(Cross posted from The Guardian)

As the buzz around last week’s Mobile World Congress in Barcelona subsides, some are questioning its future. Despite 60,000 attendees, dozens of launches, announcements and keynotes from industry luminaries there is a feeling that the real action is elsewhere.

We did see the arrival of the Chinese devices giants Huawei and ZTE – already major players in unbranded phones and with clear ambitions to build strong brands. But Samsung chose not to announce their next Galaxy smartphone – instead planning to launch on Twitter in the next few days. And Apple – as ever – didn’t show up but stole attention anyway with the news of their event on 7 March, which is rumoured to be the launch of the iPad3.

Google, Facebook and Amazon, the companies who essentially run mobile and digital, don’t take MWC that seriously. Facebook did announce their support for mobile web apps and HTML5 – which is going to be very significant over the next couple of years. But their key people were in New York selling their new advertising model to Madison Avenue. Google invested heavily in support of Android and mobilised the sites of many of Barcelona’s tourist attractions. But Apple and Amazon weren’t there and few of the startups that generate so much of the energy in mobile showed up either.

The operators – the people that used to drive the industry, and who still have the power to generate huge momentum in mobile – were (predictably) there in force. There are signs that, having been written off as dumb pipes by many, some operators are looking for ways to reclaim their throne. With their revenues under pressure from new legislation (significant cuts to roaming charges and lower termination rates) and changes in behaviour (leading to a $14bn (£8.8bn) hole in SMS income) they need to evolve their business models.

With huge customer bases, a billing relationship with millions and control of the plumbing that makes mobile work, operators should be able to compete with the big players such as Google and Apple. They have the potential, and the marketing budgets, to take useful mobile services mass market.

Project Oscar – where the key operators plan to collaborate on a mobile wallet (subject to regulator approval) – is a good start but doesn’t seem to be solving the right problem. Why can’t operators use their size and customer knowledge to create the context where a mobile wallet is truly helpful?

How about EverythingEverywhere helping to improve their customers’ social lives? FourSquare is hugely influential but has just 15 million users. Why doesn’t Everything Everywhere take lessons from FourSquare, Gowalla, Path and others to create a mass market service for people to share their social life using photos and locations. Build in ways that Everything Everywhere customers can invite their friends on other networks, but reducing the utility for non-customers.  So, on a night out, their customers can find friends and share where they are and where they are going next. Layer on offers from bars, clubs and cinemas that are actioned through the wallet, and you have a social tool that can drive revenue and reduce churn. And give those on other networks a compelling reason to switch. Diageo did this sort of thing 10 years too early with NightFly.

What about O2 making shopping a better experience? One idea is a mobile service where customers can scan a barcode on any product, read reviews, check the green footprint and compare prices. On food products, they can check health information such as calories and whether it contains trans fats. They could also create a mobile loyalty service for small shops where customers can check in with their mobiles to receive offers tailored to their preferences. I suspect that fast-moving consumer goods (FMCG) brands would love a way to target offers and coupons that isn’t controlled by the supermarkets. This creates real context for a mobile wallet.

Similarily, can Vodafone make our commute better? Information on buses and trains is available in real-time in most cities and towns; so why not develop a mobile service that knows where you are and gives you the information you need; the time of the next bus at this bus stop, whether the next train is on time etc. Add in the ability to share your location and speed when driving (hands-free of course) and Vodafone has a crowdsourced traffic service sharing delays and issues on the roads. All they need then is a way for customers to quickly and easily order a taxi – and pay for it on their mobile bill.

Some of these services already exist but have small user bases and tend to be standalone rather than converged services. They have huge potential outside of early adopters and operators are perfectly positioned to help them cross the chasm.

These sorts of service are a natural extension of the original business model of an operator – services for their customers that maximise use of their networks and drive additional revenues and reduce churn. They would differentiate an operator more effectively than their latest 30-second TVC.

One argument against these initiatives is that they could work better if available to everyone, rather than just customers of one network. Which is true, but we have an emerging industry that is largely about peddling these sort of ideas to customers of just one device manufacturer. And the three big operators each have around twice as many customers as Apple does in the UK.

