The Mobile Revolution Will Extend Your Business Model More Quickly Than The Web Did
That’s kind of a bold statement to make when many companies — be they media players or the likes of Facebook — face a mobile monetization gap and when most successful companies generate only dozens of millions of dollars of direct mobile transactions. Despite the hype around “freemium” models, the reality is that few companies can now rely on a standalone mobile business model and that most mobile business models remain unproven.
The Web extended most business models and created only a small number of truly successful new ones. Mobile will follow the same path: Extension, rather than disruption, will be the norm for most businesses, with a few disruptive mobile pure-plays as the exception but not the rule. That doesn’t mean, however, that mobile-first businesses won’t disrupt existing players. Mobile is an enabler of new direct-to-consumer products already, in industries such as car services, food delivery, and home health products. And mobile is disrupting born-on-the-Web companies such as Facebook.
However, mobile has the potential to be more disruptive than the Web. The mobile revolution will inevitably transform your business in the next decade, too —not because mobile will generate massive direct revenues but because it will trigger a more radical transformation toward systems of engagement. Mobile engagement empowers people to take the next most likely action in their immediate context and in their moments of need. Implementing the complex technology behind mobile engagement requires not just a new vision of how to interact with consumers but also significant cultural changes and investment on infrastructure, staffing, and competencies. However, brands that will be able to serve consumers’ situations, preferences, and attitudes in real time on mobile devices will be able to leapfrog the competition and, more importantly, provide their services at a premium. The firms that do this well will discover innovative ways to extend their existing business models and open up new monetization opportunities.
And this transformation will happen more quickly with mobile than it did with the Web a decade ago because mobile has unique realities that will help close the monetization gap. This uniqueness bridges the physical and digital worlds, accelerating innovation, time-to-market, and market growth. Why? There are a number of key factors to take into account among which the following trends:
– Smartphones, but also tablets, are mainstreaming. This is not just about the general rate of consumer adoption of mobile devices speeding up but, more importantly, about the fact that these devices are coupled to an entire ecosystem of services.
– Global usage of mobile Internet and apps will keep skyrocketing. Mobile Net users will far outpace wired Net users, thanks to growth in developed countries.
– Mobile will benefit from the first wave of digitization. Web-based business models, on the other hand, faced the challenge of digitalizing content and processes.
– Advertisers will master mobile engagement. The amount of time that consumers spend on mobile media will force advertisers to step up their games. Some observers argue that mobile advertising revenue in the US could surpass web revenue within one to three years. Forrester isn’t as bullish, but in the next three to five years, we do expect mobile marketing to include immersive rich-media formats that provide personalized, contextually relevant content that is not perceived as ads by consumers.
– Customer intelligence will get sophisticated with SoLoMo (social local mobile). This is not just about the marginally useful ability to check in on location-based social networks such as foursquare or to address the always addressable consumer. This will be about marketers' ability to capitalize on the mobile big data phenomenon.
What do you expect the impact of mobile on existing business model to be? Do you think the mobile monetization gap will close quickly? What about “freemium” models? Feel free to comment below.
Clients who want to know more about this can download my "How To Start Bridging The Mobile Monetization Gap" report.