In brief:

The avalanche of apps and app stores (nearly 70, according to WIP Connector) turns up the pressure on developers and other ecosystem parties to find ways to make money selling apps. How are apps discovered and promoted? And more importantly, how are these app emporiums and boutiques going to handle the simple CRM to encourage the all-important return purchase?

After all, it wasn’t so long ago that a study from Pinch Media, which analyzed over 30 million downloads from Apple’s App Store, reported that just 30 percent of people who buy an iPhone application actually use it the day after it was purchased. And the numbers plunge from there: after 20 days, less than 5 percent of those who downloaded an application are actively using it.

A lot of open questions. But one thing for certain: competitive differentiation is in the business model. And we know from the findings of a recent Netsize Mobile Trends Survey of +1,000 professionals and practitioners that the 4-Cs (Convenience, Compatibility, Choice and Charging) are key requirements for a winning app store (and so for the developers that hope to make a living selling their apps). Netsize is gearing up to release new (unpublished) survey results and a new report that reveals attitudes toward business models and what will enable real and significant app sales. Watch this space!

MAXIS, ONDEEGO & AMDOCS

What is the app store landscape and what are the monetization models?

This was also the topic at Mobile Web & Apps World Forum, a CTIA partner event organized by my esteemed colleague Ajit Jaokar. (Again, I congratulate Ajit on organizing a standing-room-only event dedicated to answering the tough questions around app fragmentation, monetization and how to make it all work. Thanks also for inviting me to speak during the SuperSession looking at mobile advertising and in-app opportunity moderated by mobile authority Chetan Sharma. It was an excellent session with Joe Lally from MTV Networks and Jerry Rocha from Nielsen and Gary Schwartz, CEO of Impact Mobile, and one that provides a great deal of material for future MSG analysis and follow-up.)

However, it was the session on personalization and content discovery, presented by Mike Lurye, Amdocs Interactive, Director of Product Marketing, that got people thinking about the business value of granular subscriber intelligence (anonymized) and ways it can be used to get consumers to the content they will appreciate and without making them search for it. To drive home the point Mike didn’t use marketing-speak. He used case studies from mobile operators in the U.S., Europe and Asia Pacific. (You can download all the speaker presentations here.)

I used the opportunity of our in-person meeting to discuss the larger issues around app store marketing and pick up on a fascinating conversation we had weeks earlier (in preparation for Mobile Monday Austria) delving into the tough choices facing developers.

Certainly, developers can jockey for position in the Apple App Store (and others), where getting featured (placed where people can find you easily) is the only way to build a business. But developers can also align themselves with retailers/operators that seek differentiation through innovative business models emphasizing customer service, easy discovery or local culture.

The latter works for Malaysian mobile operator Maxis. I am a great admirer of the carrier’s app store focus and mission: “to nurture and foster interesting developer applications for our community.” (This and more in this must-see video interview with Nava Wathan, Director 1Maxis, Maxis Communications.) Maxis has become the place to go for “something that is Malaysian.” Surely, many more mobile operators can pursue a similar strategy to stand out from the crowd (and build a successful business for their business ecosystems of developers and customers).

At the other end of the spectrum, Ondeego also “gets” it. It launched AppCentral, a mobile app store for the enterprise last fall becoming the first mobile application store meeting the unique needs of the enterprise workers and their IT departments. For enterprise employees a one-stop shop means that they can select what they need (serious apps) to do their job. For developers it means a channel to a difficult to access market and a chance to sell their productivity and enterprise apps direct to professionals who will likely buy.

PODCAST INTERVIEW WITH MIKE LURYE

First, credit where credit is due here. Although people have tweeted about the simplicity and originality of my views on the evolution of the app landscape and the marketing strategies that will help everyone make money, it was Mike who came up with the popular Supermarkets/Farmers Markets analogy.

I caught up with Mike in-person following the Web & Apps World Forum event to talk about marketplaces and ideal models for making money – now.

Here an excerpt:

APP STORES & STOREFRONTS: “The main difference between an app store and a traditional digital commerce storefront is actually not that it sells apps, but that it is based on a certain business model that’s been pioneered by Apple. Stores selling apps have been around for a very long time but Apple changed the game because they set up a business model that opened up the opportunity to get to market for a much broader range of developers and they did so by establishing very straightforward business terms that are the same for everybody.” But not all app stores must sell apps. China Mobile, for example, sells traditional digital merchandise (ringtones and wallpapers and so on) on the storefront they call their app store.

MAXIS MODEL: This mobile operator has cleverly defined the segment it will go after: the local population and local developers. “So, their store is never going to be very big, they acknowledge that. They are not trying to compete, they are trying to co-exist….This is a good strategy because when you know your customer and when you know what you want to offer to your customer that is valuable to them, and you know who is going to build it which is a local developer community, you are poised for success.”

FARMERS MARKETS: The close customer relationship is what makes a farmers market special. And mobile operators have a close customer relationship they can build on – if they recognize their real role. “The owner of the farmers’ market doesn’t get in between [the] transaction…There is a direct [customer] relationship and the owner of the farmers’ market acts as a facilitator. They make it work.” How? Through payment services, personalization insights and scale.

CALIFORNIA GOLD RUSH: If you are about to pack, think again because it may have peaked. Apple found gold in apps and now everybody is moving to California (literally). “Now, guess what, not everybody who came to California at the time of gold rush became rich, some people did, but most actually didn’t, so that is what is going on right now. Everybody and their brother wants to have an app store; some people have a well thought out strategy. Maxis is an example of that. Some people are doing essentially a ‘me-too’ kind of a thing, and there is actually nothing wrong with that in principle as long as you realize that that’s what you’re doing.”

WHITE LABEL: Mike says it’s a low-risk model. The not-so-good news: it’s unlikely to build subscriber loyalty. “There is no leverage of the operator’s unique capabilities, there is no more value for the subscriber to purchase an application in that app store versus the original app store from the white label supplier themselves. There might be some cost advantage…but fundamentally it’s not a model that will differentiate the operator.

TAKE A PAGE FROM AMAZON: Personalization has made Amazon a success. “This is the business they are in: the business of personalization. They are offering it now as a platform to others. You do that search, you bring results not only from Amazon, but [also] from Amazon’s competitors and that’s OK by Amazon because they build such a sophisticated platform that now empowers [the] ecosystem.
***
MY TAKE: Are we on the brink of new business models or is history repeating itself? And — even if it is very much a repeat of the mobile portals – what will guarantee success for the developers and retailers this time around? At the moment, developers have a handful of choices: boost word-of-mouth promotion (tough and tedious, which is why Mob4Hire’s peer app recommendation is an interesting one to watch), mobile advertising (complicated and unpredictable, which is why we are all searching for better ways to deliver the right advertising to the right demographic) and placement (tricky and transient, which is why GetJar has cleverly created a model where developers pay for shelf space). What role will personalization play (even in a pre-paid environment)? My ongoing research into recommenders brings me together with mobile operators already wringing value out of granular analytics to help people discover content they’ll likely appreciate. A prime example is Hong Kong’s CSL, an operator I showcase in my upcoming report, that has harnessed personalization to support My Net, its own (branded) mobile Internet service. Clearly, personalization is moving up the business agenda (as it should) because it’s a way mobile operators can generate revenues (helping people find and buy what they want) and stay in the game.

* * *

LISTEN TO THE PODCAST HERE: [13:00]

Disclaimer: Netsize is an MSG supporter. Amdocs is not an MSG supporter.  However, ChangingWorlds, a company acquired by Amdocs, has published a by-lined thought leadership column series on  MSG. Peggy Anne Salz has also spoken at invitation-only  thought leadership events organized by Amdocs for its operator clients.

In the first of a series of quest columns Colm Healy – Vice President of EMEA services and General Manager of Xiam Technologies, a Qualcomm company – dissects the discovery dilemma.

Search, recommendation and discovery tools are commonplace on the web. We are used to having an intermediary between us and the content that we will eventually consume.

There are many ways in which that intermediary can appear, how we access it, and how it can go about its business, but its role is the same – to enable us to find content. Content that we are looking for; content that we might be looking for; and content that providers want us to see.

The reason that these tools exist is, quite simply, because there is too much content available to do without them. We need some service in place to help us find what we want.

The same now applies to mobile content, be it content designed specifically for mobile, or web content accessed via the mobile. The amount of content available has exploded in recent years to the point where the search, recommendation and discovery tools essential on the web are equally important in our mobile experience.

Key drivers for this explosion in content creation and availability have been led, first and foremost, by the adoption of mobile as an ever-present attachment to our lives, and, in turn, the reliance on the mobile device as a device for more than simply communications.

Evolving from this is the increasing sophistication of mobile handsets – from now so-called ‘Vanilla’ phones, to feature phones, to the emergence and unremitting growth of the smartphone category – users now have mobile handsets that are capable of processing any of the content out there on the web, including HD video. Enabled by the network developments to support increased bandwidth capacity and faster peak data rates, users are now capable of consuming almost any content through their mobile handset.

The user behaviour that this creates represents an incredible opportunity for content developers and publishers. And for the retailers that provide access to that content.

