Mobile youth marketing, London, May 2008

Thanks to Josh Dhaliwal, of Mobile Youth I was invited to the workout in London, May 2 2008. Graham Brown, CEO of Mobile Youth who wrote about the 7 challenges of mobile marketing proposed 3 challenges of mobile youth marketing for this workout :

Charging : from free-content to new business models
Relevance : user profiling allowing intimacy and privacy,
Trust : social dialogue between brands and consumers

Monetizing free-content with new business models
Mobile Youth marketing is about winning the heart and mind of the youth and content, music for example is a great way to succeed. It’s one reason iPod brand is such a reference. We talked about brand that fell such as Levi’s ® (from 50% market share in 1996 down to 9%) as they lost their sexy / rebellious shrink-to-fit image [yet they launched an award-winning mobile campaign promoting user-remixed ringtones and 501 jeans in 2005]. What’s the business case for free content and capped data plans ?
Music : some great examples of the free economy. Fans downloaded Radiohead’s new album Rainbows at the prices they wanted, 38% paid a total rumored to amount 9M$. Similarly, Prince's album Planet Earth was released as a freebie but the 21 London concerts sold out for 23M$. Gerd Leonhard calls this the “tap water music” vs. “bottled music” and published 3-years blog history : Music 2.0. Damien Saunders, head of music at Vodafone agreed there were lots of opportunity to monetize mobile music. But he made the point that it is about creating user experiences with lead users and rather than promoting content with advertising which is counter-productive.
Video : there was less buzz on mobile video but Rhys McLachlan of Mediacom reminded us that youth still consume 3 hours/month of TV. Other panelists saw a smaller opportunity there. [yet 3 UK had 600’000 subscribers downloading 6 million video clips sponsored by advertising and announced a sponsored music video service – and 32 million have been downloaded on 3’s SeeMeTV and O2’s LookAtMe!, from 60,000 user-generated submissions].
Graphics : an order of magnitude of mobile entertainment revenue was given by Tal Dagan, from Comverse (ring tones 10B$, ring-back tones 5B$, graphics 3B$, other 0.5B$) [I attempted to complete the picture with other publicly available figures from MEF(25B$), IDC (highest revenue from ringtones, ringback tones, mobile television and video services, 2011 forecast of 40B$), Portio Research (music 9B$, games 3B$, video 1 B$, others 17B$)]

By comparison, eMarketer estimates mobile advertising at 2.8B$ [growing to 19.1 B$ by 2012 ]. As an example beyond ringtones, Comverse’s Klonies is a solution to push avatars during call establishment (J2ME client software) instead of the CLI / phone address-book user interfaces.

User profiling driving relevance and protecting privacy
My presentation in the user profiling panel triggered lively discussions. : how far should we drive user behavior analysis and targeting ? I explained the potential for dynamic profiling with network information : your phone address book is your social graph, call and location history, presence and device information are additional dynamic profile information’s typically available in databases such as HLR/HSS, XDMS etc… And dynamic device detection can help adapt to the preferred format and channel.

On the pro side, user profiling serves both advertisers and users. Jupiter surveys that 50% of 16-25 year old youth are happy to be targeted by advertising in exchange for free content and Blyk’s 100’000 subscribers are a testimony of this. Jack Wallington of the Internet Advertising Bureau (IAB) representing over 86% of online advertising in the United States, gave views on the normalization of the mobile advertising profile data and related metrics.

On the opposite side privacy protection is key to maintain trust with consumers. The audience recalled the controversy around Facebook’s social advertising and Beacon Facebook Ads, an engine for sharing profiles with advertisers that lead to 50’000 users joining the MoveOn.org group until explicit permission and opt-out was enforced. On the privacy issue, IAB best practices include the opt-in opt-out facilities to give control to the user. In addition strong authentication profile should assist in enforcing child safety, such as mobile operators code of practices brokered by the European Commission to prevent bullying [15% of under 16] , access to pornographic [ #1 destination is adult, peak usage time 9pm-11pm] and violent content, and inappropriate use of camera phones and location services. I was asked about authentication mechanisms beyond USIM and passwords – my belief is that only biometric (fingerprint, face recognition) authentication can properly identify a child using a device. A related issue is SPAM which affects 80% users with 23 billion messages/year.

