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Google clicks in for Mobile

googleDuring the past week Google made two significant splashes in the mobile arena. Their much heralded, bombing of middle America with Stealth fighters announced the landing of the “Droid” mobile device. Secondly, their acquisition of the leading U.S. mobile advertising company, Admob for $750M announced the full legitimacy of mobile advertising. When Google speadmobaks, the rest of the industry should listen.

There was a time, not too long ago, when an entire industry seemed to get a simultaneous epiphany – that the Internet had created a legitimate “second” screen to television.  When this became “conventional wisdom”, the advertising Dollars, Euros and Yen started to shift from the “spray and pray” methods of television to the increasingly targeted methodologies of the web.

The same thought process can now be safely referred to as “conventional wisdom” for mobile.  The consumer is spending more time starring at their mobile screen, and less and less at their Web browsers, and even far less in front of the television.  With this reality, the web advertising giant is shifting more investment to the third screen  – which we should refer to as the consumers prime screen, the mobile screen.

We have transitioned from TV ad blindness (really a Pavlovian queue to go to the frig or bathroom), to web banner blindness.  We now, however, have the personal medium of the smartphone to reach consumers.

We have moved from the communal family device, the television, to a shared, yet personal device, the PC to the personal and un-shared device, the smartphone.

There will be some winners and losers in this new reality.  The winners will be companies that have invested ahead of the curve and have developed mobile and true multimodal next gen advertising vehicles.   Advertising and promotional technologies and processes that have broken with the “spray and pray” techniques of the past and capitalize on the true personal 1-1 advertising techniques, providing consumers ads that they want to view, will be the market winners.

The Android has positioned Google to be in your pocket, not figuratively, but literally.  The combined promotion with VZW and Moto, with stealth bombers creating a thinly veiled a sense of “Shock and Awe”, is a loud statement.

(Note to the Droid ad agency – Stealth bombers do not fly during the day, hence the word “stealth”)

See my other comments on the ad campaign at the end of this blog article.

VZW is a company with a great network and a lagging device lineup. Moto has raw engineering and production talent for mobile devices and has largely fallen off the radar screen in recent years.  Google, the dominant player in the present  generation of Internet advertising, is seeking to maintain and grow that position in the next generation.

So, Google is playing a pre-emptive attack strategy in mobile. VZW is playing catch-up to the iPhone.  Moto is, perhaps, playing their last “bet the company” card on Android technology.  Offense, defense and survival makes for three very motivated partners.

With the expected proliferation of Droids and other smartphones, Google’s purchase of ADMob is both stunning and obvious.   Another winner in this market shift will be, as I have written about in the past, the major social networks.

So who are the losers this past week?

On the Wireless Carrier side of the equation, Sprint and T-Mobile have to be concerned.  The gap between them and the leaders  (AT&T and VZW) is widening.   I  expect one less mobile service company in the U.S. in the next 12 months.

The emergence of Android platforms is likely the end of Palm as a mobile platform.  The Palm Pre never got the consumers attention and thus critical market share.

Too little, too late.

Palm will not be able to compete with Google and Apple in this round.  Their demise is written on the wall (in Graffiti).

500x_smartphonemarkshareRIM also has to be very concerned.  The launch of their touch screen device, the Storm was, well, stormy.   Blackberry has a strong market position and is well entrenched.  It has made significant growth in the consumer segment in recent years.  Will that growth reverse with maturing Android devices?  While Blackberry is in a much stronger position than Palm, the combined investment potential and application resources of Apple and Google will be a major challenge to RIM’s Blackberry.

All that said, RIM still commands over 20% global share in smartphones

Application developers will have to start to prioritize their porting and promotion of new applications between four major global platforms – Symbian,  Blackberry, Apple and Android.

It will be interesting to watch the global leader in the smartphone category – Nokia and their Symbian Operating System.  This platform is relatively unknown in the U.S. market, but is dominate in the rest of the world.

The next obvious question is how do these moves motivate other players in the industry to react?  Microsoft is desperately playing catch-up to Google in present generation search engines and advertising.  Their own version of a mobile operating system has made, at best, niche inroads.  Microsoft has suffered from execution issues and seems to be the biggest example of true  “innovators dilemma” in the last 20 years.

Yahoo has some mobile applications but seems to be a company unable to focus the attention necessary on any one initiative.  Perhaps some Corporate Ritalin is in order?

My conclusion is that both Microsoft and Yahoo will likely go shopping for a focused next gen advertising company.

Ad Agencies that have largely focused on managing creative production and bulk television ad buying are increasingly on the wrong side of the technology curve.  They are, however, in a good position with the depth of their industry relationships, to be a major force in the next wave of Internet/Mobile advertising,. The question is are they willing to move from their existing business models and develop the expertise in the methodologies, either in-house or through acquisition that can maintain their market positions in the value chain for the next generation.