Yet the challenge for all players in the mobile ecosystem is centred on enabling users – buyers – to find the content that they want.

User Research

At Xiam, we recently commissioned TNS Global to carry out transnational – UK and US – research into the experiences of mobile content users which found clear evidence that discovery was standing in the way of a satisfactory mobile user experience. More importantly for the players in the mobile ecosystem, discovery of content is standing in the way of significant revenue opportunities, and creating a user experience that deters customers and will, ultimately, lead to increased customer churn.

The study, which began with a representative sample of 2,666 mobile content users and derived quantitative and qualitative research by focussing more closely on the most active users, revealed an enthusiastic but frustrated demand for easy to use content and applications.

A key finding of the research highlighted that content discoverability was a significant issue, with eight out of ten users reporting a problem obtaining content on their mobile handsets. When it came to finally finding the content for which they were searching, mobile Internet users were, on average, unsuccessful 27% of the time.

Users were frustrated by the time required to find the information they were searching for, and access the specific content that they wanted. Slow page loads, too many layers on websites, and too much irrelevant information are frequent annoyances for mobile content users.

Yet the opportunity presented by mobile content was reiterated by the fact that almost two-thirds (63%) of consumers surveyed indicated that they would spend more time browsing and purchase more content if it was personalized and easier to find.

How We Search

Though mobile content is a relatively new arrival on our plate of entertainment and services for consumption, users are already set in their ways, accessing the same types of content and doing so via the same search tools. Both, more often than not, an extension of their traditional, online content and search habits from their laptop or PC.

Mobile web browsers tend to use search engines (with Google the most frequently referenced), bookmarked sites or to enter URLs directly.

This reflects, very clearly, that there is no significant, regular influence on users as to the content for which they search:
• Search engines are a powerful tool for giving you specifically what you were looking for, though they are far from flawless
• Bookmarked sites are sites that the user has previously visited and had a productive experience of using
• Directly entered URLs indicate that the user knew precisely where on the mobile they wanted to go

Using the mobile network operator’s content portal is one of the less often used methods for accessing content, and was rated in our survey as least effective for finding desired content. Respondents reported that the service provider’s portal was often poorly organised, and that relevant content was not easily and directly accessible.

Those same users reported that they would increase the time and money spent on mobile web browsing if relevant content was easier to find. 59 percent said they would spend more time accessing content – translating to, on average, 65 minutes more per month. And 37 percent said they would spend more money on content purchases – translating to, on average, £5 more per month.

A further criticism of service provider portals was focusing too much on content downloads (i.e. sales) rather than on providing information and a service. Information on events and special promotions, as well as relevant recommendations based upon previous choices of the individual user would enhance the operator’s value to end users significantly.

This element – recommendation enabling discovery – is primary to any mobile content service as it cuts through the time consuming search procedure, and improves the experience of the user. The model adopted and made famous by Amazon – ‘if you liked this, you might also like this’ – is a simple and effective one. The more sophisticated this can be, the more effective the results will be.

And with the myriad different types of content and applications available, a tool to enable the discovery of content that is highly relevant but might otherwise go unnoticed can be especially valuable. Valuable to the user; valuable to the manager of the portal or store; and valuable to developers and publishers of the content, who will focus their efforts towards a provider that can enable their offering to be discovered.

One of Qualcomm’s key messages to the industry is that the mobile experience has to evolve beyond simple search and move toward personal discovery, making the user’s experience more intuitive. These results point to a huge opportunity for operators to increase mobile data usage and sales by providing personalized mobile apps, content and services.

Colm Healy is vice president of EMEA services and general manager of Xiam Technologies for Qualcomm Internet Services (QIS).  QIS helps accelerate consumer adoption and consumption of mobile content across all networks and devices by delivering a more engaging mobile experience that is contextual and relevant to consumers’ personal interests. In his current role, Healy manages all business relationship and deployments of Qualcomm’s services solutions within the EMEA region. As general manager of Xiam Technologies, a wholly owned subsidiary acquired by Qualcomm in March 2008, he continues to lead the team’s efforts in selling and deploying Xiam’s discovery and recommendations products to a worldwide network of mobile operators including Vodafone, Orange, O2, AIS and Globe.

Disclaimer: Xiam is an MSG supporter.

I suspect his thought-provoking blog will do more than set the tone for my book; it will impact the app store debate that will likely dominate 2010. Just look at the recent raft of app announcements: Analyst firm IDC predicts there will be more than 300,000 iPhone apps by the end of next year, compared to 75,000 Android apps; Samsung takes the wraps off its Bada app platform; and (just today) Orange officially opens its app store to users in the U.K. and France, offering more than 5,000 apps for Java, Android, BlackBerry, Symbian and Windows Mobile.

Connect the dots, and the avalanche of apps turns up the pressure on providers and mobile operators to be good retailers and put stuff we’re likely to appreciate where we can find and buy it. Common sense really.

Or is it? Not is we consider the statement from Nenad Marovac, Managing Partner, DN Capital, who was speaking at Heroes of the Mobile Screen earlier this week, In his view, “Operators should be pipes and shut up.” Hmmm… not much room in that model for mobile operators to wield the stockpile of analytics they collect (such as our browsing patterns and past purchases) to present us with a selection of apps we’re likely to appreciate.

In preparation for my own industry report on personalization and recommendation I have spent the last weeks interviewing a who’s who of industry players and their customers (mobile operators/service providers) who are convinced  the company with the most (and best) data wins. It’s a battle between operators (really smart pipes) and aggregators (Google & Co.) – and personalization and recommendation could just be the capabilities that distinguishes the leaders from the also-rans.

With that in mind, we continue MSG’s special podcast series on the top players in personalization, and conclude with Part 2 of my interview with Stephen Oman, Amdocs ChangingWorlds Worldwide Director Sales Engineering. Changing Worlds is an Irish provider of personalization technology that was recently acquired by Amdocs and is now part of Amdocs Interactive.

In Part 1 we dissected the content discovery dilemma, looked at on-portal challenges and examined the results of the company’s recent study that underlined the importance of personalization in determining and delivering mobile advertising.

In part 2 we explore personalization off-portal and across app stores.

ROLE OF THE MOBILE OPERATOR: As Stephen sees it: the operator has a spot at the “center of the Internet.” Their job: “helping the subscriber to go on to the Internet, helping them find the right content, helping them with additional suggestions which they might be interested in, and so on.  In doing that, they’re becoming if you like a partner to the subscriber when they are browsing the internet.” So, there’s an opportunity here for the operator to “set themselves up in essence as the home page for the mobile Internet for their subscribers.”

APP STORES: In many ways, it’s a repeat of the content discovery problems we know from on-portal. But it’s also an issue that independent developers will also face as they try to engage people and compete with similar, rival apps across the store. As Stephen puts it: Making an effort to personalize the content will “help people find more niche types of applications that may exist, and that would never appear in the what’s hot today or what’s in the top 10 for today.”

LONG-TAIL VERTICAL APP SCHEMES: Reports show that many apps downloaded are actually productivity apps. Additionally, apps are being downloaded by professionals in line with their professions. So, will we see a plethora of app stores split across lines such as task (apps to do “x”) or jobs (apps for doctors, for example)? Stephen was intrigued by the idea and agrees that we will likely see the launch of vertical app stores (similar to the vertical content portals that offered only ringtones or wallpapers). “It’s pretty much the same as you see in retail, you do have retail stores that sell pretty much everything, but you also have niche retail stores that cater for particular audiences.”

THE GROWTH OPPORTUNITY: In a word: convergence. “Increasingly the mobile operators’ customers are expecting and demanding that if you like connected lifestyle….Crucially, they’re looking to be able to access services across many different devices: their mobile phone, online, through their TV, through digital TV, and that convergence of access is essentially going to improve and drive growth in the mobile digital economy.”

Editor’s note: This special focus on personalization and recommendation continues in the New Year with a look at a cool new recommendation company coming out of stealth mode and an analysis of Novarra. I had to reschedule this one a few times, but this time it is timed to some important news. Not one to miss!

Disclaimer: ChangingWorlds is not an MSG supporter.  However, MSG has published a by-lined thought leadership column authored by a ChangingWorlds senior executive. MSG has also participated in an invitation-only  thought leadership event organized by Amdocs.

Listen to the podcast here. [15:12]

Related posts:

PODCAST: ChangingWorlds Reveals Real Impact Of Personalization On Mobile Advertising CTRs; Google Shows Mobile Advertising Is Hot (Again), But Will Personalization Make The Market Sizzle?

SPECIAL REPORT: GETTING PERSONAL Openwave Adds Mobile Analytics; Are Gateway Providers The Ones To Watch? PLUS New Report/Project With GigaOM Pro

PODCAST: Bytemobile CMO Adrian Hall: Operators’ Can Win On Personalization; Does A Widget Bar Do One Better Than An App Store?

MSG DEBUT VIDEO: Xiam Talks Targeting & Filtering; Make Way For The Personalized Web!