Given that operators spend about $350 to acquire each new customer perhaps they should make these services available to everyone and use them as a smarter way to recruit new customers. It’s easy to identify the operator and device of users, so very relevant offers can be delivered as advertising.

Operators have a huge opportunity and it’s time for them to step up – or leave these converged services to Google, Facebook and Amazon, and just accept playing the role of a dumb pipe.

What they were talking about in Barcelona

We were disappointed not be able to make the usual pilgrimage to Mobile World Congress in Barcelona this week, but watching the news from the event mitigated this. There just wasn’t much real news; lots of talk about devices and some interesting keynotes but not much to write home about.

This is largely because the companies that drive the mobile space now – GAFA – didn’t really show up. Yes, Google was there with an interesting talk from Eric Schmidt and lots of noise from Android. And Facebook did a keynote where they talk of their support for standardising mobile web standards – using HTML5. – Core Mobile Web platform. We learnt that mobile web is bigger for Facebook than Apple and Android combined and they intend to use mobile web to drive discovery and download of mobile web apps.

They also talked more about how their platform for mobile payments, using peoples phone bills, which neatly avoids having to pay anything to Apple We knew lots of this already but the talk is worth watching for the detail.

“Facebook would have been a mobile application if the technology had been available when Mark Zuckerberg was building it in his dorm room”

Amazon weren’t in Barcelona and neither was Apple. But Apple did get a lot of attention when they announced a new event next week – at exactly the same time as Eric Schmidt was kicking off his keynote.

The device announcements were spiced up by the presence of two Chinese brands with big ambitions. Huawei had a huge stand and announced 2 very impressive handsets as well as showing off lots of very impressive technology they have developed themselves. They are going to be a big player. As are ZTE who announced 8 devices. They are already 4^th largest handset manufacturer in the world through lots of unbranded phones.

The big problem all the device manufacturers have is that all the phones look the same now. Before the iPhone there were huge variations in phones – different sizes, different screens and even different colours. Post iPhone, they all like iPhones.

We think that phones have arrived at the same point as TVs – all of which now look the same, leading to commoditization and falling margins. People now decide to buy the largest screen they can afford and will look for tier two brands as they believe they’re all the same. In response Samsung and LG are trying to balance playing at the cheap end of the market with the new innovations like 3D and connected TVs. Which is why we don’t believe Apple won’t enter this market – they’ll focus on the set top box.

The big news of the week happened elsewhere

Facebook held their advertiser event in New York and announced their long anticipated new formats. Now brands get to have a timeline too, along with new ways to spread their content across Facebook – including within the news feed of their fans.

There is a good step by step guide to creating a new brand page here. AndMashable have a good summary too.

And we finally learnt how Facebook intend to plug the mobile gap in their revenue – Sponsored Stories are coming to your mobile newsfeed. In a similar way to Twitter advertising, brands can now get onto the 450 million mobiles used to access Facebook.

All advertisers need to do now is produce content that adds value; content that is useful or entertaining.

The FT has a good piece suggesting that Facebook are rewriting the rules of Adland – focusing on the very lucrative support network that has emerged to help brands make the most of Facebook. In this weeks results WPP makes the point that, whilst in most marketing spend, the media owner takes a much higher proportion of revenue than the agency, in social (and mobile) its closer to 50 50.

Talking about the results WPPs Martin Sorrell told the FT that;

Sorrell predicts @WPP client spend will top $2bn with Google in 2012, Facebook double to $400m, Twitter “will grow significantly this year”

That sounds a lot doesn’t it. But the total media spend of WPP is around $73.5 billion. So the most dominant digital media companies are getting just 3% of spend. We have some way to go yet.

Google continues to make news for privacy issues. Their new privacy policy came into force yesterday and they were all over the news explaining it. But regulators are circling and this article shows why it is so crucial for Google to be able to use all the data they can to target advertising. But they can and do go a liitle too far sometimes – I find my iPhone keeps announcing that more of my photos have been added to Google+ using Instant Upload.  Whilst it may be a useful service I never agreed this and it seems tricky to turn off.

