other way around.

1. On a personal level get a smart phone (not necessarily an iPhone) right now.

Much like sex, so with Mobile Engagement: you can read about it, watch it and

talk about it but the only way really to understand what all the fuss is about is to

try it out for your self.

So get yourself something that you can download apps on. Right now iPhones

are the easiest to use but Blackberry Storm might be worth considering if that’s

your franchise (just make sure you move on from e-mails). Nokia are catching up

fast with the Ovi store just launched and the N97 is in many ways the equal of

the iPhone. The point is to jump in and start splashing around.

Will you read about it, or watch it or actually do it?

As with the internet revolution, it may never be possible to be an “expert” but it

is possible to be a participant. For the PC revolution, the two initiation

ceremonies were getting an internet connection at home and buying a book on

Amazon. This time, to lose your virginity you need to download an App onto

your own smart phone.

2. Use a classical marketing approach. Although there is something to be said for just coming up with some ideas that use the abilities of the new phones there is a lot to be said for using some proven marketing discipline. You may not work through these questions in a linear order but at some point you need to chew on each of these bite sized chunks:

Objectives: as part of our overall marketing strategy what is the role of this

mobile activity – create new sales, build awareness, reinforce brand values, deepen relationship with existing customers etc. etc? “Doing something cool” is fine, but only as a means to an end like altering the brand image or attracting a new set of customers.

Segmentation: who exactly is this for? In addition to normal marketing

questions, which devices do they use and how? Is this aimed at multi-media style leaders equipped with iPhones or man on the street, regular Nokia carrying, pay-as-you-go types?

Creativity: how can we insightfully and imaginatively come up with some

new service, utility, game, joke or whatever that will have the particular effect on the particular people we are thinking of?

Integration: are we using Mobile Engagement to support an idea that

started in a different place (e.g. a sponsored event like the Guinness Hong Kong Rugby 7’s) or does the idea start in Mobile and needs support from other media to fulfil its potential (eg the Fanta stealth sound system)? In either case how do the different media/channels/utilities support and interact with each other?

Measurement: how can we disentangle the effect of this initiative from all

our other efforts and feed an evaluation of its effect into the next cycle?

While a lot is genuinely new with mobiles (and as we have said it is probably a

mistake to treat mobile as just another medium or channel) it is also true that

when technology changes people don’t.

For example, people try new things when they’re in a desperate crisis, bored and

fidgety, or a friend wants to show them how to do something and it seems rude

not to. This is as true of trying to learn to light a fire, drink Cherry Coke or

download an iPint.

So “marketing” as a way of seeking insights about people and meeting their

needs in imaginative ways is a way through the confusion

3. Experiment on something small but with potential. Should you invest in this area

or not when other areas are more familiar and proven? Our advice would be to

see mobile as part of an investment portfolio where it is at the higher end of the

risk portfolio. There are some “high growth stocks” here and no doubt some

lemons. So as part of the mix we would recommend that you need to invest in

How Classic Marketing Does Help

• Clear objectives• Segment people• Be creative• Offer utility• Accept the “medium’s” limitations• Integrate• Evaluate ROI

mobile, partly as the sooner you start the faster you will learn, and partly

because there may be some real winners to be snapped up if you get in early

enough.

But be prepare for a few ups and downs.

So now is the time to create a “mobile brief”. Or to hold a brainstorm where you

try to solve one of your most intractable problems by creating a new App. Or to

find agencies that “get” mobile.

As with the elephant, you have to start somewhere. So we do recommend just

taking that first bite. They can be delicious, we are told.

8. The Future for the Giant

All the important numbers are continuing to rise and so a pretty safe prediction is

that the giant will get bigger. But beyond simple scale there are other forces that

will grow and change the giant in unpredictable ways:

1. The Giant has got big enough to attract the interest of other large beasts in the

jungle. Indicative is Google who have no desire to see their leading position in

search eroded just because the internet is shifting onto mobile. So Google are

following in behind Apple, entering the mobile arena with their Android

operating system. Just as the PC wars were eventually fought out at the software

level (with Microsoft triumphant) so the smart phone wars might not really be

about the hardware. This means that big traditional players like Nokia, Samsung

and Sony will be going head to head with new players like Apple and Google (and

it would be rash to rule out Microsoft). Quite who will win the battle, is unclear

but it will mean that the Giant will continue to grow.

2. The creative community is just starting to become engaged with this new

medium. Not only are there thousands of software developers and

“professional” marketing creatives diving into this new field, there are millions of

ordinary people looking to see what they can do with this new thing. Clay Shirky

describes this as tapping into a “cognitive surplus”. To over simplify things, if for

the last few decades creative people have been limited to serving up 30” TV ads

to passive consumers, what will happen when a massive new “smart” medium is

put in front of this cognitive surplus? All we can say right now is “watch this

space”.

3. Communities and the politicians who (allegedly) serve them have also noticed

this new medium/channel/power. There are a number of reasons why mobile

could become a powerful political force very quickly:

it is very democratic in the sense that in the developed

world (and increasingly in the developing world) every citizen has one, and it

is with them all the time.

news, opinion and mob-like feelings can travel rapidly

through groups empowering citizens and threatening political control

new tools are helping people organise quickly and

effectively either in synchrony with political parties or independently. Much

like blogs this creates new political voices, influencers and events

while the mass media will not disappear what will

happen is that many people will be enfranchised to create, debate and

disseminate news. A good example of this is Twitter: what it lacks in

meticulous fact checking it makes up for in its speed. Whether Twitter is a

“good” thing or not depends on who you are. But it is happening.

4. Engineers are continuing to develop new features and inventions. For the last

five years or so, it must have been frustrating being a mobile phone engineer

creating stuff that no one was interested in. What has changed is that the

mainstream end user is increasingly happy to try innovative stuff. Much like with

murder, the first one is the hardest, after that it starts to become a way of life.

So we increasingly we have a mass market, who by downloading their first App

have plunged the first knife in and are ready for more.

On top of that we have an engaged creative community who are humanising and

enchanting the engineers’ geeky ideas, and as the final link, a business

community who are finding ways to make it all economically viable. This all

points to a golden age of technological and commercial innovation. As we have

suggested above, the iPhone may have heralded the start of this era but many

people will contribute to this mobile renaissance. Quite what will come out of

this is hard to say but is likely to be dramatic.

9. Conclusion: Fear, greed or friendship - living with the giant happily ever after

Nobody knows how this story is going to end.

What we believe is that we can all create our own happy endings depending on what

we choose to perceive.

Your perception will be your reality.

For those who choose to perceive the Mobile Giant as a disruptive, threatening force

to be ignored for a while and, at the very last, confronted, then we would predict a

sticky or rather flat ending.

For those who choose to perceive the Mobile Giant as a new pot of gold to be

plundered, or a set of consumers to be ruthlessly harvested then, as in line with

most fables, we would foresee a profitable short term but a nasty come-uppance in

the end.

We suspect that those who learn to live with and even love the giant (albeit having a

cautious respect for his strength and strange new ways) may have the best future.

On the whole, human ingenuity has a way of improving things for society and so we

are optimistic about living with the Giant and are looking forward to great things.

But that is just our perception. The actual adventure starts here.

Let us know how you get on.

jleach@bell-pottinger.co.uk