Interview on Twitter, Blackberry & disruptive business models

While the market complains that the it is an overhyped initial public offering. Many of the detractors are using Twitter to voice their concern. Ironic, isn’t it?  Post IPO, the stock will most likely rise to $30 and wait for Twitter to show some lift in advertising revenue. This will come as the media dollars need a home and their are few options for the digital buyer.

Twitter has moved from a microblog to a trend-crowd-sourcing destination.

1 in 5 have accounts but more and more will use the service to scrap instant and succinct info from the web. With this as a unique value prop, Twitter will capture revenue and drive profit over the next 48 months.

Starbucks: Helping Caffeinate and Juice Customers

by Gary Schwartz  (30/07/2013)

Starbucks Q3 2013 report is out: a 30 percent jump in My Starbucks Rewards spend and mobile app transactions in the US accounting for a whopping 10 percent of in-store US sales.

The only successful mobile wallet continues to grow market share

The one interesting development is the announcement that U.S.Starbucks is partnering with Duracell Power to provision in-store charging stations. With Starbucks’ success with its mobile wallet, the last thing the local Starbucks store wants is a dead phone at point-of-sale.

I have always said that wireless charging stations are honey to the wireless bee. Starbucks has already educated the consumer on the value of its retail network as a Wi-Fi network. Now it can it extend this utility to a charge-up affinity.

There are only two deleterious mobile states: a consumer with a lack of caffeine or lack of handset power. Starbucks in the natural brand to be associated with charging up.


From Singapore to Moscow: Is OPEN a four-letter word?

by Gary Schwartz  (23/07/2013)

I recently returned from speaking in Singapore at the regional CommunicAsia conference and event in Moscow. Innovation was a central theme.

In Singapore I was in a discussion with Google, SingTel and Microsoft. I asked Doug Farber, managing director for Google in Asia-Pacific, if mobile innovation is stifled when there are only a few power brokers that control the mobile ecosystem.

Google has always had a “healthy disregard for the impossible,” Mr. Farber said. Agreed. However, while Google has a healthy internal innovation culture, is it allowing the ecosystem to do the same?

I recall Richard Kramer from Arete Research’s jab that in mobile O-P-E-N is a four-letter word.

There are only a few powers that are trying to lock the mobile ecosystem: Apple, Amazon, Google, Facebook, Microsoft and Du. And while Apple and carrier networks are unabashedly closed fiefdoms, Google’s Android empire may not be truly open.

“But,” Mr. Farber said, “I am the open guy.”

“Open only on the front end,” responded Bill Chang, CEO of group enterprise at SingTel.

Outside of a few global plenipotentiaries, mobile developers have had to pick from the crumbs at the table.

Twenty-five applications command 50 percent of the app store revenue. The billions in revenue do not feed many mouths. The average developer lives on $5,000 per month, which is a bread-and-water diet of $60,000 per year, said Richard Kramer. “Where are the developer’s yachts?”

Hardware innovation has flat-lined and power is exclusively in the hands of Apple and Samsung.

The yearly CES announcements have underwhelmed and recently left the Las Vegas melee altogether. Another handset release with faster “mega” screens does not excite the crowds. With $75 smartphones entering emerging markets, smart has become a commodity.

SingTel’s Mr. Chang said in a market where companies are “cost-cut to death, it is difficult to drive innovation forward. Mobile-first is a challenge.”

Mr. Chang talked about the importance of the CIO is this process. He plays the initialism game that we all do at public events: “The CTO is now the chief transformation officer and the CIO the chief innovation officer.”

But what does that really mean to companies trying to navigate the mobile marketplace?

The CIO never had power, said Michael Thatcher, chief technology officer of Asia for Microsoft. “It is only when something is broken they have power. How can we advance this and stop being tech centric? Stop being reactive. Follow the money.”

But is there money in mobile innovation?

Outside of the big six ecosystem players, there are few that command significant market share. We live in an “app store economy” where we all need to play the piper 30 percent and never own the customer. To make money on Apple’s SDKs or Google’s, dominant big data position is difficult.

The social leviathans are also closed.

Facebook has built a business on connecting people. With its post-IPO revenue focus, it has worked hard to create a media buying tollgate on the impressions and big data that it owns.

In social portals there is little big data sharing and little opportunity to make money as an outside developer. It is a bigger issue for the entire social ecosystem.