Matthew Snyder, now CEO of the consulting company ADO strategies has a great experience in this mobile advertising industry and provided some comments on how advanced profiling can practically be implemented with multi-channel ad-serving platforms. From the discussion I attempted to list some of the main aggregators and players in this new industry.

Nokia’s media network (Nokia’s ad Business led to the acquisition of Enpocket in 2007, a mobile campaign management with multi-modal SMS, MMS, WAP, and video delivery with analytics).
Google’s Adwords for mobile
DoubleClick Mobile (works with ad networks to deliver combination ads, road blocked ads and jump pages)
Microsoft’s subsidiary Screentonic (early leader in mobile ad serving technology for European operators)
AOL’s Platform-A Advertising.com , Quigo (content-targeted advertising), Tacoda(behavioral targeting), Adtech (online ad-serving), buy.at and Third Screen Media (platform and mobile advertising network)
Admob (home of evangelist Russell, co-author of MobHappy)
Amobee(dynamic ad insertion in multiple channels : videos, music, messaging, games, WAP)

Trusted social dialogue between brands and consumers
Can mobile social networks enhance customer relationships ? The question was debated in the panel led by Ged Caroll from Waggener Edstrom and blogger who said that customer insight can be obtained with a mix mobile marketing and traditional PR+advertising. He’s a professional advocate of blogging for marketing as he explained in a video.

Helen Keegan, from Beep Marketing raised thie issue that as of today, those who master "the black art of communication and persuasion" at major brands cannot justify the ROI of mobile marketing. How much do Brands really benefit from this ? Truth and honesty are universal values that consumers recognize said Ed Homes from Haygarth. You have to decode the responses and non-responses of customers, for example in Twitter feeds. That’s the value of on-line community moderators such as Dominic Sparke’s company Tempero which also provide information tagging. Looking for successes, everybody agreed on Japan’s mobile social networks :

Moba-ge-town by Dena [statistics : 10M mobile users, 65% 0-19, 28% 20’s, 18 B PV/month, members earn virtual Moba-Gold from watching ads, FY07 sales of 15B¥ ~ 144M$] and
Mixi [statistics : 14M users, 63% early 20’s, 22 hours/month, 20’000 advertisers, mixi mobile advertising since 2006, 8B PV/month at 0.05¥ on mobile out of 13B total, at 0.1¥, FY07 sales of 10B¥ ~ 96M$]

I commented on this in last blog . For further reading, Helen edited Tanla Mobile’s excellent guide that you can download here, she blogs on mobile marketing and runs Swedish Beers mobile gathering.

3G evolution in Egypt, April 2008

I visited Dubai, April 13th for a meeting with executives from a mobile operator and review 3G multimedia services evolution in Egypt. The country may become as famous for its 3G deployment in emerging markets as for its pyramids .

The pyramids will oversee 70 million subscribers
Egypt is the largest emerging mobile market in the Arab-speaking world with 73 million inhabitants and a strong potential for growth. Mobile was launched in 1999 and penetration now exceeds 42% (probably <30 M subscribers due to multi SIMs) and is forecasted to double( estimate 68 million subscribers) in next 5 years as 3G brings cheaper voice services in the country . Compared to other countries in Middle-East / North Africa, Egypt has the highest annual growth at 170% but third lowest mobile penetration after Lebanon and Syria but may rise to the levels of Algeria, Morocco, Tunisia with similar GDP per capita. The other growth opportunity is in the fixed network development currently at 15% tele-density and 10.5% internet access. (Egypt ‘s 17 Gbps internet backbone access was disrupted in January 2008 by cuts in submarine cables.) As broadband wireless is an access option, the regulator introduced consultations on WiMax and issued 3G licenses .