Amazon may well start to come under some scrutiny on privacy as they use data on their customers to build an advertising business. In the US they buy inventory on sites they know their customer visit and serve ads based on their knowledge of that customer. They have hired senior ad sales people and are now offering this media to other advertisers.

The Guardian has a good summary of the privacy debate, which shows that opposition to the use of data seems to be growing. Industry veteran John Battelle takes a more sober view, explaining how he was tracked and how he was able to get the detail on how and why it was done.

Our industry needs to get smarter at explaining how it works and what the benefits are to people – and to make sure people know how to exercise control if they want to.

What they should have been talking about in Barcelona

Last week we mentioned that the fall in SMS, due to people using web based messaging, was leaving a $14bn hole in operator revenues. With other lucrative revenue streams like roaming coming under pressure, operators need to find new ways of making money. This was acknowledged in Barcelona and there is talk of new services –but little detail.

We believe operators have a fantastic opportunity to leverage their user base by offering converged services that make the most of their networks and the smartphones they subsidise.

So why isn’t Everything Everywhere launching a service where there customers can see where their friends go? Imagine taking lessons from FourSquare, Gowalla and the rest and create a mass market service for people to share their locations. Build in ways that Everything Everywhere customers can invite their friends on other networks, but reducing the utility for non customers.  So on a night out their customers can find their friends and share where they are and where they are going next. Layer on offers from bars, clubs and, yes, cinemas and you have a social tool that can drive revenue and reduce churn. And give those on other networks a compelling reason to switch. Diageo did this sort of thing 10 years too early with NightFly

Why doesn’t O2 develop a smartphone based loyalty scheme for small shops? Sign up to the service and invite your customers to check in every time they visit, motivated by offers from the shops.  The shops have a way to communicate with their most valuable customers who benefit from offers and news. The data is hugely valuable for targeting advertising and it’s a good way to develop a userbase for the imminent wallet. Square is going to do this if they don’t.

Couldn’t Vodafone introduce a mobile cab finding service for their customers? Signing up cab firms around the country and enabling customers to click one button to announce their location, and have cab firms bid for their business. And of course people are encouraged to pay using their phone – sending a text to add the cost to their phone bill. But we could just let Addison Lee Uber and Hailodevelop this market.

What about 3 giving their customers the tools to build a crowd sourced map of the UK, leaving reviews and comments on all sorts of places that their friends can use when trying to decide where to eat, drink or shop. Or should we just leave that to Yelp?

These sorts of service would differentiate an operator more effectively than their latest 30 second TVC. They would drive revenues and help reduce churn. And they are a natural extension of the current business model.

I’m told the argument against these sort of initiatives is that they would work better if available to everyone, rather than just customers of one network. Which is true, but we have an emerging industry that is largely about peddling these sort of ideas just to customers of one device manufacturer. And the three big operators each have around twice as many customers as Apple does in the UK.

Many of these services have huge potential outside of early adopters and operators are perfectly positioned to help them cross the chasm. As we were writing this we came across a new paper from mobile guru Chetan Sharma making a business case for this type of approach.

Operators have a huge opportunity and its time for them to step up – or just accept the role of being a dumb pipe. We’re happy to help.

Quick Reads

Interesting view that Facebook should buy Nokia and Yahoo

Apple CEO Tom Cook talking at Goldman Sachs. Clues as to what March 7 will be about?

How CBS is thinking about HTML5 and native apps

A size and dimension cheat sheet for Facebook timeline – shared on Pinterest. You can’t get more on trend than that.

In depth look at Twitter from Business Week

Finally…

…an example of the potential problems with vertical stacks. Marketing Guru Seth Godin produced a new ebook about education and made it available  – for free – on every platform he could. Including Apple. But Apple noticed that inside the book Seth mentions some other books and links to them on Amazon – so they rejected the book. Do we really want walled gardens where someone decides what we can and can’t read?

One last thing –this Seth Godin video is a must watch. 20 minutes of genius on productivity. Learn how to ship.