The technology of smartphones, advertising and applications has now combined to make the next generation of consumer services and commerce a break from the past.  At least that’s what I hear from all of the “Conventional Wisdom”.

Notes on Droid Ad Campaign:

The more I thought about the Android “Stealth Fighter” ads the more I realized that that imagery was quite familiar.  I have added four additional videos for your viewing.  Theses video are the trailers for the 1953 and 2005 versions of “War of the Worlds” , the trailer for Armageddon and CNN footage of the bombing of Baghdad.

With these videos you can draw your own conclusions.  Please let me know what you think.

In my opinion, these images all have some resemblance to the Droid commercial.  In each of these cases the situation did not end well for the “entrenched” establishment.  Mass destruction was the result.  In one case a virus saved mankind.  This is hardly the message that a smartphone operating system might want to promote.    The droid-like figures eventually emerge to destroy everything in sight –they really do – you can Google it.  In the CNN footage a nation watched mesmerized by the imagery, only to learn that perhaps the wrong war was fought.

All interesting imagery for the first shot in a new generation of smartphones.

Subtle – this is not.

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Filed under Acquisitions, advertising, android, Apple, facebook, Google, mobile, mobile advertising, Mobile Application Stores, mobile commerce, smart phone, Smartphone, Social Media, Twitter, Web2.0, wireless, You Tube

Catch the Next Wave in Mobile

The key to the future lies firmly in what you do in the present.  This is the theme of every time bending sci-fi story.  Change what you do now and your future timeline will alter.   This axiom has never been as true in the mobile industry.  With a significant portion of the industry for value added services treading water (or drowning slowly) in this economy, those who position themselves for the recovery wave  will ride to success and be the next hot thing.  If you miss that first wave, you sink.

So, enough for the metaphors , Let’s get to the predictions.

Where should you be positioned for that enviable wave of profitability?

What will be hot? My top three

-Location Bases Services – For real this time!

minority_report2The prediction of profitable LBS services has been around for as long as LBS services.  The reason I am now bullish on LBS is the convergence of social networks, large screen devices and third party LBS providers for applications.    The visions of “Minority Report” like talking billboards or auto-generated coupons as you walk past a Starbucks have been the visions of non-visionaries.

Nice for Sci Fi but not in reality.

The popular navigation applications such as VZW navigator have been the first step in this lucrative market.  The integration of LBS with social networking will be the next.

LBS will be the  bridge that will bring virtual social networking back to the real world.  looptCool apps like a Google map that automatically shows you the location of your Facebook friends, alerts you if a “friend” is at the same bar, game or locale as you.
This is being developed by Loopt – today.

Legitimate dating services such as Match.Com could obviously benefit from such a service.

Will this make the anonymous rogue of virtual space more dangerous or more marginal?

Regardless, this is coming and will be big   Position your application for this and you will catch the wave
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-Mobile Commerce  – The rest of the economy meets wireless

In a previous article I talked about the tipping point of large screen devices and keyboards.  That trend coupled with “open networks” is a perfect storm for true commerce on mobile devices.  The industry will break out of the ringtone and wallpaper commerce “sand box” to address the other 99.9999% of the economy.

We will be evolving from using mobile as an alerting mechanism for transactions such as banking, trading, ebay, sports, etc.  The next step is to use the mobile as the transaction vehicle.

There are already several mobile ticketing trials for airlines and events underway.
Using your mobile as a truecredit-cards mobile wallet is just over the horizon.

The barrier that will have to be removed is the 40-50% share of revenue that carriers take for the existing mobile oriented content.   Credit Card rates for merchants are one tenth of what carriers charge.

The carriers have been providing both a billing service and a “mall owner” function.  Open Networking and free application choice changes this equation.   Either the carriers figure out how to be the clearinghouse for general commerce using their networks, or they will be ultimately bypassed.   The consumer should hope that the carriers continue to play a role and benefit from this increased commerce flow.  Simply , the more revenue the carriers can garner from commerce generation, the less the basic subscription rates have to be.

In either case the revenue flow through mobile will increase geometrically

-Advertising –The arrival of universally acknowledged Mobile ROI
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My view is that mobile advertising has been “Swift boated” by the other advertising media outlets.  This makes sense.  If I made my bonus purely on television, radio, print or web advertising, I would be less than happy for a share of those dollars, Euros or Yen to go to mobile platforms.  The claims that mobile advertising is impossible to measure seems rather suspect to me.  You can measure TV audience but can’t measure someone who clicks on your mobile ad?

With so much more content being produced for the larger screen mobile devices, the preferred monetization mechanism will be advertising first, subscription second.  The value chain for mobile ads, from creative, agency, platform, network, publisher and advertiser will mature and become fully mainstream.

More advertising revenue will benefit the traditional media giants as well as the new wave of mobile publishers such as game provider Cellufun.

Eventually the advertising model can help carriers transition the handset subsidy to the providers of goods and services.

These are my waves for the next couple of years, what do you thing I have missed?

Are you poised to cash in?

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