Coke's "Un-commercial" Couldn't Fail to Get Attention

In a campaign that could not fail to generate word of mouth and media attention, Coca-Cola Portugal Coke planted a wallet in a busy Lisbon shopping center with a hidden camera.

In the wallet was $200 and sticking out of the wallet was a ticket to a "hot" soccer match. You can guess the purpose of the hidden camera: how many people would take the money, the ticket, both, or turn the wallet in to "lost and found?"

Fully 95 percent of the people who found the wallet turned the wallet, with contents intact.

Though all these good people probably expected nothing in return, Coke gave them a ticket to the soccer game of their own, courtesy of Coke. Coke's Social "Un-commercial"

Clever. Original. And sure to get attention.

Kindle Fire Usability Findings by Jakob Nielsen

The Kindle Fire and other seven-inch tablets have either a glorious future or will fail miserably, says usability expert Jacob Nielsen. " I doubt there's a middle path in their future," he says. 


Essentially, user experience requirements for 10-inch devices are one thing, smart phone design another, while seven-inch tablets present a third platform that has to be designed for distinctly from either full-screen or smart phone apps.

"Re-purposed designs from print, mobile phones, 10-inch tablets, or desktop PCs will fail, because they offer a terrible user experience," he says. "A seven-inch tablet is a sufficiently different form factor that it must be treated as a new platform."


On one hand, seven-inch devices do not support easy, pleasant, and efficient use of the broad range of user interfaces optimized for other form factors. In other words, seven-inch screens are too small to easily browse full websites, and yet too big to carry with you at all times like a mobile phone.


On the other hand, they are capable enough to provide good usability when designs are optimized for the platform. The screen is large enough to show pictures and full-color illustrations, and it can also support fairly efficient navigation and other user actions, he argues.

Kindle Fire Usability Findings

Is There a Killer App for LTE?

It has become the conventional wisdom that there is no "killer app" for fourth-generation mobile networks. Orange's LTE/EPC Program Director Rémi Thomas says "LTE is not driven by a killer application, but it will essentially be driven by capacity needs," said Thomas. No Killer App for LTE

It might be more accurate to say there is, at present, no stand-out killer app for 4G networks. Some think if such an app is possible, it will emerge, rather than being "planned for." Killer app is a myth

But it would be odd, perhaps almost unprecedented, for 4G mobile networks to succeed wildly, which is what virtually everybody expects, without the emergence of some new qualitatively different experience or value driver. 

It might be more important to say that "nobody knows" what such qualitatively-new experiences will emerge. But some find say it is unlikely 4G will remain "3G but faster." Some might suspect that 4G will lead to new apps that we originally believed would happen on 3G networks. 

About a decade ago, when the first commercial 3G networks were introduced, there was much talk about innovation and new applications the networks would enable, and the list looked remarkably similar to what people claim will happen with 4G. 3G history

E-commerce apps, for example, were thought to be an important 3G innovation. That is claimed for 4G as well, with more conviction, perhaps. “The availability of 3G services is going to have a profound effect on electronic commerce,” it was said. 

That also is said of 4G. It was said that “3G works better” than 2G, and that was true. It also is said of 4G, and also is true. 

3G wireless was sometimes characterized as a wireless version of the Internet, encompassing Web browsing, e-mail and media downloads. That sounds like 4G as well.

Over time, though, a distinctive lead application does tend to develop, though it might take some time. Voice and texting were the lead apps for 2G, while Internet access and email have emerged as the "killer app" for 3G, it can be argued. 

Exactly how 4G products and services evolve is highly uncertain at this time and very similar to when wireless operators first deployed 3G networks, Fitch Ratings has argued. 

For 3G networks, the industry did not offer a good view of this until smart phones, in particular the iPhone and other similarly oriented devices, drove significant consumer uptake for broadband data, as opposed to the earlier growth provided by 2G email services.

