Tag Archives: mobile

The Rise of The Conversational Commerce

Last week I was speaking in Seoul in Digital Marketing Conference for 400 marketing leaders. My topic was around conversational commerce: a topic that I have been writing about a lot.

conversational commerce

Speaking about Conversational commerce in Seoul 2017

I was trying to find an answer to three burning questions that are keeping me awake at night:

  • Why Conversational commerce is happening right now?
  • What it actually means?
  • How your brand should act?

1)Three big trends enabling conversational commerce

a) Mobile-first world

Messaging apps have already surpassed social media apps in popularity. Our audience is not mobile-first, they are increasingly mobile-only and becoming messaging only. WeChat has already shown the future of messaging-first digital ecosystem.

Our audience want the service and content in the platforms they are using.

b) AI-first world

Aptly in the same city I was having my presentation around conversational commerce, Alphago Go-robot beat the hell out of Lee Sedol, the world´s best (human) Go player. It was not even close match, not to mention that apparently in 37th move in second match Alphago did a move that had not been ever done in Go history and was called the most beautiful Go move ever.

Artificial intelligence will enable machines (or robots, if I may) to emulate human-like traits and behavior.

c) Digital platforms will become assistants predicting your needs

There will be more virtual assistants than humans in 2021. All the big digital companies (Apple with Siri, Samsung with Bixby, Google with Allo and Home, Amazon with Alexa and Echo) are building the assistive layer to their products.

Because of mobile platforms and evolved AI, companies are able to predict what you need and provide you personalized service.

2) What Conversational commerce actually means?

 I would define conversational commerce as “enabling people to interact with brands with way that is natural to them”. Interaction is limited to customer service or selling products. There is only handful of brans that people would actually want to have conversation with and the odds are your brands is not one of them. The natural way to communicate means two things:

  • The style you communicate: Whether it is with Emojis and Slang with text or using voice
  • With what device you are communicating with: It can be either chat (with human), chatbot (with robot) in messenger or using internet-of-things device (currently Google Home, Alexa devices. In the future whatever device you will think of).

The benefits of conversational commerce for user are:

  1. Convenience: Use whatever method and device you feel comfortable.
  2. Personalization: You save time (not necessarily money) as you get recommendations suitable for you.
  3. Decision support: Conversational commerce helps you to do decisions easier by learning from your behavior and predicting your next move.

3)What it means to your brand?

There are five key considerations you need to take into account when considering your conversational commerce –strategy:

1. Don´t get caught by hype

Conversational commerce is bigger thing than Chatbots. Chatbots have been one of the first trials on making it work. And they have not been particularly successful yet. Facebook bots have had failure rate of 70% so they were able to get to 30% of requests without some sort of human intervention. That does not mean that people don´t want good service through their messaging apps. They don´t necessarily want it through chatbots.

2. Choose your pilot market wisely

Compared to social media landscape, messaging landscape is much more fragmented especially in South-East Asia. This means that you might not be able to replicate your activities in one market to another.

3. Find the right partners

You don´t necessarily need to create every algorithm from the scratch. There is already quite developed ecosystem around conversational commerce that you can tap into.

4. Provide value and make life easier for your consumer

Like I said earlier, majority of the people do not want to have a conversation with brands. They want to have value whether it is through buying products or getting good consumer service. While you might be interested in creating the most witty Chatbot ever, it might be more wise to first ensure that you are providing straightforward utility first and then start extending to more human-like interactions.

5. Be fun and natural

That being said, the great opportunity with conversational commerce is ability to humanize otherwise transactional brand-human relationships. When you have ensured that you are providing value and clear benefit to the user, the personality of your chat can be a true competitive advantage.

We are living in the peak of hype cycle with conversational commerce and there will be round of iterations when it will truly live to its promise. My point is however clear: it is not question about will the conversational commerce happen, it is how and when it will happen?

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Why Xiaomi is The Future of Smartphone Industry?

What is the world´s fourth and China´s biggest smartphone company?
Hint: It is not Nokia.

It is actually company called Xiaomi, four-year old Chinese company, who does really affordable smartphones and has been dubbed as the Apple of China. it has taken China by storm and is now eying for world dominance. So forget the usual players for a moment and take couple of lessons from the new rising star of mobile:

1.Smartphone market will be commoditized, be cheap
Smartphone is not a status symbol anymore or anywhere in the world. The latest innovations in smartphones have majorly been in terms of size. Xiaomi´s operating margin was only 1.8 percent compared to 28.7% Apple and 18.7 Samsung. Part of it is due to their aggressive growth strategy, but other part is the commoditization. Profits will definitely shrink in smartphone category. Especially when the main source of growth will come from developing markets.

