A major advantage to writing the Netsize Guide 2009 was the opportunity it provided me to connect with 34 C-Level executives for no holds barred interviews to discuss the opportunities/threats/trends highest on their radar. My interview with Mauro Montanaro, CEO Fox Mobile, was more than your typical Q&A; it was an invigorating exchange that we have pledged to continue on a regular basis. The reason: We understand the pivotal importance of mobile search, content discovery, and recommendation in all content-selling strategies moving forward.

It was a trend I picked up on a few years back when I watched the stellar rise of Schibsted, a Norwegian content provider that offered mobile search to help users find and buy its content (and that of its partner content companies) with the help of a solution from FAST, now a Microsoft company. Back then the mobile search industry focused its efforts squarely on winning mobile operators; a perfect fit with content providers (who own the content and need mobile search – as well as discovery and recommendation – to merchandize it) wasn’t a topic.

Fast forward, and mobile content companies are beginning to understand the benefits of mobile search and, more importantly, search merchandising. Why? Because simple Retail 101 tells us customers can’t buy what they cannot find, and, with operator portals on the way out, D2C destinations can best bubble their content offers up to the surface if they are findable in the first place. Paid search schemes round out the model, allowing content providers to monetize their traffic (which can be considerable for large brands, a major reason why so many of them are beefing up their mobile search/paid search strategies).

Which brings us to this week’s news that Fox Mobile (more specifically Fox Mobile Distribution’s consumer brand sites Jamba and Jamster content sites) has sealed a deal with MCN, a provider of search management, search merchandising, and PPC vertical paid search programs. The service will initially launch with the search results of carriers in Thailand and Sweden, and will later extend to other regions. “This partnership is another step to accelerate our endeavor to have mobile content contextually integrated with consumers’ browse and search activities, and also supports our efforts to extend our global leadership in mobile content distribution,” Kaj Hagros, COO of Fox Mobile Distribution, said in a press statement.

By way of background, MCN plugs into the content at the source (the content provider) to connect users to the content (not links to the content, as is the case with other search providers such as Google & Co.). As a result, MCN has announced a raft of recent deals with major mobile operators and a growing number of content providers (nearly 200 in its roster counting Fox Mobile). Beyond making it easier for users to get to content, MCN has developed what it calls “search merchandising,” a term that underlines MCN’s role in joining up mobile search, advertising, and content sales (through its allwords vertical paid search program) by allowing content providers to bid on entire verticals (such as games and music) rather than keywords.

Put simply, search advertising combines MCN’s federated search (delivered via MobileSearch.net, MCN’s white-label search platform) and vertical paid search (delivered through allwords, MCN’s own PPC mobile content promotion program) to make content searchable, findable, and monetizable. (MCN CEO Marc Bookman told me shortly after the allwords launch last year that the program was “generating click-throughs in excess of 45 percent – it’s as high as 90 percent in the comics category – and the highest conversion [sales] rates in the industry.” I’m not sure what they are these days, but I’ll certainly raise that in my next interview/podcast with the company.)

My take: Connect the dots, and Fox Mobile has its eye on the prize: The focus here is very much the connection between mobile search, advertising, and content sales, and creating an optimal interplay between them so that good user experience inspires more searches, which result in more monetization and, ultimately, drive more usage of the services among consumers. And all that without giving over control of the content to a mobile search provider/portal provider.

I was pre-briefed on the MCN tie-up around Mobile World Congress, but Mauro preferred to go on-the-record with his broader views on search, discovery and recommendation – features and functionality that define the company’s evolving content strategy. (You’ll see it all come together around April, when the new Fox Mobile makes its debut, and Mauro walks me through the new suite of services.)

In the meantime, allow me to share an excerpt of our Q&A (below) and (courtesy of Netsize) the complete interview from the Netsize Guide 2009 that started it all (further down in this post):

MSearchGroove

Q: New branding, new company, and a renewed focus on covering the value chain from licensing through production to distribution. What is Fox Mobile’s objective?

A: We want to sit between technology industries and Hollywood – between Silicon Valley and Hollywood. That’s where we want to be, and where we can be.

Q: You were just out there with Nokia, showing clips from Ice Age 3, which is set to come out in July. What other mobile products will follow and how might you distribute them?