GUEST COLUMN:Using Personalization To Pump Up The Volume & Increase The Value Of The Mobile Internet

At first, the endgame was about boosting personalization to improve the mobile operator portals (that forced us to navigate through multiple menus) and cut the clicks to content that we genuinely appreciated. Typically, operators implemented personalization tools to bubble up cool content to the idle screen, taking the hassle out of finding and buying content on the device.

Fast forward, and on-portal is no longer where (all) the action is. The explosion in the number of app stores — software applications supermarkets run by handset makers, operators and independent players such as GetJar – increases our interest in finding stuff we like, and the sheer abundance of apps turns up the pressure on companies across the emerging ecosystem to make finding cool stuff a no-brainer.

By way of background, the content discovery dilemma was expertly outlined in a recent post by Alfred DeRose, who heads Tego Interactive, a Web and mobile product and services company specialized in integrated solutions for converged businesses determined to get more out of their digital assets. Working with clients to address a variety of issues around content discovery has allowed Tego to create a series of “cheat sheets” and white papers describing the problem and offering suggestions/solutions. So, watch this space.

PERSONALIZATION FOR THE PEOPLE

Put another way, content discovery is back at the top of the agenda and interest in personalization/recommendation technologies (to expose people to apps they are likely to appreciate) is also on the rise.

I know this from my interviews with vendors and operators, and from studying a raft of recent stats confirming (through app downloads) that we do indeed want more mobile stuff than ever. However, a disturbing hole in the argument has been (until this week) a lack of insight into what the people want.

Indeed, the underlying assumption has been that poor discovery (and even more miserable mobile search, as this in-depth post from my last mobile search master class shows) frustrates us (because we can’t find what we want) and forces mobile companies (operators/content owners and now developers) to leave money on the table.

So – how serious is the content discovery dilemma, really? Are people really frustrated? And would they buy more if it was easier?

NEW SURVEY

Thanks to a new survey of 2,666 mobile users in the U.S. and the U.K. — conducted by research firm TNS Global on behalf of Xiam Technologies, a Qualcomm subsidiary providing discovery and recommendations solutions to mobile operators – we finally have some thought-provoking stats.

The key data point: 80 percent of people experience some sort of problem getting stuff. The three biggest barriers: stuff is hard to find, phone and interface issues are a pain and the content is just plain irrelevant.

MOBILE SEARCH DOESN’T CUT IT

People are relying on mobile search to discover content, with some 68 percent using search engines to find what they want. 58 percent type in the URL. But – when it comes to effectiveness – people report URLs (83 percent) and bookmarks (89 percent) are the best ways to find content. Mobile search comes in a close third. Interestingly, 67 percent said the handset manufacturer portal was an effective way to find content; 67 percent said operator/service provider portals were effective.

Overall, people complained they are unsuccessful in accessing/purchasing (!) content they want 27 percent of the time.

WOULD PERSONALIZATION HELP?

In principle, it would. Assuming it was easier to find personalized stuff, almost 60 percent would spend more time accessing content and almost 40 percent would spend more money. Would people accept customized recommendations to find stuff they like? Approximately half of people survey in both the U.S. and the U.K. would accept suggestions.

HOW MUCH MONEY CAN BE MADE

Specifically, people said they would spend over an hour a week (55 percent increase) more accessing stuff with their mobile phones and over $8 per month (148 percent increase) if finding and buying was a no-brainer.

In addition to these consumer insights, the report is chock-full with interesting stats about the type of content people download (apps lead the pack) and pay for (games); top mobile sites (service provider destinations/portal trail the likes of Google, Yahoo, Facebook and the BBC); and the gripes people have about their providers (too pricey, too difficult to use and un-cool content).

MOBILE SOCIAL FUTURE

My personal thanks to Martin Clancy, Xiam Marketing Manager, for bringing my attention to the report (in a pre-briefing) and for arranging an interview with Colm Healy, Xiam CEO, to connect the dots. Naturally, much of this analysis is reserved for my report.

However, one exciting observation I can share is the pivotal importance of “significant others” (peers, friends, like-minded people) in the content app suggestions we can expect moving forward.

As Colm put it: The space is “in the eye of the storm.” App stores up the ante and force companies across the ecosystem to focus on personalization and recommendation as means to expose people to the stuff they are likely to appreciate and – ultimately – purchase.

App stores are the place to go – but what is going to keep us coming back for more?

Colm believes that social discovery will provide that stickiness. As he puts it: Recommendations from our friends will be the way we find apps.

But the challenge is not just in harnessing rants and raves from our peers to complement personalization and drive discovery. The real work is in creating recommendations that will work across the plethora of app stores coming on line. “There are unique challenges related to app store fragmentation. If I’ve discovered a great app on an iPhone, obviously what I want to do is let my friend know about that great app. But – if they have a different phone – then the question is how to direct them to the right app for that particular phone.”

Another trend high on Colm’s radar: apps to discover apps. As Colm sees it: Smartphones are chock-full of features and functionalities — clever technology that providers could/should harness to sell us on the wealth of apps at our finger tips. It’s all about taking advantage the interface and features such as location, the compass and the accelerometer (to name a few) to help people get to apps they would likely appreciate.

My take: Personalization has been at the center of mobile since the start. First people bought content (such as ringtones) to personalize their devices. Then companies implemented technology to deliver personalized suggestions and idle-screen takeovers as a way to help people navigate the avalanche of content and cut the clicks to content. It’s work in progress. Now the explosion of app stores pushes the content discovery issue back to the top of the agenda for operators, handset makers, developers – everyone. As this report shows, people would spend more time and money accessing stuff on their mobile phones if it were easier to do. Moving forward, people will likely not only appreciate personalized recommendations (particularly if they come from their peers). They may even come to expect them.

Disclaimer: MSG relies on Tego Interactive for the creation and integration of its online and mobile destinations/strategies. Xiam has aligned with MSG to publish a sponsored series of thought leadership columns and contributions beginning in December 2009.

Imagine a living room where a large flat screen wirelessly attached to a set top box hangs from the wall. You enter a personal code into the set top box that recognizes your profile; the screen welcomes you to a portal where there are no channels only menus with links to personalized content and apps that range from social networking to commerce to premium content and entertainment.  A blinking icon reminds to you to record Wimbledon while an ad from Wilson invites you to view their latest rackets.  As you click the record button, you slide out the keypad on your remote and navigate to the Wilson site where you purchase a new tennis racket.  Payment for the racket is included in your monthly cable invoice.

Sounds like science fiction?  Hardly.  We are on the cusp of next generation iTV (interactive television), services that will elevate our viewing experience. Advertising will also be transformed,  paving the way for two-way communications that enable brands to target households according to key demographics and other information collected by the set top box (STBs). Mobile devices, widely regarded to be the remote control of our digital lives, will surely play an important role in this scenario. (Mobile already has a central spot if we consider how people reach to their phones to cast their vote for talent shows, follow sports and read the gossip during soap operas.)

The promise of being able to access the wide open Internet and everything in between on your TV may be a while away, but the battle for the living room, the one that will decide who monetizes our content consumption and who cashes in on the commercial messages we consume, is being fought now.

Best positioned in my view are the cable companies, who have the trump because they own the signal into the home and have a trusted relationship with subscribers. They also benefit from established business partnerships with broadcast and cable network programmers, that receive billion-dollar fees for entertainment content.

But there are other players lining up to stake their turf. For example, Tier 1 service providers in North America and Europe are rolling out high-speed connections into the home as part of their multi-play strategies to deliver premium content and advertising services via IPTV (TV via the Internet). While the viewing experience for consumers might not be radically different, the opportunities for brands to deliver targeted and relevant advertising could get a boost since multiplay is about creating a holistic view of the customer by monitoring behavior across channels including mobile.

Little wonder that Internet giants are also lining up to own the living room experience. Navic (acquired by Microsoft), gives broadcast and network programmers a unified platform to distribute premium content and advanced advertising services across disparate cable systems.  And let’s not forget Google. Through its relationship with Dish Networks and Visible World, Google is  geared to provide brand advertisers with expanded reach and more precise demographic targeting aimed at satellite and cable subscribers.

These companies have their eye on the prize: knowing the customer first and best. But it’s not an easy goal to reach. Operators concerned about privacy issues are predictably reluctant to release STB data to marketers and industry partners. What’s more, cable’s legacy architecture presents a host of interoperability and scalability problems that must be overcome in order to provide brands national reach across regional cable companies.

So what is cable doing to overcome these challenges?

Although the space is crowding and the privacy/technology obstacles are significant, cable companies are nonetheless next positioned to win the battle for the living room. But how well prepared are they for the struggle ahead?

The cable industry along with CableLabs, the industry’s research and development arm, has developed several key initiatives to usher in the age of iTV. These efforts, already well underway, provide the standards and interfaces that will allow brands and publishers to conduct business via cable and better target their audience demographic.

To get the inside track on work in progress I recently spoke with Paul Delzio, Director of Business Development and Product Management at ARRIS, a provider of infrastructure and advanced advertising solutions to cable. As Paul put it: ARRIS and other solution providers are “helping operators build a superhighway to the home and throughout the home using modern architecture that will ensure an interactive future with robust subscriber services.”  As he sees it, operators will monetize this highway through differentiated data plans, digital TV fees and new revenue streams from t-commerce (tv commerce), advertising and billing.”