2. Copy with pride & style
One of my colleague ordered new Xiaomi phone. When I tested it out, it was quite a revelation for a devoted Apple user. Actually it was probably the first Android phone I thought of actually, so striking was the similarity with iPhone. Whereas many other copycat products I have seen, it did not feel cheap or shady at all. The package was nice and the phone felt way more premium than its price. So it would be unfair to categorize Xiaomi phones only as copycats, but it would be unfair not to mention that aspect either. It is not coincidence that Lei Jun, the founder of Xiaomi, rocks black turtlenecks and jeans in their product unveilings. Technologic innovation is expensive, so Xiaomi bypasses that one and innovates in other areas of their business.

3. Innovate the business model
Xiaomi is not technologically innovative, that is true. From business perspective, they have been really disruptive. Xiaomi keeps their phones longer in the market than other competitors (even to 18 months compared to 6 months of Samsung). Apple has to come up with new products constantly to keep up their margins. Xiaomi is more betting on component cost drop-off during those two years and prices their product initially close to the component cost. Selling phones (they also have tablets and tvs) is just one side of the coin; their main goal is to actually sell services and apps through the phone.

Next year will be important litmus test for their approach as they are rapidly expanding beyond China. They concentrate on markets with large populations, e-Commerce infrastructure and weak telecom carriers. The initial response from India was great, although now the sales have been blocked because of potential patent infringement. The focus on India, Indonesia, Brazil & Russia is wise strategy, but there might be actually some opportunities in more developed markets as well. My colleague was not the only Singaporean who has bought their new phone. During this Christmas season Xiaomi phones have been more popular lucky draw prizes than iPhones. At least for a while, the slick design and renegade attitude has certain aspirational cool factor, not normally attributed to budget versions.

4. Innovate the distribution
Xiaomi has a digital-first approach to the sales of their phones. They partner with big e-Commerce retailers (like Tmall in China and Flipkart in India), and sell their phones through them. They never sell through brick & mortar stores. By selling directly to consumers, the company can collect and administer all the feedback and built it into the next generation of their phones.
They are also well known for their flash sales, which resemble more of buying rock concert tickets than traditional mobile phone sales. In China, during Single´s day, they sold over 200k smartphones in less than 3 minutes. In India they sold out in their flash sales in 4 seconds. Flash sales work both from branding and business perspective. They create demand and buzz around the phone. Flash sales are not just solitary transactions; they are actual events. One of the main reasons why they sell limited quantity of phones each week is to keep costs down by having smaller inventory.

5. Being cheap does not mean that you do not have brand
Xiaomi phones are entry-level phones, but creating brand affinity with teens is not necessarily a bad strategy. Xiaomi is not just a cheap phone for their devoted fans. It resembles more like religious cult. Part of it is that Xiaomi is probably the first technology brand, that Chinese can really be proud of. It does help to have charismatic leader to go with it as well. Xiaomi launch events are real festivals and people even buy tickets to attend them. Over 60 million watched the livestream and some even took 15h ride to attend those launch events. The events, flash sales and the product serves as marketing. Xiaomi does not really do conventional advertising and uses only 1% to marketing. Their devoted fans and devoted leaders are the best marketers. When Lin Bin (Xiaomi co-foudner) had a “planking” competition with their management team this December, the photo was shared over 3000 times. Not necessarily something that would happen with more traditional companies.

Although you would not necessarily switch to Xiaomi phone, their disruptive business model is something to follow and watch out for in 2015.

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Why Smartphone Batteries Are Always Dead?

During recent years our smartphones have taken huge leaps.

Still even though we have fingerprint scanners, high-end cameras, all the bells and quite a lot of whistles, one question still boggles every smartphone user´s mind:

Why does not my damn battery last any longer?

 The reason is simple. Smartphones in general follow Moore´s Law, meaning that processing power will double for every two years. Batteries are expectation to this, because they are chemical products converting chemical energy to electrical energy. Batteries do not follow Moore´s Law as their “technology” has already been optimized.

