Communities Dominate Brands

The end of a generation, no more "old" 2G phones available in Japan

Picked this one up via our friends at MobHappy. Just like old analogue TV broadcast systems are being shut down around the world in place of digital broadcast networks, also the inevitable progress of faster cellular networks and their phones is going on. Now we see the first clear sign that the time of second generation digital cellular networks like GSM, TDMA and CDMA are coming to an end, and third generation networks like WCDMA/UMTS and CDMA EV-DO (and faster) will be left standing.

What is the first evidence? They stop selling the older technology. The Japan Electronics and Information Technology Industries Association reports that January 2008 was the first month in Japan, that all new mobile phones for sale in the country were of the third generation (3G) phones or newer (ie HSDPA or 3.5G). This means Japan has stopped selling "old" second generation phones including the "2.5G" (GPRS) and "2.8G" (CDMA2000 1x RTT and EDGE) generations - and for example the current Apple iPhone is a second generation phone .

Note very concretely the difference in appreciating the newer or older technologies. In the USA where the iPhone is still considered a top end phone, in Japan there are no phones of its generation even for sale anymore. And bear in mind, the high speed phones are all color screen cameraphones, what were called high end "smartphones" just a few years ago (now there are plenty of non-smartphone 3G phones obviously). But this goes across the whole range. Thus all new phones, even those aimed at under 10 year old kids in Japan today, are high speed 3G phones faster. (oh, and the first country where this happened a little bit earlier, was South Korea, no surprise?). Read the full story at Yahoo News in article "Japan marks funeral for second generation phones."

The 3G consultant in me smiles broadly today. And they said it can't be done...

Need to get your head around mobile marketing? Read Tanla free 128 page Mobile Marketing Guide, just released

There are many of our readers from the side of marketing, branding and advertising who can see mobile emerging as a new channel, but don't know what to do with it, beyond the basic spam SMS ads and basic banner ads on WAP pages. Then we have a lot of digital technologists, especially with a mobile background, who are curious about what kind of success, if any, mobile advertising and marketing might have, and what kind of traffic and revenues it could generate. There are some great books coming about these matters but those books are still some while away. So what to do, what to do?

Right now, a brand new Mobile Marketing Guide 2008, published by Tanla, and edited by our friend Helen Keegan (and sponsored by the MDA, Mobile Data Association) has been released. It features several articles by some of our fave experts in this field including Russell Buckley of Admob and MobHappy, Mike Short of O2/Telefonica and the MDA, Dan Applequist of Vodafone, Steve Flaherty of KeitaiCulture and Jessica Sandin perhaps best known for her long career writing about the industry for Informa and various print media, and many others; and best of all, its totally free !  (oh, and you may find a familiar face with a contributed article about the 7th Mass Media in there as well ). Yes, hop over to this site and fill out the form and get the Tanla Guide for yourself. Then you'll at least be roughly on equal footing with all others who ponder and wonder about wireless advertising and marketing, perhaps in our lifetimes?

Thank you for the inspiration, Farewell to Arthur C Clarke

It is probably no big surprise to our regular readers that I am somewhat a fan of Science Fiction. That has been a strong interest of mine, bordering on a passion at times, ever since that first summer vacation when my father suggested that instead of reading books about war and spies, as the 13 year old, I should try some science fiction. He gave me an Arthur C Clarke to read.

I had read some Jules Verne before so its not like I hadn't read any Sci Fi, but this was different. It wasn't just Clarke, I also devoured Isaac Asimovs and Ray Bradburys and Robert Heinleins that summer - I read 30 paperback Sci Fi books in that summer of 1973. Some of my most enduring stories have come from that time and I honestly do feel that my immense optimism for the future, that things not only can get better, but they will get better, comes in part from that immersion, almost brainwashing, that I had that summer. And since then Sci Fi has become a staple among books I read - with of course spy stories (James Bond, anyone?) and war stories and now also the lawyer stories etc that are common among the standard bestseller.

