Mobile Fix – February 8

Bolting on Digital

The news of Waterstones £37m loss has reminded many of the retail casualties – and there seems an inevitability about the book sellers demise, especially when Amazon is seeing huge volume in ebooks
We were reminded of a story we told when presenting to the Facebook sales team on the day HMV announced their bankruptcy. Before the announcement the share price had dropped to 1p, valuing HMV at just £5m. Digging around, we found that 5 years earlier HMV had been valued at £500m.

Now over these 5 years nothing had really changed. Back in January 2008 Amazon was a major player in music sales. Pretty much everyone then had an iPod so iTunes was a big player too. Whilst Spotify wasn’t around, LastFM was.

The thing that killed HMV was the fact the ‘new’ players just kept improving their business – investing in new features and perfecting the way their sites work. Amazon know that shaving 100millisecodns of the load time of their site increases their revenue by $100m. All the clever tricks detailed in the excellent Avinash Kaushik article we pointed to last week improve the experience of the user and drive more sales.

But whilst the new players were doing this what were HMV, Jessops, Blockbuster and Waterstones doing to make their web experience better? Was digital a core competency or just bolted on?  Imagine our surprise to see that neither Jessops or Blockbuster have sites that are optimised for mobile. At least Waterstones do, so they are still in the game.

Fit for Mobile

We are finally seeing brands recognise the opportunity (and the potential threat) of mobile and the IAB report that 57% of the top 100 UK brands now have a mobile optimised site. So, some progress. Now the challenge for most is to get a good mobile website.

It’s only going to get worse (better)

One of the charts we often use in our consultancy work with clients is the Mary Meeker one showing that only 18% of mobile users currently have a 3G connection. So no matter how disruptive tech, mobile and social are being in a clients sector, it’s only just begun. When the other 80% replace their featurephones with a smartphone, then the fun really starts.

Cisco have predicted that mobile internet usage will grow by 66% each year for the next 5 years;

By 2017, the average mobile user will watch 10 hours of video, listen to 15 hours of music, make five video calls and download 15 apps each month.

It’s worth digging into the full report as there is some fascinating data. The proportion of mobile traffic generated by the top 1% of mobile data subscribers has fallen from 52% in 2010 to just 16% last year. This supports our learnings from talking with consumers – once people get smartphones they see that they are often much faster than their home or work PC and hence more and more usage migrates to mobile.  And whilst there are still lots of power users out there, people learn behaviours from their friends and widen their mobile repertoire.

Some other key predictions are that by 2017 two thirds of mobile traffic will be video and that nearly half of all mobile traffic will be ‘offloaded’ onto WiFi.

Ofcom see a similar trend, saying that they expect a 300% increase in web usage (desktop and mobile) over the next 5 years. This is prompting a rethink about fibre;

“We will get to the point where there is fibre to every home, I am sure of it,” Unger said. “Copper has served us well and prevented us from having to take a step in the dark. Building a fibre network would have been difficult ten years ago.”

So this provides the context for the takeover of Virgin Media by John Malones Liberty Global. Nicknamed Darth Vader we can expect heightened competition between Malone and Murdochs Sky. Which should see us get to newTV a little sooner.

Nothing new

Whilst the technology millions of consumers embrace is new, what brands want them to do hasn’t changed. As Marketers our tasks are still around creating strong brands, acquiring customers, building valuable dialogue and maximizing sales.

Smart people have been doing this for years, making the best use of the media and technology available to them, be that press, mail, radio, TV, Teletext or Compuserve. eConsultancy has taken a look at some of the old techniques and looked at how they work in digital.

A million years ago I joined Ogilvy Direct (to launch the first home computers for Compaq and write papers on the Information SuperHighway and the Time Warner Interactive TV trial in Florida) Having not worked in DM before I asked for a reading list and was introduced to books by David Ogilvy, Lester Wunderman and Stan Rapp, amongst others. The amazing thinking from way back in the 50s blew me away – and whilst not too much was being used on DM in the 90s lots of the thinking is perfect for digital marketing now. This piece by econsulancy is a good starting point, but I recommend you dig the books out too.