When you are desperately trying to find a place to charge your phone, here are couple of things to consider:

Team is only as long as its weakest link
Life is like working out in gym. As tempting it would be to only do bench press and skip all the more difficult exercises, it will eventually backlash. Smartphone manufacturers have been obsessed with new additional features and bringing more power. What they have neglected is the battery. At some point, the drained battery might be the Achilles heel of the whole smartphone industry if it is not taken care of.

People learn new habits when they are forced to
When we still used feature phones, it would have been totally unheard of to charge your phone even on every day. Nowadays you charge your phone whenever there is an opportunity and you are accustomed to everyday charging. People also routinely disable different features to maximize the battery life. Would people be more effective if they could use all the smartphone functions without the fear of battery drainage? One way to increase the battery life is not to use data, but that pretty much defies the idea of smartphone, not?

The solution will come from somewhere, we just don´t know the angle
It might even be that our batteries will never be able to last as long as during feature phone era. The toll our new features put on smartphones is just too much. There will be improvements in battery technology, but it will take time. There are couple quick wins to be had, such as smarter antennas that could double your battery life. The answer might not also be to increase the durability of the battery, but to make recharging faster. If you could recharge your phone fully in 30 seconds (or even 2 minutes), that would be the potential game changer.

Batteries are not a trivial matter, as certain studies say that people appreciate it more than brand, speed or camera quality. That might be an opportunity for some newcomer brand to disrupt the marketplace?

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Who Will Be The Master of Internet Universe?

Web is dead.

That is the title of one of the greatest articles ever written about digital revolution four years ago to Wired. The main points about that brilliant piece are still valid, although speed of mobile revolution surprised many of the players for a while. The main idea of the story is that web starts to resemble more and more traditional industry with handful of players. Web is oligopoly and certain verticals almost resemble monopolies.

If you simplify the consumer-facing web business (so I am excluding infrastructure and other boring things which is where the real money is), it is about three things: products, commerce & advertising. Products enable you to connect to the Internet: smartphones, computers, watches, television sets, fridges and whatnot. Commerce is about being able to buy things from Internet and advertising is what it is: bombarding you with messages to buy more stuff.

Product category as we know it will eventually be commoditized. If you want to remain premium, you have to innovate constantly. That is the only way to remain luxury brand in this realm. Cheap smartphones will eventually beat the premium ones. In the future you are able to connect to Internet in whatever device and you do not really have to pay that much of that privilege.
Where the growth will come? Wearables can be the future winner product category, although they have not really yet taken off. The changes are rapid though. iPad was launched only four years ago, created totally new category and is currently at risk of vanishing because of the phablets. So is the life.
 
Current champions: Apple, Samsung
Challengers: Xiaomi and other cheap manufacturers
Disrupters: Luxury brands (Would connectivity enhance Rolex? I say not, but I might be wrong as well)

Commerce will become even bigger and you are able to buy pretty much everything online. Will all the physical retail vanish? Not necessarily, but the point is not about that. It is about that you are able to buy everything online, and majority of people will do exactly that, because it is more convenient and affordable.
Commerce is the biggest opportunity and a space I follow most closely. Strong brands will definitely start to create their own online retail experiences, which would enable them to bypass the more traditional retail channels. In the next decade there will be lots of turmoil in this category and many big players will fall and new challengers will arise. Biggest challenges are not that much about technology (lots of payment innovations happening), but about logistics.
Second interesting point is that idea of commerce has changed with shared economy. Both Uber and AirBnB are selling physical service, which would not be possible without digital channel. How far collaborative economy can be stretched remains to be seen. It can potentially be really big disruptor to the way we do business in general.
Last point about commerce is the ecosystem approach. Apple makes money constantly through App Store by enabling others to make money. Facebook is building app ecosystem with the acquisition of Instagram, WhatsApp and Parse. Both Amazon and Alibaba are enabling developers to build things on their platform.
 
Current Champions: Amazon, AliBaba, Ebay
Challengers: Google, Facebook, WeChat, Line, Apple (Apple Pay) 
Disrupters: Brands, FMCG brands, Collaborative economy players (Uber, Airbnb…)

Advertising will be important, because people will keep on buying stuff. Stuff makes us happy. More stuff makes us even happier. How are you able to buy that stuff if you do not know that it exists?
Will advertising become smarter in the future? Yes and no. In last decade or so, we have had one revolutionary advertising idea. That is SEM. You show people ads when they actually want to see ads. Contextual advertising and retargeting have been nice inventions, but mainly advertising is still based on interruption (some of it being more relevant like app install ads). One of the most innovative companies in the world, Facebook, makes most of its money by interrupting its users in various ways.
The advertising business is relatively simple: it is all about reach. All of the most successful advertising platforms are based on firstly to reach and then secondly the quality of those who you are reaching. That is unlikely to change. However, the biggest task is to try to narrow the gap between the interruption (advertising) and purchase (commerce). The monetary exchange is the only tangible KPI we have and less you have to travel to do it, the better.