A: We will have Flash content ready for July when the movie is released. What you saw today is just an appetizer; it will be followed by a whole suite of products. Distribution can take a number of approaches. This can be with our D2C brand, or it can be through the Nokia Ovi store, or through a download icon on Nokia that we manage globally. It can also be on O2 (a carrier in Germany that we work with). Basically it can be on a number of platforms, which is why time-to-market is going to be critical for mobile content. Lesson number one is that we have to work with the creatives very early on in the game to be sure we get the right content for the best formats. And this you can do if you are media company, not just a mobile company.

Q: How do you create content for so many platforms and keep a lid on costs? We know from MTV, for example, that it’s in many cases a matter of shooting content several times from several angles, including one for mobile. But that can get expensive…

A: My personal advantage is that I am from the entertainment industry. I used to shoot music videos and I used to be a singer. We get around the problem of double-shooting by focusing a lot on animation. As the Jamba brand, we’ve been very strong on animated characters in the first place, such as the Crazy Frog. Likewise, the Simpsons and Family Guy are also animated characters, so the process is just working with script writers and animators to explain the format you want, or just taking snacks [from the animated movie] for mobile.

Q: With so many app stores it’s beginning to look like the early days of the portal out there. It’s a confusing and fragmented landscape. How are you going to choose the stores where you sell, or the formats and operating systems you support?

A: It is more fragmentation, you’re right. As to portals, we are seeing a repeat of that. But we will not likely see a repeat of the exclusive content contracts that made it [reach] even harder. When it comes to branded content, I doubt anyone would give an exclusive [contract for content] again. We are based in the U.S. and currently reviewing which platforms to target, because in some cases you have to double your production costs depending on the platform. So, if you produce for iPhone – you have a set of tools you can’t necessarily use on Flash or Java. Working on Flash is great. It’s a fantastic tool for content providers and it targets a lot of devices, but not all of them. With Java, you have a broader penetration but the quality of what you can do [with content] is lower. So we need to make a choice. It will always be on a ‘cost versus return’ basis.

Q: More app stores also turns up the pressure to improve search and discovery. In fact, a major gripe with app stores is people can’t find the cool apps…What is the problem and how are you going to address it?

A: Search is important, and discovery is key. We aim to be more findable on every platform that we are on, and the new brand will focus on search and discovery as part of the offer. If you look at our B2B2C strategy, we want to be the partner of choice for companies that have high traffic. Why? Because then there are more chances of being discovered. Nokia is one of them [a B2B2C partner]. We are running their download client globally and discussing branded participation in the Ovi store. It [presence in the Ovi store] gives you access to one-third of the mobile population in the world, and that boosts discovery. I have also seen some of the demos at the Nokia stand, and they have been able to cut the number of clicks to discovery.

Another way to increase discovery is to work with carriers. Many operators are sending out RFPs [Request For Proposal] for outsourcing of content verticals, and that provides another channel [for Fox] to be discovered.  These [two] are the most promising but we shouldn’t forget the importance of contextual integration with the Internet companies such as the MySpaces of the world. Web-to-mobile discovery is coming on strong, particularly in the U.S. where the messaging revolution never happened. We are active on that front and focus on being the contextual integration partner for a lot of Web companies that do not have the skills to provide mobile services. Here we are bringing together their Web offer with our mobile offer so they can be discovered through relevancy when consumers are browsing the Web.

Q: What about relevancy and recommendations? During our Netsize interview we chatted off-the-record about some cool things in the pipeline. Can you give me an update?

A: You’ll see this in the new brand and the new user experience we provide around search and discovery. Recommendation – and the cross-sell and up-sell it encourages – is also part of the new strategy. We will have recommendation engines, but I would like to talk about it when I have the whole story.

Q: What about client-based discovery? You have a major brand that would also allow you to be a destination on the handset.

A: We have a WAP store, a Flash mobile client with Adobe, and we are considering a desktop app with Adobe as well. We are active on all these fronts and you will see the products as part of the new branding. Client-based discovery is great when you have branded content, as we do, to wrap around the client. This way the consumer gets part of the content for free in order to download it for the first time. But the client and desktop [strategy] only works if you have a fantastic piece of content in the first place that you can convince a consumer to download. That way you hide, in a way, the technology behind the content.

