Archive for November, 2006

Mobile phone soon free with advertising?

The mobile operator Vodafone starts a test in England in which Yahoo! will deliver image advertising for the mobile Internet. In return, mobile surfers will receive reduction on their data costs. Google boss Eric Schmidt thinks that in the long term, mobile phones can become free by publicity. Recent research by the IAB and Insites has shown that also mobile users in Belgium are open to the idea of receiving mobile advertising in return for a reduction on their invoice. Will the mobile phone soon be completely subsidized by advertising revenue?

Vodafone and Yahoo! are testing together mobile advertising services.

At the presentation of their bi-annual statistics early November 2006, Vodafone announced to start a test together with Yahoo! To make the mobile internet more attractive. In the first half of 2007 the companies are organizing a pilot for both consumers and advertisers.

Advertisers get the possibility to show image advertising on certain parts of the Vodafone mobile data services, such as the portal site Vodafone Live. The telecom company is explicitly keeping the option open to also integrate this advertising possibility in games and mobile TV.

Users that see the advertising receive a reduction on their data costs. However, clients of the mobile provider have to explicitly agree to receive advertising on their phone screen.

Also the Belgian consumer is open for mobile advertising.

Recently IAB Belgium asked Insites to map the Belgian mobile users in the study ‘Belgian Mobile Mapping’. This appreciated initiative brings a first and elaborate analysis of the use of the mobile phone in Belgium as well as the expectations and perceptions of the users.

One of the most striking conclusions is that a third of the Belgians is interested in receiving sponsored information. This can be useful messages content-wise such as traffic information, news items, weather reports or a commercial message such as a reduction coupon.

Phones free by advertising?
The model that is being tested by Yahoo! and Vodafone also seems to exist elsewhere in the internet and telecom branch. Separately from the Vodafone announcement, Google boss Eric Schmidt expresses similar thoughts. Schmidt recently told Stanford MBA students that mobile phones should actually be free of charge. Users of mobile devices should in return accept advertising.

Schmidt assumes that users will soon be using their mobile device 8 to 10 hours a day, to surf, to call, to send sms, to mail and to manage personal data. In this situation a business model based on advertising revenue can be profitable.

But the bi-annual statistics of Vodafone prove that such phone use is still futuristic. On average, Europeans call ‘only’ 150 minutes per month. That is about 5 minutes on average per day, only 1 percent of the amount mentioned by Schmidt to profitably deliver free phones.

Seems that making the mobile phone completely free based on publicity income will have to wait a bit. Focused initiatives to partially subsidize content will soon follow in a Belgian context as well.

Mobile Web 2.0: who are the winners ?

For the moment, the Web 2.0 is making progress. New buzz words such as User Generated Content, Wiki’s, Ajax,… are rapidly getting integrated into our vocabulary. They create new challenges for traditional publishers, content providers, advertisers, retailers and telecom players. An important question that rises: what is the role of the mobile phone on the Web 2.0? Who can profit of the rising of the Mobile Web 2.0?

A brief description of the Web 2.0 is almost impossible. Founder Tim O’Reilly needs none less then 5 pages to define the developments surrounding Web 2.0 (*). Here, we highlight one major thought that allows us to estimate the role of the mobile phone.

The Web 2.0 fully uses the possibilities to collect, enrich en offer Collective Intelligence to large user groups. Contribution and participation are central step stones for the building of Web 2.0 platforms. The more they get used, the greater their value for their users.

Google PageRank, the opinions on eBay, Wikipedia, … these are examples of eco-systems that grow from the power of participation of the end user.

The capturing, encoding and stocking of small pieces of content will become more and more important for the further growth of Web 2.0. Besides large users of content, mobile phones become more and more important creators of content.

A good example is the introduction of the Miki, the mobile brother of Wiki which was launched earlier this year by the company Social Text. Via a simplified user interface the Miki allows the user to continuously keep his Wiki at hand, with his mobile.

The introduction of smartphones and mobile broadband will facilitate the recording and distribution of podcasts or vodcasts. These days the first pictures of big disasters such as the tsunami or the bomb attacks in London are no longer provided by the large press agencies. Attentive witnesses make photos and videos with their mobile and deliver them to their favorite media.

What does this mean for the traditional content providers and media players? In the traditional chain of values there’s the law that says “Content is king”. Production and media companies can get their share by controlled creation and distribution of content.

The rising of Web 2.0 platforms turns the traditional content and media business completely upside down. Content creation and content use come together. The winners are those players that manage to build up contact with the user and to create a fast self-enriching platform. “Contact is king”.

The mobile phone becomes one of the most important contact devices on the Web 2.0. Mobile operators are naturally well placed to play a key role in the further development of the (Mobile) Web 2.0 and to generate additional revenue with it. Important is that they can open up the access to the ‘off-portal’ environment fast enough. On the other hand, traditional media will have to learn to quickly serve their audience on the mobile platforms, that are complementary to their existing channels. Question is whether they can build up the skills of contact management, community management and datamining, in time before the giants of this world’s Googles beat them to it.