Longer term, Fitch expects the majority of operators should achieve data device penetration rates of at least 70 percent to 80 percent. If so, mobile broadband will collectively represent the killer app for 3G. But what about 4G? Is it just "3G with more speed," or something else?

Fitch expects that 4G services will likewise be defined by innovative devices, perhaps tablet oriented, with new content applications, including video that will drive significantly increased demand for data. If so, 4G might ultimately be different from 3G in providing a platform for different types of end user experiences.

There is a line of thinking that the value of 4G might initially accrue in large part from significantly-lower the cost per-bit costs to provide mobile broadband. Verizon Wireless, for example, believes the cost to deliver a megabyte of data on 4G with LTE will be half to a third of the costs of a 3G network.

But if the 4G experience is anything like what we've seen with 3G, it might take years for the answer to be found. 

Family Data Plans are Coming

Verizon Wireless expects to offer family data plans “sometime in 2012,” says  Verizon Communications CEO Lowell McAdam. 

The long-awaited move should have roughly the same impact on mobile broadband adoption as family plans for voice and texting have had on mobile adoption, namely drive mobile broadband usage and accounts very high, over a relatively short period. Family data plans coming

Family plans for voice and data were a major factor in driving widespread adoption of mobile devices in entire households, and family data plans are fully expected to spur adoption of smart phones and data plan usage.

In 2003, family plans accounted for less than 10 percent of the U.S. market, where by 2007 they accounted for 41 percent of adult mobile subscriptions, and 56 percent of new activations. Family plans revolutionize the market

In 2005, researchers at the Yankee Group noted that “family plans have been the main driver of teen cell phone adoption during the past few years. Family plans drive teen mobile adoption

As recently as 2007, 71 percent of all family plans involved only two lines, while Ericsson Business Consulting suggested at the time that nearly 60 percent of family plan accounts, the master account holder is using 75 percent or more of the monthly bucket minutes. Impact of family plans

Contrast that with the situation late in 2011, when the heaviest usage is probably not on a parent’s line, but on the teen and young adult devices. That would be true both for voice as well as text messaging. In many families, it was children who got parents using text messaging, which were, pre-2007, “data services,” as mobile broadband had not begun to be adopted on a wide scale.

Most observers also would say that family plans drove text messaging adoption and contributed to lower churn, as well.

A study by Strategy Analytics suggests that 60 percent of smart phone owners want a single, shared data plan to connect multiple devices like tablets, smartphones and laptops. About
50 percent of smart phone owners are interested in connecting multiple devices through tethering to their smart phone and 40 percent have an interest in a standalone 3G portable WiFi router (like the MiFi from Novatel Wireless) to connect all their devices. Consumers want family data plans

Executives at AT&T and Sprint also have been talking about the changes for years, and it appears the plans finally will be offered. Though it appears specific policies are not yet fully worked out, the plans will encourage purchases of smart phones and data usage across a range of devices on a single account. Policies not set yet

"I think in 2012 we will see it," McAdam said. UBS webcast

At the moment, not that many service providers offer family data plans, and most plans are not the robust plans we typically see in the U.S. market for texting and voice.

Since the spring of 2011, Orange has been offering two devices per data plan, bundling 600 minutes, unlimited texts, unlimited BTZone WiFi access, and 2 GBytes of  shared data across for iPad and iPhone users, for example, with a cost of £99 a month for 16 GByte plans, according to Infonetics Research.

Typical U.S. family plans might allow as many as five devices to share texting and voice buckets. The number of devices presumably would be greater, to include tablets and tethering, for example, once the major U.S. carriers start to introduce the new plans. .

Vodafone Ireland offers shared mobile broadband for business users with a 5GB limit, shared across however many users is required, for a fee of €7.50 per connection per month, with each additional increment of 5GB being another €10.

Optus offers a plan connecting five users each on a 4 GByte shared plan, with 20 GBytes of data pooled between those five users each month.