Current Champions: Google, Facebook
Challengers: WeChat, Line, Twitter (was tempted to leave it out completely, but I give it a shot still), “Traditional media companies”(although I do not really have high hopes for their complete digital transformation, but they will remain influential on this space as well)
Disrupters: Amazon (the closer you are to the actual transaction, the less you have to interrupt), Content owners (although none of them has done any major moves and have mainly milked the status quo)

The lines are naturally blurry. The quote from Eric Schmidt summarizes the whole situation:

Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon.”

That is also the reason why these big companies are testing weird things and buying obscure companies. Internet has made it easier to disrupt a category and also connect categories in new way. Facebook & Google test drones, so it can bring Internet the people who don´t have it yet. Thus increasing the reach. Amazon tests drones, because shipping is the biggest bottleneck of eCommerce. When your business can start to flourish rapidly, it can also vanish rapidly. There is no time to sleep, because sleep is the cousin of death.

What do you think, who will become the master of the Internet universe?

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Anatomy of An Insight: Meat Pack Hijack

I had totally slept on this, but luckily was shown it today in a meeting.
Entertaining and effective loyalty idea from this Guatemalan shoe store Meat Pack:

Insight: Most brands and companies are struggling with the top-of-mind. Consumers are promiscuous among brands. There are not many monogamous relationships with brands. If you are able to make your customer think about your brand, when they are shopping around, you are already having the upper hand. If you are able to make them come out running from that same competitor store, you are most likely winning.

Other lesson: If you are challenger brand, you should act like challenger brand. Although you might offend certain big players, your fans will just love you more.

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Why Yahoo Bought Tumblr?

“F*ck yeah”

Ended David Karp (founder of Tumblr) his announcement about upcoming Yahoo-acquisition. He is not the only one amped up about the deal. Internet has been buzzing about the Yahoo´s recent acquisition of Tumblr. On theory marriage of Tumblr & Yahoo looks rational. Will it be that on practice?

What will Yahoo get from Tumblr?

1. Reach (especially to the young target audience)
Currently Yahoo has over 700 million unique visitors/month and Tumblr with its 300 million unique visitors and over 100 million blogs might help it bypass the 1 billion-visitor threshold. Yahoo is buying growth.
Tumblr user base is also the youngest among the different social media channels. It is stronger than any other social network within 13-18 and 19-25 demographic. As the buying power of teens and tweens increases even more, this target audience becomes more and more lucrative for marketers. It is therefore important to reach them young and maintain that relationship.
2. Gateway to Social Media & Mobile
Like many of its peers, Yahoo has been struggling with social media & mobile. It actually has a more impressive track record with screwing up potential social media opportunities (Flickr-which has been rewamped today as well, Geocities, Del.icio.us) than utilizing them. By buying Tumblr, Yahoo will get healthy social media which has been designed to be mobile-first from the beginning.
3. Street Credibility
Yahoo has not been a flavor of the month in recent years. Tumblr acquisition is exactly the kind of bold move that shareholders love. It is also the most prolific action Marissa Mayer has yet announced after taking the helm of the struggling company last year. Will it be the right move? That remains to be seen.

What will Tumblr get out of the deal?

Coherence & Monetization
Being the most user-friendly blog platform has its benefits, but also certain challenges. Tumblr is also the world´s most NSFW blog platform filled with porn, politically incorrect gifs and one-off-jokes (not even saving the founder David Karp). How Tumblr will maintain its characteristic quirkiness, but become “brand safe”? Currently adult sites are the leading category of referrals for Tumblr. Yahoo, as a household name, will give more legitimacy for Tumblr and probably help to clean up its act.
Tumblr has also been struggling with monetization and its business model throughout its whole existence. Whatever you say about Yahoo, you cannot dispute their skills and strengths on traditional ad sales. With Yahoo sales teams with interactive advertising (Tumblr) on their toolkit, it will be quite interesting selling point. The challenge is to find ad solutions which are seamless and enhance user experience.