CableLabs’ development of tru2way, java-based middleware that will be integrated directly into next-generation TV sets, is a critical step in this process.  With it, subscribers will be able to interact with a wide range of applications such as program guides, commerce, games, Video on Demand (VOD) and web browsing, without the need for a set top box.  Naturally, the world’s largest TV manufacturers are on board to bring us this technology.  Panasonic, Toshiba, Sony, Sharp and Samsung are just a few of the players lining up to cash in on this opportunity. Look for a big push at retail this holiday season.

But not everyone is going to rush out and buy tru2way TVs. So, CableLabs has introduced EBIF (enhanced binary interchange format), a technology which is being integrated into STBs as we speak. In fact, 15 million units are projected to be installed throughout the U.S. by 2010.  EBIF will enable true interactivity through multimedia pages that resemble html, so the consumer experience will have a similar look-and-feel to what we get on the Web. The advantage for brands is lead generation because cable viewers can click on a marketing message, in the form of a static banner, and receive information or goodies in the mail.

According to Paul, this “Cable Advertising 1.0 (which makes use of snail mail to fulfill a consumer request for information) will open the doors for brands eager to justify TV spend.”  Marketers see the opportunity and have stepped up spend on advanced advertising solutions from ARRIS and its partners, which supports them with the same tools they know from online and mobile, such as campaign management, media planning, analytics and response measurement.

These Cable Advertising 1.0 ad products and fulfillment services have been wisely engineered to meet the needs of this emerging ecosystem and to provide user experiences we can appreciate via this medium. Graphic overlays on top of full motion TV commercials will allow viewers to click through to micro sites where they can request information or coupons which will be delivered in the mail, allowing advertisers to target demographic segments by selecting zip codes.

Interactivity will also play a role, but mobile won’t be a shoe-in here. Subscribers can also participate in voting and polling using their TV remote control. Will we really want to use the cable remote control for text messaging? The jury is out is out on this one, but it’s clear there is a laundry-list of usability issues that will have to be solved before the cable remote is our keypad of choice in the living room–particularly when you consider the sophisticated touch and tactile keypads next generation smartphones will provide.

Personalization and relevancy on the big screen

Where are brands in the equation? The good news is significant progress is being made on the new standards and interfaces that will allow brands and marketers to buy interactive and addressable advertising locally or across multiple cable operators. Spearheading this effort is a consortium of ecosystem partners including SCTE (Society of Cable Technical Engineers), systems manufacturers including ARRIS, Biap, BlackArrow and Sigma and Canoe Ventures, a joint venture funded by the cable operators.

For brands seeking national reach, Canoe Ventures is developing a platform for advertising stewardship and fulfillment across the top six cable operators in the U.S.  The platform will aggregate inventory and subscriber intelligence to provide brands with rich data services, localized messages, lead generation and fulfillment on a national basis.

The platform will also no doubt attract the attention of Web giants who want to get in on the action. In fact, Paul tells me it’s “inevitable that major retail portals like Amazon and Expedia will want to collaborate with operators to provide subscribers with a personalized shopping experience.” What will make this experience more enjoyable for consumers and more targeted for advertisers? The key to the equation is unlocking the rich assets — our transactions, interactions, browsing behavior and viewing history all captured in the STB.

And why wouldn’t they be there? After all, it’s much more enjoyable to view a HD large screen to select your next vacation rather than squint and scroll on a 15” laptop. Moreover, cable operators are in great position to expand their billing systems to accommodate billing partnerships with the leading online retailers. Now consumers can buy what they see on TV and add it their monthly bill (Does this sound familiar? Mobile operators are determined to leverage their billing relationship in a similar way.) Shoppers benefit from a consolidated bill from a trusted provider.  Brands will love this — a virtuous cycle of shopping, analysis, advertising and more shopping.

In fact, astute brand managers will see the synergies between cable and mobile. Leads collected from the TV can be fed into mobile advertising systems enabling brands to continue the conversation on an individual basis.  Additionally, mobile SMS will grow as sports and reality TV continue to prompt voting and polling.

What else is cable doing to hedge their bets?

While excitement around Cable Advertising 1.0 continues to grow, some cable operators are exploring their options. In July Time Warner Cable and Comcast joined up to launch “TV Everywhere”, an over the top service (that is, where content is going over the Internet and not through the STB) designed to give cable subscribers access to premium content online.  Content from  cable network programmers such as TBS, TNT and Starz, along with movies from HBO and Cinemax, will be made available to Comcast and Time Warner subscribers.  It is rumored that AT&T will jump on the band wagon, as well.

But, as Paul pointed out, over the top is both “an opportunity and a threat.” On the opportunity side, TV Everywhere will accomplish several important tasks; it will extend audience reach, allowing operators to further monetize ad revenue, while at the same time reinforcing brand loyalty.

As a threat, TV Everywhere will enable subscribers with tru2way TVs to access the Web and enjoy premium content at no cost.  Case in point is premium content provider Hulu. The company’s audience , which has doubled since launch to approximately 1.3 million daily visitors as of July (Quantcast), underlines the validity of the ad-supported business model.   Hulu advertisers include some of the world’s leading brands : Johnson & Johnson, McDonald’s, Visa, American Express, Best Buy, Chili’s, DirectTV, GM, Intel, Nissan, State Farm, Unilever, Wal-Mart, Cisco, and Procter & Gamble.

Plus, it doesn’t take much imagination to envision extending the concept of TV Everywhere to the mobile Internet. Combined with mobile’s portal personalization and recommendation engines (already delivering good user experiences to millions of subscribers in Europe and Asia), premium content streamed over the mobile Internet would provide the broad reach brands have been waiting for. Major Tier 1 service providers planned CAPEX investments in LTE can be subsidized in, no small way, by interactive video advertising dynamically inserted into premium content on the handset.  

Bottom line: who will dominate the living room?

At the end of the day, the battle for the living room will be determined by sophisticated personalization and recommendation engines that understand our preferences and profiles and serve us relevant content and marketing messages.

When operators append third-party retail data to subscriber demographics and STB viewing patterns, then the vision of personalization begins to get interesting.  Comcast Spotlight, in fact, is leading the way by appending third-party data from Experian to improve household targeting.  It’s easy to imagine households that frequently purchase from Toys R Us are a good bet for family products or mini vans.  And personalization technologies will connect the dots for sure.

While the wide spread adoption of tru2way is good news for cable operators it is also good news for telcos and premium publishers.  Sure, subscribers will be free to browse off-portal.  But why bother?  A rich and personalized portal with premium content, entertainment, shopping, social networking, video on demand and other services, will make browsing the Internet irrelevant.

So, who will dominate the living room?  Cable is in the driver’s seat – for now.  In view of somewhat difficult (but not insurmountable) environmental challenges, time will tell if they will be able to deliver the vision of a personalized portal with robust services supported by advertising,  If they don’t, the leading telcos that follow a multiplay strategy and Internet players will be just a few clicks away.

Jim Levey, formerly Director of Product Marketing for Search and Digital Advertising at Amdocs, joins the roster of authors and influencers contributing news, analysis and thought leadership to MSearchGroove. He comments on developments in personalization, recommendation and mobile advertising.

In brief: In line with MSearchGroove’s ongoing and in-depth look at smart toolbars, personalized portals and the players that set the bar for these technologies, regular columnist and contributor Jim Levey shows a robust economic system (and new content distribution model) is emerging with personalization at its core.

These portals have developed large online communities by empowering users with self-service tools that enable them to create their own personalized homepages chock full of content that is dynamic, up-to-date and consistently relevant to their preferences.  This is achieved thanks to widgets that interoperate with specific applications such as search, weather, finance and social networks.

Fast forward and it’s the same model in mobile – although mobile markets in Europe and Asia have stolen the lead on North America (at least for now).

Why are operators outside the U.S. so far ahead in the delivery of content experiences that users appreciate? In my view, mobile operators, particularly in Europe, have embraced path-breaking personalization solutions that implicitly push relevant content to subscribers based on their browsing behavior. But their business objectives don’t stop at delivering a satisfactory mobile user experience (because it is personalized); they are further harnessing these solutions to deliver targeted advertising that potentially drives results.

Put the two together, (personalized mobile experiences and advertising messages targeted to users based on their content consumption), and you have the capabilities mix to satisfy users and – at the same time – create a sizeable market conditioned to accept relevant advertising. (And isn’t this exactly what brands have been waiting for?)

Put simply, by collecting and wielding terabytes of data, which reflect subscribers’ mobile Internet habits, operators can lay the groundwork for contextual ad serving.

The endgame is all about delivering users content they want and advertising they will appreciate. But these business benefits can come at a price. This mass customization requires network resources and bandwidth beyond what most operators anticipated or can afford. Clearly, users who can finally get the content they like are eager to explore the wealth of content and apps at their fingertips. This results in increased usage, challenging operators to think of new ways to generate new revenue streams (potentially to offset bandwidth costs or at least invest in network upgrades which will become a top priority if advertising on mobile becomes video-centric).

