Why you should care about the rise of broadband

This is one of my favorite business charts.


Home broadband vs. dial-up, 2000-2013. Source: Pew Internet & American Life Project


As home internet has gotten faster, we have seen new business opportunities emerge. For example:

In 2000-2001, Quokka Sports tried to build a business of streaming sports like sailing online. In 2013, users could watch the America’s Cup and one of the greatest comebacks in sports history live, online, for free.

Traditional network programming has been living uneasily for the past decade as networked homes have spawned multi-channel viewing, while attempts at disruption have emerged from Apple and Google (hardware) and Netflix and YouTube (content).

The networked home is gaining traction; security systems have long been wired into phone lines, but with broadband we are seeing intelligent devices like thermostats, cameras, and door locks as well.

In 2006, right at the tipping point of dial-up vs. broadband, I heard a network television executive remark at an industry conference:

“With more broadband, people will get done with what they need to do online faster, then get back to watching TV. There are only a limited number of things a person can search for.”

In hindsight it’s clear that this person’s remarks were self-serving, maybe even intended as self-preservation. Laugh now, then consider this remark about gigabit-speed Google Fiber:

“What they’re doing is not any different than an overbuilder,” [Time Warner Cable chairman and CEO] Britt said on a conference call with analysts to discuss first quarter results Thursday. “And we’ve had overbuilders for the last several decades in the business.” 

Thinking that faster speeds are the equivalent of faster horses is myopic and an attempt to preserve the status quo.

Now, think about what we are seeing in the mobile world as devices get more powerful and networks get faster. The innovations we’ve seen in that space have only just begun. Brands would be wise to optimize for the present, but be prepared for the business models of the future arriving via faster connection speeds.



2010: The Year of Mobile

A year from now, we’re going to look back on what happened this year and declare that it was finally the “year of mobile.”

Here’s why:

  • Devices. Mobile phones have been getting more sophisticated, as operating systems evolve, batteries live longer, and processors run faster. And it’s not just phones – netbooks have been hot and tablets will soon seize the spotlight.
  • Applications. Thousands of applications available specifically for mobile experiences that aren’t the clunky WAP-based sites of old. These run on more sophisticated operating systems, giving users familiar interface cues.
  • Networks. 3G networks might be strained now, but that won’t be the case forever. AOL initially strained under the demands of dial-up, but ended up thriving (and then missing the switch to broadband). Wi-fi hotspots have proliferated and you can find a network almost anywhere you go today.

These three areas will continue to progress and if competition keeps prices in check, innovation will continue and we’ll be more connected than ever by the end of the year. We’ve seen interesting concepts in all three of these areas before, but today’s overall system has reached a point of maturity making the mobile experience useful, usable, and desirable.

And as consumers get more out of mobile platforms, advertising will follow suit and finally take off. Ads will now become part of the Apple and Google ecosystems, not standalone networks with limited reach.

Other things we’ll see:

  • A new “hot” skill set emerges. Mobile expertise will be in highest demand with lowest supply – at least in the US.
  • Another check box for integrated marketing. First you had to tack on a website. Then it was some social networks. Now it will be a mobile presence.
  • More ways to love to hate advertising. The world is going to discover new ways to be annoyed by ads never previously imagined. Will location-based relevance save the day? I don’t think so.

Think back to surfing the web on a Treo 650 using Blazer via GPRS or a RAZR using WAP over EDGE…we can look back and laugh about this now. It’s likely we’ll be feeling the same about Safari on an iPhone 3GS/3G sooner than you think.

US Mobile Marketing: Easier Done Than Said

Confused about mobile marketing?  Don’t be.  If you’re an
interactive marketer, you probably already know more about the channel
than you think.

Forrester clients can learn more in a piece of research we published yesterday.  Here’s the executive summary:

Eighty-three percent of marketers believe that mobile marketing will
grow in effectiveness over the next three years. But although US
marketers see the channel’s growth potential, a technical acronym soup
and low levels of current adoption among many mobile marketing formats
await early entrants. So to test the new medium while managing these
early risks, US marketers should apply lessons learned from other
digital channels to launch effective mobile campaigns. Also key to
success: targeting the small but influential base of consumers who have
already experienced mobile ads.

So let’s move from talking to doing already!

P.S. If you have a moment, I’d welcome your feedback via the Forrester Blog Feedback Survey.

Talking about mobile marketing

As you may know, my research coverage at Forrester has shifted into mobile marketing.  Last night, I moderated a panel discussion last night for MITX  and we talked about the industry for a couple hours with The Weather Channel, ESPN, Carat, g8wave, and Ringleader Digital.  The three biggest points that came up in discussion:

  1. Measurement.  It just isn’t there today.  There wasn’t a lot of discussion of platforms, but it seems like marketers must broker deals with all kinds of players that operate many different systems.
  2. Standards.  Like the rise of online ads – lack of formats and standards.  IAB?  MMA?  Marketers, agencies, publishers, platforms, manufacturers, and carriers need to put their heads together to make mobile ad formats work.
  3. Education.  Do you want to learn something new today?  Figure out the difference between on- and off-deck, what is WAP, or why does 3G matter.  Learning about this environment sounds strangely like learning about how the web works a decade ago.

Good crowd and good panel.  Lots of iPhone fans.  Lots of Blackberry users.  And lots of great services, products, and ideas out there – but I think some of the technical complexity and immaturity of the current business opportunity keep mainstream media attention away from the space.