Infonetics forecasts that approximately 15 percent of all smart phones (with some regional variation) will be sold as part of a shared data plan by 2015. Likewise, 15 percent of tablets will be sold as part of such a plan by 2015, and that percentage will continue to grow beyond this point, according to Shira Levine, Infonetics Research directing analyst, and Richard Webb, Infonetics directing analyst. Family data plans set to grow

Infonetics forecasts for penetration of family data plans likely will be revised upwards once the U.S. service providers start to introduce the new plans. As family voice plans made feasible use of mobiles by children and teen-agers, so family data plans will expand mobile data usage from a couple of devices, or a few devices in a household to allowing every device to be a smart phone, plus encouraging users to buy network-capable tablets and e-readers.

To the extent that mobile service providers wish to encourage network use by tablet devices, the family plans will be the key enabler of more-rapid adoption.

Zero Moment of Truth from Google

Today we're all digital explorers, seeking out online ratings, social media-based peer reviews, videos, and in-depth product details as we move down the path to purchase, says Google, which as a free e-book dealing with the "zero moment of truth" in all shopping. ZMOT from Google:

"Winning the Zero Moment of Truth" is a powerful new eBook by Jim Lecinski, Google's Managing Director of US Sales & Service and Chief ZMOT Evangelist. Jim shares how to get ahead at this critical new marketing moment, supported by exclusive market research, personal stories, and insights from C-level executives at global leaders like General Electric, Johnson & Johnson, and VivaKi.


If you're a marketer, a CEO, a sales rep, or an aspiring entrepreneur, this eBook on marketing strategies and the ZMOT will help you understand this shift in the marketing landscape and show you the strategies it takes to win.

Do Service Providers Earn Back Their Cost of Capital?

To the extent that all U.S. broadband networks rely on private capital to invest in new broadband facilities, the question of financial return for such investments is fundamental. After all, telcos, cable companies, satellite and wireless providers go to private markets for the funding to build their broadband networks, and those investors have lots of choices.

If the financial return, and the risk, of broadband facilities investment do not roughly match or exceed what is available from alternative investments, those investments will not be made, and it won't matter much how much people scream about what they can't get.

In that regard, it is fair to note that many investors no longer consider telecom an especially desirable investment. It is rare these days to find a venture capitalist willing to consider backing a new telecom equipment supplier, for example. To the extent that interest remains, it is centered on mobile and mobile applications.

And there are reasons for that investor caution. Any perusal of industry statistics or quarterly or annual financial reports, at least in developed markets, will show stress around the traditional revenue sources most communications or video suppliers rely on. 

Growth rates are down, subscriber trends are negative in many cases, profit margins are lower than has been the case historically, and there is more competition and a shift of value elsewhere in the Internet, broadband and wireless ecosystems. 

In fact, Bernstein analyst Craig Moffett argues that, over the last decade, the returns on invested capital in communications networks in U.S. markets have been anemic, at best. He argues that economic value creation has been, in aggregate, barely positive.

Wireline networks have the weakest returns on invested capital with a 1.5 percent gain over the last decade. Wireless networks had a meager return of 0.3 percent. Cable garnered a 2.5 percent return. Satellite networks had the best return on invested capital at 5.5 percent. Others, including AT&T, Comcast, Dish,Sprint and Verizon, have negative returns, Moffett argues.

You might argue that though low, those are positive numbers. True enough. But there are borrowing costs, and in many cases the cost of "good will" associated with acquisitions. Add those in and returns can go negative pretty quickly.

It probably goes without saying that potential end user shifts in the direction of over the top video entertainment do represent a threat to subscription video revenues now earned by telcos, cable and satellite companies.

A new study by Edelman suggests U.S. consumers are are disenchanted with their entertainment choices. Only about 17 percent of respondents think entertainment sources today provide “very good” or “excellent value.” That should send up a warning flag about the latent potential demand for different video and other entertainment options. 

