Knowledge Bridge

//Kevin Anderson /February 26 / 2013

The mobile media revolution is about business not just distribution

Last year, internet subscribers doubled in Zimbabwe, largely due to a dramatic increase in mobile access to the internet. It’s the latest example of how mobile technology is remaking people’s ability to communicate and to access news and information. As entry level smartphones, costing less than $100 or even $75 without carrier subsidies, target the “next billion”, mobile will continue its meteoric rise. This revolution will put a smartphone, or at least a smarter phone, in the hands of billions more readers, listeners and viewers around the world.

For most news organisations, the response to the mobile revolution will be one of distribution, but Cory Bergman, the General Manager of mobile-first news service Breaking News, says that the mobile revolution is about more than distribution. Distributing your content to mobile audiences is a challenge easily met, but media are only starting to grapple with the business challenges. Writing for the Poynter Institute, Bergman said:

The mobile revolution isn’t about design and distribution as much as it is about revenue disruption. … Both Craigslist and Google created new business models enabled by the technology and scale of the Internet. In the same way, mobile is enabling new business models and use cases. Just like the mid- to late 1990s, we’re at the leading edge of the ensuing disruption.

He believes that mobile payments and geolocation, the ability of phones to customise advertising and content based on a user’s location, could disrupt local advertising. “For local media organizations, that has the potential to destroy your business,” he adds.

This disruption is not far off, he says, and he points to the moment where mobile internet use will surpass desktop. If anything, the developing world is ahead of the developed world in this respect. As we’ve pointed out several times here at Knowledge Bridge, for many internet users in Africa, the Middle East and South Asia, mobile internet access is people’s sole way of accessing the internet. In many countries, mobile will dominate, rather than the desktop internet.

This isn’t just about differences in distribution channels. Just as importantly, there are dramatic differences between the business of the mobile and desktop internet. As Bergman says:

There’s a huge gap in advertising yield between desktop and mobile experiences: $3.50 versus $0.75 in average CPMs, according to Kleiner Perkins’ Mary Meeker. Mobile is growing so quickly, the explosion in available inventory is depressing advertising rates.  Ad agencies typically lag demand, which means this gap won’t be bridged anytime soon.

Bergman’s worry is that news organisations’ response to the mobile web will be similar to that of the desktop web: that with such low advertising margins, it would be too easy to focus the business on the desktop web, even though this would ignore a growing segment of the audience.

However, as the news industry is realising with the desktop web, simply applying advertising and revenue models from traditional media to digital media isn’t proving to be successful. The same holds true for mobile media, and the strategies that worked for monetising desktop audiences will not be the same strategies required to monetise mobile audiences. It will take creative thinking both in terms of content and commercial teams to come up with appropriate and successful strategies for mobile.

To develop these successful strategies, Bergman suggests that news organisations consider how the mobile experience differs from the desktop internet. “Mobile is not merely another form factor, but an entirely new ecosystem that rewards utility,” he said. News organisations need to consider how to tap into the high level of social media use on mobile, the opportunities of location both for targeted advertising and targeted content and also the increasing use of mobile payments as potential ways to build this utility and the commercial activity needed to support their mobile efforts.

Article by Kevin Anderson