How mobile will affect the strategy of newspapers


I like bold statements. Bold statements make things happen.

It was a bold statement when CEO Eric Schmidt last year at the Mobile World Congress in Barcelona announced Google's completely new strategy: mobile-first.

“It's not a phone anymore,” he explained. “It's your alter ego, an extension of everything we do.”

In the year following that statement a lot of important things happened in the mobile industry:

  • Android grew to be the dominant operating system for mobile phones.

  • Smartphones outsold PCs in the last quarter of 2010 (although Eric Schmidt eight months earlier predicted the shift would come in 2013).

  • Apple became the fourth-largest producer of mobile phones.

  • Nokia fired its Finnish CEO and appointed the first foreigner, a Canadian from Microsoft.

  • Nokia and Microsoft joined hands to start fighting for a dominant position in the mobile ecosystem.

  • Microsoft acquired Skype for US$8.5 billion.

  • And Google acquired Motorola for US$12.5 billion.

A couple of weeks ago, I heard another bold statement, this time at the Open Mobile Summit in San Francisco. On stage was John Donahoe, CEO of eBay: “I believe there will be more change in how consumers shop and pay in the next three years than there has been in the last 20. Think about that.”

He was talking about the development of mobile commerce, or m-commerce.What has happened in the last 12 to 18 months has changed eBay's point of view of the future, he said.

The numbers are staggering:

  • From a standing start three years ago, nearly US$5 billion worth of commerce will close on mobile devices for eBay in 2011.

  • More than US$3.5 billion of payments will occur on mobile devices via PayPal in 2011.

  • Three transactions per second are now happening on mobile devices.

  • eBay sells 2,600 cars every week on mobile devices! Yeah, people buy cars on a mobile device.
  • Barclays predicts in the next five years m-commerce will grow by 55%. In comparison, online sales will grow by 8% and in-store sales 1.6%.

In a recent survey by ComScore, 13.5 million consumers in the five largest European markets accessed retail sites on mobile phones in the spring of 2011. Of these five markets, the UK saw the biggest growth: up 163% over the same period last year.

Jeffrey Grau, principal analyst at eMarketer, put it this way: “For years, the trend has been for consumers to research products online, and then go buy in-store. But as the industry improves its slate of mobile offerings, consumers are increasingly visiting stores to research products, and then (buying) something else on their mobile devices.”

Mobile devices are blurring the line between online and offline at a pace no one could have predicted. Consumers feel as though they have a vast mall in their pockets.

At the Open Mobile Summit, John Donahoe admitted: “If I would have stood here a year ago, I would have said eBay competes in the e-commerce space. It's a US$350 billion market, it's 4% of total retail and we think it's going to double or triple, and that's an enormous opportunity,” he said. “But what has happened over the last 12 to 18 months is the blurring of the line between online and offline. The 'e' is falling out of e-commerce, because retail and e-commerce are now becoming one.”

So mobile has dramatically affected the strategy of giants like Google and eBay. So how will it affect the strategy of newspapers? My bold statement, in all humility, would be: With the effect of m-commerce on retail, the nature of advertising will also change in ways we still cannot grasp. Factors such as personal preferences, location and getting in front of the customer at the right time will move measurements and expectations, (and how we're able to charge for advertising!), from eyeballs to feet.

What kind of engagement do you achieve?

Because the mobile device is so personal and individual, media's traditional broadcasting perspective becomes obsolete. One-to-many will morph into one-to-one-to-one-to-one-to-one because of contextual matters.

Still not convinced mobile will change your business again, as the Internet once did?

Well, let me quote this news that came out Monday from eMarketer: “Adults in the United States now spend more time with mobile than print magazines and newspapers combined.”

One hour and five minutes on mobile versus just 44 minutes for newspapers and magazines — combined!

That's a 10% share of people's media time for mobile. And yet, mobile gets less than 1% of the advertising dollars.

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