WHO FOOTS THE BILL?

Against this backdrop, the big question becomes: Who is going to pay for it all? Some mobile operators are betting on differentiated pricing and data plans (which require users the foot the bill) to solve this problem. However, this is hardly a long-term sustainable model in an age where free is the norm. Ad-supported content and business models are the way forward.

The real money is with the brands.  But, as we all know, brands are sitting on the sidelines waiting for the mobile industry to provide reach, standards, accountability and access to customer data. High marks to U.K. mobile operators who are trying to achieve this with the GSMA, but it’s a work in progress and it’s not clear if brands can wait.

So, why are operators slow to get onboard and get thinking about ad-funded models?

It’s clear: Operators are caught between a rock and a hard place. On one hand, they are sitting on stockpiles of data that can power personalization and ad serving engines.  On the other hand, while operators know brands would like to get their hands on this data, they also know their subscribers trust them to act responsibly with their personal information. Indeed, the blogosphere tells us some people are even spooked by personally relevant content and advertising. (Interestingly, many more reports show consumers see huge value in receiving content such as coupons and vouchers relevant to their location or intent to buy.)

Naturally, some mobile operators have responded to this with a wait-and-see strategy. Others, however, have turned a problem into an opportunity, using personalization solutions that anonymize customer data, to develop sharper segmentation and deliver mobile content experiences that set the bar.

These solutions make sense because they encourage subscribers to browse the mobile Internet freely, while at the same time anchoring them to their operator’s portal start page because the experience (in tune with their lifestyles) is so good. Beyond this, some personalization solutions harness widgets (in the form of a widget toolbar, for example) to enhance this experience by delivering fresh content to the handset and take the tedium out of navigating the mobile Internet.

MARKET PERSPECTIVE

What is the value proposition and how has the market reacted? I recently caught up with Joel Brand, Product Manager at Bytemobile — a provider of network-based service delivery platforms that enable the delivery of value-added servcies –  to get his perspective on this next mega-trend.

The way Joel sees it, mobile content personalization is “a subtle approach to marketing.” Subtle here means a trust-based give and take.

From the get-go this conversation – which we recall is based on a deep understanding of behavior and personal preferences/tastes — is a rewarding exchange that respects the individual and further rewards them with a fulfilling mobile experience that is perfectly in tune with their lifestyles.
As a result, the line between content and advertising blurs and the individual welcomes both because there is no noticeable difference. Both are relevant, useful and enriching. With this the groundwork is laid for an ongoing brand dialogue that can continue at other times and in other sessions. Quid pro quo.

What is the user experience when content and advertising combine? Joel offers this. “If a subscriber is browsing mobile travel sites [then] the system may push content from Expedia or Club Med.” Similarly, , if the user purchases South African jazz ringtones, the system can work with a third-party ad network to serve a marketing message about FreshlyGround, a hot band from South Africa. The possibilities are limitless because it’s tailored to each individual.

Put another way, the goal is to blend content with marketing messages in a non-intrusive fashion. The content is informative; the advertising is informative and the message is welcomed.  Advertising works best when it is subtle.

AMDOCS INTERACTIVE

Another significant player in the mobile Internet personalization space is Amdocs Interactive ChangingWorlds. The company’s solution, which is deployed in 56 top-tier mobile operators worldwide, harnesses advanced algorithms to analyze individual browsing behavior in real time and push relevant content into the portal.

I got together with Mike Lurye, Product Marketing Manager at Amdocs Interactive, to get his take on where this is going. As Mike puts it, it’s all about personalization, “but the value is in user choice.” The Amdocs approach lets users make the decisions, providing them the option to actively configure content requirements. But the system also makes decisions for the user, choosing which content to push dynamically based on the subscriber’s browsing behavior.

In practice, Amdocs Interactive features a smart icon-driven toolbar which supports more intuitive navigation and links to third-party content and services including social networks, ecommerce, search and news. All can be launched from the operator’s portal, but the experience doesn’t end there. The toolbar remains in the browser and travels with the user as they engage with these services.  As Mike puts it: “All this intelligence is logged, analyzed and optimized for a personal portal experience.”

With both Bytemobile and Amdocs Interactive, the marketing approach is subtle and the chances of success greater. This is because subscribers are in control and therefore comfortable about making personalization choices, either through configuring the widget toolbar that travels with them everywhere or by letting marketers/operators know what they like.

ROBUST ECOSYSTEM

Connect the dots, and the pieces are in place for a sustainable economic model that fosters the growth of the entire ecosystem. Why? Because aggregated and anonymous browsing behavior provides the data essential to the creation of well-defined profiles that, in turn, pave the way for brands to deliver subscribers an offer they literally can hardly refuse.

Marketers benefit because these personalization solutions provide the much-needed basis for an effective ad-supported content distribution model. The insights they provide into individual browsing behavior combined with other data points provide a consolidated view of the customer. And, as we know, delight the customer is the first rule of successful marketing.

Personalization pays for operators as well. In fact, Mike tells me one of his company’s operator customers saw as much as 20 percent uplift in revenues. It’s difficult to say whether the revenue boost was due to increased data usage, more premium content consumption, upgrades to richer subscription plans or more beneficial revenue share agreements with third-party ad networks – since the solution impacts each of these – but it’s clear that personalization had an impressive incremental effect. The same solution potentially improves mobile search, resulting in a more personal (hence useful) user experience.

And finally, it’s good news for the publishers as well – provided they forge relationships with the clever operators that have embraced these personalization solutions in the first place. By negotiating licensing and rev share agreements with these operators – ones that are willing to stream subscriber intelligence to the publisher ad servers – these publishers have the capabilities to extend the personalized marketing experience that subscribers have come to expect. No longer in the dark about their users profiles and preferences,  these publishers have the business and customer intelligence the need to serve relevant ads and sell premium inventory aimed at a high CPM audience.

THE BOTTOM LINE

While the mobile ecosystem seeks a silver bullet solution that will get brands to open their wallets and increase mobile advertising spend, some companies are growing the market by focusing on the user side of the equation. Companies like Amdocs Interactive and Bytemobile are sharply focused on the connection between personalized content, relevant marketing and personalized search. Together the companies count an installed base of more than 100 mobile operators worldwide. Do the math and those  implementations translate into tens of millions of subscribers who already enjoy a personalized portal with widgets that travel, and would likely be open to marketing messages that match their interests.

Personalized advertising is not science fiction.  It’s happening now because it must. The advent of 4G and LTE pushes operators to pursue new revenue streams to offset capital expenditures. Operators will therefore need to leverage subscriber intelligence, invest in personalization solutions and so take the lead in building an ad-supported content distribution model that works for everyone. This will surely spark interest among the marketers currently sitting on the sidelines and get the attention of the brands.

It was great to have the last few days off and even better to map out an exciting line-up of MSearchGroove projects for the next few months. One that I am particularly honored to announce: my collaboration with GigaOM Pro, the new research arm of the highly respected tech blog GigaOM. By way of background, GigaOM Pro has brought together an impressive roster of industry authorities and analysts (including my esteemed colleague Chetan Sharma) to “address the gap that exists in real-time expert industry analysis on emerging technology markets.” The GigaOM Pro solution: Make timely, highly relevant analysis and insights accessible and practical.

I’m on board to write an in-depth examination of personalization and recommendation technologies and business models, a natural next step given my long track record analyzing mobile search and my deep involvement in the recommender space. (This includes work with Strands, a major provider of recommender systems, on recommender industry events including RecSys 09 – October 22-25, NYC.)

The report is an ambitious undertaking and I am naturally interested in connecting with personalization/recommendation companies –so please contact me directly if you wish to be considered for inclusion. peggy@msearchgroove.com

Why the buzz about personalization?

The advance of Internet-specific smartphones and the spread of app store schemes turns up the pressure on mobile operators (and their content providers) to decipher data transactions (on and off the network), combine it with location and demographic data and use the results to create a 360-degree view of the individual.

Where does this shift leave mobile operators?

They are hard pushed to turn analytics into competitive advantage. Sensing this business opportunity (that execs tell me they estimate hovers in the hundreds of millions of dollars), a slew of companies (such as Amdocs, Bytemobile, Novarra and Qualcomm) are among the first out the gates with revamped offers to arm operators for the ultimate battle with Web giants for the mobile customer. This special series profiles the players jockeying for position in the marketplace.

This week we look at Openwave, which has recently productized its existing analytics capabilities and business intelligence know-how, and packaged it up as Mobile Analytics.

The solution – designed to aggregate usage data and behavioral information across a variety of sources, including on-portal surfing and open Web browsing, to generate meaningful reports –dovetails with other Openwave offers (behavioral targeting, profiling, usage pattern analysis) to lay the groundwork for the delivery of relevant content and advertising.

I caught up with Mayur Pitamber, Openwave Product Management Strategist, to discuss the role of the mobile operator, debate the value of personalization and what we can expect next in the Openwave product roadmap.