Facebook to work with developers on mobile

In an announcement about their support for gaming, Facebook announced some love for mobile
“You’ll see a lot of investment from us in teaching developers how to use those channels in mobile,” says Hernandez.
“In March we’re bringing a group of engineers across and doing a tour of Europe around just the mobile platform, and how to build great apps with it. We’ll have 250-300 people per event in three of the most interesting hubs for gaming in Europe: Stockholm, London and Tel Aviv.”

Vertical stacks

Morgan Stanley believe Amazon is be losing out to Apple on digital content at the moment. Whilst they think Amazon will come good in the end, the near term is challenging. It’s clear that everyone wants to offer content and a quick look at the UK market for movies shows the challenges for Amazon and the rest.

Tesco are innovating with their BlinkBox streaming movies and we were interested to see their expansion into home broadband. They have a history of commissioning content (remember TrolleyWood?) to give them something others don’t have, and combining that with broadband and mobile connectivity is the start of their own vertical stack.

Sky is to offer content across connected devices to non subscribers, building on the success of their Sky To Go service. The Guardian think this is a stroke of genius and this is some interesting thinking on the implications. Dixons have announced they are to launch a movies streaming service under their KnowHow positioning and HMV have launched a service too.

Because relying on other peoples devices (and connectivity) puts you at risk of being disintermediated, smart players will try and create their own vertical stack – or try and find a secure place in someone elses.

1 Billion mobile subscribers in China

In the week that China will gain its one billionth mobile subscriber, their mostpowerful online media player has gone Mobile First. Tencent has over 430 million online users but whilst the biggest in terms of reach they only rank 6^th in ad revenue. So a focus on smartphones (75 million will be sold in China this year – up 29% on last year) should enable them to capitalise on the emerging middle class and charge higher ad rates.

Smart mobile thinker Chetan Sharma has written a good summary of the current state of play on mobile in China and India. He makes the very good point that, with around a billion mobile subscribers in each market, the way they adopt technology will have a major influence on the rest of the world.

Another week, another mobile payments player

Following Barclays Pingit – allowing customers to send money by text – we now have Boku. Boku sounds pretty good but when you dig into it there is not a lot of substance. The NFC functionality requires you to stick a NFC sticker on your phone – like Bling were doing in the US until they closed last summer. And Boku works through operators – but has yet to reach agreement with one.

We don’t see much room in the value chain for another player unless they create real value for both consumers and retailers. Outside of the banks and credit card companies, SimplyTap would appear to be best placed because of its retail connections

Privacy concerns go public

Following the fuss about Path being a little naughty with users contacts, there is now a new agreement between some of techs biggest firms to adhere to a new policy on privacy. Of the top 30 most downloaded apps, 22 don’t have privacy notices and a number  – including Path and Twitter  – upload some or all of a users contacts to their own servers.
We’re not sure this really solves the issues. Imagine that iTunes decided to upload all my contacts. Adding a paragraph explaining this to their 60+ page Ts&Csdoesn’t really make it transparent.

And whilst Google, Apple and Amazon have all signed up, there are some omissions; Facebook isn’t included and we expect them to be very soon major player on mobile apps.

But is this really a problem for people? The success of these services is the ability to connect with your friends and that can only happen if you allow access to your contacts. Storing the data is a step too far, though.

Google have come under scrutiny for their work around on how Safari deals with cookies, but again is it really a breach of privacy? The main purpose of the workaround is to make ad targeting and measurement work better.

Our holy grail has always been ads so good they are a service and to attain that you need the best possible tracking and measurement, so people see ads that are relevant (and hopefully) useful.

If people want to worry about privacy there are probably better things to get concerned about. Every car in London is monitored for the congestion charge and the plethora of CCTV cameras, combined with facial recognition, means ‘they’ can find out exactly where you’ve been. The ease with which they found pictures of this guy was nothing to do with the fact he worked for the security services.

Mobile advertising needs better plumbing

Flurry have some new data showing the disparity between the proportion of time spent with media compared to the proportion of ad spend they get. No surprise that mobile is way out of whack – getting 23% of peoples time in the US but only 1% of ad spend.

One reason for this is that big agencies tend to be slow to move money from something they understand really well to something they don’t really get, yet.

