With Android, Google is set to dominate mobile ads, whatever form it may take, beyond search and display. As eyeballs go to mobile, Google will have an advantage position by controlling the OS.
And TV is the next one to disrupt. Youtube might be turning to be profitable by now. The experiments in online video ads are beginning to pay off, as it shows the amount of content agreements Youtube is getting into.
Googe wants to control the underlying technology platform, so that whatever evolution digital ads go, they are at the leading edge. Chrome and Android are the most obvious cases. On2, Widevine acquisitions followed the same rationale.
Google strategy to kill competitors is also getting more and more obvious: Give for free the core value of your competitor.
Google Apps against Microsoft Office
Chrome and Chrome OS, to make the OS irrelevant, as all apps run in the browser.
Android against Apple iOS
Digital advertisement, powered by Google, is one of the biggest enablers of the Digital Renaissance. Google enables both publishers and advertisers of any size to benefit from online advertisement. They are one of the biggest ‘patrons of the arts’ for the long tail.
Highlight data points in the chart:
Mobile ads market in US is $4 bn in 2012. Facebook managed to get $339m, even if they just started mobile ads this year.
M2M is not taking off as fast as operators would like.
But the threat for them is not about failing to reach billions of devices talking to each other, as M2M promises. That will surely happen. The threat for telcos is that they might not be the ones to control and manage them.
Cheap WiFi modules combined with the nature of IP make Over-the-Top solutions as effective as any other, if not more. For customers, OTT has the advantage not to lock them to a single connectivity service provider.
Telcos know it. More and more, they will have to do as DoCoMo just did, and aim to play over-the-top. It is the right move. Telefonica has done it in other domains with Telefonica Digital by creating a new umbrella brand called Tu, for over-the-top communications services.
The point is not that telcos cannot rule in M2M. The point is that it is unlikely you do, if you just focus on locking M2M Service with Connectivity, as telcos did in the days of voice and VAS.
When you look to Asia to replicate the success of Mobile Payments compared to other regions, you need to know what is behind. The success comes from two totally disparate markets that have little in common among themselves, and with the western world.
1. Emerging Countries.
A few years ago I visited a good customer in Cambodia. They were the leading mobile operator in country and we were discussing the upgrade of the Prepaid platform we provided. I was surprised when our country manager took me to meet the CFO and not the CTO or CIO. Why was the Prepaid platform under the management of Finance? The CFO himself answered: The country had a total of 40.000 bank accounts, while they already had 2 million prepaid mobile users and growing. In Cambodia everyone had a mobile phone, but only a few of them could afford a bank account. Their Prepaid Accounts had transformed into Mobile Wallets. People had started to use Airtime Transfers as a method of payment. The mobile operator was also becoming a new sort of ‘bank.’ The technical solution was based on simple USSD transactions.
The story shows that a large number of Prepaid users with ARPU‘s under $10/month will make the statistics to Mobile Payment users.
I lived a few months in Tokyo. A few days after you land you realize you need a Suica card. The Suica card is a RFID wallet card that is ultra convenient when you use the wonderful railway and metro system in Tokyo. Taxis are very expensive and having a car too. Soon you notice everyone has one Suica card, only if to use the public transport system.
With eveyone carrying a Suica card, you understand why most convenient stores and any merchant that receives small payments in cash accepts it.
On the other side, the handset ecosystem in Japan is totally different from the rest of the World. The handsets that Docomo and KDDI provides are still specific for Japan (only after iPhone 4, Apple is making significant inroads in market share). Therefore for phones to support Suica, it was only a matter of Docomo and KDDI agreeing with Suica to link their balances.
Mobile Wallets in emerging market are filling a need we might not have in western countries.
You can learn from Japan experience. Just be aware it is a market with many specificities, and that a big driver for adoption was the wide use of public transport.