AN EXCERPT OF OUR Q&A

Q: Let’s talk about the fit with mobile advertising. You have just launched the complement to your own mobile advertising solution, which is Mobile Analytics. What’s the level of interest in mobile advertising? I’m hearing some operators get it, but many more don’t…

A: There was some hype about it at first, but operators are starting to see the value of it now and they are also beginning to understand the real value of the data they have. The last months have been marked by a surge of activity and RFIs and RFPs specifically for mobile analytics solutions, which is new in this market. We didn’t see this last year.

A lot of what happened and the initial excitement around mobile advertising industry was quite premature. It’s not just about offering targeted advertising; it’s about offering relevant products and services based on the user’s behavior. The operators can use analytics to gain profiles of these users, the sites they frequent and what they do while online. It’s when this information can be aggregated and provided to media agencies and brands that it really becomes valuable.

It’s all about helping operators to provide the mobile audience metrics that the brands are looking for. Not necessarily going through the GSMA, because they have some of that [covered in their] initiative, but doing that directly. With the solution we’re offering the operators can provide those metrics directly to the brands, to the media agencies, to the publishers, and be a vital part of that mobile advertising ecosystem. And with our solution there’s no need for us to insert tracking or cookies or JavaScript, or anything like that. Every Web page goes through our gateway and we can basically track on that. So, that’s a key differentiator.

Q: There are, of course, other solutions in this space. A long list of gateway providers: Qualcomm, Amdocs, Ericsson, Nokia, Bytemobile, Novarra. And the space is getting crowded.

A: Obviously, there are competitors out there.  All gateway providers can provide parts of this sort of solution. However, I haven’t come across a solution [similar to ours] with this [breadth] out there in the market at this point in time. Being a gateway provider for the last 10 years, we’ve been providing this type of reporting to operators. But now we’ve added more features and made it more user-friendly. So, it’s a mature business intelligence product that we’re bringing to the market.

Q: In early August, Telstra announced it had implemented your Mobile Analytics solution. The press release says it’s all about providing Telstra a “dashboard view of intelligent analytics and rich reporting capabilities across its mobile device portfolio.” To start, how many of your operator customers have this solution or perhaps the analytics solutions that preceded this?

A: We have deployed previous versions of this analytic solution to some six tier-1 operators around the world.

Q: Let’s say I’m an operator and I don’t have a solution from Openwave, but I like the analytics.  Can I just have that, or is it a package deal?

A: Previously, the solution was just built around Openwave products. But obviously, we want a bigger market share, so we’ve designed the solution such that it will work with any other gateway, any other vendor of gateway products.

Q: You said before competing on analytics is the way for operators to be “a vital part of the ecosystem.” Can operators really play this central role?

A: That’s a really good question. I think it’s quite difficult to answer as well. The operators have traditionally been sluggish. Their bread and butter has been voice revenues and SMS revenues. To really get them incentivized to offer new services such as mobile advertising, you need a compelling business case. I’ve spoken to dozens of operators around the world. Some of them are in advanced stages of creating any-time mobile advertising organizations. Others have only one or two mobile advertising product managers. For these operators, the business case – for whatever reason – is just not compelling enough for the decision makers to say okay, let’s really invest in this.

Q: This jives with what people told me while I was conducting interviews for Mobile Advertising Research UK. As one executive at a mobile infrastructure company that counts over 300 network operator clients observed: Mobile advertising only becomes interesting for an operator when “the type of revenue they can envisage is around 2 percent of their overall revenue to 5 percent, and with an opportunity to grow to 10 percent of revenue. This is the revenue that will really make them sit up and make it work.” Another figure that stands out: GBP 28.6 million, which is what the IAB reckons was the mobile ad spend in 2008. What’s your take?

A: I can believe the ad spend for the U.K. I think the hold up is the thinking about the role of the mobile operator. We have to be clear about what they can do. In my view, the role of the mobile operator will be to provide incentives for people to use new services so that additional inventory and mediums become available to insert ads. And obviously, once those mediums become available, that becomes attractive to brands and advertisers. But, right now, it’s difficult for operators to manage their inventories. They have SMS inventory, MMS inventory, on-portal, off-portal. All of these are different systems and it’s difficult to provide brands and advertisers a consolidated view of what is available out there. So, it’s when there is a clear view of the different inventories out there and the tools to manage these inventories, and make these inventories available to third-parties such as the brands and media agencies, that I think mobile advertising will really take off.

Q: Are you convinced operators can start acting like media companies? Or are there going to be a lot of carriers that focus on access over audience?

A: The tier-1s I talk with have created organizations to manage mobile advertising. They’ve created sales forces to go out and sell inventory. So, they are already acting as media agencies and helping brands identify which inventory they want to use. But again, these are just the big tier-1 operators.

Q: Advertising is messaging – and loads of it. Or it could borrow from TV and be video-centric? We don’t know. In any case, we have more data usage – both from people surfing with their smartphones and brands that want to reach them. What is the potential impact on the network side of things? What are you seeing?

A: We’re seeing huge increase in data traffic volumes. A data tsunami is going to hit operators within the next 12-24 months. And some operators are quite oblivious to this. So, [with Mobile Analytics] we’re helping the operators to identify trends on the operational front as well. We’re saying ‘Hey, you need to do capacity planning and optimize your networks because this is going to be your traffic in 6 months or 12 months.’

Q: Let’s move to the report on North American mobile Internet trends you issued that may have got lost in the CTIA shuffle. It made some interesting points, and I understand you are about to release another one soon. What were some of the key observations and what were the surprises?

A: That report was basically based on data from one of our customers in North America. Many of the trends we saw confirmed what the market was thinking. For example, everyone is doing social networking on mobile. The top sites, as you could guess, were Facebook and MySpace.

In terms of search, we were able to also track some keywords. Something that was interesting: people – when they wanted to find Google — wouldn’t enter Google on their mobile phone and go to Google. They would actually enter ‘Google’ in a Yahoo search engine. This operator had Yahoo as a search partner. Anyway, that tells us that a lot of search use may be because of usability. It’s easier to type it [a destination] in a search box than to navigate to it on the Web.

Q: Finally – what about app stores? They’re hot. What is the value-add, if any, from analytics?

A: One of the operators we’re working with is in the process of opening an app store. They know that not all users are going to go through the apps. If you figure the iPhone app store has tens of thousands of apps and growing, users would lose patience sifting through all that. This operator wants to analytics specifically on this [operator] app store to identify the top ten apps. But it goes beyond this to include how many times have the apps been downloaded; who has consumed them; and whether the users have shared apps with other people. More importantly, the operator is providing this app store data to the application developers, so they also have insight into how their apps are being used and how many people have downloaded their apps. So, Mobile Analytics can be used to identify the audiences going to these app stores – and that can be used to build the business.

WHAT’S NEXT?

Generally speaking, the value of data is not in the data itself, but in the mashups we create when we combine it with other data stores. Put another way, the way to wring the value out of analytics is to combine it with location and demographics data, which is why Openwave is keen to feature both in its Mobile Analytics solution. Mayur tells me we can expect location in the next months. (Openwave is also gearing up to announce another customer win for its analytics offer in South East Asia.)

Likewise recommendation capabilities are moving up the list to take a center spot in Openwave strategy. As Mayur put it: The next version of Mobile Analytics will come with recommenders “bolted on.” No word yet on what the recommender will allow (delivery of content or advertising – or both?), how it will achieve this (based on item-to-item or user-to user – or both?), or how it will integrate with Openwave’s underlying Integra platform. But read between the lines, and the sharpened focus on recommendation is at least a welcome testament to the timing and importance of my upcoming GigaOM report on the same topic.

Openwave, unlike some of the gateway providers I’ve examined/profiled in this series, is also bullish about mobile search. The company demo points out that Mobile Analytics potentially improves mobile search, allowing operators to deliver relevant results individuals will find useful.

I am reminded at this juncture of a related post I wrote about the potential for operator-centric, operator-powered, operator-controlled mobile search. With the right tools and technology mobile operators can follow our virtual breadcrumb trail to optimize our mobile search (and advertising) experiences, using our actual usage patterns to give us the answers/results we will most likely appreciate.

My take: Personalization is a hot topic but personalized recommendation and search are even hotter. The space is crowding with gateway providers that are using their position in the network to give their operator customers insights into what people are doing on the network (on- and off-portal). The end-game is about helping operators make business decisions based on new subscriber behaviors and trends. Openwave is one of a number of companies in this space – but it has its eye on the prize: drilling down in the data to help operators manage bandwidth allocation, deliver targeted mobile advertising AND fine-tune recommendation and mobile search. What better way for operators to compete against Internet and search engine giants, and potentially win?

Next in the series: We discuss personalization with Novarra.

But this time it’s more than warm-and-fuzzy lip-service. This time it’s hard-nosed business. Two developments – flat sales of  more traditional mobile entertainment offers such as games and ringtones (albeit at a high level), and the phenomenal popularity of apps and app stores – exacerbate the content discovery dilemma, forcing companies and operators alike to admit that better personalization is a must if higher revenues are the goal.

