OK, bad grammer but the title is an excuse for a pun on the marketing failure of the brand ‘I can’t believe it’s not butter’. They have produced a series of iPhone ads linking to a non-mobile optimised site. The banners were placed in the app What To Expect, and links to their standard, multi-column formatted website. iPhone users would have to zoom in to read the text. It seems that some brands still don’t get the point of optimising for mobile.
A new study from eBay, suggests that the UK could be seeing if £4.5bn in mCommerce by 2016. The only thing holding it back are the poor mobile data connections. In a survey conducted for the online auction site by retail specialist Verdict, they estimate that 16% of the UK lacks the coverage for mobile broadband with a further 20% below average. That could result in a loss of over £1bn per year in revenues. In a study of 1500 UK consumers they found that lack of coverage, low speeds and reliability were the major barriers for mobile shopping. The costs of data is also an issue for many customers. The DMA/Empirix study published last week also found that consumers were ready to shop, but the brands were not providing the service.
eBay has sent the results of Ofcom and are pushing to speed up the delivery of 4g which will provide much faster broadband. Although 4G networks are rolling out in the US and elsewhere, the UK has yet to agree the terms on which it will be auctioned off. The operators claim they have not seen their return on the £30bn + cost of the 3G licences. Mobile is the fastest growing channel for eBay who expect to see over $4bn in sales this year. More on the report here.
With the increase in mobile broadband usage, Ofcom has carried out a series of test to find out how fast it really is. Whereas fixed-line broadband offers average speeds of 6.5 mbits (0.5 seconds for the average web page), mobile has just 1.5 mbits (8.5 seconds for an average web page), although some networks achieved speeds of over 2 mbits. It’s fast enough to be called broadband, but slow when compared to fixed line broadband. O2 came out the best in the studies, and Orange performed the worst (no comment from them). Mobile broadband is on the rise, with 17% of households now using it, and 7% using it exclusively for internet access. Two years ago it was just 3%.
Ofcom concluded that mobile broadband speeds would remain significantly lower than fixed lines until at least 2013, after which new channels will be rolled out.
… but businesses are not ready to deliver it yet.
A new study by the DMA and Empirix on consumer and business attitudes to mobile shopping has identified a significant gap. Consumers are ready for it now, but business aren’t ready. The study surveyed over 3500 consumers and 1500 businesses, many of them customer contact centres.
A couple of interesting figures came out of the report:
Much like the DMA/IAB study last year, this time most consumers want promotional offers from retail brands on their mobile. However, privacy and security were key to this. 79% said they would like promotional offers but only if the brand cannot see their personal data. This is clearly an opportunity for pull-based offers through social location, such as Facebook Deals.
The other bit of interesting data was when consumers were asked about QR codes … 32% new what it was, but had never used one and 39% didn’t know what it was. That’s over 71% of people who weren’t using them. Whilst brands are keen to push QR, it seems that consumers just don’t see the point.
From the business perspective, 75% of companies thought that implementing mobile would be at an additional cost to them. Even more significant, 89% of the companies didn’t have a mobile strategy.
Underlying all of this gap is the difference in perception between consumers and businesses. Brands are still stuck in their traditional silos: Call Centres, Digital, ATL etc and channels; sales, marketing, CRM and customer service. As consumers, we don’t work like that, and expect to communicate with brands from any device about any matter. Many people in the industry talk about the ‘single customer view’ rather than silo-ing. This is an essential step for business to make if they want to be getting the most out of mobile and social media.
Jack Dorsey founder of mobile payments company, Square (and a Twitter founder to boot), tweeted that they are now seeing $3 million per day in payment transactions. Square is chip and pin type device that attaches to a smartphone and allows merchants to turn it into a pdq machine. It took the first 10 months to get to $1m per day, but just three months later, they have tripled that. Spured on by investment from Visa, it certainly looks like Square’s mobile payments are gaining momentum. Many industry observers believe that 2011 will be THE year of mobile payments, and both mobile PDQ and contactless are showing the possibilities.