***

NETSIZE GUIDE 2009 (Download your free copy of the book by clicking here.)

Q: You are renaming your company Fox Mobile Group. Does this new identity also signal a shift in strategy? If so, what is new besides the name?

A: Obviously, now that we are 100 percent owned by News Corp., we’re not just Jamba any more. But there is more to it than that. This also allows us to launch new brands in the future, which is what we plan to do in the U.S. soon. As a result, we can run a portfolio of brands, giving each its own legs and own possibilities as part of the Fox Mobile group. We’re also renaming because we want to be associated with [parent company] Fox on a B2B level.

Q: That’s very different from your D2C strategy to this point. Why the new focus and what are the growth opportunities?

A: The first opportunity is on-deck with the operators. In our company, we have built up competencies in content creation, content licensing, and sales and marketing. The strategy is to be part of their offer or, in some cases, to be their partner of choice if they choose to outsource the management of part of their content portal management to outside companies. If they’re a large carrier with operations in several countries and they want to centralize that outsourcing, then it’s clear there are only a few companies they can partner with globally that can manage that – and we definitely want to be one of them. It’s a strategy we are pursuing actively, especially in Europe. The trend is less progressed in the U.S. There is a massive opportunity and a difference to the way the market was a year ago. As you know, this trend [to content management outsourcing] was taking place before the economic crisis hit. Now we see it accelerating.

Another aspect of our B2B strategy is to be on-deck with some of the OEMs. Clearly, the success of the application store on iPhone in the U.S. has spurred a lot of interest among other more global [handset] manufacturers. The question for them is: Would it be better to have a third-party company [like ours] managing their activities, in terms of [managing] the applications store or [managing] content provision to consumers in multiple countries. Clearly, these handset makers have proprietary content services; just look at the example of Nokia and Ovi. However, they also offer download services, and last year [in our Netsize guide 2008 interview] we had already discussed the model in which third-parties sell their content through the download client. Today we have a situation where handset manufacturers are promoting their own services and brand. But they are also becoming a distribution mechanism for third-party companies. Because they realize they can’t possibly cover the whole spectrum of potential content and services that the consumers want with their own devices, they are making some of the real estate available to companies like us to deliver services through a client. The good news: It enhances both the value of the handset and the value of the content because it is distributed over millions of handsets.

A third aspect of our B2B strategy is about working with Internet companies that have high traffic. An example is our launch with MySpace in the U.S. at the end of September [2008]. It’s a contextual integration project in which we work with a partner to optimize their traffic and conversion of that traffic into sales of mobile content.

We are currently developing tools we can share with some of these Internet companies that would effectively allow them to start a mobile business without investing in a mobile business.

Q: What is your vision of convergence and the role of mobile TV and video in the mix? How are you positioning Fox Mobile Group to take advantage of the opportunities?

A: A cross-platform approach is important because consumers do not, and will not, differentiate between mobile and PC in the future. I think they [consumers' experiences] will start to converge in the next two or three years. For this reason, we’re exploring ways to combine TV, movies, and games consoles into one cross-platform offer.

That said, video and video streaming are high on my radar screen. The networks are mature and adoption rates of consumers in the U.S. for streaming channels are amazing – and we are on-deck [in the U.S.] with AT&T, Sprint, and Verizon providing channels for their streaming offer to consumers. In fact, the U.S. will soon become one of the hotbeds of technology because consumers [there] completely leapfrogged mobile messaging and are going straight for mobile data services.

Of course, video streaming is a technology that was hyped years ago. It never took off in Europe the way it should have, but it’s flying high in the U.S. I also think there is huge potential in approaches that combine streaming and downloads. We offer [streaming] content to carriers in the U.S. as part of Fox, and we are also looking at ways to integrate some of our product offers, such as Jamba or Jamster.

Q: On the topic of video streaming, do we “snack” video content? Or do we want a range of options that include full-length programming?

