Reading through the annual KPCB internet trends (shouldn’t they change to the Annual Mobile trends report?) one graph stood out the most for me:
What does this mean? It means that every industry is essentially disruptable via Mobile. Enough said.
The mobile explosion is simultaneously the biggest opportunity and biggest threat for established brands and companies. Unfortunately, many big companies just keep failing on this front.
A lot of companies do this:
It’s a big mistake. Mobile has to be front and center, an inherent part of the company’s DNA and not an afterthought. Mobile requires building new capabilities within the organization with a strong focus on Product and User Experience (UX).
On Mobile UX is 10x more important than on the web – it’s not just the small screen size. It is the nature of user interaction with mobile devices. Interactions often happen in snippetsÂ ofÂ time – 5 seconds here, another 10 seconds there. Users demand immediate satisfaction and have very littleÂ patience. Often users are justÂ trying to do one thing and they want to do it wellÂ or use the best application out there to make it happen.
Platform and device dependency are both challenging. Android device proliferation results in a sea of different screen sizes, chip-sets and overall device capabilities. Some devices are excellent and others are so bad there is no way they would makeÂ your appÂ shine. BeingÂ at Apple and Google’s mercyÂ is a pain point that requires changing how engineering approaches development inside organization. Coming in with an approach that basically dictates moving your Web assets to Mobile is bound to fail.
Folks working at bigger companies sometimes ask me what is the best way to be successful on Mobile. My answer is that it’s best to treat your mobile project like a an independent startup. Hire people with the right skill-set, give them as much independence as you can and all the tools they need to build a product they love. If they will love it, there is a much higher chance to that rest of the world will fall in love as well.
Facebook has been making waves in the investment community with it’s massive success in mobile ad revenues. And they are just getting started. According to eMarkter, Facebook’sÂ mobile ad revenue will top $2 billion in 2013, an increase of more than 300% from the less than half a billion dollars earned in 2012.
Unsurprisingly, Mobile developers and marketers were way ahead of Wall Street on this one, and it’s pretty much the biggest secret that everybody knows about right now.
Earlier in 2013, developers started playing with the Facebook mobile app install tools, experimenting with the different options. in the last week of Q1,Â 40% of the top 100 iOS and Android app developers bought Install ads.
Very quickly, it become clear to mobile acquisition experts that the pendulumÂ in mobile app installs ads has shifted from ad networks to Facebook’s platform.Â I’ve talked to several marketers and growth professional, mostly in mobile gaming (where a lion’s share of the spending is happening today), and they are all basically saying the same thing – Facebook has the best ROI in the market right now. Most of them are spending at least 50% of our budget on Facebook, and some spend much more.
So why is Facebook is winning in mobile app installs?
First and all, the ad-unit itself seems to work well. The bigger picture in the ad does a good job, and the way the ad unit is integrated into the Newsfeed is effective. With current inventory fill rates, it seems that most users get one or two ads as they scroll through their mobile Newsfeed. That seems like an acceptable ad saturation rate for most users, resulting in less ad fatigue and better conversion rates for advertisers.
More importantly, Facebook has been able to do much more with targeting than most mobile ad networks out there have been able to do so far. Mobile Ad networks are facing Â technical barriers, driven by the constraints of the iOS and Android platform. With lack of robust tracking tools across apps, like pixels on the web, It’s difficult for ad networks to track users across apps and gather all the data they need. This results in smaller buckets of available targeted audience. For example, if a marketer is looking for a demographic of woman aged 34-45 interested in event planning, ad networks might provide some or all of the demographics and interest based targeting, but it’s virtually impossible to find an ad network that can deliver the ad to a significant audience scale like Facebook does.
Facebook has also rounded up the it’s mobile ad platform with a number of goodies. One robust capability is the “Look a like audience” feature, which is basically a shortcut to leverage 1st party proprietary data. It enables a marketer to target ads to users who have “Look a like” interests comparedÂ to the Facebook fan page userbase. It also allows marketers to retarget customers in the app through contact information, such as email addresses and phone numbers. This is a breakthrough for many marketers who have troves of data, Â but are having difficulties leveraging the data to have better targeting.
All this stuff adds up to a substantial advantage driving real value for app developers. Is this advantage sustainable?
For mobile Ad Networks it might be challenging to build an audience as wide and deep as Facebook has, without getting more flexibility from the platforms with tracking and data. Many marketers speculate that this might not happen on iOS at allÂ (Apple seems to be taking the opposite route by tightening control over user data and removing UDID). Some think that there might be more flexibility on Google’s Android platform, but it remains an open question.
Google probably has its sight on the app install ad spending, and could use the Android platform data to build similar capabilities and go direct to market. With Facebook’s success, it’s almost eminent in my mind. It makes sense for Google to try to play the Mobile app install game – both on Google+ and through other mobile properties, as well as power other types of ads across Android apps. Â Apple with iAd is trying to do the same, but up until now Cupertino has not shown marketers that the ad platform is effective, and they need to up it’s game to get there.
All in all, it seems that Facebook has a winner for the short term, and maybe also for the long term.
Back in 2010, Mark Zuckerberg went on stage and told TechCrunch’s Michael Arrington that the age of Internet privacy was over and hinted that we should get over it.
2 year later, web privacy is officially dead and every other thing we do is posted online on Facebook, Twitter and Instagram. Major and minor details of our lives are being broadcasted openly to hundreds of friends, family, and random people we last met 10 years ago, befriended on Facebook, and have not yet deleted because of some obscure reason.
Then, as some of those posts get shared with friend of friends and their friends, we can wake up on day just to find out that the embarrassing picture you posted, by mistake, via Facebook’s automatic iPhone sync, is viral and trending with teenagers in Estonia.
This is just the beginning. As humanity takes the next step toward a world where everything is digitally documented in real time, geo-privacy is next. And it’s dying. Quickly.
However, location sharing is a bit different. Location sharing requires refined controls about who you share your location with and for how long. Several companies are already seriously hacking into this and are making significant progress (full disclosure: Life360, the company I work for, is one of them). Those companies are taking the friction out of location sharing. However, they are doing much more then that – they are making the advantages of making your location public seriously outweigh the disadvantages.
I believe we are approaching a tipping point. This one is a bit harder for adults to grasp, but kids are all over it. They understand it’s the future. A 12 year old that just got his first smartphone will grow up in a world where location sharing is a must – finding where your friends are, hauling a cab to your location, checking-in with your mom so you don’t get that “Are you okay?” embarrassing call in front of all your friends, getting that special discount at Starbucks when you check-in. The list of use cases just keeps getting bigger everyday and some of them are killer features.
It might take a little bit more time (as with any technology that needs to leap past the early adopter phase into the mainstream), but eventually we will live in a world where it just doesn’t make sense to not share your location. Ten years ago, if somebody told you that your parents will shout at you for not posting recent pictures of your baby boy on Facebook, you might have dismissively laughed at them. Less than ten years from now, don’t be surprised if other people will just know where you are, whether you like it or not.
Geo-privacy is dying, we just need to get over it.