The more that these social portals try to leverage these assets to generate revenue, the less socially authentic they become to the consumer. Our social spaces have become more like driving down the public highway.

Social portals such as Tumblr and Instagram have generated such value in the market because they remain authentic – pre-revenue and pre-commercial, of course.

Everything is disintermediated. App stores and social portals are all controlled by Facebook, Amazon, Apple, Microsoft and Google, and somewhere we all have to pay the piper.

Telecommunications is the history of open and then closed systems, from RCA closing down FM Radio and early television.

It is the same recent history of Apple disintermediating the wireless carriers with an “Internet device” and then turning around and using the same iPhone to shut down the mobile Web with a closed App Store.

Are we entering another closed loop where innovation becomes stifled? What does this mean for business?

Google sponsors the ship, “Unreasonable at Sea,” to sail around the world evangelizing entrepreneurism and innovation. How can we make the power brokers more unreasonable at home?

SCREEN WARS (Digital Media Forum Keynote 2013)

In Dubai talking to agencies and brands about “digital velcro”. How linking content seamlessly between one screen plus other consumer screen equals a multiple of value for a brand.  20  mins – view here.

Two Fisted & One Fisted Mobile

Discussion with Prepaid Press on mobile commerce.
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“The mobile shopper is a fundamentally different animal than the bricks & mortar and online shopper.   In a world where everything seems to be converging, you have the words ‘digital’ and “cross media”. It goes across tablets, traditional mobile handhelds. We talk about PCs as being mobile. We even talk about televisions as being powered by mobile connectivity.It seems to be a battle for screens. If you don’t understand how to engage strategically with the mobile shopper specifically, you’re not going to drive your objectives. The book looks at how to deal with the specific target audience who is attention challenged.  They are walking down the road, coming into stores and darting out. They are picking up their kids and then barreling out to some other event.  How do you intercept them to purchase? How do you get them engaged?

Prepaid Press: Let’s break this down a bit. First, what is the biggest difference between mobile and bricks and mortar consumers?

GS: I talk about a two-fisted consumer and a one-fisted consumer.  A two-fisted consumer is somebody who needs to have the interactive device, but the interactive device takes up two of their hands. The reason I made that distinction, is if you have a two-fisted device, like a tablet or PC, you are not really mobile. You’re portable. You can lean against the wall, you can sit down at the mall, but you are in a thoughtful, engaged interactive session.

A one-fisted consumer is somebody who has a handheld, who can multitask, who can interrupt their experience in the aisle to look down, grab an alert, and continue with their day. That is a fundamentally different kind of consumer.

Prepaid Press: So the two-fisted consumer has to concentrate on the device, right?

GS: They are not a pure, multi-tasking consumer. They are multitasking on the screen, but they are not multitasking with the environment, not as fluid as the one-fisted consumer.

Prepaid Press:  One-fisted is someone with an Android, or an iPhone, doing something else at the same time?

GS: If you want to engage with somebody who is a shopper, who wants to buy prepaid cards, wants to spend money on their card, you need to understand that they are lost in the screen experience. That they’re not really good shoppers. They are good at shopping for some things in a virtual mall, in a storefront on that device, but they are not really great at shopping at the prepaid mall, at the POS in the local C-store. You’re immersed. What you need to do is engage with them in an interactive way while they are doing other things that are shopping related. That’s why you need a smaller screen experience. You need something that buzzes in someone’s pocket. They take it out and say, ‘oh! I have a coupon’ or ‘my balance is X’ or if buy something with my gift card, I get an extra bonus. Or, they have accrued points with a loyalty card and can spend them now. That kind of impulsive engagement. On a dime, I can turn and make that decision to spend money.

Prepaid Press:  So the two-fisted consumer is proactive and initiating the activity, where the one-fisted consumer is having something pushed at them?

GS: Yes, absolutely. On a small screen, you don’t really have an immersive experience. People spend a lot of time on those units, but it is primarily an immersive game environment. If I want to buy the best PC on the market, I need to research it, I will engage with that on the large screen, because it is a better experience for me. I can see more, go onto social media and see reviews.  I can do all these things with multiple windows on a larger screen format. On a small screen, I am going in, in a very targeted way. I’ll go in and get a nugget of information, but I’m not going around and doing a lot of due diligence. Usually it is the store interrupting me, based on a profile or preferences. The relationship is now directed and interrupting my day, but I asked for it. I started that back and forth somewhere else – online, in the store, wherever.