I’ll be thinking more about this in the future – next month I’ll publish a document outlining how interactive marketers can take what they already know and apply to mobile.

What’s wrong with mobile marketing

I spent the day in New York at the OMMA Mobile conference.  As I’ve blogged before, I’ve started covering mobile marketing and advertising as part of my day job.  But 2008 isn’t going to be the year that mobile makes it big – and the longer recession looms over us, the longer mobile’s emergence will be delayed. 

However, I’m just starting my research so I’m building up to identify how to make mobile marketing work now and in the future.  Today, there were some very smart minds sharing their thoughts – I’ll share their reasons why mobile isn’t prime time yet.   My biggest takeaway: mobile marketing has lots of potential, but is currently trapped in an immature adolescence, at best.  Sure, we’ve started to notice mobile – deeper voice, more curves, whatever – but this thing ain’t ready to drive a car, vote, or drink a beer yet.

If you want to know why, here’s what I heard today:

From Evan Neufeld of m:metrics: "what is driving us forward and holding us back"

  1. Pricing:  consumers are getting nickled and dimed to death for data.
  2. Devices:  need better devices to spur usage.
  3. Bandwidth:  consumers want to drink from the hose.
  4. Subsidization: Largest audiences for text messaging, a low value ad play.

From Jeremy Wright of Nokia, formerly of Enpocket.  "Why isn’t mobile advertising bigger today?"

  1. Fragmentation.  Buyers say it’s hard to make a deal.
  2. Measurable ROI.  Reporting isn’t great.
  3. Engagement post-click.  Lack of ecosystem partners and campaign integration.

From David Verklin, CEO of Aegis Media Americas.  "The biggest barrier to mobile advertising."

  • Speed.  2.5G isn’t fast enough.
  • But most marketers don’t even know what we’re talking about, 2.5G, 3G and so on.
  • We need to use mass media to drive people to concentrated places, i.e. from TV to web.

Manish Jha, CEO of Vantrix (and formerly of ESPN Mobile).

  • His company deals with interoperability issues – they have a database of 13,000 phone types.  Think about it.  You may have enough of a headache building your website for PC and Mac.  Or just on PC, for IE and Firefox.  Or just in IE, 6 vs. 7.  Think that’s bad?  Try 13,000 phones.

Verklin actually came out and said it:  2008 isn’t the year of mobile.  2009 is.

What that means is you should be preparing yourself now for mobile, just like you did with social media – by experimenting.  Upgrade your mobile plan to include data.  Text in a vote to American Idol (in a few weeks) or submit a code to My Coke Rewards.  Visit ESPN mobile and notice the banner ads.

(Naturally, the flip side of this is how to mobile marketing work, which will be covered in an upcoming piece of research.)

Mobile insights from Finland

As I’ve mentioned before, my research coverage has shifted to include mobile marketing.  I spent the past week with Nokia in Espoo and picked up some interesting insights from our interactions.

You may know that Nokia’s origins come from the wood pulp, rubber, and cable industries.  You may not know that just a decade ago, mobile was only 5% of the company’s business mix.  Today they’ve become the world’s largest volume handset manufacturer, with over 112,000 employees.  Reminds me of IBM’s shift to services – fascinating case in refocusing a business.

In 2007, there were over 3 billion people on mobile networks – over half the world’s population.  Nokia projects this number will increase to 5 billion in 2015, but with a 100-fold increase in network traffic.  That’s a quite different world than today and not that far away.  Mobile marketing may not be prime time today, but it will be.

Last year, Nokia launched a special Arabian-African edition phone.  It was made in special colors with seven preloaded Ramadan-related applications, e.g. Qibla direction indicator and Hijri calendar.  Reminds me of the limited edition SMUs from Nike and adidas – this is a tactic that could be applied to many brands in many markets.

Speaking of devices, Nokia has the ability to put 7 megapixel cameras in their phones, but hasn’t.  Why?  Customer experience – a 7MP camera would create greater latency in the imaging chain.  So they’ve gone with a max 5 MP to optimize the experience.  I think it works pretty well; last year, I borrowed a N73 with 3.2 MP camera that was pretty good, much better than my 1.3 MP Blackberry.  I’m currently borrowing a N95 8GB which has 5 MP and built-in GPS for geotagging – which delivers images like the one at the top of this post.  Not bad.

I heard about a service called Twango for the first time.  It combines a lot of different features from the sites you use today – social networking, picture sharing, file sharing, messaging.  Twango’s ability to let you set varying permission levels for group and individual access are far more granular than most sites today.

Thinking through Nokia’s focus on consumer internet services – they’ve got gaming, lifeblogging, social networks, maps, and music – they seem to be the only device manufacturer with such a broad focus.  Microsoft, Apple and Google play here as well, but none have the same global device presence.  Others like Motorola, LG, and Samsung aren’t getting into services as far as I can tell.

Do you remember the story of Crown, Cork and Seal?  At one point in its evolution, the company mapped out the market in a 2×2 and saw a big empty space in the upper right.  But the lesson learned was that sometimes a white space doesn’t mean market opportunity – it may mean that the canary has stopped singing.

What are your thoughts on manufacturer as service provider?  Is Nokia ahead of the game, just difficult to see from a U.S.-biased lens?  Or is this direction doomed?