Change. Or Die

Colin White, UK Chief Executive of Oxygen8 Communications, offers advice to newspaper publishers looking to make a success of the mobile channel

Colin WhitedigitalopportunityThe steady decline in newspaper readership and revenue has accelerated dramatically over the past 12 months, with publishing companies seeing upwards of 80% of the value wiped off their shares. As the recession hits advertising revenues, particularly the classified car and property ads, there is growing pressure on publishers to fast forward their forays onto the web and mobile to drive significant incremental value.
And following the UK governments recent announcement that all homes should have broadband by 2012, the writing is clearly on the wall for the printed page both national and regional publishers need to take a radical look at their business strategy.
One strong point in their favour is that newspapers have strong brand value and are a  trusted product. But even for those publishers that have built up a strong online user base and brand, turning that audience into revenue remains a challenge for organisations still entrenched in the cultural attitude of the printed medium.

Classified opportunity
One of the key changes is a shift in model, most notably the move from paid to unpaid classified advertising. Rather than charging the advertiser to place a classified ad in the paper, publishers can now deliver classified ads to consumers via mobile phones, with each responder paying a small charge. By offering this free advertising model, publishers can reinvigorate the classified advertising market to deliver incremental value to the consumer audience.
Taking this approach, sellers can create ads using their mobile phones, including a photograph or video. Buyers express an interest by sending a text message to a Shortcode number which then prompts the release of contact information from the buyer to the seller. The seller also receives real-time alerts whenever someone responds to the ad.
With a flexible, scaleable mobile platform that can handle hundreds of connections and messages per second, publishers can manage numerous classified ads and connect hundreds of buyers and sellers simultaneously.
This real-time, two way communication between buyers and sellers encourages greater audience interaction, whilst also driving brand value and loyalty. It also provides publishers with unprecedented access to customer information, which can be used to support complementary product and service advertising around the main ad, maximising revenue opportunities.

New model
Mobile classified advertising, however, does not require the large telesales force associated with the print model. Instead, organisations will become increasingly reliant upon technology platforms to manage and automate the sales process, and the remaining sales staff will have to be retrained to deliver the new services offered online and via the mobile.
Furthermore, publishers need to recognise the need to leverage technology to co-ordinate both Internet and mobile advertising, to co-ordinate marketing across every platform, and to maximise the strong brand and existing online traffic. Operating increasingly in an international market creates new opportunities to grow the audience, but also presents challenges in delivering relevant promotions in different markets, undertaking affiliate marketing programmes and identifying new advertising partners across the globe.
This organisational and cultural change will undoubtedly be a major – probably the major – issue to address if publishers are to successfully tap into new revenue streams.

Local demand
It is also important for publishers to recognise the growing demand for local information. Local portals providing up to date information on towns, even villages, are becoming increasingly popular. They are also enjoying a huge increase in user generated content, thus minimising the operational overheads for publishers.
This localisation trend provides a new opportunity to offer location-based services for local advertisers, enabling them to exploit the location of the mobile user or the use of local IP identification with the provision of real-time, personalised offers. These simple services can deliver a significant revenue stream, with the additional benefit of using the strong customer data to drive further revenues in the future.
Indeed, there are opportunities to provide advertisers with richer data and richer marketing using online and mobile media than any publisher could ever offer in the printed environment. Furthermore, while the demand is for increasing localisation, publishers also have a far greater opportunity to leverage the massive global audience to drive significant revenue streams through global advertising and content syndication.

Global phenomenon
The shift in customer behaviour and attitudes to seeking news has been dramatic, and it is a global phenomenon, even in counties with low Internet penetration. From watching rolling news information online to the growing demand for local information, the old habits of reading the daily newspaper and watching the 6 oclock news are dying out. 
With huge competition for advertising spend, the ability to offer a free advertising model to a strong user audience is compelling. Combined with in-depth customer information, the provision of simultaneous advertising and strong location-based services, this creates a powerful publishing model. It is now up to the publishing companies to make the staffing and operational changes required to maximise the new media marketplace.
But there is no turning back: if publishers dont make organisational changes today and embrace new opportunities for driving mobile and Internet revenue, they will see further steep decline and may well end up out of business.