Declining entertainment value obviously creates a gap that competing providers might be able to exploit. Unlike many other businesses, though, the video entertainment business is unusually controlled by content creators and distributors, rather than distributors. DirecTV, for example, recently had unusual success with its “Sunday Ticket” service delivering National Football League games, says Michael White, DirecTV Chairman, Chief Executive Officer and President.

Those sorts of issues mean there is potential for alternative distribution methods, so long as content providers are willing to cooperate. For fixed-line access providers, there are other issues, beyond a threat to existing video service revenues, though. Some would argue that fixed networks already have trouble earning a return on invested capital that justifies deploying that capital.

Whether or not a provider of goods and services can remain in business is not a consumer's problem, of course. But the apparent difficulty of making money in the fixed-line service provider business is a key concern for service providers, naturally. 

Beyond that, to the extent fixed access networks are seen as a key underpinning of economic growth, and a "national resource," there are key public policy issues. Specifically, if robust and high-speed broadband access is a "public good," inability to earn a return on invested capital is a broader problem. 

Where is the Value of a Fixed Line?

One often hears it said that “broadband is the anchor service” for fixed-line service providers in the future. One also frequently hears that new value-added services would be a healthy antidote to service providers becoming “dumb pipe” access providers. One sometimes also assumes the growing use of "connected devices" benefits mobile service providers (it does), but not fixed-line providers.

All of those statements are true, but analysts and observers might be missing the growing potential of the “dumb pipe” access business, especially as the home and business environments increasingly feature the use of many different “untethered” devices, and as more users get used to switching even their mobile devices to untethered fixed line connections (Wi-Fi). Razorsight Blog


the value of a fixed-line broadband connection will grow as each additional connected device is added.

In August 2011, for example, the share of non-computer traffic for the U.S. market increased to 6.8 percent. The largest percentage from this share came from mobile devices, which drove 4.4 percent of total digital traffic in the U.S. market. The second largest driver of non-computer traffic was the tablet category, contributing nearly two percent of total traffic.



As the share of U.S. non-computer traffic rose over the past four months, the percentage of that traffic driven by tablets has risen from little more than 20 percent to nearly 30 percent. In May 2011, 22.5 percent of non-computer traffic came from tablets. By August 2011 that figure had grown to 28.1 percent, eating into the share of traffic garnered by mobile devices and other web-enabled devices.

That is but one example of how use of connected devices is changing the value and use of fixed-line broadband connections.



In fact, the GSMA expects the number of total “connected” devices to increase from nine billion in 2011 to more than 24 billion in 2020. “Mobile connected devices” (presumably those with a subscriber information module) will grow 100 per cent from more than six billion in 2011 to 12 billion in 2020.

Do Data Caps Alleviate Congestion?

It is an unquestioned fact that a small percentage of broadband users, on virtually any network, use vastly more data than typical users do. The top one percent of data consumers account for 20 percent of the overall consumption, for example. What isn't so clear is that data caps actually do anything to help manage congestion at peak hours.

Are heavy users the problem during peak hours? The question might seem silly. If the big problem for an access provider is peak hour congestion, then heavy users would seemingly have to be part of the analysis. But the question some would ask is “who are the heavy users, at peak hours?” That might be a different question than “who are the heavy users, over a billing period?”

Some might say heavy users are just good customers. Of course, usage is not revenue. Most access providers might argue that the best customers are those who pay the most each month, while using only as much data as most other typical users. Razorsight Blog

Social Communications Patterns Different from Voice

Those of you familiar with the typical voice usage pattern will find this graphic by Dan Zarella interesting. It shows that Facebook sharing ("communications") happens on weekends, in contrast to voice traffic which tends to happen on weekdays. Contagious content


Some would also note that much website "commenting" and reading tends to happen on weekends as well, suggesting that perhaps people engage in digital communications on weekends because that is when they have time to spend on social sites, read, watch and then share.