(*) also read

When it rains in Paris…

WAP is back. For many this comes as a surprise. The launch of WAP (“Wireless Access Protocol”) in 2000 is still associated with one of the biggest flops in the still young history of the mobile telephony. This early-born child has now been given a new name: the Mobile Internet. It has begun a silent, but remarkable return.At the launch of WAP, the expectations were very high: via the WAP protocol, internet content would also become available for every mobile user. During this hype many companies have made significant investments in their WAP infrastructure. Only to notice afterwards that nobody visited. For years, the small bandwidth of mobile networks and the limited possibilities of handsets formed a major obstacle for the breakthrough of the Mobile Internet.

But the tables are turning. The Mobile Internet is becoming one of the most important drivers of growth for the coming years. The market is being flooded with multimedia mobile phones and PDA’s with extensive and easy-to-use navigation possibilities. In parallel the coming of mobile broadband technology (Edge, UMTS, …) is leading to acceptable speed. The introduction of fixed price packages will largely reduce the costs for the consumer.

The impact of this is best visible with our southern neighbours. In a few years time, France has established a flourishing industry around the Mobile Internet. A few hundred companies are active today on several domains: information offering (news, weather forecast,…), gsm personalisation (logo & ringtones), chat & dating services, mobile marketing services and m-commerce. It has been estimated that this year a revenue of more than 150 million EUR will be generated. This is at least remarkable. France is not on top of the ranking lists when it comes to internet penetration, domain name registration or other related services.

The French success story has multiple explanations. First of all there is the speed-up penetration of multimedia handsets. The French mobile phone parc is completely renewed approximately every 2 to 3 years. The French operators are allowed to subsidize handsets, to offer the consumer a free mobile phone after purchasing a new GSM subscription or prepaid card. Secondly, the French market has for years build up experience with paid interactive services during the Minitel era. Several content providers have deliberately avoided the ‘free’ internet and are now taking their chances on the paying mobile internet. Last but not least, the French operators have significantly invested in Gallery: this is a shared platform on which content providers can advertise their services. So far almost 1000 services are available on Gallery, en the number is rising fast every month. This platform offers an easy and uniform access, regardless of the operator.

When it rains Paris, it pours in Brussels, according to the old saying. In the spring of 2006, the 3 Belgian mobile operators have launched their ‘Gallery’. Listening to the name ‘PlazZza’, it serves as a platform shared by advertisers, content providers and m-commerce providers. There is also the rising of new payment systems (Mpay, wHa) that allow easy WAP billing. The first drops have fallen, now let’s wait for the first serious rainstorm.

More information:

The future of the Internet underestimated

“The impact of the Internet is overestimated in the short term, but underestimated in the long term.” This quote from Bill Gates dates from the turning-point year 2000. Back then, the still young Internet sector was confronted with doubtful business models and an enormous stock market crash. Nobody believed in the Internet anymore, except a persisting few, considered fools by many.

In the meantime we know better. The Internet has caused an enormous impact on social, geopolitical and economical fields. Some of those initially persisting people got their profit out of it…

Socially, the Internet has radically changed the communication methods between people. E-mail, instant messaging, chatting and blogging have become for many essential elements of their identity. Just consider how many new relationships have come out of the Internet. The success of the Blackberry illustrates how many are not able to live off-line for even just a few hours.

Geopolitically, the Internet has caused quite a stir, both negative and positive. The spreading of malafide information among terror groups worldwide has never been easier than today and creates an incredible threat. On the other hand the Internet creates a global economical platform, in which companies beyond their countries boundaries become dependent of one another. This certainly contributes to a worldwide stability.

Economically, the Internet offers an incredible source of information for only a fraction of its former cost. The hereby created product and price transparency ultimately created efficient markets. Products and services can now be spread worldwide in a record time. The enormously fast roll-out worldwide of the iPod and iTunes would not have been possible without the Internet.

So have we experienced everything the Internet has to offer? No! Although the appreciation for certain Internet companies is now high time, the future of the Internet is still largely underestimated.

Firstly, the access to the Internet will still be extended. Today the Internet is still mainly accessible via the PC. Tomorrow this will happen via PDA, mobile phone, television, household electronics, GPS system,… Especially the Mobile Internet will play a crucial role in all this and the most relevant information will always and in real-time be available for any consumer.

The use of the Internet is expanding exponentially. Among others, this is made possible by new facilitators who offer the creation and the distribution of content on the easiest way to the non-technical end-user. MySpace, Flickr, YouTube, LinkedIn, … are only a few examples of new facilitators that experience a rapid growth.

From the start it has been fascinating to help build the Internet sector in Belgium. With the First Tuesdays we, in collaboration with Best Of, have established a certain dynamic during the first interesting years. With the challenges ahead of us, we are sure that the momentum of the coming years is certified.

We wish Inside another 10 successful years as facilitator of the Belgian Internet business community!