Why Facebook Also has to go "Mobile First"

BTIG analyst Rich Greenfield notes that the biggest problem with Facebook is uncertainty about Facebook prospects in the area of mobile advertising, where Facebook has virtually zero market share at the moment.

To keep matters in perspective, the U.S. mobile advertising market is growing far faster than expected, but remains a smallish part of overall online advertising, or advertising in general. 

eMarketer estimates mobile advertising spending in the United States reached $1.45 billion in 2011, up 89 percent from $769.6 million in 2010. U.S. mobile ad spending probably will grow on the order of 80 percent to $2.61 billion in 2012.

But that remains a smallish number, compared to total U.S. advertising spend.

V.Me and PayPass Value, According to Visa and MasterCard

You can debate the different approaches now being taken by MasterCard and Visa in the mobile wallet area. What is less unclear is how each company sees value being delivered. A key emerging new factor is the role of the tablet, even though the smart phone will continue to be viewed as the primary retail payment device.

Is There a Mobile Broadband "Divide" That Cannot be Fixed Rapidly by the Market?

Policymakers, it might be argued, should try to solve real problems, not imagined problems.

Likewise, policymakers and regulators sometimes should be encouraged to avoid mucking about when key problems already are being resolved.

Sometimes, "doing nothing," or perhaps "not getting in the way" is the right course of action. That would seem to be the case for global mobile broadband services, despite the
contention of some International Telecommunication Union researchers that a big problem exists.

“As the broadband revolution unfolds, large segments of the world’s population are being left
behind,” the International Telecommunications Union argues. 


Oddly, other ITU data suggests that mobile broadband adoption is growing rapidly.



The ITU rightly suggests that “over five billion people have never experienced the Internet or have only experienced it through public or shared access, let alone experienced the Internet through broadband access.”



But the ITU also has said that a third of the world’s seven billion people now use the Internet. Over the last five years (2006 to 2011), developing countries have increased their share of the world’s total number of Internet users from 44 percent in 2006 to 62 percent in 2011.


The logical and natural implication is that as Internet usage gradually shifts to broadband modes, users in all markets also will shift their usage in the same direction.


In fact, mobile voice adoption accomplished in less than a decade what policymakers had fretted over for many decades, namely the issue of how to provide phone service to human beings in the developed world. That no longer is a significant issue, and the problem was solved with minimal action by global regulators.



The ITU notes that there are 5.9 billion mobile subscriptions now in use, representing mobile penetration of 87 percent overall and 79 percent in the developing world. The next issue will be broadband service, but the previous success with voice suggests the broadband problem is anything but insurmountable.



Mobile broadband subscriptions have grown 45 percent annually over the last four years and today there are twice as many mobile broadband as fixed broadband subscriptions. Though much of that activity occurs in the developed world, there is no particular reason to believe broadband will not be adopted rapidly in developing regions as well.



So the notion that people anywhere in the world “are being left behind” completely misses the rapid adoption of mobile services by all users, everywhere, at a pace regulators might have found “impossible.”



To be sure, broadband adoption has not yet reached the levels of mobile use. But few believe there is any fundamental reason why that will not continue to evolve at a rapid rate, everywhere.



It is one matter to note that, at the moment, “there is a wide disparity in broadband access around the world, both within countries and between countries.” It is quite another matter to make the argument that structural barriers are so significant that consumer demand and supplier cleverness cannot fill the gap quickly.


Without diminishing some important role for regulators in the telecommunications business, once again it seems regulators are far behind the curve.

How Strong is Demand for Mobile Wallets?

According to March 2012 panel-based research by marketing solutions agency Catapult, just one-quarter of U.S. consumers were at least somewhat interested in using a mobile wallet for in-store purchases.

A clear majority of 58 percent were not interested, including 41percent who reported a complete lack of interest, according to eMarketer.

None of that might mean too much. Interest as high as 25 percent, for a service few consumers actually an use, might be considered "strong" demand, early in a new product's emergence.

More important, people cannot evaluate any new product they have no experience with, one might argue. Only after a clear value proposition is understood can consumers "buy," which validates the market.

Many of us would argue early surveys do not tell us much of anything about the ultimate level of interest.

Why Service Providers, Like Other Marketers, Want "Younger" Customers

It long has been a staple of consumer marketing that it is important to gain young consumers because those purchasing habits will carry over as each demographic group naturally ages. Auto manufacturers, for example, have tried to work with a sort of transmission belt, where initial purchase of an affordable brand naturally progresses to more-profitable brands as those buyers grow older.

Whether or not the tactic works as well as it once did, there remain reasons why marketers still orient their campaigns and products around younger users. In the important global markets, the average age of a human being is lower than in developed regions.

That means the critical mass of current customers are younger, so it makes sense to focus on products that appeal to  younger consumers.  Outside of North America and Western Europe, the average population age is under 30 and in some cases under 25.

What Drives Mobile Banking and Payments?

Across the globe, one segment of consumers, called "smartphonatics" by researchers at Aite Group, is driving the demand for mobile payments and banking.

The differences in mobile payments and banking behavior between Smartphonatics and other consumers are significant.

In 2012, 70 percent of "smartphonatics" worldwide have used their mobile device to make a payment, and 80 percent have used their device for banking purposes.

In contrast, less than a quarter of other consumers have made a mobile payment, and only a third have completed mobile banking transactions.

But the relationship here is correlative, not causal, Aite Group suggests."The smart phone is simply an enabler, not a driver, of changing behavior," Aite Group researchers say. In other words, heavy mobile payment and mobile banking behavior is not "caused" by smart phone ownership.

Rather, some people who own smart phones are more inclined to find value in doing so. The notion of "early adopters" is relevant here, as well as the notion of customer segments and value. Where banking is difficult, and a smart phone enables convenient banking, smart phone users will adopt at high levels.

Where banking infrastructure is highly developed, smart phone users do not have as much incentive to use mobile banking or payments products.

What Drives Mobile Banking and Payments?

Across the globe, one segment of consumers, called "smartphonatics" by researchers at Aite Group, is driving the demand for mobile payments and banking.

The differences in mobile payments and banking behavior between Smartphonatics and other consumers are significant.

In 2012, 70 percent of "smartphonatics" worldwide have used their mobile device to make a payment, and 80 percent have used their device for banking purposes.

In contrast, less than a quarter of other consumers have made a mobile payment, and only a third have completed mobile banking transactions.

But the relationship here is correlative, not causal, Aite Group suggests."The smart phone is simply an enabler, not a driver, of changing behavior," Aite Group researchers say. In other words, heavy mobile payment and mobile banking behavior is not "caused" by smart phone ownership.

Rather, some people who own smart phones are more inclined to find value in doing so. The notion of "early adopters" is relevant here, as well as the notion of customer segments and value. Where banking is difficult, and a smart phone enables convenient banking, smart phone users will adopt at high levels.

Where banking infrastructure is highly developed, smart phone users do not have as much incentive to use mobile banking or payments products.