  


On the other hand, the data is not completely conclusive. Other studies suggest that the amount of Facebook content creation is fairly even throughout the week, though consumption might be said to peak mid-week, on Wednesday. Facebook shares and reads





But Zarella suggests Twitter "retweet" activity shows yet a third pattern, building during the week and then falling on weekends, suggesting people are reading during the work week, and then cutting back on weekends. People retweet when they actively are reading, in other words, implying that Twitter is getting used less on weekends.





Friday is the best day to get retweets, Zarella says. The click-through-rate of emails ist best on Monday and Saturday, as well. Less content is published on the weekend, therefore more comments are compiled on Facebook on Saturday, says Zarella. Best days for sharing, consuming

Verizon to Launch Over the Top Streaming Service?

Verizon Communications plans to launch an over-the-top video streaming service allowing customers to stream movies and television shows over the Web, Reuters reports. Though the idea might be bold and breath-taking in concept, the initial programming line-up might be rather limited.

Reuters says the package of programming would be limited in scope. If multi-channel video programmers get their way, and they will, the service is highly unlikely to feature any of the video that normally is a staple of cable, telco and satellite video services. That is going to severely limit the appeal of the rumored service. 


Many will see the analogy to Netflix, but the offerings are likely to be quite a lot more restricted than what Netflix offers, for the simple reason that it would cost billions of dollars to get distribution rights even for movie fare, and it seems unlikely Verizon is willing to do that. 


The idea seems to be to create a streaming video service that could reach potential video prospects outside Verizon's fixed network footprint. But that's the sort of deal video content suppliers are most likely to resist, as it threatens the lucrative business programming networks now have with their cable, telco and satellite distributors. 


The new service could be rolled out in 2012, Reuters reports.  Verizon to take on Netflix with Web service

2012 Content Marketing Benchmarks, Budgets and Trends

Some nine in 10 business-to-business marketing organizations, regardless of company size or industry, say they've used content as a form of marketing in 2011, the same proportion as in 2010, according to a study by the Content Marketing Institute and MarketingProfs. Those marketers say they use about eight separate content marketing tactics to achieve their marketing goals. 2012 Content Marketing Benchmarks


Some 60 percent of the 1,092 surveyed marketers say they plan to increase spend on content marketing in 2012. On average, they now spend over a quarter of their marketing budget on content marketing, the study found.

The report, "B2B Content Marketing: 2012 Benchmarks, Budgets, and Trends," provides a detailed look at the findings. Get the full findings here.

One in Four Starbucks Transactions Now Use Mobile Payments

Less than a year after Starbucks launched an app that allows mobile payments, it has hosted 26 million such transactions on iOS, BlackBerry and Android. Roughly one in four Starbucks card transactions is now executed using contactless  mobile payment.


In the nine weeks after it was released, there were three million transactions. But in the past nine weeks, there have been six million, says Adam Brotman, SVP and general manager of Starbucks. One in Four Starbucks Transactions Now Done Via Mobile:


But mobile vastly lags the Starbucks card where it comes to volume. About  $110 million has been reloaded to customers’ Starbucks cards using mobile top up, Brotman says. Some $2.4 billion was loaded onto Starbucks cards overall in 2011.


So 25 percent use mobile payment, but only about 4.5 percent of card top-ups have been conducted on the mobile device. For whatever reason, it appears people are more comfortable using PCs to refresh their accounts, instead of reloading directly on the mobile. 


For those of you who have done both, there might be a simple reason. It is just easier to reload on a larger screen than on a smart phone. 

Is Netflix Business Model Broken?

Wedbush analyst Michael Pachter has downgraded Netflix to "underperform" from "neutral," with a $45 price target.


“In our view, the company’s business model was broken when it raised prices for its hybrid customers, and continued customer defections will require it to invest ever increasing amounts on marketing,” he says. “We estimate that Netflix will spend $800 million on streaming content in 2011, and expect streaming content costs to rise to at least $1.7 billion in 2012, partially offset by approximately $200 million in DVD and postage savings.” Wedbush Downgrades Netflix


One wonders, though. Retail price adjustments happen all the time. It is not so clear that a simple price change, even a change that arguably involves creating two new products where there once was a single product, can break a business model. 