Change – or Die

Bruce Renny, Marketing Director of ROK, believes that mobile networks are fast becoming commmodities, with potentially serious consequences
Much as they pretend its not really happening – like turkeys ignoring
the onset of Christmas – most mobile networks are sliding slowly, but
surely, into becoming mere commodity providers. Nothing more, in the
eyes of the consumer, than those companies who compete to sell us
our water, gas and electricity. An essential pipeline, of course, but a
pipeline nonetheless.
For those of us able to remember a time when using a mobile phone was a
daily miracle, and the companies that brought us our mobile services
were seen as cool, it is apparent that the novelty has, to a very large
extent, worn off. Particularly among the younger demographic who grew
up with the technology and now take mobile telephony for granted. It
seems almost a cause for nostalgia…
Of course, novelties, by their very nature, do wear off, but for the
mobile industry as we know it, the ramifications of the inevitability
of convergence and the resultant commoditisation of mobile
communications as a whole represent a potentially fatal threat to the
existing mobile industry revenue streams of voice, text and data,
unless some radical action is taken now.

From Cool to Corporate
You cant really blame the mobile network operators for failing to
embrace convergence, of course. After all, much of the investment
undertaken by the carriers in trying to build upon their
original cool brand status, while retaining and growing their
customer base will, as a result, be wasted once the inevitable happens.

With customer service satisfaction levels across the network opertors
at an all-time low,  coupled with the increasing availability of wi-fi
enabled devices (allowing low-cost VoIP calls and data access), and
with churn running at an astonishing 35% per year, even the most myopic
telco must realise that change is happening.
It could be argued that cool has become corporate. The mobile phone
is now just an essential part of our lives, and when you throw in the
perceptions of the customer, now and going-forward, the picture begins
to look a little scary.
Among the more tech-savvy mobile customers, the uncomfortable reality
for the MNOs is a pervading attitude of cynicism and
resentment against such things as high mobile roaming charges and high
GPRS data charges, resulting in a complete lack of brand loyalty. At
least, thats the case for the long-suffering British consumer.
Virgin, as the major MVNO in the UK, could be cited as something of an
exception, because it has invested in CRM and brand values. Virgin long
ago scalped Orange as being the only telco able to boast of its
customer-centric focus developing something approaching brand loyalty.
For the rest of the MNOs, putting your fingers in your ears, closing
your eyes and saying la-la-la-la as loudly as you can will not
prevent convergence and commoditisation – and the paradigm change which
will result to the networks as we know them.

Think about the customer

So what could they do now? Is it all too late? Maybe not. Firstly, the
MNOs must make the customer the centre of their business strategy and
service delivery, rather than seeing customers as opportunities simply
to maximise rent as people churn from one network to another, driven,
usually, by lower prices.
Secondly, its surely time for the industry to bury the 3G fixation.
Far too much money has been thrown already at a service people simply
do not want or need. At least not in sufficient numbers to make
economic sense.
Thirdly, its time for the cost of GPRS data bandwidth to be
drastically slashed. People want to access content – and will do so in
large numbers – but not when the data charges to do so are so
ludicrously high. No wonder the iPod is such a phenomenon, while mobile
music video downloads are, at best, a niche market.
The network operators should accept – and fully embrace – the
inevitability of convergance with, ideally, transparent billing for
all-you-can-eat connectivity to include mobile voice and text packages,
fixed-line services, broadband connectivity and entertainment bundles
with lower-cost roaming charges. Some have started doing so already,
albeit at a glacial pace and even then with a were only
half-pregnant – so it doesnt really matter kind of attitude.
In the meantime, the opportunity exists for the MNOs to re-ignite
cool brand values through resourcing existing mass-market
content-delivery mechanisms such as GPRS. T-Mobile is on the right
track with Web & Walk.
Put simply, my message to the mobile operators may be summed-up
by quoting the ex-England cricketer Geoffrey Boycott: “Play forward or
play back – but dont dither”.