But as this good opinion piece – by a senior person at mobile video giants YouMe- points out, mobile is still to mature and things like measurement are still a challenge. We need to get to the standard of online quickly but the infrastructure – or plumbing – still needs a lot of work.

A function of the hysteria around privacy mentioned above is that some of the plumbing is being dismantled. As the opinion piece points out Apple are limiting the ability of developers and ad networks to access useful data. Somewhat controversially, YouMe suggest this isn’t that bad for Apple, as they can use data from iTunes to target iAds.

Until mobile can agree on the plumbing and make running mobile advertising just as easy as running online, the huge potential of mobile won’t be realized. Of course the imminent EU regulations on cookies are about to complicate this anyway.

Smart brands, willing to put in the extra effort needed to do mobile properly, can and will get competitive advantage. The response focused brands are doing this and we see that the major vendors are anticipating the impact of Facebook and changing the way they charge for advertising.

The new mobile cliche

Now that the popularity of is this the year of mobile cliché seems to be waining, we see a new old chestnut emerging. Mobile apps or mobile websites? gets asked everywhere and, as with any tech discussion, the right response is; It depends on what you want to do.

The don of usability Jakob Nielsen has published some good thinking on this topic, with his view being that mobile sites will eventually win out. He argues that whilst usabilty is better in apps right now, the developments in mobile web will balance this out. He also repeats his view that In the long run, the Internet will defeat smaller, closed environments because Metcalfes law shows that the value of a network grows by the square of the size of the network.

We’re big fans of mobile sites for those looking to talk to (or acquire) new customers, because you can harness the power of mobile search. If you have a strong customer base then native apps can make more sense, as you don’t need to rely on discovery through the app stores – which are effectively broken.

The development that Nielsen alludes to is HTML5. A great example of its progress is this student built HTML5 version of the hot iPhone to-do list app Clear. The app has done really well because of fantastic UI – it’s a joy to use – and the browser based version is almost as good. To help in his job search Evan You created his own version in just two days.

To get a flavour of what is possible in HTML5 it’s well worth taking 10 minutes to watch this Adobe video where they demonstrate their product suite now built around HTML5.

They demonstrate Edge, a tool for building animations in HTML5, CSS and Javascript and Adobe talk of how Edge content can be quickly and easily made into a native mobile app through PhoneGap (which they bought late last year) They also show there is life left in Flash, with new tools that allow Flash work to be exported as HTML5. One huge benefit is that all those Flash developers can now work on mobile projects – democratising mobile development.

We’re not sure that all these tools are quite ready for primetime, but it won’t be long before the equilibrium in mobile balances between those with the tech skills and those with the ideas. Both are vitally important.

What is everyone waiting for?

Someone has taken a look at the websites of the Top 50 global brands and found that lots aren’t mobile optimised (although they mistakenly say Amazon is not). Some new research shows that more people are now focusing on mobile, but many are not.

Someone else took a look at the websites of agencies that Forrester suggest are good at mobile and found that 5 of the 9 mentioned don’t have a mobile optimised website. You should read the comment from someone at one the agencies arguing they don’t actually need a mobile site. Unbelievable.

Quick reads

Good summary of the state of Mobile from Comscore

New research shows that the Amazon Android appstore has had a big boost from the Kindle Fire – with some apps
performing better on the Amazon store than in the official Android marketplace. We expect the appstore to launch in the UK when the Kindle Fire eventually launches here.

Nike keep on the branded utilty tip with a great tool for Basketball players – the HyperDunk

Nokia are doing OK with their Lumia in the UK – getting a 2% market share

More bad news for operators  - as people use more web services to communicate, they text less – leaving a $14bn hole in operator revenues

Really smart thinking on how to get the most from web analytics

Harvard Business Review are putting science into viral advertising

The power of big data – how a store worked out a girl was pregnant before her Father did 

Microsoft put the boot into Google with a very funny film.

Finally

- we were very flattered to be asked to take part in Camerjams excellent Mobile10 project –where he asks mobile royalty (and me) 10 questions. It’s worth reading some of the other interviews on the page – some very smart thinking.

As we gear up for Euro 2012 and the Olympics what we can learn about the prospects for mobile from the Superbowl?

