Mobile digital explosion depends on technological innovation
date
Jan 29, 2013
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2013-mobile-digital-explosion-depends-on-technological-innovation
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Published
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Google
Apple
Facebook
Amazon
search
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Post
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summary
Mobile digital explosion depends on technological innovation and overcoming obstacles to unleash revenue potential in advertising and services on small screens.
2013 will be the year of mobile devices. At this point, you must be wondering if you hadn't heard this last year and the previous one. Yes, you did. For almost a decade, it has been unanimously said that the following year is the year of mobile, but the path to the electronic El Dorado still depends on changes in fundamental and connected vectors, whose evolution is directly linked to technological innovation capacity.
An initial detail: note that it was not in 2012 that traffic growth on smartphones and tablets skyrocketed. Between 2009 and 2011, it had already tripled, and last year, it grew more than 27%, and the revenue forecasts for mobile advertising in 2013 are almost US$12 billion (Cisco predicts that mobile traffic should grow 18 times in the next five years). The traffic migration, however, is not yet converting into revenue and only increases the prize at the end of the rainbow and puts pressure on a market that struggles even to compensate for losses with the digital revolution. Mobile, today, still means potential and not capital and this does not change before some things change - at least in services that have their revenue linked to advertising.
The first of these necessary changes is in the format and efficiency of advertising. No sooner had the industry begun to get used to traditional formats on the web, it will have to relearn how to impregnate brands through small screens and with very high turnover. Each user sees less than two impressions on the phone per visit, on average, and this higher bounce rate on mobile than on desktops (“bounce rate”), among other things, inhibits the awakening of this market. The thirty-second television model as the ideal of persuasion is still in the imagination of advertisers and advertisers. Digital does not make the same time concession for brands as traditional media and this is a difficult dogma to change.
The second necessary and fundamental change is in the peripherals of digital devices, because it is probably what will enable the previous transition. Since the beginning of electronics itself, the maximum is to make devices smaller and smaller. This lasted until the appearance of the iPod Shuffle from Apple, which, even though it was cheaper, did not have the penetration that the company wanted. The user made it clear that he is willing to use slightly larger devices in exchange for clearer displays. The combination of screens that allow greater brand viewing within a context is another lock that potential mobile revenues still have. The brand not only needs to be displayed - it needs to live in a context created by the publication (be it social or not) for the advertising effect to be felt. Until then, obtuse formats like the ones that try to force the reader, for example, to wait before displaying the content, will continue to be the market champions. The “try” is due to the fact that the user usually prefers to go elsewhere rather than waste time looking at the logo of a stubborn company.
The third point concerns patents. With the largest industry players gritting their teeth at each other and drawing their patent portfolios in eternal legal battles, technological innovation slows down - and without it, the previous two changes become unlikely. It is no coincidence that after the boom of the late last decade in product development for the end consumer, companies are now more cautious, launching equipment with updates that are little more than cosmetic (Apple's Siri is one of the exceptions). As US patent law practically governs the world of technology development, as long as American lawmakers allow patent trolls to move with agility, it is difficult to think of new iPods, iPads and Spotifys. And it's also hard to imagine new technological paradigm shifts necessary to leverage the revenue potential that exists in the territory of mobile devices. A new gold rush is being postponed by the difficulty and risk that companies have to innovate.
The year 2012 was a landmark for mobile device technology, as this MIT Review article says, but the biggest impact of the year was to make even larger the prizes for those who unlock the sector's money tied to the ability to exploit advertising and use of services still alien to use on the phone. There is certainly a user behavior issue, but it is strongly determined by technological obstacles (such as, for example, viewing on small screens), which desperately need solutions.
Not even the “Four Horsemen” Google, Apple, Facebook, and Amazon explore this market adequately. Even though some companies are making big profits in this area, there is still no one swimming easily like Google did with search or like Facebook did with social media. The banking sector has a good chance of being the first industry to get a slice of this revenue, launching P2P payment systems, for example. Until someone presents new technologies that allow the full adoption of the mobile world, it remains the unreachable El Dorado. Attacking obstacles to innovation is the fastest way to find your way.