Last week I directed your attention to this excellent column from Mark Lowenstein, who drives home a point the significance of which I cannot overstate: “The most important way to differentiate in this growing but increasingly crowded market is to deliver a more personalized, contextual applications experience.” He was referring to app stores, where we are forced to sift through thousands of apps. (Déjà vu! It was our frustration with scrolling up and down mobile operator portals and hierarchical menus that opened the door for a variety of mobile search and content discovery solutions and providers that promised to take the pain out of finding and buying content.)

Put simply, personalization is not just central to app store schemes. It is critical to the delivery of content and advertising we will likely appreciate because it is in tune with our lifestyles (through profiling) as well as the important clues we leave behind though our browsing behavior, purchase patterns, and download history. (JumpTap, for example, has built a business connecting the dots between these data points to match relevant advertising to relevant consumer segments. As this MSG post recounts, the company  first released tapLink, a platform that builds targeting intelligence from multiple sources including search queries, browsing history, demographic and location data, and then followed up with the recent launch of tapMatch, its pay-per-click (PPC) performance mobile ad marketplace.)

As I have written many times on MSG, the new paradigm is personalized content-push based on a deep understanding of the individual. It’s even more compelling if the technology can learn users’ likes and dislikes over time to dynamically and consistently deliver the right content mix.

One company making its mark is Xiam Technologies, a Qualcomm company that I have tracked from the start. I recently caught up with Colm Healy, Xiam CEO, in a video interview to discuss the role of recommendation and personalized discovery techniques. (My personal thanks to Martin Clancy, Xiam Marketing Manager, for arranging the interview, and to Curtis Shmigelsky and the rest of the great people at bnetTV for including it in MSG video jukebox!)

I encourage you to check out the video interview in the sidebar. A highlight: Colm’s comments on the opportunities in personalization for mobile operators. As he puts it: “Mobile is a uniquely personal device and if you [operator/service provider] aren’t taking advantage of that by building in recommendations and personalized discovery techniques, you’re missing a beat.”

Almost as exciting as the array of business opportunities Colm describes, is his view of filtering. To cover all the material we did in a reality short video didn’t allow us the time to explore this topic as deeply as I would have liked. However, Martin has kindly offered to set up another interview following this week’s debut to delve into Colm’s vision for filters and systems that will – as he hinted in the video interview – “filter out the noise around us to focus in on the things that really make a difference to me.” His vision: “What you need is to get to a situation where a service becomes like a personal assistant that’s helping you get through the clutter and find what you really want.”

My take: Colm’s sharp focus on improving our mobile experiences – through improved personalization and, moving forward, the development and implementation of better filters – is the way to go. It’s also a perfect fit with a milestone, must-watch keynote speech by Clay Shirky, aptly entitled It’s not information overload. It’s filter failure. In this address, Clay puts his finger on the problem of our times: “What we’re dealing with now is not the problem of information overload, because we’re always dealing (and always have been dealing) with information overload…Thinking about information overload isn’t accurately describing the problem; thinking about filter failure is.” If we apply it to mobile, content and apps aren’t stalled because we don’t appreciate them or want to purchase them; we are confronted by a content overload problem and we need better filters that will help us find and buy what we – as individuals (hence the critical role of personalization) – appreciate even before we know we want it.

BTW: Qualcomm, which recently beefed up the personalization element in its Plaza suite of solutions to include Plaza Retail, has also reached out for a briefing to walk me through improvements to the storefront, and the nuts and bolts of the modular toolset it introduced for creating or managing app stores, and personalizing the content experiences they offer.

Disclaimer: Xiam sponsored the creation of the video, but did not influence the questions/topics covered in the interview.

Taptu’s approach, which takes universal search to the next level, crawling and indexing the social networking sites and destinations such as MySpace, YouTube, and Wikipedia, to expose an eclectic mix of results and content we might not have found otherwise, has been at the core of Taptu’s differentiation. But it’s the company’s latest release white paper (Touch Search: A New Vision For Mobile Search, which you can download by clicking the button in the sidebar) that signals an exciting shift in the mobile search paradigm.

The advance of touch devices changes how we browse the mobile Web and, naturally, it impacts what we expect from mobile search. What’s more, the touch Web represents a fast-growing subset of the Web, consisting of websites and Web pages that are optimized for access by touch devices like the iPhone.

However, as I point out in this earlier post, Taptu does more than acknowledge this trend; it has responded with a roadmap to encourage the innovation that content providers and brands agencies will require to deliver an optimized search and advertising experience for touch devices. I met up with Andreas Bernstrom, Taptu COO, a few weeks back to see Taptu’s prototype search service in action. Now I have the green light to post (I respect Andreas’ request not to give too much away here), so here’s a brief summary of my private demo and the details I can share.

USER EXPERIENCE: Search is dead simple and there is even the option to see and click on popular searches, cutting click distance and turning search into a recreational activity. See hot searches and share results. That’s a feature that no doubt builds on the learnings gained from 1-Tap, a feature of Taptu’s mobile search service that – true to its name- lets users share their mobile search results (including cool mobile content) in one click. To save users from typing in their friends’ details, 1-Tap can also tap into other services such as Web-based email and Twitter.

PRESENTATION: No dull lists of links or tedious trail of thumbnails. Results are displayed in a card format optimized for presentation on a touch device. I watched as Andreas not only breezed through the card results (depicting images and information in an easy-to-browse format); he could actually flip the cards over to see more details (say, the discography of a particular band or the tour dates of a group). And if you like what you see, then share it (!)  – Twitter it, post it to your personal site or just send it via email to your friends.

ADVERTISING: Advertising is indeed content, and judging from the emphasis on “cool” (and engagement), I would bet this is the business mantra at Taptu. Search ads (as we know them) still work, but the best ads are not only relevant to the keyword query; they enhance the experience. Andreas called them “engagement ads” and gave me glimpse of how this new advertising form dovetails with our content/search experience.

It’s early days, but this idea is one whose time has come. No more advertising messages and banners that annoy rather than excite. Imagine exploring advertising, using your finger to peel through its layers like an onion and immerse yourself in advertising that doesn’t seem at all like advertising. Now that’s a way to grab (and keep) my attention. “You can go into the ad and play with it.” Video, pop-ups, and a mix of content-rich cool stuff. Taptu showed it off to me, but it won’t be commercial for at least another six months. The strategy is about building an audience first and then introducing engagement ads, so watch this space!

(Here I am immediately reminded of a presentation from Tomi Ahonen, mobile luminary and author, in which he recounted why he believed Asian operators have their head around mobile – much more so than operators elsewhere. In it he quoted BJ Yang, CEO of AirCross, the number one South Korean mobile advertising company and the mobile advertising arm of mobile operator  SK Telecom,  who said mobile must be regarded as a “very close personal playground.” If that’s the attitude we need to make mobile (and mobile advertising) work, then Taptu’s approach might get us there, delivering fun (to consumers) and money (to the business ecosystem).

The demo Andreas showed me was a car ad that allowed me to move through the car and experience driving. I could sign up for test drives, see which dealers where had which models, check out related information, news, and reviews, and share the works with my friends.

Andreas and I mulled over what this could mean to viral marketing. Would the ability to share make seeding viral videos a new form of advertising. (It sure worked for Quicksilver, maker of surfing clothing whose “dynamite” video spread like wildfire with kids asking when they would ever be able see it on TV (!) People clamoring for advertising – now that’s a change…)

Would all this interactivity lead to a new monetization model? Say, pay-per-view instead of pay-per-click….

SURPRISES: From Taptu – I’ve come to expect it. This mobile search experience is full of them. I’m encouraged to explore my search results and all the content related to what I asked for in the first place. On each card, alongside the results, I have a wheel symbol that allows me to discover connections between content (some I couldn’t even imagine). I tried it out on music results, finding bands that were like my first pick and tracing their roots and the roots of each member in the band. An element of serendipity to keep content fresh and our minds active? Sorted.

So the mobile search and advertising experience are in synch for the Touch Web. But how big is the market and the opportunity?

Taptu offers this trio of industry predictions. (The methodology is explained in detail in the white paper.)

1)      Total global mobile search volume will grow rapidly from 63 million searches per day at the end of 2008 to 620 million in 2012 – almost 10 fold growth in just four years.

2)      The volume of searches from touch phones will grow even faster, to overtake the volume of searches from normal phones by the end of this year.

3)      By 2012, over 60 percent of all mobile searches will come from touch phones alone, representing less than 10 percent of the installed base of phones and just 20 percent of annual shipments.

My thanks again to Steve Ives, Taptu CEO, and Bob Last, Taptu Head of Business Development, for providing me the opportunity to contribute to the white paper.

Disclaimer: Taptu has collaborated with MSG on white paper projects.

While a new report from Bernstein Research may argue that (at least in the US) Google wins the mobile search battle hands-down on the strength of its brand, I believe that other factors (specifically, the quality of the user experience and the tie-up between mobile search and mobile social networking), will pave the way for other companies (and business models). BTW: I am scheduled for a podcast interview this week with Jeffrey Lindsay, Senior Analyst, Bernstein Research, to discuss the key findings of his milestone report, Google, IAC, Yahoo!: Mobile Internet – the Next Advertising marathon – Google and Yahoo! Moving to Front of Pack. In the meantime, I recommend you read Dianne See Morrison’s worthwhile summary post at MoCoNews.