Orange and Barclaycard have been promising contactless payments in phones for over a year. They finally launched the UK’s first NFC phone last week. It will first be available on a Samsung Tocco Lite on both pay as you go and monthly and the payment facility (called Quick Tap) can be set up by Barclaycard or Barclays Debit Card customers. NFC works much like an Oyster Card (for those of you who’ve travelled in London), whereby you top-up your account with up to £100, and can make single transactions up to £15. In essence it’s like cash, but without the pocket full of coins. The contactless payments can be used at 50,000 stores, including Pret a Manger, EAT, Little Chef, Wembley Arena, Subway, Wilkinson and McDonalds.
Consumers often raise the issue of security with NFC. Could someone just brush past and deduct a payment? No, because the data is encrypted and can only be read at terminals. In fact, the NFC chips have been available on Barclaycards for some time, and there are no examples of that security being compromised. What if someone looses their phone, could someone just spend the money? Not really. If you lost it will all £100, once you tell Barclays the payment facility is cancelled and the money refunded. If you went out with £100 cash and lost it, you’ve lost £100. That doesn’t happen with contactless.
In spite of that, there are understandable consumer concerns about security, which is why users can add a pin number, making the contactless facility more like a traditional chip and pin. Will contactless catch on? Certainly Orange and Barclaycard have massive confidence in the scheme, and will be rolling out other handsets shortly (lets hope one of them is a decent smartphone). The potential of contactless as both a payment and marketing channel is there, however there is one big but. Consumer adoption. In spite of large investments in mobile NFC by banks, operators and handset manufacturers, there is little evidence that consumers are demanding contactless payments. Pushing technology to consumers does not a promise of success. The world of mobile is littered with failed technology (mobile TV, video calling, any Nokia phone in the last three years …). What is disappointing with the Orange/Barclaycard offer is that neither the handset nor many of the brands involved are exactly cutting edge (contactless in a Little Chef???). True, you have to start somewhere, but this isn’t going to reach the kind of social opinion formers who will evangelise about the technology. Maybe it will all happen with a contactless iPhone 5!
The Problem with Bluetooth
Just a few years ago, Bluetooth was predicted as being the next big thing in mobile marketing. The DMA even produced a set of Best Practice Guidelines. Bluetooth offered a number of advantages:
- It was network independent – you didn’t need a mobile data connection
- You could send large files, quickly to mobile handsets
- It worked on even the most basic mobile phones
- The units were relatively cheap to install
However, it has never reached its promised potential. There have been few examples of major brands successfully using Bluetooth, and none recently. The failure of Bluetooth seems to be down to a number of problems:
- Users don’t understand how it works – most people have no idea how to turn on or off their Bluetooth. Those that do tend to keep it off as it uses a lot of battery power
- It doesn’t work on a number of handsets including iPhone and BlackBerry. Given that these two models represent half of smartphone users that is discounting a lot of people
- It isn’t very reliable – the units often fail to pick up handsets or cannot deliver content
When it comes down to it, Bluetooth was never intended as a marketing medium. It was intended to connect to other devices or for peer to peer file sharing. As such there has been little investment in the channel or the technology.
NFC, The Future of Mobile?
Near Field Communications, or Contactless is a contender for the next big thing in mobile. Unlike Bluetooth there has been a considerable investment in the technology by banks, mobile handset manufacturers and the mobile operators. Visa, for example has committed 400 million Euros to rolling out NFC this year. Payments and ticketing are the main driver, however the potential of NFC marketing is also a factor in its development. So far, only BlackBerry have announced a handset, but other manufacturers will follow. Rumour is that Apple will include it in the iPhone 5, assuming they can get the technology ready.
