Smartphone penetration in the United States is expected to double from 19 percent in 2009 to 38 percent in 2013. Analysis of data traffic from Bytemobile’s global customer base of mobile network operators indicates that traffic to operator portals generated by smartphone users is two to three times less than traffic generated by non-smartphone users. This implies that most smartphone users completely bypass the operator portal in their mobile Web search and navigation.
With recent advances in mobile device capabilities, the availability of mobile-specific content on the Internet and consumer loyalty to established online brands, operators’ portal revenue and user traffic are on the decline, as more users head straight to popular Internet destinations. Users that had previously downloaded mobile media from operator portals are now downloading content for free through search engines or from popular mobile content distribution sites such as Zedge and app stores powered by Apple, Android, Palm and Research In Motion (RIM).
With portal revenue contracting, it is imperative for operators and their content partners to implement next-generation services that drive user engagement and thereby the monetization of mobile content.
The First Step: App Stores
In September 2009, there were 23 app stores worldwide, including those run by device makers, as well as operator stores such as China Mobile and Vodafone and independent outlets such as GetJar and Handango. Since most app stores offer their own software development kits (SDKs), mobile media companies must develop applications and widgets for a mind-boggling number of different platforms in order to reach full distribution.
Currently, operator and OEM-based app stores target only high-end smartphones, with the primary distribution mechanism being the pre-installation of individual applications, widgets or app store icons on the idle screen of the device. In the United States, this means that 81 percent of non-smartphone devices are completely omitted from the equation. Of the remaining 19 percent that comprise the smartphone base, only new devices are pre-installed with such services.
Companies such as Amazon and Google have proven that serving personally relevant content to end users can drive monetization immensely. However, discoverability and relevance of content remain the No. 1 challenge for mobile content storefronts and app stores.
While mobile widgets have been the cornerstone of the success of online services such as YouTube and Facebook, they have not yet taken off – due to limited device coverage and platform fragmentation issues.
The Next Step: Mobile Widgets
An in-browsing widget experience rendered in a phone’s browser solves the problem of platform fragmentation, since developers need to write the widget application only once for all handsets. If the application is delivered clientlessly from within the network, then all mobile users benefit from a personalized widget experience without having to download any plug-ins or clients, which significantly increases the installed base of active users.
Some operators are already running a widget application management solution or platform that enables them to successfully tap into high-volume revenue streams for mobile content.
Widget application management solutions provide a dynamic and personalized in-browsing experience for all handsets and across all mobile Web traffic, both on-portal and off-portal, allowing operators to maintain a valuable presence in front of their customers at all times. By inserting a personalized toolbar on the screen of any mobile device, operators can deliver a selection of relevant value-added widgets such as local news and weather, enhanced search, social networking and other customized applications at the user’s fingertips.
Widget application platforms also provide a direct communication channel to the mobile user, empowering operators to influence where he or she goes and to simplify the browsing experience by suggesting useful and relevant content. By further adding user value through the delivery of external content and applications, these platforms open the door for operators to engage in profitable partnerships with content providers.
The Goal: Total Personalization
User personalization can be delivered in multiple ways. The operator can recommend relevant widgets to specific customer segments or individual users based on their past browsing and application usage behavior; these widgets are often contextually based, reflecting the Web sites that users frequent. They also can enable users to customize the content, applications and widgets that they see in the toolbar on their own mobile devices.
Recent trials and deployments of widget application platforms by Tier 1 operators have shown strong adoption – 66 percent of users accessed widgets via the toolbar more than once a week. A highly trafficked channel such as this presents potential opportunities for advertisers as well.
Using standard interfaces to deliver widgets and applications to mobile users will empower operators to stay relevant and continue adding value in the off-portal world. Personalizing the browsing experience will provide substantial new revenue opportunities. It will enable operators to maintain their visibility, provide services and monetize content regardless of where the user browses. In fact, the more that consumers use mobile devices to browse the open Internet, the greater the operator’s branded presence. This is the walled garden turned inside out.
Adrian Hall is chief marketing officer for Bytemobile, a provider of integrated mobile Internet solutions for wireless network operators.