A: Will consumers want to watch a movie on their mobile phones? I’m skeptical. It’s more a combination of short clips – three to five minute snack clips – which are TV programming reformatted for mobile. There’s also a place for medium length [video] offer, but I find 10-12 minutes is the maximum [length] you want to offer, regardless of the type of content or its format. We have figured out what consumers want, but I can’t share too much of it now. I advise you to check out what Verizon and Sprint in the U.S. offer their consumers on-deck as part of the flat-rate data plans. To be clear: Flat-rate data plans are a must for any video services to happen.

Q: You mention pricing, what models are you exploring?

A: Consumers are getting smarter and they want more quality for their money. We know from our own research that a majority of people want to have mobile content. They’re just afraid to start a transaction because they don’t know what they’re getting in return, and they don’t how much they’ll be billed. That is something we want to change. It’s an area we will focus heavily on in our new brand launch this year.  Offering consumers a clear idea of what they are paying for? I think that’s going to be revolutionary in this industry; I don’t think this has ever been offered by anybody before.

The ad-funded model is interesting. However, in the mobile space, I see purely ad-funded models being very challenged in the next two years. I cannot see a solely ad- funded model succeeding in the market when the volumes out there needed to justify an ad-funded model in the first place are so small. Not only that, but we are now facing a credit crunch.

There are hybrid models [based on ad-funded], and we are experimenting with a few, as well as ways to offer a paid model that is somehow complemented by some element of ad-funded approach. But we are keeping with our premium content or paid content model for the majority of the activities that we have. Overall, it’s quite difficult today, unless a company can achieve tens of millions of impressions or unique visitors, to see how an ad- funded model could start to work.

Q: What are the key trends you see in 2009? What does the industry need to focus on in order to achieve success?

A: We hear a lot about technology, but what is missing in this business is blockbusters.What is missing is something really exciting, either on a product or content level, to shake up the industry. There hasn’t been much new since 1999, when ringtones, wallpapers, video streaming and audio streaming broke on the scene. Now we need to bring in the expertise of people who do this professionally, and that means becoming more of a mobile media company than a mobile technology company.

We have the advantage of being part of a media company and we will exploit that [advantage] by being heavily embedded in all the creative processes in the studios.  That way we can release content to the market, the likes of which have not been seen before, particularly in the area of video. In the next year, our focus is going to be on attractive content. Why? Because, for the mobile industry, the integration of mobile into the successful content in Hollywood, in movies, and in TV has barely started.

Disclaimer: MCN has been an MSG supporter; Netsize is an MSG supporter. Peggy Anne Salz is author of the Netsize Guide 2009.

But it was Jonathan’s presentation in London last week – like no other – that has strengthened my determination to create/cultivate the linkages/ exchanges that will allow us all (“every single one of us,” as Jonathan would say) to move the industry a giant step forward. One day after a speech to the 450+ attendees at Future of Mobile, where Jonathan launched into a harsh critique of the mobile advertising industry (in fact, the entire communications industry), he switched gears and replaced his entertaining rant with a realistic roadmap to change. I was fortunate to witness the birth of this powerful plan and overjoyed that I accidentally left my MP3 recorder running.

If you do nothing else today, listen to Jonathan’s speech here.

It outlines the seven steps that the industry can/should/must follow to get where it needs to be. Jonathan aptly titles this chapter of our great adventure No Way Back From Here. And the truth is. There isn’t.

By way of background, it all began with Vol. 1 of a book/concept Jonathan dubbed The Communication Ideal. (Many of you may not know the context – and therefore miss the pivotal importance of Vol. 2 ( No Way Back From Here). For this reason, Jonathan and I are developing a comprehensive yet highly accessible summary of key points to post on MSG to make sure we’re all on the same page. On December 8, Jonathan “will close the Communication Ideal Phase of the ‘Every Single One Of Us‘ movement.” December 9 marks the start of No Way Back From Here, a new venture and one that will be the most powerful ever because it combines pragmatism and passion. (Listen to the audio and you’ll understand…)

Cognitive dissonance (until now rampant in the mobile space) has been replaced by the recognition of a painful truth: Mobile advertising (and perhaps mobile as a whole, if we accept advertising is nothing more than a form of content) is broken. Now we (“every single one of us”) has to fix it. The good news: We are ready to seek solutions. The great news: It’s not just about Jonathan.