The key benefits of NFC are:
Simple to use – you just ‘touch in’ to make a payment, get your voucher or call back
The infrastructure already exists in the form of payment terminals in numerous retail outlets
Clear user permission – the action of touching in means that mobile handset users have specifically given their permission
So, it looks like NFC has a future (unlike Bluetooth). It is estimated that it will be available in all handsets within the next 12 months. That just leaves one major hurdle, consumer adoption. Will mobile users trust it enough to actually use it?
What kind of skills, qualities and qualifications are you looking for when hiring people for digital media roles?
The DMA and Birmingham City University are trying to find out the answer to these questions. Please complete the survey here – it will take about five minutes. http://tinyurl.com/6e7oy6c
A new report from PwC called Embrace New Revenue Sources: Living in an Apps-driven World, suggests that in the future just 50% of operator revenues will come from text and calls. The remainder of their revenues need to come from other sources such as apps. So how’s that going to work?
The problem for the operators is this:
They have little chance to increase their call/sms/data revenues. Most people are on the package they want, including their data, and don’t feel they should pay any more for it. They also expect a free (or cheap) new phone every 18 months. Yet, the operators are having to provide more and more service for that package. At the same time, their little extras have been eroded: inter-network calls, roaming charges and data charges have all been limited by legislation.
To some extent they have no choice but to get into other revenue streams such as content and apps. The problem for the operators is that they’ve already tried apps and it didn’t work. Contrary to some perceptions, Apple did not invgent the AppStore. The operators were at it a few years before Steve Jobs launched apps on iTunes. Stores such as Vodafone’s Betavine and O2’s revolutions put apps in front of their customers. The problem with them, however, was two-fold:
Firstly from the content provider perspective it was expensive. As one developer put it, ‘it would cost £1000 to get in there, and you had about one weeks’ visibility. Unless you had a major hit on your hands, you would lose money’. Apple changed all that with their appstore, going from a B2B to a direct to consumer model, where the developer received a revenue percentage rather than paying to be there.
Secondly, there is the problem of the consumer relationship. People don’t see their mobile operator as a place for content, but more as a utility company to provide calls, texts and access to that content. The operator portal was a classic of this: users tolerated it as it was the first port of call, but they only used it as a jumping-off point to the things they really wanted. When it came to promotion on these portals, if you weren’t on the first page (the Top Deck) you were basically nowhere.
The biggest problem that the operators now have to face is that the consumer relationship for apps and content is now with the operating system: Apple’s iTunes, Android Market, BlackBerry World and Nokia’s OviStore. Changing people’s perception of operators as a utility will be hard, if not impossible to achieve. In the long-term the only solution for content revenue is to create tie-in’s and joint ventures with the OS app stores.
Following on from the previous blogs about unsolicited texts for accident claims, it seems that some of the spammers have switched to mis-sold load protection insurance messages. Much as the accident claims texts, they start in exactly the same way …
‘Free Msg: Our records indicate you may be entitled to £3750 …’
Clearly, it’s coming from the same source as the accident claims texts. Both types of marketing message are regulated by the Ministry of Justice, who are well aware of the problem. A spokesman for the MOJ was on Radio 4’s You and Yours yesterday explaining the problem. You can listen to it on iPlayer here (the interview is 21 minutes in). He said that thousands of people had received this message. In fact, it’s probably many more than that. A few quick surveys show that up to half of everyone has got such a message. That’s millions of messages.
The good news is that something is being done. As mentioned in the Radio 4 interview, they are working closely with the DMA to resolve the problem. We (the DMA that is) have created a working group which includes the regulators (MOJ, ICO), experts from the mobile marketing and telecoms industry, and mobile operators. The problem for the MOJ is that whilst dealing with the unsolicited messages are high on their priority list, they don’t have the technical resources to identify the culprits. By bringing together various industry experts, we can make it easier to identify the spammers, also look at how they got hold of the data and even take some preventative measures to stop the messages reaching the handsets.
There will be updates on the progress in this blog. Click here if you want to read more about the claims texts and what to do about them.