One fact that terrifies all the operators is that people use their phones at these events to share pictures and video – AT&T reported that people in the stadium uploaded about 40% more data than they downloaded.

But the second screen hype seems to have been just that – hype. Whilst Shazam are bullish about how the ads they tagged performed other commentators suggest a missed opportunity. Many of the ads had no call to action and others just had a web address, whilst only 16% pointed people to social.

As we expected the thing that did work was search. Google tell us that;

SuperBowl ad related searches in the US rose 200% on desktop, 970% on tablets and a whopping 2700% on smartphones.

The nice people at Frukt have a good round of the ads that ran and we’re reminded that TV can and does get people talking. Chrysler ran a fantastic 2 minute ad, created by Wiedens with a little help from Clint Eastwood, that hassparked lots of debate with the Fruitcake party – sorry the Tea party -condemning it as political. Searches for Clint Eastwood during the game went up by 5000% – we hope that Chrysler had bought search directing people to somewhere they could watch the ad again.

As Google say in their blog post;

Advertisers are beginning to see that mobile can deepen engagement with their brands and extend the value of their ad buy beyond the 30 seconds on air.

But we agree with those that point out the real winner might have been Apple – who didn’t run any ads but got fantastic coverage when virtually everyone on the Giants team pulled out their iPhone to take pictures of each other.

Facebook ads coming soon

Following the IPO filing we’ve seen speculation that Facebook are about to solve their mobile monetization issue with the extension of featured stories to mobile users. It’s clear that mobile is an issue for Facebook, but also a huge opportunity.

In the US the mobile ad market as a whole is expected to be worth just $2.6bn this year with Google $750m) and Apple ($90m) the key players. With the huge usage, high dwell time and the data that Facebook have, they should be able to make a big impact in mobile ads.

Some question just how effective this well be, arguing that the mobile experience on Facebook is underwhelming. Whilst we tend to agree, we expect to see some radical improvements in the mobile experience soon. Remember that at F7 we were told Timeline would be available on all devices?

One other interesting revelation from the filing papers is that the Facebook interpretation of an active user is a little looser than one might expect. For example, if you click the like button on the Addictive homepage, you’re an active user of Facebook, even if you never visit the Facebook site. Looking at Nielsen data it would seem that around 8 million US users (of 161m) fall into this category, so it’s not a huge issue.

One other piece of news on Facebook underlines their commitment to mobile –they have announced a deal with UK company Bango, to enable mobile payments. Few details yet, but its an interesting step for Facebook, adding payments to their vertical stack. Intriguingly we see that Bango also signed a deal with Amazon recently – again no details on what the deal is about. Given how dominant Amazon are with their one click payments it seems odd they need to bring in a partner in this space.

Path runs into privacy problems

When people question whether Facebook will be as dominant on mobile as it is on desktop, Path is invariably quoted as one of the examples of potential threats.Since relaunching they have done very well and would seem to have a bright future.

But this week they have been getting attention for the wrong reasons. A smart programmer discovered that Path takes a copy of each users contacts and stores it on their servers. So somewhere in San Francisco is a full copy of all our contacts. Path were quick to apologise and change their policy. And it was swiftly pointed out that many social apps behave in a similar way. But it does feel like this issue isn’t going to go away and the Guardian has a good round up of the story and some thoughts on implications.

Google

Google have been busy this week with news of their Solve for X conference where they bring together some of the smartest people in the world to look at solving big problems. Some of the amazing subjects include a new way to produce fresh water and a way to take a picture of the minds eye.

News of some high tech glasses they have developed, leaked too. These glasses are wearable but provide a computer interface. So, as you meet someone, Google Googles can identify the person and give you their profile on your glasses – so you need never forget a name again. We’re getting closer and closer to the Minority Report.

The new Google office – or campus – in East London looks like a great resource and a way to connect with the vibrant start up culture in this area

But thinking about their business now, we were fascinated by a chart on Splatf called eggs in one basket – which looks at what proportion of a companies revenue comes from its biggest revenue source.