Prepaid Press:  You talked about a battle for screens. What is that?

GS: Andrew Harrison, the CEO of Best Buy UK, talks about the new battleground. The new battleground for him is the battle of screens. There are so many different screens around us now as consumers. In addition to the large and small format screens, you have television, billboards, interactive signs, all these different screens, all vying for a consistent messaging experience. The battle is to understand how to engage the consumer in a very smart way, and a very consistent way across all those screens. That is the new battleground.

Prepaid Press:  I would assume that you have to be very careful about branding with all these new screens, right?

GS: What branding has to do is work out how to take their product or service across those screens so the consumer is presented a fluid and productive engagement. Understanding what the consumer is looking for at each juncture in their day on a given format screen.

Prepaid Press:  But, you have to create different experiences for each type of screen, right?

GS: Yes, people are looking to interact in different ways at different times on  different media. For example, in an online, thoughtful environment, you would not want to say, ‘here is a coupon, buy me.’ They are going to say, ‘hold on a second, tell me about yourself. Give me examples, a video. I want to explore. Show me comparisons.’ They are expecting a deeper dive because I am in a thoughtful environment, whereas on the mobile device, I’m happy to just get a coupon. It’s a very targeted interaction based on my relationship with you. A relationship between a brand and a loyalist is just like a relationship that we have interpersonally. We are just using a different media and we have to be thoughtful about that.

Prepaid Press:  So, if we were in Las Vegas and you offered to buy me a martini, if it was 5 PM, I would probably do it, but if it was 8 AM, probably not?

GS: That’s a really good example. Context is everything and media is very contextual. You expect certain things and you need to have brands deliver on that expectation.

Prepaid Press:  Doesn’t the mobile experience make context easier? You know what time it is, and you may know where the consumer is.

GS: That’s why the CPM (Cost Per Thousand) in traditional media has plummeted to the floor. Brand has a higher expectation than an impression count. They want to know more about the consumer. They want to interact with the consumer. Interactive media has changed expectations. Media has gone through a sea change and brand expects a targeted contextual engagement. The ROI factor has gone up. So, don’t just give me a CPM, give me a CPA (Cost Per Acquisition). Give me a CPS (Cost Per Sale).

Prepaid Press:   When you target your audience on a mobile medium, is it a challenge or an opportunity, or both, to tweak your message?

GS: It is an opportunity, but one that we have to navigate in a very circumspect way. It is not an opportunity to buy lists. It is not an opportunity to find people based on a location, invade privacy. A mobile device, especially a one-fisted small impulse device is very invasive because, if my phone buzzes in my pocket while I am walking down the street, I will absolutely take it out and see who is contacting me. If you are interrupting my day in a way that will make them glad to hear from your brand, OK, but it is also an opportunity to make them angry. It’s a double-edged sword. That buzz in your pocket could be a family member trying to contact you and you need to respond. A few brands that you will include in that circle of trust, you don’t mind if they interrupt. They mean a lot to you.  I opted in, I expect  it. I am not surprised. I may not even mind, based on proximity, learning about a few things that are happening in the local mall, or getting some special deals. That targeting is the holy grail, but it comes with a lot of trust and expectations. If you abuse those relationships with the consumer, you will never be able to get their trust again.

Prepaid Press:  Are there particular demographics that are more open to one-fisted mobile marketing?

GS: There is no question that there are 3 buckets of commerce. Digital. You have the ring tone revolution, digital stuff that is consumed on the phone, games for example. The purchase of content on the phone and personalization of the phone has been in full force for 10 years. That is a younger demographic, personalizing my phone, personalizing my experience. What is emerging now is virtual commerce. I buy credits in a game. Gaming crosses a lot of demographic lines. That probably skews fairly young, but it crosses over into a range of other demographics.

The big challenge is in the physical world. That is a chasm from the digital and virtual to physical purchase over the phone is so huge. You can talk demographics. You can postulate that it is going to be older, but until that actually happens, it is really a moot issue. That will evolve. It will take about 4 to 5, or some people say, 10, years to evolve. It will take a long time to cultivate that in-store base.

Prepaid Press:  Who do you think will benefit from reading your book?

GS: The book is targeted to anyone who wants to understand this impulse consumer, from retailers to brands and marketers, but I tried to cater to the mainstream audience that is interested in this new economy.  In order to succeed in your business, you need to understand how to engage with that new consumer. That is what the book is focused on. •

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