As you might have seen already we are members of 1% for the planet. This means that we donate 1% of our top line revenue to organisations that work for a better environment and society. 1% for the planet was founded by Yvon Choinard, the founder of Patagonia. We are very happy today since have [...]
Off portal changes the game back to a game of cut-throat online marketing. It is a very different game to B2B sales to one customer group, the mobile carrier. It is also slightly quicker and costlier. Sales cycles of 12 months and “free” traffic on a revenue share deal is becoming a thing of the past. Well, it moves from the only channel into a portfolio of channels you need to develop and grow in order to have a business as a content provider.
If we look at the facts the message is clear. A UK study shows the following. In December 2007 57% of unique mobile internet users came from a carrier deck. 12 monts later in December 2008 the same number is 22%. I do not have numbers for 2009, but when I ask around today among carriers and others the reply is in the 10-20% range. So we have clear evidence that we are repeating the web journey from 1995 and onwards. Carriers still a very necessary part of the ecosystem, but now it is a game of online marketing that starts in the mobile. It will be a cut-throat game not for the faint hearted.
The shift now is away from technology lead to marketing lead in order to succeed. The biggest impact of these two is the responsibility and burden of marketing now falling heavily on the content provider. New skill sets and fresh cash to invest in marketing is needed. Many content providers are more geared as product development and product marketing outfits, not D2C powerhouses. This happens at a time then mobile advertising has pretty poor ROi in many channels and other marketing is expensive. CPO deals are not that common at the moment. In the near term it will put a strain on cash flow.
However this is a transition period. It will stabilise and long-term models and pricing in line with performance will prevail. In 24 months’ time we will see media driven models and conditions rule the mobile internet market.
The road to profitability hinges on mastering the challenge with small revenue streams and historical issues with consumer trust.
Revenue: Multi-line models required: Advertising, sponsorships, virtual goods, auction based ad systems etc. Paying for enhanced experience and more convenience for user.
Trust: Scams with everlasting subscriptions for ringtones etc still in peoples mind. Transparency and honest offers will be key for long term survival.
In 5 years we will have a new range of digital media houses/publishers and some of the old media houses will have made it through their cathartic journey from old media to new media. Wanna join the ride? It will be fun!
The business of mobile services and media