What next?

Based on the statement from Marissa Mayer, it is quite improbable to see radical changes with Tumblr in the immediate future. The model for the Yahoo/Tumblr-coexistence will probably follow Instagram/Facebook –route where Instagram has remained relatively independent from Facebook. Many are likely to draw parallels between this acquisition and the quite ill-fated Geocities-acquisition from 14 years ago, but I am not that pessimistic. Tumblr definitely fills certain problematic gaps within Yahoo´s current strategy.

The crucial questions are whether the synergies that look obvious on paper come to fruition in action and was the price right?

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Mastering the MIM: Marketer´s Guide to Mobile Instant Messaging

SMS is dead.
Long live MIM.


WhatsApp has been a major contributor of 25% decline of SMS in Spain
. Chinese WeChat has over 300 million users. Over 90% of Korean smartphone users use Kakaotalk. These are just a few examples of the rising trend of the mobile instant messaging (MIM).

Instant messaging as such is not a new thing (remember ICQ?), but there are certain reasons why it has had its resurrection now:

1. Phones are increasingly more about data than talking
In developed countries nearly every new phone sold is smartphone. Smartphones are increasingly more about being smart than phone. There is app for that, now also for the basic phone features (talking and texting).

2. That data is getting faster

New 4G LTE (Long term evolution) phones will enable high-speed data for mobile phones. This opens new opportunities for what kind of content we can exchange in MIM platforms.

3. Facebook is so huge that it is already mass broadcasting

If you are average Facebook user sending your status update, the odds are that the message will be seen by your family, friends and colleagues plus countless of people you do not even know about. This is great, but serves more of people´s need for vanity and instant recognition. The most meaningful conversations happen with the people you know. Same phenomenon has been also reason for the success of Path.

4. There is always need for 1-to-1 communication

Some might argue that Facebook message does the trick. However the challenge is that Facebook is already flooded with so many messages, it is not that reliable way to catch people (at least not all of them). Phone has been relevant for so long because you can be quite certain that your message is received. Although Facebook has increased the number of “friends”, it has not really increase the number of “real friends”. The amount of those real friends is limited and many of interactions with those people we want to keep private.

5. World is getting smaller

Majority of MIM applications work internationally. The bread and butter of Telcos profit margins has been charging for international calls and roaming. MIM applications do not have those international boundaries. You want to communicate with your friends no matter where they geographically are.

6. World is getting more visual

Although SMS-messages have been relatively cheap, telcos are still taking quite big premium with multimedia messages. With MIM applications you can send whatever data possible and the because of the point 2 the alternatives are actually increasing all the time. Basic SMS- type of messaging is just the beginning for MIM applications and there will be probably lots of innovations in what kind of communication there will be.

What are opportunities for marketers?

Many MIM applications are still quite in infancy regarding their business model. Opportunities for marketers also vary greatly between different platforms. For example paid application WhatsApp is totally ad-free and there has not really been marketers using it (expect for personal use). On the other end of the spectrum is the WeChat, which is currently almost like Wild West with Chinese brands flooding there.

MIM applications are interesting part of mobile strategy for marketers. They provide straight access to consumer´s main screen: smartphone. As the smartphone is always within you, that is the straight pathway to consumer connecting digital to retail. That is the connection which every marketer wants to master. It might be that clever way to utilize MIM is the key for cracking that task.

But why anyone would want to have 1-to-1 connection with brand?

Compared to Facebook where your brand page reaches only fraction of your fans, MIM application has almost the hit-rate of 100%. This is creates a big responsibility for brands. You cannot flood your fans with messages such as “Like if you are ready for the spring!” or “Tell us in one word: (Our Brand) make me ______”. You are truly invading personal space with your message so it needs to add some real value for the consumer. In Facebook you are more likely to get away with stupid brand messages, although they are definitely not recommended in there either.

Here potential routes for marketers to utilize MIM:

1. Daily Deals & Promotions
Deals and promotions are always appreciated by the consumers. With MIM you can connect it phones and also create the sense of urgency to redeem those deals. Of course, provided that these deals are good.
2. Daily tips
MIM provides opportunities also for content marketing. It could be daily practice tips for sport brand. It could be song of the day for music service. Of recent campaigns Oreo Daily Twist could work in Whatsapp. The most important thing whether deals or content, is the expectation management. You have to be really candid about what kind of messages you send and how often. You have one change to lose trust and none chances to get it back.
3. Extension of loyalty card
Having own MIM circle for the valued customers could be great idea for rewarding your best customers with VIP treatment.
4. Rapid Market research
Combined with promotions or deals, MIM also provides vehicle for doing rapid market research and gather intelligence for your loyal customers.