So Amazon make nearly 90& of their money from product sales. Apple make 52% of their revenue from iPhones. RIM make nearly 80% of their money from hardware sales.

And lots of business rely on advertising; Facebook around 83%, Yahoo 81%, AOL 63%. And Google makes 96% of its revenue from advertising. That is a lot of eggs in one basket and some people think this is in jeopardy as Apple, Facebook and Amazon seek to balkanise the web and lock Google out of their walled gardens.This Time article on the subject is worth a read.

We think it’s always dangerous to underestimate Google.

Retail

After our piece on Brand Cathedrals last week we were interested to see thatAmazon seems likely to open a physical store – probably to promote the Kindle.

Forrester have a new report out looking at the renaissance of the retail store and we think some smart retailers are going to use showrooming, mobile and ecommerce to reinvent high street shopping. As the Tesco QR shop in Koreashowed, you don’t need a lot of space to sell product. And just as stores like JCrew’s Liquor Store in New York sells other brands to compliment their own label product, why doesn’t a retailer use the Amazon affiliate scheme to dramatically expand their range? 6% isn’t a bad margin

Switching to online retail, the hottest thing in social right now is Pinterest, andthey are starting to monetise their content with some affiliate deals. Given the rapid growth of this site and its clear influence on retail, we wouldn’t be surprised to see someone like Amazon come sniffing round with a checkbook. Whilst Boutique.com, the Google foray into retail, failed, people like ASOS and Net a Porter are showing you can sell a lot of schmutter if you get social and online content right.

There are lots of interesting starts ups playing in this space.

Moneyball Marketing

Over the past few weeks we have read some interesting thinking around how marketing is (finally) adapting to digital. In Harvard Business Review there is a good piece by McKinseys Davis Edelman looking at how different the consumer journey is nowadays.

And a former Googler has some great thinking on how brands can play Moneyball marketing –using data to get real competitive advantage.

Demonstrating just how mainstream this new approach is, Adage has this great quote;

a December investor presentation by Chief Marketing Officer Keith Weed in which he noted several digital programs that produced north of $3 in revenue for each dollar spent.

Although this thinking is around digital we’re seeing clear evidence that mobile can play it’s part. A new study from research firm Insight Express shows how over the past few years Mobile has outperformed Online in its ability to drive brand attributes like awareness, favourability and purchase intent.

So as well as getting response, mobile advertising can drive the brand too – we just need to improve the standard of creative work.

Quick reads

This is smart thinking on the need to integrate mobile and online

Amazon are signing a deal with Viacom to get more films for their Web Video service.

Some good reading on the need for a mobile strategy.

Siri is only the beginning – good article by the guy who invented Siri

Google have launched  a mobile version of their Chrome browser for Android.How long for the iOS one?

Mobile search volume in the US doubled between December 2010 and December 2011.

And finally you’d be forgiven for thinking that digital has had a disastrous effect on entertainment with piracy etc. This report shows the opposite is actually true; the industry grew, whilst consumers increased their spend.

Facebook Floats

As predicted Facebook have announced their IPO and the documents they provide as part of the process make interesting reading.

Advertising provides 85% of their revenue – down from 95% as revenue from Zynga grew to account for 12% of the total. (btw this news drove Zynga shares up by 16%). And new data shows that Facebook now accounts for 28% of all online display ads in the US – far ahead of Yahoo in second place with 11%.

But one quote from the risk factors is interesting for Fix readers;

“our revenue may be negatively affected unless and until we include ads or sponsored stories on our mobile apps and mobile website. We believe that people around the world will continue to increase their use of Facebook from mobile devices, and that some of this mobile usage has been and will continue to be a substitute for use of Facebook through personal computers.”

So, yes we will see ads on Facebook mobile before too long.

But there is a lot of work to be done to find a way to do that without negatively impacting the user experience on mobile devices.

One clear sign of their ambitions in mobile is the hiring of James Pearce to build relationships with mobile developers. James has been instrumental in building Sencha, the company that has driven the development of html5 and javascript tools to enable mobile webapps to get close to native apps in functionality.

