mobile digital footprints
London, November 2007
This Viewpoint explains the power of 2.0 (two dot zero) ideals, why 'Mobile Web 2.0' centres on the unique value created by "mobile metadata" and why AMF Ventures believes that Eric Schmidt, the CEO of Google, understands that the ownership of mobile metadata will create more shareholder value than search!
Every CxO seeking to deliver any aspect of a convergent solution should read and debate this viewpoint as it impacts: mobile operators, handset manufactures, equipment supplies, platform supplier, application developers, middleware, venture capital, advertisers, consumer brands, media companies and agencies; the digital players.
Web 2.0 talks of “harnessing collective intelligence”. This viewpoint presents the idea of extending this concept to the realm of mobile Digital Footprints and explores where shareholder value will be created.
At the forefront of “harnessing collective intelligence” is the mobile device, as the device is able to capture content at the “point of inspiration”. Notwithstanding any content captured directly from a device through an action of the user, there is the larger issue of Digital Footprints; this being the data captured (location and attention) just by keeping a mobile device with you. This unique mobile data and its exploitation is the essence of ‘Mobile Web 2.0’
Back in 1996, Nicholas Negroponte described the concept of Digital Footprints as a “slug trail”. We have always left Digital Footprints. Web 1.0 was about the ‘consumption web’ and clicks; in 1.0 the user left some aspects of a Digital Footprint but did not ‘write’ to the web. 2.0 gave us the ‘read/write web’ and users have emerged as both creators and consumers, we are now the audience and the author. Since we are now writing and creating content we are leaving much larger footprints, however the mobile device can provide data on where we are, how long we have spent there and who you were with; without user input! This has significant implications. However, leaving aside the privacy and security arguments, there are other implications to the leaving and more importantly harnessing of these Digital Footprints.
Web 2.0 has shown us that customers are not afraid to ‘share’ data and personal information (for instance sharing personal photos using Flickr). With Mobile Web 2.0, we add the uniqueness of mobile and leap forward because the Mobile is a personal device. Extrapolation of the trends seen on the Web (sharing personal data) to the mobile devices suggests that we are likely to witness a much richer “Digital Footprint” – and more importantly – a footprint tied to personal identity through our personal mobile device. In that sense, the idea of harnessing collective intelligence becomes dramatically significant when coupled with the ideas of mobile Digital Footprints. Therein lays the significance of ‘Mobile Web 2.0’ and Eric Schmidt’s assertion of ‘Mobile Mobile Mobile’ as the next opportunity.
What is 2.0?
2.0 is an umbrella for practical thinking that centres on the network effect, collective intelligence, the long tail, wisdom of crowds, clans, clubs and all other manner of data exploitation ideals. In contrast to this, early web models centred on cost reduction and zero cost of customer acquisition.
Companies such as Paypal, E-bay, Amazon, Last Minute and Google have changed our traditional methods of finding information, booking holidays and selling services. Consumers see the impact of these web services - but there is a wider and deeper impact which is not immediately evident. The impact is all pervasive i.e. it directly impacts on our children, our parents, our suppliers, our customers and our customer's referrals. It is all about the 'network effect' and the ownership of the underlying data i.e. the metadata. This is the basis of Web 2.0.
Web 2.0 brings the power of data ownership and the analysis which were previously the domain of large companies within the cost range of the SME. 2.0 technologies provide the data that the 'shop keeper' always had; which enabled him to welcome Mr. Smith and recommend something different to Mr Smith today. In that sense, moving from 1.0 to 2.0 is about the move from separation, isolation and solitude to relationship, engagement and conversation. The social engagement fostered by Web 2.0 and underpinned by data is more important than specific software, tools, methodology.
Tim O'Reilly [O'Reilly Media] described the 7 principles of Web 2.0 in an article published in October 2005. The article focused on the Web as a platform. The progressive thinking that underpins 2.0 has now extended across most sectors and business practices including:- Advertising 2.0, CRM 2.0, Enterprise 2.0, TV 2.0, Mobile and many more. Irrespective of use, 2.0 epitomises a business model that will be built on data, identity, trust and connection. Two services as shown in table 1, have typified Web 2.0 these are User Generated Content (UGC) and social networking.
User Generated Content
the images, video and text uploaded by the creator
images, video and text shared by the users
generation of usage metadata for analysis
an identification of who the creator is, reputation.
validation of friends and connections,
from the users to protect their identity and
the basic requirement to enable the
Table 1. Data, identity, trust and connection - the lynchpins of 2.0
Consumer or Creator?
Every call we make is about someone creating and someone consuming and then swapping roles. Every SMS we send is about creating, every SMS we receive is about consumption. Consumption is about one click; switch on the TV, buy on Amazon, read your message, receive a call. Creation is many clicks; dial a number, create an SMS and post a blog.
YouTube, Flickr and blogs are recognition that humans are as much creators as we are consumers. User Generated Content technologies have enabled the masses to put their creations into the public domain. We can create and this enables users to entertain themselves outside of the linear broadcast TV model; creation, in some instances, of content has become the mechanism of entertainment itself.