It is too early to tell whether MIM will be the secret weapon that connects digital and retail. One thing is certain though: MIM cannot be left out of consideration for your mobile strategy.

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6 Seconds of Fame: Idiot´s Guide to Vine

I heard it through the grapevine, that Vine has been all the rage in the social media circles last couple of weeks.

Here is brief summary what it is all about:

What is Vine?
It is basically Instagram for short videos. Twitter mastered the microblogging with 140 characters and now it is aiming to do the same with microvlogging and six seconds. Vine currently works only in iPhone and best in conjunction with Twitter. Vine was launched on the end of January.

What it supposed to be?
“Posts on Vine are about abbreviation — the shortened form of something larger. They’re little windows into the people, settings, ideas and objects that make up your life. They’re quirky, and we think that’s part of what makes them so special.”
Dom Hoffman, co-founder & GM, Vine

How it works?
Go to Apple app store and download the Vine app. Then you (preferably) log on with your Twitter handle to the app. After that start shooting. The process is super simple: press what you want to film with your thumb. Then edit what you filmed to 6 second video. Share it on Twitter.
To use Vine is really intuitive and simple, but to make something worthwhile takes probably more than just six seconds.

How does it look like?

More examples can be found here.

What Twitter has to do with it?
In a way Twitter missed the Instagram bandwagon, so Vine is natural leap from photo sharing. It tries to benefit from the overall rise of visual storytelling in our current digital culture. It´s a little bit Instagram, little bit YouTube, little bit funny GIFs and working solely on your mobile. Twitter wants to strengthen it dominance in the short-form messaging and Vine is at least some sort of answer.

What brands already use it?
General Electric, Taco Bell, McDonald´s, Marriott Hotel, Urban Outfitters to name a few. Also porn industry has found it, like all the technological breakthroughs.

Give me some examples!
Not showing you the porn ones, but here are three Brand vines:

What brands should use it?
If your brand is already strong on Twitter, Vine is quite natural extension to your Twitter presence. If your company is not that active in Twitter, Vine probably is not the first social media channel you should invest in.

Where it can be used?
There are couple of good listings about potential use cases of Vine for brands, but currently I think the most prominent ones are the following six:

1. Flashing your brand´s digital cojones: Like with all new applications, there is currently the short timeframe when your brand can appear to be on top of the curve. Half-baked Vine executions will probably fill Twitter in the following weeks.
2. Improving your customer service: Short how-to guides about the products.
3. Spicing up the internal marketing: Employee presentations made more interesting and faster.
4. Even faster way to convince investors: Quick elevator pitch for your company.
5. Enhancing your rapid social media responses: Wheat Thins message to Questlove above is a good example of that.
6. Making your product catalogue come alive: New ways to showcase products (like Urban Outfitters has done below)

Hot or not?
Some might argue that Vine is a novelty app, but so is Instagram. That novelty had $715 million price tag. It remains to be seen will the 6 seconds be as revolutionary as 140 characters were. Vine has potential though. It is certainly something new. With its strong social, local and mobile dimensions it might just be the new killer app.

Now I am just waiting for Harlem Shake Vine edition.

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Why Google is Struggling with Mobile?

The future of the business is mobile.

Or so they say. Currently it seems more that future business of companies is ruined by mobile. Zynga has lost 85% of its value, because the mobile adoption has been faster than expected. Facebook has been stumbling with mobile advertising, although its recent mobile ad revenues beat the industry estimates.

Even the traditionally steady high-performer Google has been showing signs of slowing down. The problems have their root cause in mobile: Motorola acquisition has not yet paid off and mobile advertising has driven average click prices down.