Arthur C Clarke had a special place in my heart. I thought him and Isaac Asimov to be very similar, my fave Sci Fi authors. My father had all of them in paperback his bookcase and I read certainly more than half of the books by both authors over the next several years. But individual Clarke stories just somehow touched me even more than Asimov. His style of getting into that moment in the future and telling it like it was today, and we the readers totally understood the moment. Stories like Childhood's End, and Rendezvous with Rama, and Earthlight. Perhaps my fave story of them all is A Fall of Moondust - about a stranded moon-based surface transport, which has a catastrophic accident, and sinks into the dust sea on the moon. And then the frantic efforts of the rescue teams on the moon to try to rescue the passengers trapped under a sea of dust. Magnificent writing.

He is no doubt best known for 2001 A Space Odyssey, the book and the movie. I never thought either was anywhere near his best work. But regardless, all of Clarkes books that I've ever read have been among my faves, and especially for that young teenager mind, who was trying to figure out a world that seemed destined to end in apocalyptic nuclear war (this was the 1970s which started with America in Vietnam and ended with the Soviet Union in Afghanistan) - Sci Fi gave me a lot of hope. To want to get to the future, because in my lifetime we would be travelling to the stars. And all the magnificent new technologies that we would find in that future, and within my lifetime.

When I was a kid I never thought I could actually amount to anything as a writer (writing was not one of my fave subjects in school) but I admired authors a lot. I loved books. It is funny, that in 2000 when we were collecting the material for my first actual book to be published - an edited book, written by 12 contributors at Nokia and co-edited with Joe Barrett of Nokia and myself - that book was a book about the near future. How mobile phones might have cool new services in that "3G world" that was coming in a few years.

While on an extremely short time scale, it was a book about science fiction. We made educated guesses what might be happening five years from that time, and how phones might be used. That 13 year old boy who picked up his first Arthur C Clarke never knew how powerful inspiration those books and that man would end up being for him. 27 years later I wrote my own "Sci Fi" book. Funny how life turns out. I have always thought of him as one of my inspirations. Now we hear that Arthur C Clarke has died at the age of 90.

Thank you, Mr Clarke, for the stories and visions and than you most of all for the inspiration. We will miss you.

American Marketing Professionals Unsure about Digital - findings from Peppercom and PR News

I received the news item over a week ago from our friend Jacob Ramos, about the survey of 500 American executives and their opinions of digital media, run by Peppercom and PR News. You can find the results at this story "Digital Doubts and Disconnects".

A few highlights - 36% of executives involved in digital media feel it is too soon to tell, if their digital marketing campaigns are successful (ouch).

60% feel they are behind, or at best on par, with their rivals when it comes to using digital channels.

Most feel the web will play a bigger role and also many see it as a useful vehicle for building reputation. Only a quarter of the companies surveyed felt comfortable being able to handle a web crisis (can anyone spell Kryptonite, Dell Hell or Sprint 1000?).

Now - my take on it. Yes, interesting finding and yes, its frightening when you are accustomed to working in an interrputive advertising world (TV ads) and now have to un-learn everything and re-learn all new ways of working, and to get your head around "Engagement Marketing" and even more radical - "User-Cocreated Advertising" but - here is the American rant coming - why was mobile not mentioned in the whole story?

The cellphone? Three times as many people actively use SMS text messaging worldwide than use email. There are nearly four times as many mobile phones - at 3.5 Billion cellphone subscriptions - than there are personal computers. The cellphone is permanently carried (the laptop is not); the cellphone is personal; it is always on; it has a built-in payment system (imagine if all web users also had Paypal accounts); it is available at the point of inspiration, and delivers nearly 10x more accurate audience data than the web.

The rest of the world knows that the mobile (cellphones) is the newest mass media. Admob delivers 2 billion ads to cellphones every month. Flirtomatic has shown how Google Adwords can be adapted to mobile advertising on a dating/flirting service. Blyk is now inventing user-cocreated advertising.