One might argue that becoming a provider of substantial amounts of original content, where the original business had been video distribution, can break a business model. Some have pointed to potential price increases of as much as 60 percent for some Netflix customers. But we are talking about a video entertainment product that costs, at most, about $16 a month, even assuming the biggest price increase.


Before the changes, consumers had been paying about $10 a month for both DVD and streaming access. 


To keep both features costs about $16 a month, and providing users with one DVD at a time and unlimited streaming. Given prevailing prices for a subscription to a service such as HBO, or renting DVDs from kiosks, that really is not an outrageous amount of money. 


One might argue that what "broke" was investor expectations that had bid Netflix up into the $300 per share range. Irrespective of the merits of operating costs around delivery of discs, versus streaming, what really has changed is the Netflix decision to become a provider of more original or unique content, which is a different business than simple video distribution.


The retail pricing changes, and the differences in online distribution compared to postal delivery arguably cannot "break" the business model. But becoming a distributor of unique or differentiated TV programming is a different business from distributing rental movies. 

Clearwire Seeks $300 Million in New Equity

Clearwire Corp. says it will seek $300 million in a new equity offering. Clearwire said Sprint would buy as much as $347 million if Clearwire can raise between $400 million and $700 million. Clearwire Seeks $300 Million in Equity Offering

Cloud Computing Yields Perceived Benefits, But Might Not Save Much Money, Global Survey Finds

About 82 percent of 3,645  cloud computing users surveyed by TNS in eight countries say they saved money on their most recent cloud project. But savings have been relatively small, with
35 percent of U.S. organizations, for example, reporting payback of less than $20,000. Cloud computing ROI

The issue is not whether respondents believe they have seen improvements. The survey indicates that nearly all organizations boost improvements in IT performance following cloud adoption, with 93 percent of all organizations reporting at least one area of IT improvement.

Among the most common improvements, 52 percent of users report increased data center efficiency and utilization, while 47 percent witness lower operating costs post cloud adoption.

And these benefits arrive quickly as 48 percent of organizations see benefits within six months. Overall, more than 80 percent of respondents see gains within six months.

Some 23 percent of all U.S. organizations and 45 percent of U.S. organizations with fewer than 50 employees report no savings, says CSC, which funded the study.

Some 88 percent of Australian organizations see improvement in their IT departments since adoption of cloud, and 82 percent see benefits in six months. However, the cost savings of cloud are not as high as expected. Some 64 percent of organizations say they save under $20,000 or nothing at all after their last cloud adoption project. In particular, cloud computing is not helping Australian small businesses save money, as 95 percent save less than $20,000 or nothing at all. In fact, 48 percent of small businesses say they saved no money.

Eighty-two percent of UK organizations see benefits from the cloud in under six months; 38 percent see benefits immediately. Almost half (49 percent) cite increased data center efficiency and utilization as the number one benefit from adopting cloud.

However, 63 percent of small businesses say their total cost of delivering enterprise services stayed the same after implementing cloud services.

Some 90 percent of U.S. respondents said their organizations experienced IT improvement post cloud. However, cost savings were not as extensively realized. In fact, nearly a quarter of U.S. organizations don’t find any cloud savings.

For the purposes of this survey, cloud computing was defined as “a general term for anything that involves delivering hosted services over the Internet.” The survey further specified five essential characteristics, including that cloud computing was an on-demand self-service with broad network access; involved  resource pooling, rapid elasticity and measured service.

Interviews were conducted between October 2011 and November 2011. Organizations in the United States, the United Kingdom, France, Germany, Brazil, Australia, Japan and Singapore were part of the survey.

None of those results should be surprising. We are early in the process of cloud computing adoption. Some would argue significant changes take time to show clear productivity gains because it takes time for human beings to adapt, and for entire processes to be redesigned around the new technology.