Here are five other reasons why Google (like many other companies at the moment) is struggling with the mobile:

1. Status Quo Bias
For years the AdWords has been the hen that lays the golden eggs for Google. As humans, we are more likely to believe that things remain the same and are more likely to select to stay in status quo whenever possible. Every company encounters status quo bias at some point. AdWords are still selling like pancakes, the main difference is that the average click price has dropped for four consecutive quarters in row.
Although no one accuses that Google is not doing mobile innovations and investments, there has apparently not been pressing need for them to roll them out faster.
2. Android Ecosystem does not pay off (expect for Samsung)
According to certain estimates, Google makes about $6.50 through ads on Apple devices, compared with under $2 in Android. Google makes roughly the same amount of profit selling Android ads & apps in year that Apple makes selling iPhones a week. Google has regarded Android ecosystem more of an extension of the advertising. Currently it seems that it only benefits Samsung (and maybe to some extend users).
3. Mobile advertising ecosystem is currently broken.
People are not yet ready to make purchases with mobile. That is likely due to change in the future. Meanwhile, the mobile ads generate less revenue than traditional ads on average. Mobile has been thus far more about duplicating the web experience for Google, than regarding it as a center of the advertising innovations.
4. Consumers are even more unpredictable with mobile
Who would have predicted that texting will become popular? Or that tablets will become hits? Consumers are always fickle and surprising, but especially in mobile. Consumers do not really know (or at least articulate) what they want, but they still act quite fast to get it.
5. Google is not (yet) producing phones
Although Google bought Motorola, there has been a strict separation of church and state between Android and Motorola. Apple and Samsung have proven that the money in mobile lies in hardware. Microsoft has returned to hardware game as well. Facebook will probably enter the competition soon. Can Google stay away from the phone game?

I am sure that Google has certain tricks up on their sleeves regarding the mobile. Until those tricks are revealed, there will be more growing mobile pains ahead.

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iPad Mini and The Future of Mobile

Despite the surprise launch of the next generation iPad and the brouhaha that followed it, the most important launch of the yesterday´s Apple event was still the iPad Mini. According to late Steve Jobs that tablet should never been launched:

“This size isn’t sufficient to create great tablet apps in our opinion”

The point is not that Apple is ruining the grand vision of iPad or dancing on the grave of Steve Jobs. The launch of iPad Mini is just a reflection of the current market situation. People do not necessarily want to have great tablet apps, they just want to read e-books with the tablet. Kindle Fire and Nexus 7 have shown that there is a great demand for smaller tablets which are designed mainly for content consumption (such as text, videos, audio and basic casual games). Judging by the strength of Apple´s content ecosystem (iTunes, iBooks), it is likely that iPad Mini will be successful. The biggest concern is the higher price, but that does not really have stopped Apple buyers before either.

The launch of iPad Mini is a good indicator of where we are moving in the mobile sphere. Here are four predictions what will happen in the near future:

1. Apple will release bigger iPhone.
If (when) iPad mini will be a hit, we are quite likely to see bigger iPhone. The success of Samsung Galaxy S III has proven that the traditional heuristic of “it has to fit the pocket” do not really apply. We have the need to communicate and consume content. For those whose urge for the latter is bigger, would want to use bigger smartphones. And they just put it in bag instead of trouser pockets. Or get bigger trousers.

2. The Tablet+Dock hybrid will be the laptop of the future
There has been flood of new device announcements with Windows 8 OS that are not traditional laptops. Instead they are hybrids, merging tablets and laptops. These devices might not be the future yet, but the thinking behind them will be. It is odd and inconvenient to carry around smartphone, laptop and tablet with you. I would presume that the separate bigger tablet would be the one to go. Smartphone would be the urgent communication vehicle; the separated tablet for mobile content consumption and that powered with the dock would be for work.

3. Mobile is the driving force in technology usage of the consumers
Also with the launch of Windows 8 OS, there has been quite a big surge of touchscreen laptops. The way we use mobile is shaping how we use other devices. Mobile is all the times with us, so we expect the same user experience with other devices. That is also reason why companies are struggling with mobile. They view it as an add-on, when it should be the core of what they are doing.

4. Forget the different devices, it is about integration of screens.
In the near future, we will not talk about mobile, tablets or laptops. We will just have different screens, which are integrated together and serve different purpose. The company who will master this integration most fluently will be the winner of the technology race. We will have screens for home, work and mobile (enabling both work&entertainment) and certain devices that enable us to use these screens. What devices those will be, remains to be seen. One certain consequence will be that there will be renewed interest to TV screens, which have and still are the default home screens for the majority of households.

iPad Mini will not be the last interesting technology launch in the near future. There is still plenty of white space to discover while consumer technology usage is changing. The one who understands the consumer experience and “the integration of screens” most thoroughly will be able to find and conquer that white space.

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