The Americans who think about the digital divide, need to know that the world's most prevalent digital platform is not the internet, it is cellphones. Even in the USA from last year, more people owned cellphones than had internet access. In many countries the majority of internet access is from cellphones, including some of the world most technically advanced nations, such as Japan and South Korea, to some of the most backward, such as India and Africa. If you want a digital media plan - you need to understand mobile. (and you will want to read Alan's excellent White Paper to help you along the way, entilted 7th Mass Media)

Headlines for mobile numbers, coming this year 2008

Last year I wrote in the Spring about what kinds of numbers would be reached in mobile in 2007 in Coming to a Headline Near You in 2007.


UDATE Dec 10 2008 - I've just published my annual statistical review about the overall size of the mobile industry for end-of-year 2008. All new numbers so if you are interested in the "big picture", you may want to read this blog entitled Trillion with a T: Newest Giant Industry is Mobile



A year ago I said that during 2007 we would see mobile subscribers reach 3 Billion (we did); cameraphones reach 1 Billion (yes); value-add services for mobile reach 40 Billion dollars in revenues (check); SMS reach 100 Billion in revenues (final numbers still to come but this number has been reached) and SMS users to pass 2 billion (also true). On one number I was off, I said mobile music would reach 10 B dollars of revenues in 2007, but the actual number we reached was only 9.3 B. An impressive number out of the 30 B dollar music industry worldwide, but not the number I expected. Apparently the mobile music business is not growing as fast anymore as it had been for the previous ten years. Still, not bad accuracy for a short-term forecast. I also wrote another near-term guide to the growth numbers of the industry at the time when the iPhone was launching, in "Guidemap to the Goldrush" which was also widely read and referenced in the blogosphere. Obviously I also report on the actual achieved numbers in mobile, the latest such report was this January when I wrote my major annual review of the industry, in "When There is a Mobile Phone for Half the Planet"

So now its time to look into the crystal ball for 2008. What kind of numbers can we be expecting this year in mobile? We are already pretty well at the 3.5 Billion mobile phone subscriber number today. We will hit 4 Billion subscribers by the turn of the year. Maybe it happens in December, maybe in January or even February, but less than a year from now the planet will have 4 Billion mobile phone subscribers. 2.5 times as many as have a credit card or TV set; nearly 3 times as many as internet users; 4 times as many as own a PC or laptop; over 5 times as many as automobiles. And now mobile phones are nearing the population of radios in use worldwide.

Another interesting number is the users of advanced 3G phones and services. Of all the phones in use around the world, by the end of 2007 about 13% were 3G phones or faster. By the end of 2008 that number will reach 20% and in absolute numbers will be more than 700 million advanced phones (ie phones more advanced technically than the iPhone, in layman's terms). Those 700 million phones will not all connect to 3G services and networks, but about 300 Billion subscriptions will be using 3G networks and services, and deliver 180 Billion dollars of revenues to 3G network providers. Thats nearly as much as the global internet industry, broadband connections, monthly fees, advertising revenues etc combined which Price Waterhouse Coopers measured to be worth 177 B dollars in 2007 (but it will of course also grow during 2008). Still, 3G will only be 20% of all phones and only 7.5% of all subscribers in mobile, yet 3G will almost match the global internet industry for revenues. Not bad for a "commercial failure" which is what 3G was called just a few years ago, ha-ha..

While we are on the phones, yes the iPhone. I have gone on record from before it launched, that I believe Apple will sell 10 M iPhones this year. It will be close, but I still hold to that prediction. The iPhone has sold better in the USA than I expected, but not as well in Europe. I believe Apple will release a 3G version of the iPhone and that will help them with their Asian launches and boost European sales. 10 M this year, yes, I stick to that prediction still.

And on total industry revenues? The mobile telecoms business is worth about 850 B dollars today. That number is only for the service revenues in mobile, excluding handset sales, network sales etc. The mobile industry is growing at healthy rates, inspite of ever increasing "buckets of free minutes" and bundles of free text messages, etc. The total industry will grow past 900 B dollars during 2008. We are nearing the 1 Trilllion dollar industry level, but that number will probably not be met before 010 or so (as I've been predicting since my second book M-Profits in 2002).