In my view, social search – search that enables people to add their personal knowledge, opinions, and experiences to search results – has arrived in full force in online. (The market is already teeming with people-powered search engines – ranging from Wikipedia, which recently took the wraps off Wikia, a search service that combines computer-driven algorithms and human-assisted editing to Mahalo, a company building – and paying – contributor communities to direct searchers to relevant results, to nimble newcomers like NosyJoe, a private beta social search engine that relies on people to “sniff the Web for interesting content.”)

The mobile phone – a personal device we have with us at all times – represents the next frontier for social search.

We not only use our mobile phones to capture and share content; we also use them to interface with the world around us and connect with social networks on the fly. As cultural anthropologist Mizuko Ito pointed out in her milestone book Personal, Portable, Pedestrian: The mobile phone has a pivotal place in our daily lives based on the fact that it is personal (we customize and personalize mobile devices and consider them an extension of our personal identity); portable (even the Japanese name for mobile – Keitai, roughly translated “something you carry with you” – stresses the relation between the user and the device, and not between the technology and function); and pedestrian (because it is portable it’s a perfect fit with life as it happens, and activities that require partial or sporadic attention).

It’s on our mobile devices that we have come to expect – even demand – personalized and context-aware services and applications tailored to our lifestyles and life stages based on the clues we leave behind, such as preferences, past purchases, browsing patterns, and a deep understanding of our interests and passions.  What’s more, the form factors of the device – a small screen and a tiny keypad – naturally limit our interest in browsing the Web as we do on a PC. Put another way, users can’t sift through lists of blue links results; they require answers that are genuinely useful and relevant.

Indeed, Internet search retrofitted for the mobile Web suffers some serious shortcomings.

• First, it is one-size-fits all. Whether you are a student, a scientist, or a silver surfer, Internet search engines (horizontal search engines designed from the ground up to deliver the same results to all searchers based on queries and keywords) deliver a similar set of results, regardless of our individual information needs.
• Second, it tends to promote search engine optimized sites over the truly optimal ones. To complicate matters, the mobile Web remains the rather poor cousin of the real Web. There is no cross-linking data to power PageRank algorithms, which is a major reason why regular road tests performed by companies such as Mobile Commerce Ltd. – a U.K. company that, among its many other capabilities – possesses what the founders call a “piece of enablement” that gives them deep insight into the search queries passed through the operator portals in the U.K., and the results set returned to the user – reveal that Google and Yahoo! fall down on the job.
• Third, it has huge difficulty when it comes to connecting with the indexes that are growing and flourishing under the radar, such as blogs, user-created music and videos, and all the cool stuff that makes up the legendary Long Tail. Mobile users expect these content types to figure in their mobile search results, a variety and freshness of content Internet search engines cannot deliver.

Enter “people-powered search,” social search that harnesses people to deliver results tailored to searchers on the basis of who they are and what they like, addresses these issues.

The introduction of an approach that effectively infuses human preferences and human judgments into computer algorithms covers the bases to pinpoint truly relevant information and better answers. What’s more, the personal touch it gives to search results represents a perfect fit with the mobile phone, which we’ve already established is an intensely personal device.

• First, it recognizes the rise of a participatory culture and the role of people in the equation. These are trends that combine to give individuals more of a say over their content experiences. Book marking, tagging, voting, blogging, and networking – all of this is possible on the mobile, allowing us to turn our conversations into content. The rise of mobile social networks and communities paves the way for us all to have more input into our search results.
• Second, it benefits from the increasing popularity of peer recommendation. A recent survey from Jupiter Research shows 64 percent of users will try a service or content recommended by a friend, and 69 percent will pass what they like along to between two and six friends. Naturally, search results – particularly those in response to queries seeking cool new music or good restaurants nearby – would benefit from some crowd-sourcing.
• Third, it taps into new mobile search behavior trends. Mobile search is no longer an action-oriented activity; it has become a recreational pastime. Recent user surveys conducted by comScore, and new research from made-for-mobile search engines Taptu and Abphone, reveal the main emphasis is on content discovery and new ways to amuse ourselves during long commutes or breaks in our daily routine. We do search for information, but we are also interested in cool new stuff, interesting trivia, and ways to have fun.

In summary, the idea of people helping people isn’t about idealism; it’s the basis for an ideal business model. In mobile search, where algorithmic search can deliver neither personalized search results nor peer recommendations, social search and variations that tap the wisdom of crowds to deliver the right mix of answers and entertainment have a clear competitive edge over the plain-vanilla search we know from the PC.

This post sets the stage for an in-depth look at cool new mobile search services – some in beta – sure to leave their mark, so please check back regularly.

Disclaimer: abphone, ChaCha and Taptu have collaborated with MSG on white papers and research.

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 the news today is the acquisition of ChangingWorlds by Amdocs, a company that has quietly and cleverly added capabilities that build on its billing expertise to deliver the right content to the right user in the right context. As I observed in this earlier analysis of Amdocs, the company isn’t there yet (no one is), but they have correctly placed personalization and relevancy at the core of their competitive strategy. The decision to acquire all of ChangingWorlds’ shares for $60 million in cash is a brilliant move – and one that makes Amdocs the one to watch.

A larger trend at play here is the run on personalization companies. Think of Qualcomm snapping up Xiam, a company specialized in personalization and recommendation technology. Go further back, and you might recall Real Networks acquired Sony Network Services (a company that had perfected personalization to stream mobile music according to your mood), or that Microsoft-owned FAST also bought AgentArts, a personalization and recommendation company based in Australia. And the list goes on…

In fact, my standard PowerPoint presentation, which I have presented at several mobile search seminars and a recent master class in London, contains a slide explaining the pivotal importance of recommendation and personalization (aptly titled Was it good for you too?) which also recounts the recent raft of M&A that has transformed the space.

Personalization companies are hot – and with good reason. If the end-game is about delivering advertising, apps, content and even search results that I am likely to find both genuinely useful and interesting, then technology provided by the likes of ChangingWorlds, Xiam and others I have high on my radar is crucial. (It’s all about relevancy here, but frequent exchanges with Ogilvy’s mobile advertising evangelist Jonathan MacDonald have broken me of the habit of using the term too loosely. Read his rant and you’ll understand why.)

Connect the dots and Amdocs’ acquisition, coming on the heels of a strategic decision to bundle its search and advertising capabilities in one division, is on the money.

By way of background, ChangingWorlds, an Irish provider of personalization technology, is best known for its ClixSmart platform. Designed to provide individual consumers with “proactive recommendation of content based on their preferences and context,” the platform has been deployed by 50+ mobile operators around the world.

(In a nutshell, ChangingWorlds’ ClixSmart platform includes a variety of solutions in areas such as content recommendation, mobile search and mobile advertising. Sitting at the core of this platform – and taking center stage in all ChangingWorlds does – is a profiling and personalization engine that is capable of capturing subscriber intelligence by automatically monitoring the implicit behavior of how users use and navigate the mobile Web.)

As Barry explained it to me a while back, the combination allows ChangingWorlds to create richer preference profiles and combine this profile information with external sources of complementary data – ranging from user demographics to mobile billing records. (Little wonder billing giant Amdocs snapped it up.)

And let’s not forget the recent tie-up with Sprint Nextel in the U.S., which sees the mobile operator launching ChangingWorlds’ ClixSmart technology both on the carrier’s own portal, Sprint Web, as well as providing advanced personalization solutions for a number of Sprint’s cable partners and wireless wholesale customers. (I was scheduled for a podcast with Sprint and ChangingWorlds’ CEO David Moran to get the inside track on this deal, but I can imagine this project is on hold indefinitely.)

Nonetheless, we get an idea of the use case from Kevin Packingham, senior vice president of product and technology development for Sprint, in a recent press statement. In his view, the aim of the deal is to “automatically learn what content the customer likes and put it on their homepage,” thus enabling Sprint customers to access genuinely useful content they will most likely appreciate. In this scenario, ChangingWorlds’ ClixSmart solution automatically generates personalized, dynamic content teasers that enrich the user experience of Sprint Web and stimulate increased click-through. ClixSmart teasers, which include text and images, are rotated dynamically and personalized according to the ClixSmart user profile to provide a compelling and relevant user experience designed to encourage Sprint Web users into using more mobile data.

ChangingWorlds and Amdocs share several customers including Sprint, the Vodafone Group and Telefonica O2.

During a recent industry event, David told me the company was preparing to broaden its focus beyond mobile operators and content companies to address the wider opportunities around content discovery such as voice-activated content portals, online destinations and electronic program guides for digital television. This is no doubt attractive to Amdocs, which has its eye on the bigger prize: Personalized and converged services.

I just this minute saw an email from Jessica Francisco, Account Executive, Weber Shandwick, with the news that James Patmore, Vice President of Amdocs Advertising, Content and Entertainment division, is available to speak with me later today and discuss the growing importance of mobile personalization. I’m excited about the opportunity and will have more after the call. Thanks for the prompt response Jessica!

BTW: MSG is still setting up a few features including a search box – so apologies that you can’t find the reports on Xiam and others easily. But be patient – we’re on it.