Here you can read the full IPO documents for Facebook

Amazon stumbles

Following Apples stellar financial performance Wall Street was less than impressed with Amazon posting a decline in profits of 57% despite revenue being up 35% on the same period last year. And their forecast for the next quarter is essentially to break even.

The fall in profits is driven by a big hike in costs as they lose money on each of the Kindles they sell. And they are selling lots of Kindles – it’s the top selling product in most Amazon markets and has been since launch. And the Kindle Fire has got off to a great start in the US;

Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 17 weeks ago

Another area that sucked up investment is the Amazon play in offers – LivingSocial lost over half a billion dollars – on sales of around a quarter of a billion. There do appear to be some extenuating factors in these figures though.

But their entry into appstores seems to be paying off with customers ‘nearly tripling’ whilst Flurry research shows that the Kindle Fire is accounting for around a third of all Android tablet sessions

Given the range of activities and strength of Amazon across so many areas we have to give Jeff Bezos the benefit of the doubt – he is investing for the future. Including surreptitiously buying a business that is a leader in speech recognition

You can download the full press release here

NewTV

Whilst the main focus for sports fans in the UK is obviously who will seize the challenge of managing sleeping giants Leeds United, in the US everyone is gearing up for the SuperBowl. As well as being very very long, it has long been famous for the ad breaks when advertisers usually launch new commercials.

This year is expected to be the first 2screen superbowl with all the players in social TV trying to maximise their impact. Shazam will be used by around half of the advertisers whilst Yahoo acquisition IntoNow has a partnership with Pepsi Max.

Fast Company has a good look at some of the key players in this space – but as long as the market is balkanised – with so many disparate players – the opportunity is limited.

We believe that any marketing strategy that requires people to use a particular app is doomed to be niche. Even with the huge installed base of Shazam, you’re effectively locking out a big chunk of the audience. Like last year, we suspect the big winners will be people who use search smartly.

Whilst on the topic of new TV, this story about a comedian who gets 5 million viewers to his twice weekly videos on YouTube is interesting. That sort of scale compares well to lots of satellite TV stations.

MySpace still hanging in there

Even though the big story in social (and mobile and advertising and .. well everything) is Facebook,  it is worth remembering that there is lots of others stuff happening in social. New research showed that MySpace is still a significant player – and still bigger than Google+. Tumblr has grown rapidly and has a high dwell time, but the most surprising thing is that Pinterest is now a top 10 social network – with huge growth in users over the last few months. And as well as having high dwell time it is also a huge traffic driver to retailers

This video interview with Twitter chief Dick Costello is worth watching too.

Brand Cathedrals

We are huge believers in the power of brand cathedrals – those retail experiences where people go to pay homage to the brand just as much as to buy. For the launch of 3 we pushed the idea of stores that were places you celebrated the breadth of content the network was to offer, but lost the pitch. Nike does it well, as do some fashion brands like Comme De Garcon with their Dover Street Market.

But no-one does it better than Apple and announcing a new hire to head up their retail business they say;

“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,”

John is John Browett – currently CEO of Dixons. Obviously we’ve been going to the wrong Dixons stores.

Quick reads

No surprise that top VC firm Accel is keen to invest in mobile. This interview is a good take on what’s interesting the investors.

Games giant EA mobile sales are up 19% to $70m

Travel site Kayak was an early entrant into mobile and they’ve now decided that they are a mobile first company, with the new design of their desktop website taking its cues from their mobile properties. We are going to see this more and more – especially as responsive designbecomes better understood.

And ESPN have now decided that mobile isn’t the third screen – it’s the first screen.

By 2020 we’ll have 24 billion connected devices – a good infographic.

Google have added impressive new capabilities to Maps and Google Earth

This is an interesting take on how Google and Apple have very different approaches to innovation

This is a clever use of QR codes that will be copied endlessly.

Finally

I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we’re quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available. In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.

P&Gs CEO on an analyst call this week.

We agree.

At the Web2.0 conference in San Francisco yesterday Mary Meeker shared another of her fact packed decks. As ever, essential reading.

There is a lot of good content from this event, with videos of interviews with Sean Parker, Dick Costello, Dennis Crowley, Jon Donahue and just about everyone else who is shaping our business