Granted, Jonathan is spearheading this re-think, but his outreach to stakeholders, shareholders and investors at all levels ensures this effort will deliver real value and tangible results. And if you think this has never been/can never be done, then think again. Mobile Advertising Netherlands, an effort involving the Interactive Advertising Bureau (IAB) and companies up and down the mobile advertising value chain, has recently produced research aimed at providing companies “insights in the possibilities and status of Mobile Advertising in the Netherlands.” Clearly, there is a blueprint here to follow – and Jonathan gets this better than most.

However, as I have I observed earlier, it’s not about Jonathan; it’s about every single one of us.

There is encouraging evidence that many of us see it this way. In fact, the need for new guidance and new approaches runs like a leit motif through my work and my encounters with execs over the last weeks/months. From briefings with brands such as Coca-Cola, to yesterday’s amazing exchange with Mauro Montanaro, Jamba CEO (soon to be branded Fox Mobile), the same message comes through loud and clear: Mobile is not about technology, it is about communication.

Insisting that mobile content/apps/advertising is about anything else is a flawed approach and “business as usual” is not an option.

The need for a re-think also echoed through many of the presentations during the Mobile Content conference and the invigorating discussions/exchanges that followed. You could sense this groundswell at Future of Mobile when six social media practitioners/industry bloggers – including Helen Keegan of Beep Marketing and James Whately of Whatelydude – took the stage to tell us where mobile has failed and why. (More on Helen’s take here.)

Take a wider view and you can pick up on similar messages and similar intensity across a wide range of sites and destinations, including London Calling (written by mobile advertising evangelist and esteemed colleague Andrew Grill), David Cushman’s FasterFuture and Tomi Ahonen’s Communities Dominate Brands – to name a few.

Connect the dots, as Tomi and I did, and change is underway – at all levels everywhere. (Tomi documented his moment of clarity in this eloquent must-read post.)

My take: If we accept that advertising is content (just today MoCoNews tells us Gap and Target have launched iPhone apps to spread brand love and boost their value-add) and we recognize the pivotal role of mobile and community in advertising (translated: mobile social networks, viral marketing and personal recommendation), then the only sustainable business model lies at the intersection of these new universal constants.

And, if you listen in on the audio, take special note of Tomi Ahonen’s introduction. Yes, there is a change in Jonathan’s thinking, but there is also a seismic shift in the mobile industry -and the epicenter for this is London!

(I am immediately reminded of The Medici Effect, a book by Frans Johansson that documents how, why and where diversity in ideas and experiences breeds breakthrough ideas/insights. They occur at intersections, and London is certainly the place where mobile and advertising meet. I’m going to read the book again, and suggest you also check it out…)

And before you dismiss the potential significance of London (and the U.K.) in the scheme of all things mobile, consider today’s stats from Nielsen and the story they tell (as reported by Brand Republic): Mobile Internet use has skyrocketed in the U.K. in 2008, growing eight times more than PC-based Internet.

The Mobile Media View report found that from Q2 to Q3 2008, the number of people using the mobile internet increased by 25 percent from 5.8 million to 7.3 million . That’s compared to 35.5 million surfing the wired Internet, up only 3 percent from Q2 to Q3. The mobile audience is younger than its PC-based counterpart, and flocking to sites that provide immediate information/value. In fact, mobile Internet traffic also accounts for the lion’s share of visits to majority of page visits to sites like BBC Weather, Sky Sports and Gmail.

Finally, as I have twittered and told my closest associates, MSG will be a proactive part of what Jonathan is leading and what we are all building. The first efforts will center on #1 of the seven-step plan: Documenting/assessing the lay of the land through primary research, interviews and analysis.

Understanding how things are now is the first step to affecting significant future change.

And speaking of analysis, interviews with Coca-cola, Jamba (Fox Mobile) and some 25 other key execs/thinkers will be featured (in Q&A format) in the Netsize Guide 2009, a book whose unifying themes are empowerment, engagement and expansion. I am proud that Netsize has commissioned me to write the guide and pleased to collaborate with George Yaryura, Netsize Strategic Marketing Manager, who shares my enthusiasm about the project and excitement about its potential impact.