If you're a marketer, you won't be able to ignore mobile for long. No doubt you've already heard the advantages of marketing on a mobile device. Everyone has one; they take it everywhere, stare at it attentively, poke it frequently, dress it up tenderly and talk to it incessantly.
But for all its advantages, the mobile ecosystem is still confusing for many marketers as evidenced by the one question that comes up in every conversation about mobile marketing: What is a deck and why are the carriers controlling them as opposed to leaving them open like the internet?
First, let's start with definitions. The deck is the limited navigation hierarchy that you see on your phone when you switch it on. Most phones in the U.S. are not smart phones, so these decks are typically only a few levels deep, and they are entirely different from carrier to carrier.
In North America, the average wireless subscriber accesses most of their content on-deck. What remains outside the carrier's controlled deck is the off-deck world, which is accessible by typing a URL into a browser (an additional cost in many data plans).
So how does all this affect marketers? The good news is that marketers can play on both sides of the fence. A buy that spans both on- and off-deck content -- across multiple mobile carriers -- can soon achieve the kind of coverage that will assure both reach and precise targeting. Some search providers are forging multiple relationships with major carriers, and more off-deck mobile websites are ready for a revenue stream.
Most people are claiming that the "wall" between off-deck and on-deck is tumbling. I beg to differ. I think they will both be here for quite some time.
Let's look at the example of NTT's successful iMode service. In the late 1990s, NTT began rolling out the iMode service in Japan. By 2006, iMode had reached 46 million subscribers. iMode was a carrier-managed experience. Content creators had to integrate with iMode’s billing scheme in order to provide content. Content creators would bill for content access and they paid iMode 9 percent of the fees. Some content was offered for free. But, after the iMode service scaled to millions of users and billions of dollars, its growth tapered.
Now, NTT is finding that it can drive more growth by focusing on data services for people who are browsing the off-deck open web rather than focusing on billing for content access. In other words, once the infrastructure is built and the consumer's basic needs are served, new monetization models become possible. NTT is finding a way to make money through the transition. It's like a Maslow’s Hierarchy for consumer needs. Basic infrastructural needs, like speed and content availability, come first, but those needs are very expensive to satisfy.
So how do you get to the point where a consumer's basic mobile data needs are satisfied? Who is going to build the hefty infrastructure? At this point in the U.S., it's the carriers. They are each spending billions of dollars and they want a return. They saw online ISPs get commoditized while Google and Yahoo built powerful brands. This all resembles the economic question of public goods versus club goods. Cable TV systems are club goods. Benefits flow only to the paying members. Terrestrial TV is a public good. A lighthouse is a public good. Would it make sense for a for-profit company to build a network of lighthouses and then provide public use for free?
That is essentially what many people are asking of the carriers. People are generally asking them to build and pay for an open mobile web without tolls, with the promise of "if you build it eventually you will make money."
In the U.S. today, on-deck data usage exceeds off-deck data usage. We may hope for an open system but are willing to trade that in for a better experience. As long as carriers bear the brunt of the investment in making and integrating a better consumer experience, the on-deck world will continue to matter. Who knows, maybe the carrier will find a way to transition from a profitable but closed system initially to a profitable but open system once the adoption and ecosystem is built out.
Omar Tawakol is chief advertising officer for Medio Systems. .