Quick Reads

Google is making it easier to buy ads across desktop, tablets and smartphones, which should drive mobile volume and lift prices. If you want to take advantage of the bargain that is mobile search right now, you need to move quickly.

Amazon are launching a virtual currency – Amazon Coins - that will enable customers to buy apps and games for the Kindle Fire. They plan to give customers “tens of millions of dollars`’ in this currency and developers will get 70%  of the currency spent. This is an interesting move and underlines the lengths GAFA will go to attract developers to their platform.

We’re convinced that the rise of exchanges and DSPs is going to shake up the media world – both for content companies and agencies. Kellogg’s is an early mover and plan to take their buying in house.

The majority of the firm’s paid-for digital ads are now traded via this route, and Kellogg works directly with demand-side providers (DSPs). Starcom, its agency, thus fulfils a different role.

With smart people looking at how the Exchange model will work for Out of Home and TV, this is going to get really interesting.

Facebook is rumoured to be taking location to the next level, with an app that tracks where people are, so people can find their friends etc. This builds on apps like Banjo, Highlight and Glancee which were flavour of the month at SXSWlast year. They use data from Twitter and Foursquare to work out where people are, and then announce their proximity to you. And of course, just weeks after SXSW Glancee was bought by Facebook.

We don’t usually get into people moving around the industry, but this week we noticed a couple of things worth mentioning. Amazon have moved one of their key people from running Kindle in Europe to heading up the Amazon Media group. Our client when we did the launch of FT.com, Gordon Willougby is really smart and this suggests Amazon is taking advertising very seriously

But over at Apple, most of the key ad people have left. Theo Theodouru left a couple of months ago and now we see Todd Tran has joined Rovio, the people who brought you Angry Birds, as Head of Advertising. With Brian Cooper, the head of creative and strategy, quitting to join Ogilvy, it would seem the European ad team at Apple is now a little light on talent.

More IAB research out this week shows that media agencies are taking mobile seriously – with 38% of Agency CEOs and MDs ‘driving the mobile agenda’.Presumably the other 62% are leaving the most important development in marketing since the launch of commercial TV to the mobile bloke; the one man and his dog eared Mary Meeker deck, who is responsible for emerging media.

Finally……More old time thinking that stands the test of time. One of the original marketing geniuses Claude Hopkins was tasked to launch a brand of Suet in the 1930s and ran a brilliant piece of what we might now call Content Marketing. He was just missing the YouTube video and a bit of Facebook Liking.

Why not apply those principles to Cotosuet? Rothschild & Company were then completing a new store. They would have an opening in two weeks. I knew Charles Jones, the advertising manager, and I decided to go to him and offer a sensation for his opening.

The next day I did so. His grocery department was on the fifth floor and it included a large bay window. I urged him to let me have that window for a unique exhibit. “I will build there,” I said, “the largest cake in the world. I will advertise the cake in a big way in the newspapers. I will make that,” I promised, “the greatest feature in your opening.”

My idea was to make a cake with Cotosuet in place of butter. Then to argue that a product better than butter was certainly better than lard.

Mr. Jones accepted my proposition. Then I went next door to H. H. Kohlsaat & Co., bakers, and asked them to bake the cake. I told them to make the special tins which were necessary, to decorate the cake in a magnificent way, and to build it as high as the room. They did so.

At the time of the opening I inserted half-page ads, in the newspapers announcing the biggest cake in the world. That was on Saturday, and that night the store was to open. After dinner I started down to see the cake myself, but the cars stopped on State Street long before they reached the store. I stepped out and saw before me a perfect sea of people. After a long time of struggle I reached the doors. At every door I found a policeman. The authorities had closed the doors because the crowd was too large to admit.

During the next week, 105,000 people climbed four flights of stairs to that cake. The elevators could not carry them. There I had demonstrators to offer samples of the cake. Then we had prizes to offer to those who guessed nearest to the weight, but every guesser had to buy a pail of Cotosuet.

As a result of that week, Cotosuet was placed on a profit-paying basis in Chicago. We gained many thousands of users.

Great marketing is still about two things. A great idea. And smart use of the tools available to bring it to life.
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  • http://www.facebook.com/rafiki270 Ondrej Rafaj

    Very nice article, thanks Simon!