Mobile internet? Towards the end of the year 2008 we will learn of the 1 Billion mobile internet user number. That will include WAP usage (which some purists say is not the real mobile internet) but nonetheless, numbers will appear that 1 Billion internet users will access the web with their mobile phones. Most of those are not using mobile exclusively; and for most who access both via PC/laptop and mobile phone, the majority of use will still be from the PC. But many countries now report that the majority of their use is from mobile users, not PC users, such as Japan, South Korea, India and South Africa. In many Western countries already some 30%-40% of internet users access at least part of the time with mobile such as in Italy, Spain, Austria etc. That number keeps growing. During 2007 that number was 825 million people who accessed the internet (including WAP) via mobile and yes, near the end of the year 2008 we will reach 1 Billion users of the "mobile internet".

Of the content revenues on mobile. Already today mobile content revenues are far greater than internet content revenues. I've pointed out that the three biggest internet content revenue groups are advertising, adult entertainment and gambling revenues. That makes the internet still today a very immature mass media (where porn and gambling still constitute two of the three biggest revenue sources). The mobile content industry is younger than the internet content industry, but much more mature, where the top three categories of revenues are music, gaming and social networking on mobile. Gambling and adult of course also exist on mobile but have been surpassed by several other content types, and only linger near the bottom of the top 10 in mobile content revenue categories. Still, for 2008, mobile content will pass another major milestone, as the mobile content industry passes 50 Billion dollars in content revenues.

I should point out that I can't commit now to mobile music. The mobile music business worldwide did grow last year, but not as fast as it had grown the previous nine years since it was invented in Finland in 1998. So as I can't see the direction of mobile music for now (is it continuing to grow or perhaps slowing down) as a content type, I can't commit to a forecast for now.

Meanwhile the current hottest topic in mobile is mobile advertising. We've seen several very widely diverse evaluations of the size of mobile advertising during 2007 between 1.5 B and 3 B dollars. I like the Informa number, they are very accurate measuring mobile and their number for 2007 came near the end of the year in November, when they said 2.2 B dollars was the size of mobile advertising in 2007. How much will it grow this year. Certainly will pass 3 B dollars. Big growth indeed, but yes, mobile advertising is still less than 1% of the global advertising industry, so this is a baby business yet. But it will grow fast. Mobile is the 7th Mass Media and it is exceptionally suited for advertising and marketing.

What of SMS text messaging? We're already at a 100 Billion dollar global industry in SMS text messaging today. The most widely used data application on the planet, SMS is used by 2.4 Billion people today. But no really dramatic numbers to reach this year. SMS user base will grow, to about 2.7 B users probably at the end of the year. SMS revenues will continue to grow into the 115 B dollar range. So yes, it is very big and very important, but we won't be crossing any very impressive threshold numbers this year in SMS. Steady growth only, ha-ha, it is an addictive service. Already 58% of Americans use SMS text messaging, so even the laggards are getting it. This is an unstoppable train..

So that is my quick forecast for what kind of numbers to expect for mobile in this year 2008. Now, for those of our readers who are not fully familiar with the current numbers in mobile, I have my annual review document for the industry, my Thought Piece on Understanding Mobile Industry in 2008 (like a short intense White Paper, fully loaded with stats and sources). If you'd like the free Thought Piece, send me an e-mail to  tomi at tomiahonen dot com  and I'll send you the Thought Piece as a return email.

UDATE Dec 10 2008 - I've just published my annual statistical review about the overall size of the mobile industry for end-of-year 2008. All new numbers so if you are interested in the "big picture", you may want to read this blog entitled Trillion with a T: Newest Giant Industry is Mobile

New Business Models in online communities

I have never met Benjamin Joffe - but he is part of our global network as is Lars Cosh-Ishii from tokyo

Benjamin recently presented in OZ and I wold like to share with your his thoughts which are as always good value. Over to you Benjamin.

| View | Upload your own

Oh - we had a community - Lessons from Nextel

A fascinating article on what Tomi blogged at at great length

may I add on the Sprint/Nextel debacle.