End of duopoly : usage up, tariffs down
Competition has increased throughout the Middle-East with 3 mobile operators per country in Egypt, Saudi Arabia, Kuwait and Jordan. In Egypt, Orascom and Vodafone, controlled the market until 2007 when a new license was awarded to Etisalat. This resulted in a 50% cut in prices to 0.35 LE/min and a decline of ARPU from 15$ (82 EGP) in 2005 to10$ (58 EGP) in 2007. Mobinil and VFE blended ARPU fell by 20% and 12% respectively but low tariffs increased minutes of use to by 15% to MoU to .Again in April 2008, Mobinil announced new price cuts. We expect the operators will have to cut costs by sharing of investments in infrastructure or introducing MVNO retail channels. In addition, the fixed-line monopoly of Egypt Telecom is challenged by the regulator (NTRA) auction of second fixed-line license auction in June 2008. Etisalat and Orascom are possible candidates for this license. Egypt is also introducing number portability using infrastructure from Giza Systems and Telcordia

The following players operate in Egypt :

Orascom Telecom Holding (Mobinil)
48% market share
16 M + (Alohat per-second billing prepaid subscribers)
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum
Naguib Sawiris is the well known chairman and CEO of Orascom Telecom.

Vodafone Egypt Telecommunications
42% market share
14 M subscribers
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum

Etisalat Misr
10% market share (plans to capture 30% market in next 5 years)
2.0 M subscribers (3.5 M estimate mid 1008)
GSM 900Mhz, 1800Mhz and WCDMA 5MHz spectrum
Ericsson – based 3G HSxPA network covering major cities including Cairo, Alexandria, Zagazig, Tanta, Sharm el Sheikh, Luxor.

Telecom Egypt
Fixed : 11.2 M lines, penetration level < 15%,nhousehold penetration ~ 75%, ARPL ~10$
TE Data ADSL : 0.45 M subscribers (141% growth in 2007)
Internet 0.4 M subscribers (290 M minutes monthly usage, VoIP is illegal for consumers but it legal for corporate accounts through ISPs.)
Telecom Egypt owns 45% of Vodafone Egypt

3G internet + content for early adopters
Vodafone Egypt and Mobinil acquired a 3G license at a cost of 610 M$ each, 20% of Etisalat Misr 2G + 3G license cost. Like in other emerging markets, 3G business case in Egypt includes expansion of the voice capacity, internet access and new entertainment services.

3.5G allows internet access in the marekt underserved by Telekom Egypt (only 0.4 million ADSL subscribers). Already 24% of Egypt’s subscribers use their mobile to browse the internet according to Maktoob Research. Vodafone 3G offering for the for the enterprise sector includes “ mobile connect “ USB modem allowing a browsing and file exchange.

Early adopters are moving on to 3G data services and operators are promoting to high ARPU subscribers to compensate 2G ARPU decline. For an example of the interest by early adopters, check the blog of Tarek Ghazali in Cairo who hosted the carnaval of mobilists in Egypt

Vodafone launched its 3G in the youth segment with video calling, mobile TV (1¢/min or 2.5$/month for 5 hours), and music downloads. Kamera's Egyptian subsidiary SweGypt provides a suite of mobile TV channels, including the Arabic news channel ShortCut, the sports channel SportCall and the entertainment channel WOW! TV. Kamera will also deliver highlights from the EURO2008 football championship. But only 12% of Egyptians are comfortable with the idea of watching live television on their mobiles, based on Maktoob Research market survey. Here is one of Vodafone's adds for 3G video calls.


Mobile advertising is also emerging : Vodafone launched the "Please Call Me" message which comprise a link to video ads or IVR announcements. 52% of subscribers say they are interested in receiving advertisements on their mobiles according to Maktoob Research. And mobile communities are also on the growth path : Vodafone Egypt has launched a student competition to stimulate development of social networking and entertainment services .

Virtuoso project teams, MIT Sloan , September 20, 2007

Notes edited from IMD/MIT Sloan DSI program

Bill Fischer is professor of technology management at IMD. Bill Fishers studied management of the creative processes. His case studies shows that all-stars teams are required for great changes and great successes. And he brings a combination of academic research with his own real world experience from activities in healthcare, in telecommunications and in Asia, Africa, the Middle East, and Latin America.

If you believe the future of telecommunication is that of a new media they you should like the examples from the book Virtuoso teams co-authored by Bill Fischer and Andy Boynton
because they offer examples ranging from entertainment (West side story and Miles Davis) and to telecoms technology (in the days of Edison).

