DIGIDAY:MOBILE – Fragmentation and the State of the Mobile Industry

One of the major pain points for anyone developing for or selling in the mobile space is the fragmention of the industry.  Different platforms (SMS, mobile web, apps), different devices (iPhone, Android), and a dearth of standards have created a lot of confusion as to how one can best reach mobile customers.  This problem was tackled by a panel of speakers, and a pair of speakers discussed the findings of an industry survey on the subject.

Keynote Panel – Reaching Consumers in a Fragmented Mobile Market

The first panel discussion of the day was challenged with discussing and bounding the problem of fragmentation of the mobile market.  How does a marketer chose the right platform, device, operating system, etc in order to reach his or her desired audience?

Frank Barbieri – Chief Product Officer at Transpera (moderator)

Dave Gwozdz, CEO of Mojiva

Gannon Hall, COO of Kyte

Christine Cook, SVP of Martha Stewart Living Omnimedia

Tom Constabile, New Market Development at Verizon Wireless

Alexandre Mars, CEO of Phonevalley

Uncommon among marketing, Cook described a “not-so-sexy” way to reach the biggest audience by supplementing an app-based approach with SMS communication.  Barbieri called this divide the “icing and the cake problem.”   Hall argued that SMS was “so five years ago” (although this disagreement with other speakers makes sense; Kyte is a mobile video platform while other speakers’ business models depend heavily on SMS usage.)  Gwozdz offered an advantage for SMS, allowing a marketer to demonstrate return at scale, whereas the richer methods of communication are more expensive and difficult to develop while reaching a smaller audience.

Mars described platform fragmentation as a budget problem (similar to Cook’s schedule concerns.)  In order to move mobile marketing to the next level, it’s critical that marketers can convince their clients that they need to increase their spending in the mobile space.  In the meantime, mobile marketing is similar to what web marketing has faced: everyone wants the new and shiny approach.

Constabile noted that fragmentation has been historically good for customers.  As more users adopt smartphones and can experience the more feature-rich content, fragmentation problems will decrease.  but this will take time.  Verizon Wireless is looking to simplify the tiers of devices to mitigate fragmentation, but Constabile notes that mobile budgeting must be done with a longer timetable (3-5 years) and with the targeted customer in mind.

Barbieri noted that “you’re never dissatisfied with your mobile phone until you sit down next to someone whose phone is better.”  Constabile described this as an aspirational opportunity.

Another divide is between applications and mobile web.  The immediacy of the mobile environment is search-based (and to a smaller extent sharing-based.)  Cook asked whether developers are satisfied with a one-time payment from an app-buying customer who then largely ignores the product, or do they desire more interactivity?  Gwozdz noted that mobile web is advantageous to smaller brands who cannot afford to develop applications for every platform.  Even Hall, who championed apps over SMS, is in favor of developing for the mobile web to maximize discoverability and sharability of content.  Mars got the last word, highlighting the ultimate concern for a mobile advertiser: they need a specific mobile strategy, or else they will ultimately fail to reach their customers.

State of the Industry in Mobile

Dave Gwozdz, the CEO of Mojiva and Jordan Rohan, the managing director of equity research at Stifel Nicolaus, shared some highlights from the DM2PRO.COM “State of the Industry in Mobile” survey.  Gwozdz described some key learnings from the survey:

  • Mobile advertising has grown in the last six months
  • More companies are launching multiple ad campaigns in mobile
  • Paid support is declining in favor of ad-supported content
  • Brands, publishers, and agencies are moving towards ad networks to maximize return; using multiple networks in order to fill available advertising inventory
  • Big pain points are measurability and fragmentation
  • Over-reliance on click-through rates because there aren’t more precise measurements to replace it

Rohan, an analyst by trade, summed up the survey’s findings by describing the “ABCs of the State of the Industry”:

A (Apple iPad and Android)

  • Both platforms are surging in popularity
  • 48% of respondents are using iPads for marketing in Q3, while it didn’t exist in Q1

B (Budgets)

  • Usage is expanding from endemic uses; category participation is broadening
  • Growth in areas like Pharma, Retail, and B2B
  • In the absence of precise metrics, it’s difficult to increase spending on mobile
  • Budget forecasts are becoming more realistic (68% increase on spend forecast in Q1 decreased to 21% in Q3)

C (Confusion)

  • Measuring success and conversions still a major concern
  • Advertising inventory concerns are starting to materialize
  • SMS is attractive because it averts a conversion pain point by using metrics familiar from e-mail marketing
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