The smartphone revolution in the shadow of the iPad


Over the past months media houses all over the world have had extreme expectations for the iPad and all the opportunities involved. The iPad should be a completely new user experience. And more than anything, it should be the “final solution” to the user payment issue.

The sales figures of both the iPad and similar tablets have been enormous; therefore we can conclude that it has been a success so far.

At the same time we can also conclude that the iPad isn’t yet quite as magic as we expected it to be. It has been fun and interesting to explore, that’s true. But so far it hasn’t proven revolutionary in terms of use, or new or innovative opportunities.

However, at the same time as everybody’s eyes have been focused on the iPad, an almost “secret” and silent revolution has taken place when it comes to smartphones, with an explosion both in traffic and in use.

Tor Jacobsen, CEO at VG Mobil, says the growth rate has been like a wall — going straight to heaven. Jacobsen is in charge of brands and products for handheld devices, as well as iPad and other e-tablets at VG, which is Norway’s largest media house.

Norway has a population of almost 5 million people. Currently, VG Mobil has 650,000 unique users per week, which is triple the traffic compared with last year. VG Mobil is now twice the size of its nearest competitor when it comes to traffic, and has approximately the same size as the total of the number two, three and four players in the market.

One of the keys to success is the high rate of smartphone ownership. Browsing on a smartphone can in some ways give a better user experience than the Internet, with a more obvious and precise focus on news. The use of the smartphone tends to be more and more as a break filler when you are bored or just want a short time-out.

Jacobsen points out two major findings that might explain why the smartphone has hit the market so well.

First, a smartphone is considered very personal and is normally kept much closer to its owner than a PC. Since we always carry the smartphone with us, it is easily accessible and close to the action point. For example, when you are doing your afternoon grocery shopping, the mobile is excellent as a purchase trigger. It is obvious that opportunities for advertisers are huge if they use them right. The efficiency might be much higher both when it comes to branding effects and in terms of immediate purchasing effects.

The experience of VG Mobil is that a lot of advertisers are now testing various kinds of smartphone ads. When they realize how good the effect is, they keep coming back, continuously investing more of their marketing budgets in this segment. It is obvious that industries such as retail and banks have unexplored opportunities within smartphone ads.

Secondly, the reader experience in itself is more focused on the smartphone than on the Internet. With apps you select what to read and what to do, and you don't have to care about all the “mess” that an Internet page also displays.

On the occasion of the World Championship in cross-country skiing in Oslo in February, VG decided to grab the opportunity, aspiring to “own” this special occasion and situation through the VG media platforms. They introduced a tailor-made app and involved the users in various sharing services.

They focused on two things: the users should have fun and at the same time be continuously updated. From the advertisers’ side there was a high willingness to pay for ads compared with normal standards. As it turned out, the payback was also high, with a very high hit rate. The success was huge, with tremendously high traffic and downloading of apps. Hence, during this limited period of time VG Mobil managed to take great market share, jumping to completely new traffic levels afterwards.

The portfolio of media platforms has grown a lot. Jacobsen underlines the importance of long-term strategic management of the Media House’s portfolio of platforms and brands.

Each platform has its unique advantages and specific uses. If you manage the portfolio of media platforms correctly, the total reach will improve significantly. The computer is typical for Internet news updates during daytime, while the newspaper in print and on the iPad is consumed at home. The iPad version is definitely an afternoon or evening product that you enjoy while on the sofa. Even though many people now use it as a business tool, the highest traffic on iPad is undoubtedly in the evenings. The smartphone is more of an in-between device, in use throughout the day.

“It will take time to develop the new platforms to their full potential, but still this will happen a lot quicker than we can imagine,” Jacobsen concludes. Apple is a good example illustrating that fact. When the iPod was launched, it took 10 months to sell 1 million units. When the iPhone came, it took three months to sell 1 million units — and then the same number of iPads were sold in only 28 days.

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