Let’s give up on the idea that technology defines markets. Legacy research industry taxonomies and agendas have created some major blind spots, the biggest of which is that we have difficulty seeing markets independent of their underlying technologies. Example: mobile media.
There was a time when all an analyst had to say about a technology company was that the company was saddled with legacy products and was unable to scale with new applications. Back in the mid-nineties, this was the equivalent of recommending that IT departments dump the supplier altogether.
Today, the research industry has reached a size and age where legacy research agendas are creating their own challenges. Whenever you structure research organizations and assemble information taxonomies, you create your own legacies and scalability challenges. And there’s a pretty massive hysteresis to the whole process.
This is apparent today when we talk about mobility. The mobile industry has grown leaps and bounds over the past two decades, with services reaching $185.8 billion in the U.S. in 2008.
Along with this industry growth, there is a generation of analysts who have emerged to specialize in the technologies, services and consumer behaviors associated with wireless telephony, mobile devices and mobile data applications.
Which creates its own epistemological dilemma:
Are mobile network applications a simple extension of the moble experience? Is the experience unique to the mobile environment? Or are these other types of experiences that extend onto the mobile platform?
I ask this question, because I had to answer this question for myself back in 2007 when I was running the Mobile Enterprise Alliance. At the time, we had accomplished our four-year mission of defining the terms “mobile enterprise” and “enterprise mobility,” and we realized that the mobile enterprise IT environment had become synonymous with the enterprise IT department and that companies were extending corporate software applications into mobile environments.
I came to the conclusion that mobility did not exist on its own.
So, coming back into focus, this relates to the oft-discussed concepts such as:
- mobile music
- mobile media
- mobile advertising
If you believe that the mobile experience is fundamentally different, you think of mobile advertising as different from other types of advertising on other platforms and media. The same goes for music, media, etc.
This is where things go wrong. If you put mobile advertising into a vacuum, you suddenly lose all perspective — namely that advertisers buy advertising on a variety of platforms. Individual advertising campaigns span multiple media: print, video, audio, multi-media, etc.
And the mobile analyst can spend months getting briefed by the hundreds of companies playing in a tiny market. The result is disproportionate coverage, and the analyst is challenged to explain whether a report is talking about a market that will be $100 million or $10 billion.
I’ve seen it happen.
With mobility, legacy research agendas have led industry analysts to make two wholly incorrect assumptions:
Mistake #1: Mobile Media Consumption
I’ve addressed this one elsewhere, but the commonly accepted meme about mobile media is as follows:
Consumers spend an increasing amount of time with their mobile devices. Therefore, mobile devices will come to dominate interactions with media, communications and applications.
and
Consumers will spend $TENS OF BILLIONS on mobile media.
Which makes sense if you forget that people consume media in a variety of places. Remember television? And people tend to spend the bulk of their media budget inside bundled services such as Internet access and Pay TV.
Mistake #2: Mobile Advertising
Following similar assumptions as before, looking at the hundreds of billions of dollars that consumers spend on mobile services, factoring in the predicted growth for mobile data traffic, and comparing to the Internet advertising marketplace…you get the easy prediction that the mobile advertising market will quickly reach tens of billions of dollars globally.
But this assumes an altogether different Internet experience on mobile devices, mobile-specific advertising and so on and so forth.
It also assumes that the bulk of advertising budgets are specificalyl spent placing advertising and not marketing services. People who know mobility, and who’ve never delivered a marketing program, missed this one big time. They thought that 95% of the advertising budgets would go to mobile advertising inventory. When it’s more like 10-20%.
Root Cause: Legacy Research Organizations
Our industry made these massive mistakes, costing our clients billions of dollars, because we used legacy research organizations to answer questions about new markets. At some point in time, it would have made sense to send the media/advertising analyst to work with the telecoms clients. And by the same token, it would have been appropriate to get the mobile analysts in the door with the larger teams at the advertising agencies.
But it would have taken more than just that. We were dealing with offbeat mobile teams at the agencies, specialized mobility teams at the media companies, and similar teams at the mobile operators.
The mistake we all made was to think that the technology defined the market…When the market defined the market
Hence — Big Picture
We’re far from perfect, but our goal at Big Picture is to find the operative questions for an industry or a market. What are the questions that matter? And what are the assumptions that we make?
And yes. One more thing. Forget about the technology. If we’ve learned anything, it’s no longer about the technology.
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