Available vs. obtainable talent
Virtuoso teams are elite teams put together for one-time-only efforts to create big change. Such change is difficult to develop and execute. It needs the best talent a company has to offer to have the best chance of success. In other words, an elite group with a license to really deliver big change, staffed with the very best performers that the company can place in each position, including going outside of the organization to get them. These teams are intense and intimate, and they work best when members are forced together in cramped spaces under strict time constraints. They assume that their customers are every bit as smart and sophisticated as they are, so they don’t cater to a stereotypical “average.” Leaders of virtuoso teams put a premium on great collaboration and they’re not afraid to encourage creative confrontation to get it.

How does this approach differ from the conventional team approach? Larger organizations are reluctant to acknowledge elites, because it is easier to manage human resources through egalitarianism and harmony. In addition, in most companies, talent is the property of groups, functions, regions, etc, and not visible or movable within the broader corporation. Therefore traditional teams are typically made up of whoever’s available and achieve average results.

Directive leadership
The example closest to telecoms technology is that of Thomas Edison whose virtuoso team leader skills included :

• Committed systemic vision (end to end services)
• Team diversity and skills (he assembled engineers, mathematicians, technicians, business people)
• Open business organization : flat hierarchy meritocracy and rewards and communications
  Fast prototyping
• Communications and marketing (he pre-announced products to create demand and also innovated in business models)

Individual talent within a team context
Another virtuso team example made a breakthrough in the entertainment industry. West Side Story went against all of Broadway musical traditions of the 1950s. Blood on stage, racial violence, dissonant music changed the face of American shows and the subsequent movie got 10 Oscars. The team of virtuosos included classic composer Leonard Bernstein, choreographer Jerome Robbins, writer Arthur Laurents, and lyricist Stephen Sondheim. Do you remember the Maria song ?


Another musical example comes from Miles Davis musical re-invention during his career. He surrounded himself with great musicians like Bill Evans and ensured that even rehersals would add surprise and drama. This has been documented in Kind of blue: the making of the Miles Davis masterpiece, Ashley Kahn and the video below from Ken Burn's Jazz.

Innovation teams at IDEO
We looked at a video on IDEO, a design industry leader and promoter of the concept of ‘design thinking’, a term given to the introduction of design methods and culture into fields beyond traditional design, such as business innovation. In telecoms they are known as having worked on the Helio device design. We also had a teleconference with a lead designer.

Teamwork ; The key soft skill is teamwork not creativity. Innovation is a team sport. They stress importance of human empathy : we help client to innovate up to the CEO agenda. If you want to innovate you need inspiration requires contact with human beings. Thru interviews with customers and observations you get ideas. You need to get out into people’s houses, offices and conduct dialogs with a view to identify problems and headaches. Make sure everybody knows what the customer experience is.

Analysis : Then comes the ability to synthesize for decision making. It’s the art of making meaning and finding directions from a mass of ambiguous information. Some points are important, some other not. Start by aggregation of information. Innovation can be big or small; breakthrough innovation, looking for large revenue. Walk out the room with one or three messages for executives, package the idea in such a way that it can be communicated to all stake holders.

Prototyping : IDEO value proposal is 'think to build', having researchers in the same building where implementation occurs provides a high degree of immediacy. The approach is to get a prototype to the market as soon as possible. What is a prototype : right things but not the overall service and using available tools like photography, Flash animations. People are scared to show an innovation to upper managers unless its ready. Foster a culture of prototyping : failures become variations, options, choices. Prototype reduces the costs of failures that can be corrected before people are emotionally connected to features.

Social networks brainstorming, Helsinki, June 2007

Social networks brainstorming
A visit to good old friends. Peter Vesterbacka from Somebazaar.com has just launched is Connected Day service for day care centers, nursery schools who want to share children photos and videos with some level of privacy. Joonatan Henriksson from HP, and the team at Fjord and Movial to review 3G group communication services and beyond. Fjord is a great team to design new user experiences while Movial has superb expertise with software clients for mobile messaging.

Mobile Music
With Tomi Hietavuo , the former HP bazaar DJ and and Finish rock band Kemopetrol, with whom we started mobile services in 2002 and did video-blogging in 2005, we checked the new Meteli.mobi service launched by Nemesys – New Media Systems, a Helsinki content production company providing mobile information about concerts festivals, bands, musicians. One cool idea would be to add instant communication groups of fans, visitors to these services. I also met with Meteli.mobi CEO Patrik Lindberg.

Trip to Helsinki are always stimulating. A short clip on this trip.