Big Four Mobile Trends @ CES (Part 1)

Trends1As promised, here are the four major trends we saw getting picked out and prognosticated at CES. If you follow anything that I write (and, hey, thanks you two!), many of these won’t be unfamiliar concepts to you. But it’s always interesting to get a fresh take, as well as some “motivated spin” from the guys who have something to gain and lose.

The walls of the walled gardens are coming down

This idea of “walled gardens”–or content held in a closed network environment–actually isn’t just popular in mobile; it’s happening everywhere in new media these days. But insofar as the wireless industry is concerned, the term generally refers to “carrier decks,” or the content you’re presented by the Verizons and AT&Ts of the world when you log onto the mobile web. Right now, what’s available to you is dictated by the deals and partnerships that the wireless operators cut.

But this is changing, according to the experts. In Europe, in fact, it already has–with more than 70 percent of mobile transactions being done off-deck, according to Brian Dunphy, Head of Brands and Affinities for Qualcomm (versus maybe 15 or 20 percent here in the States). He talks a lot about the need to open up “discovery points,” where users can easily find new, valuable content. When this kind of access is offered through carrier decks, everybody can profit nicely through revenue-sharing deals.

Yet it’s not only about discovery, but ease of use. Howard Tiersky, head of Retail Integration for consulting giant Capgemini, points to data usage on the iPhone, which is something like 3 to 4 times the average on standard handsets. He attributes this to a simple, intuitive layout (i.e., widget blocks on the interface), and a good Web experience; or at least a better one than on other phones. So if Google’s Android mobile operating system works anything like the iPhone, it may just be the killer app mobile has been waiting for.

Still, carriers are worried about unstable and unsafe applications choking bandwidth and spreading viruses. Meaning it’s not just about letting mobile apps reign free, but building a second generation of vetted mobile tools, says Brian Johnson, Senior VP for mobile transactions provider mBlox. Cautiously, carriers are catching up (e.g., Verizon just recently allowed sending pics from mobile apps), and open initiatives like Android will help to create the standardization that the industry desperately needs to progress (more on this later).

Mobile banner ads work today, but they won’t forever

Dovetailing on the walled garden idea, mobile banner ads are getting clicks today–upwards of eight times as many as web banners–because the mobile web universe is so small, and there’s still a novelty to it. Many analysts are quick to point out, in fact, that the click rates are in line with what you saw with the earliest banners on AOL and Yahoo.

But it’s not like you’re not paying for it, as the ads are running at a CPM (cost per thousand impressions) of more than 10 times that of web-based banners. Plus mobile ad units are static and tiny, completely unlike the giant, fully-interactive experiences you see with today’s web banners and towers. Still, industries like theatrical, retail, and especially auto–who was late to the web party, and didn’t want to miss the next wave with mobile–have the budgets and the business models to make “itty-bitty banners” work for them.

The party won’t last forever, though, caution the pros. Soon enough, iPhone-like mobile browsers will start rendering better and better versions of the full web, including Flash and Ajax, which will make WAP–or wireless access protocol, which is what mobile web sites are coded in–a dead technology. Then you get into the even stickier problem of how you pay for an ad unit that’s viewed on a 24″ desktop screen versus a 4″ mobile handset; or, for that matter, how you even track it (because how do you know what kind of device is rendering the ad)?

What this means for brands today, according to mBlox’s Brian Johnson, is that they need a two-pronged mobile strategy: Get ad units and branded applications on to carrier decks where you can, for sure; but you also need to get to work on an independent mobile strategy, which involves not only ad seeding through third-party sites–especially around mobile search, which we’ll get into–but how you integrate the mobile channel with your offline marketing strategy via shortcodes, cross-promotion, etc. If you visit the Lab, you’ll hear me banging away at the drum about this second point in particular.

Okay, that’s it for a late Friday afternoon. Stay tuned for Part 2 next week… I know you’re upset about the three-day weekend wait now. Sorry, but that’s life!