At the end of a call today with a nascent mobile advertising company, the entrepreneurs described me (fairly) as having dumped “a bucket of cold water” on their idea.
When I spoke at a local event a few weeks ago on “location-based services and the mobile ecosystem” (slides below), an attendee pointed out that I was “a bit of a wet blanket” on the subject.
Don’t get me wrong, I’m as excited about the mobile future as anyone — and after a decade of empty promises the smartphone revolution has finally kicked mobile innovation into high gear. But when I reflect on my time in the “m-Commerce” trenches back in the last bubble (’98-’99), I know in my bones that we’re still in early innings on this thing.
Here’s what I think will *eventually* happen:
- Consumers will increasingly rely on their mobile device as an always-on, personalized enhancement layer on their real-world experiences (think augmented reality, but more effortless, personalized and relevant). Some of this will happen at the app layer, some at the OS layer, but between them the mobile share of attention (or potential on-demand attention) will be nearly constant.
- In cooperation with their app- and OS-level partners, massive, data-intensive “mobile engagement enablers” (think OS-agnostic infrastructure players like Urban Airship and SimpleGeo) will maintain real-time maps of all those opted-in mobile consumers by location, demo / psychographics, intent + need states (both declared and inferred from location + social media exhaust), etc., etc., all made available to trusted partners via API.
- Performance-based offer networks (notice I didn’t say ad networks) will make it possible for anyone to bid for permission-based access to these opted-in mobile consumers by any combination of day-part, location, brand affinity, need state, etc. (Facebook’s ad console is the closest thing that exists today, but still a pale approximation of what’s to come).
- Creative agencies will help their brand clients develop and implement new customer acquisition, latent customer activation and preferred customer incentive strategies (notice that I didn’t say “advertising campaigns”) across the mobile audience. Campaigns will unfold differently for different blocks of current and potential customers, based in part on those customers’ relative influence in social networks and prior engagement history with the brand.
- With the help of their creative and execution partners, brands will shift bigger and bigger chunks of ad spend toward personalized offers and incentives designed to reinforce brand loyalty and trigger new behaviors. These offers will mostly be delivered to mobile consumers via 3rd-party proxies (social media platforms, branded entertainment content, social games) but a few elite + high-engagement brands (think Starbucks) will be able to build rich new direct relationships with their mobile customers.
The good news is, lots and lots of really smart entrepreneurs see this same scenario unfolding and are hard at work staking a claim to one or more of the layers or components described above.
The bad news is, none of those players — with the possible exceptions of Apple, Google, Amazon (soon) and Facebook (a dark horse contender) — has the power to implement the full stack outlined above at anything resembling workable scale.
So what we have on our hands now — and for the foreseeable future — is a colossal battle for the future of consumer marketing and entertainment, worldwide. Since it costs almost nothing to start a software company these days, there will be limitless new entrants clamoring for attention.
As these midgets fight… tech giants will battle with mighty strokes (think massive acquisitions and billion-dollar patent fights)… traditional marketing enablers will delay their own obsolescence through FUD… and brands will sit on the sidelines and wait for the dust to settle.
A smarter person than me once said, “being early is the same as being wrong”. It’s not too early to play in this market, but your strategic view (and by extension your financing strategy) had better have as its base case a long and bruising battle with victory a long way off.