Nextel Communications Inc. (Nasdaq: NXTL - message board), once the poster child for high average revenue per user (ARPU) in the United States, is now a large part of the reason that Sprint Nextel Corp. (NYSE: S - message board)’s financials are in a mess. Earlier this month, when Sprint Nextel reported its earnings, the company recorded a non-cash goodwill impairment charge of $29.7 billion. This accounted for a massive write-down of the value of the Nextel unit Sprint bought.

The crux of the matter via Unstrung

Sprint made a fatal mistake. It did not realize that Nextel users loved their technology for what it allowed them to do with people with whom they wanted to communicate. Sprint thought the technology didn’t matter and believed it could push Nextel users onto its CDMA network with an inferior push-to-talk technology. But that wasn’t right. And in droves, Nextel users are moving to other operators. And they aren’t moving in “ones.” Communities churn in groups. Once a member no longer has “their club,” they move groups elsewhere. And once you lose a loyal community of users it is very difficult, if not impossible, to get them back.

Which is where we come in

In 2005, Tomi Ahonen and Alan Moore wrote a book entitled Communities Dominate Brands. The authors analyze the transition from “armchair” networks to communities that are mobile and active. The communities, they wrote, "can suddenly swarm and appear by literally the thousands on a moment’s notice.”

The authors discuss that communities are the counterbalance to brand dominance in the 21st century. They purport that, “by examining what word of mouth, when enhanced by the powerful digital echoes of mobile phone communities and other networked communications such as IM, email and blogging can do,” the authors have seen that “communities have been an undefined or underestimated barrier to recent marketing success...

"By harnessing community power and working with them, a modern marketer can succeed in delivering remarkably positive marketing effects to the intended target audience,” they state.

In going back to our Sprint Nextel example, Sprint could have enhanced and embraced the Nextel brand for what it was intended to be. Rather, Sprint Nextel rid itself of engineers who understood iDEN; it didn’t support upgrades to networks or devices; and it angered a loyal base of customers – and it's now paying the price.

There is one more thing that we should consider in this super-connected world is that peer to peer flows of communication are up to 10 times greater than all other web traffic depending on the time of day. whereas I would say most brands are still in broadcast mode.

The social marketing intelligence company Xtract - have identified that 65 - 70% of purchase decisions are influenced by direct advocacy of one peer to another. What we call word of mouth.

In a networked world Marketing has finally become a conversation. On hundreds of thousands of blogs, community sites, forums, viral emails, bulletin boards, consumers relentlessly exchange views, complaints, opinions and comments about products and services, about brands, about companies, about your company

Why now? Because they finally can. These fickle, wired, empowered, opinionated and experienced consumers are getting used to 'having it their way', in ANY way imaginable, which includes wanting to have a direct influence on what companies develop and produce for them.

I cant remember who said that - but it still makes sense to me and perhaps to Sprint/Nextel now

The best telecoms/convergence conference of the year - bonus see Alan and Tomi both at same event

It time for the second annual Forum Oxford Conference, at Oxford University in England on Friday 18 April 2008. The event is in line with Forum Oxford's mission (future of mobile telecoms) but with a good convergence story impact, from fixed-mobile convergence to TV-mobile and advertising-mobile to payments-mobile dimensions. I have said repeatedly after the first Forum Oxford Conference, that it was the best event I have ever attended - if you want to read my review of last year's event, here is the link "Communities Dominate... Conferences?"