Whilst the Web consume model, balanced by new UGC and social networking models has seen massive growth, the mobile sector will soon over-take the Web as a platform for creation and social networking. The mobile phone has the advantage that it is always available and content can be created at the point of inspiration; this is the balance to consumption which is the ‘point of entertainment.’ As shown in figure 1
The mobile industry has focussed on the consumption model, which to a greater or lesser extent justified 3G business models via payment for services, applications and content. The creation side (photos and video) and taking content from the mobile to the web has emerged as a service that users exploit. Further, creators will put up with a poor user interface to engage, as it is their creation they will spend the time to master the processes.
Take up of consumption and creation within the mobile context is predicated on issues discussed at length within the mobile industry; battery life, handset constraints, UI, data pricing and access speeds. However, neither creation nor consumption are unique to mobile!
Mobile Web 2.0 – the uniqueness of mobile
The previous few paragraphs have briefly highlighted how value can be created from a mobile device as:
o the device is always available at the point of inspiration (creation) and point of entertainment (consumption);
o it provides a new media platform to complement Print, TV and Web, and;
o it is available for payment, either as a replacement or complement to plastic and cash. Which form and what limits are furiously debated by commentators who are either protecting or seeking to exploit.
Value added mobile business models were built on the idea that the user would consume and pay for content and applications. Progression of technology has allowed the Web to become mobile, bringing to the mobile service provider the possibility of advertising revenue. New and additional value could therefore be accessed utilising the same ideas that have driven Web 2.0, insomuch as the mobile can mimic the Webs' focus on clicks within the application or browser to deliver the data and information for personalisation, context and advertising revenue. These clicks are known as our "Digital Footprint" and are a driver of value creation. Digital Footprints come from Mobile, Web and TV - the digital metadata of who we are, the true value and why the ownership of this data is the battle ground to be won and lost.
The reason AMF Ventures believes Eric Schmidt will wake up thinking "mobile, mobile, mobile" before he looks at his email, worries about the value of Double Click or improving a search algorithm is because users spend least time on TV, some on the Web but the mobile is attached personally 24/7 as shown in figure 2.
Figure 2: time and value of data
However, even if mobile based form factors will be the predominant method of Web access globally, this thinking has limited the real value and uniqueness of mobile, as it has constrained the possibility of data collection to clicks from within the mobile browser or application.
If unique "mobile metadata", data that the mobile platform can deliver which cannot be collected or obtained from another source, can be sourced; it will create value over and above other platforms such as the Web or TV. AMF Ventures has identified four unique categories of "mobile metadata" that add value to a users’ 'Digital Footprint’ and are waiting to be exploited. These are:
o Availability - as the device is with the user from dawn to dusk;
o Location - where the user is, has been, is going;
o Attention - what the user is spending the time doing, outside of an application or browser, and;
o Who - who the user is doing activities with.
The value creation opportunity comes from the ownership of these metadata categories, as the owner will be able to undertake the analysis and exploit the trends and connections. It is unlikely the user will ever know this (or care!), as long as the final service which they see will be tailored exactly to their needs.
The implications of Mobile Web 2.0
How will this vision of mobile Digital Footprints be delivered and what technology/technologies will be used? Clearly it is a whole 2.0 ecosystem question which aligns with recent announcements from Google who also believe that an alliance spanning handset manufacturers, network operators, developers and software vendors is required. Such alliances recognise that benefit individually, benefits collectively. Give this recognition that we must look at all components of the value chain at once and no individual component (or entity) in itself can deliver a service that the customer values it is a likely to be a mashup.
Hence, the device, the network and the software stack must all act in harmony to create an ecosystem which delivers a truly tailored service to the customer (in return for the Digital Footprint that the customer is willing to share with the trusted entity.
Accepting the principle that users don’t care about the underlying technology and will willingly share their Digital Footprints, the same users focus on: trust and value. User will work with the provider that they trust most as long as they perceive value from the delivery of these advanced services. The provider that understands this principle stands to leapfrog the competition through network effects and can deliver more advanced services to the user, at a lower cost with improved performance; it is likely that such a provider will reduce churn, improve margin and increase market share.
Although slow in coming, Mr Negroponte’s slug trail is finally upon us with Dr Schmidt’s vision. The combination of Mobile Web 2.0, Digital Footprints and Trust is very disruptive. 2.0 thinking has a significant impact on network access choice, middleware platform functionality and device capability. The impact of this combination is just being felt and the effects will accelerate with Google’s recent announcements about ‘Android’ Google clearly recognises that the whole ecosystem must grow with all existing players benefiting (and that’s the difference between a Gphone (going it alone) and Android (an alliance).
AMF Ventures suggests BRANDS look at these developments as opportunities – rather than threats. However there are many questions which AMF Ventures can help you consider and explore:
o How can we align our company to best leverage this new world?
o What about advertising?
o How do we work with the new (aligned) device stack?
o What about open source?
o What are the implications of leveraging open source on devices?
o How can we create a true Web 2.0 system by harnessing metadata and gain competitive advantage?
o How do we engender trust?
Considering trust, this may be Google’s biggest competitive advantage. Think of this every time a ‘@gmail.com’ email arrives. The product still shows ‘Beta’ and yet millions of users are prepared to let email reside on Gmail and more importantly accept advertising in return.
There is a wide range of opportunities to create value for companies in the expanding mobile value chain and eco-system, however, emerging business models will be based on different economics. "Mobile Web 2.0" is about the uniqueness of "mobile metadata" in relation to the Digital Footprint and is not merely about the extension of the Web to the Mobile.
migrating some original thinking from Nov 2007