Mobile Fix: Politics and big data

09 Nov 2012  |  Simon Andrews 


Simon Andrews, founder of the full service mobile agency addictive!, rounds up this week's mobile news.

The key story for marketers from the US election is about how forensic the Obama campaign was. They leveraged their data from the last time and developed a way to use it to target the right message to the right person - in the most appropriate channel. TV was hugely important but so was the content - especially the celebrity messages like this Chris Rock sketch which received 8 million views.

Knowing what works for you and why, is the most valuable skill in marketing. And being able to connect things together is also vital - no one medium can do everything, so blending channels makes sense.

Perhaps the best proof of the power of big data is the way Nate Silver was able to predict the result so accurately. His book is a must read.

Facebook

A good example of how data is enabling marketers to blend channels is Facebook Custom Audience. You upload a list of your customers email addresses and after a little hashing so no-one is identifiable, Facebook shows your ads to those Facebook users on your list. As you'd imagine, being able to message people you have a relationship with is pretty powerful and one travel company reports US$25 in revenue for each US$1 spent.

Much of Facebook's effort in advertising is about leveraging data in this way - their RTB exchange works in a similar way but uses the cookies dropped by brand websites instead of email addresses. The end result is similar - ads delivered on Facebook to people who have had some contact with your brand.

Because this can now be done at scale, advertisers and agencies are very excited about the opportunity. Rob Norman of GroupM said: "We love it. We absolutely love it. Massive, massive, massive increase in the amount of exchange traded media. We think it's probably quadrupled the market in terms of availability of total impressions."

Of course not everyone is convinced. Michael Woolf, talking about Mark Zuckerberg, makes a strong argument that he is not Don Draper.

If the value of Facebook's inexhaustible advertising space goes down, then everybody else's value goes down with it.

Advertising

The huge amount of inventory and the comparative lack of demand are causing problems for content creators and the VC backed start-ups that expect advertising to be their business model. Whilst the growth is there, the consensus is that the model is broken; Business Week says mobile ads are the future but they're also lousy.

A lot of this comes back to the fact that media networks - who don't know the brand well enough - do most mobile creative. And that most money is still chasing response, so ads get measured on how many clicks they get. Another influential factor is that the desktop model is being ported to the smartphone - when we really need something more suited to user experience. Native formats on Facebook and Twitter are a clue to where we may end up.

The other thing we probably need to avoid porting from desktop is the fragmentation of the space. A good AdWeek piece looks at how the plethora of ad middleware tech players are adding complexity and essentially constitute a tax, without delivering on the promised benefits. And despite all these clever companies, the price of desktop advertising is in serious decline.

One quote stands out: "US$561 million has been pumped into SSPs (supply side platforms) and ad networks alone, with just US$93 million being invested in creative services.

The X factor that turns a digital campaign from ordinary to extraordinary is, in our experience, always the creative idea. Are your brands spending enough on creative thinking?

Operators focus on advertising and payments

With Project Oscar finally approved by the EU, Vodafone, O2 and EE have morphed it into Weve - a business that aims to create a mobile marketing and services platform with 65 million potential customers and a revenue target of £1 billion in 5 years.

We're pleased to see that the project has evolved from a wallet to one where the context is key; with payment just one important element. They start with the 15 million people who have opted in to services like O2 More. It's good to see the operators establish a credible challenger to GAFA - they now have to execute.

Just how this JV affects the individual activities of the operators remains to be seen. This week we see that EE have partnered with iZettle - the European answer to Square. This is an exclusive deal but it is unclear for how long.

It is also a little unclear whether people can use Visa with iZettle - it's a more complicated process than using Amex or Mastercard. Visa told the BBC they are working with iZettle to develop a compliant solution. As Visa is an investor in rivals Square and Mobile Money Network, the issues here underline just how complicated this market is.

And muddying the water even more, Google has announced that their wallet will now work on the mobile web. And rumours suggest they plan to have an iOS version soon too. The wildest rumour though, is that Google plan to launch a physical card - so you can use your Google Wallet anywhere you would use any other credit card.

Apple

Whilst the iPhone 5 is selling incredibly well and reaction to the new iPads has been very positive, the share price is down 20% on the peak a couple of months back. Which means Apple is worth US$138 billion less than it was.

The general feeling is that Apple is losing its cool a little, with early adopters moving on. And inevitably competitors are starting to take share - especially in tablets, as we pointed out last week.

New numbers show the fall is continuing. Apple's share of worldwide tablet shipments fell from 59.7% a year ago to 50.4% in the three months to the end of September, IDC said, while Samsung's leapt from 6.5% to 18.4%.

A new strategy for Google?

With Android growing six times faster than iPhone (according to new Mary Meeker data) the role for the Nexus hardware has been hard to define. There is a suggestion that one key strategy for Nexus is to drive down prices relative to the competition.

They want to keep the prices high; they want to force the price to be so high that operators have to subsidize the devices very highly. That's not only the Cupertino guys but also for the guys up in Seattle. They want higher margins; they want to charge more for software.

TechCrunch see this as an experimental path towards mobile internet ubiquity.

Which makes the news that Google (and Microsoft) are looking at buying the white space spectrum in the UK even more interesting. This spectrum would be cheaper than bidding for 4G as Google wouldn't need any licence - so they could roll out free wifi across the UK.

With the support for Chromebooks and Eric Schmidt's talk of free phones subsidised by advertising, we should look at Google's long term vision. Remember they launched Gmail with huge storage, knowing that by the time people built up a lot of data the price of storage would have fallen enough to make it affordable.

Pushing down the price of hardware and offering free ubiquitous connectivity would enable Google to maintain real scale and seriously disrupt the business models of the competition.

We talked about Google's ambitions in mobile some six years ago and noted their interest in wifi and spectrum even then. With the best monetisation model for mobile, they have a huge incentive to keep driving the market forward.

Click here for your full Mobile Fix (complete with links to background articles).

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