For the 18 April 2008 event we have already as confirmed speakers several of our fave stories and companies including Blyk, Fjord, the iPhone, MTV, MyNuMo, Xtract; as well as a keynote by Alan Moore on "Social Marketing Intelligence, the new Black Gold of the 21st Century" - this alone is a must-see and worth the time out of your schedule. If you are a regular reader of our blog and have not yet seen Alan deliver a keynote, you really need to get to this event. He is mesmerizing on stage, even better than in written words. And the event features a hot debate about the future of the internet (is it mobile or fixed) between Dean Bubley of Disruptive Wireless and myself. I'll be co-chairing the event with Ajit Jaokar, the famed author of Mobile Web 2.0 and several other books. We also feature such luminaries as Christian Lindholm (yet another leading author in mobile), formerly with Nokia and Yahoo and now with Fjord. And Mi-Pay will be talking about the role of mobile payments in Africa and the developing world, very fascinating to see how powerful this technology already is. If you are interested in how mobile is evolving, this is the event you can't miss. Last year's attendees felt it was the best event they had ever attended.

As this is a university-sponsored technology conference, it is also very inexpensive to attend. The event itself costs 195 UK Pounds (about 300 Euro, 400 USD). That is a small fraction of what typical telecoms conferences cost - and if you consider the quality of the speakers and topcis, you're really getting top value out of this event.

As its in beautiful Oxford, the hotel rates are reasonable compared with London, and Oxford is an easy distance from Heathrow airport. Alan and I look greatly forward to seeing many of our readers there at the event - and if anyone has our book, please bring it over and get both of us to autograph it for you. (Obviously I'll be most happy to sign any of my other books as well). The final lineup is still growing (a couple of speakers have not yet submitted their topics etc, still more cool speakers and topics to be added). But to find out more and for info on how to sign up for our event on 18 April, follow this link to Forum Oxford Future Technologies Conference 2008.

Good luck Kimi, Good luck Heikki for the 2008 F1 Season

Just a brief comment as we go into the first Grand Prix weekend with the 2008 Formula One season commencing in Australia now. I have blogged at length about the season to come (and some thoughts about the past season) at my F1 blog - Tomi Ahonen F1 Blog - so if anyone of our readers here happens to be a fellow F1 fan, join me there for much more. But I can't wait. The last time we had a Finnish driver wearing the Number 1 on the nose of his F1 car, was Mika Hakkinen driving the McLaren returning for his second championship, in 2000. Now for 2008 we have Kimi Raikkonen the returning champ for Ferrari. And my fellow Finns will also be cheering Heikki Kovalainen (now at McLaren) and we also have kind of "adopted" a third "almost-Finnish" F1 driver, the German Nico Rosberg who drives for Williams, who is the son of Finnish F1 Champion Keke Rosberg. This season I hope we'll be lucky enough once to see all three drivers on the top steps of the podium. And one more weird tidbit, this is the "Season of the Sons" (as opposed to Terry Jacks's 1970s hit pop song Seasons in the Sun) - as for the first time ever, among the 22 F1 drivers are three sons of former F1 drivers. Nelson Piquet Jr is son of 3 time champion from Brazil, Nelson Piquet. Nico is son of Keke Roseberg. And the third son is rookie Kazuki Nakajima, the son of the first successful Japanese F1 driver, Satoru Nakajima who is the second driver at Williams. So we have the Season of the Sons.. But yes, more car racing at my blog.  We now here at Communities Dominate return to our regularly scheduled programming..

Google maps and search for mobile world launch in Poland

I had the pleasure of attending the big Google event in Warsaw yesterday courtesy of my customer Plus/Polkomtel the big mobile operator in Poland and was invited to attend the Google party afterwards (only in Poland do they really know how to drink Vodka, eh?). Thank you Krzysztof Proczka for being such a great host for me as always.

They had impressive launches relating to Google Maps to mobile (available on both Era and Plus networks in Poland) and a world launch of a special mobile version of Google search - Google Search Appliance - that was unique to Plus. I am eager to see how these take off. It is typical of the initiatives that Google is engaged in, to help bring about a more open, and mutually beneficial business, services and applications system for mobile telecoms (and digital convergence). A very cool event. My best of luck to Google, Plus/Polkomtel and Era, and the various content partners they have in the project !!