My Digital Footprint

where your privacy is someone else's business ...

Friday's counter intuitive research - advertising creates more enjoyment

http://blogs.hbr.org/ideacast/2010/08/hbrs-idea-watch-strange-but-tr.html

start at 4.25 on the pod cast for  "Defend your research from Harvard Business Review/ Sept 2010 - interview from Leif Nelson Prof @Berkeley"

Research on people watching TV shows - interrupted with commercials and non-interrupted; expected outcome would be that people enjoy more the one that was not interrupted.

However, pretty strongly people enjoyed the TV with commercials more, good news for advertisers.

Reason and rational is adaptation.  What is this.  Consider a 10 minute massage, the massage gets less enjoyable as time goes on. if you cut the session in half and start again, the enjoyment increases.

Why do people like and pay for premium channels without ads - plots are complex and provide natural interruption by stitching story lines. Designed to keep enjoyed high.

Smart take and counter intuitive research

Is social media just a new rock and roll?

A weekly post cast by Jim Hopkinson who works for Wired.com

http://thehopkinsonreport.com/2010/08/19/episode-118-social-media-is-the-new-rock-and-roll/comment-page-1/#comment-88918

This one is a thought providing piece on Social Media saying that SM is for this generation the rock and roll of previous generations - worth listening to.

my view is that I like the analogy draw up but I am not sure if I agree with it all but it did made me think.

One aspect to consider is why the youth love technology/ social media?  One answer is (based on a massive amount of real research by FT/ Orange) is that technology/social media gives kids a place to go where parents don't have control.

This idea fits well with what the article says and to the roots behind other generational gaps/ ideals/ fashions.

If social is a place where "we" go today as parents don't have control, with all these new controls there will be new opportunities as the new generation or youth find a place where their parents (or heaven forbid) grandparents are not.

How could a mobile operator add value to location?

 

Location should have created substantial new value on a mobile operators’ balance sheet.  In their rush to control and lock down this valuable data set, the operators set the charges to high and put up an impossible API; these actions meant that by-pass and alternatives would flourish and they have. Location is in so many ways unique to mobile, therefore we are right to question how an operator could try to capture some value back.

Here is an idea for you (free)   I would like my operator to control the location that my applications sees, I want someone to become the intermediately and offer me a “trusted service”, as the value has migrated from the knowing location to managing it.

Some example:-

Rich and Famous - you want to tweet your latest update with your location. Would be good but this means the Mr Robber and Mrs Burglar know that you are out or somewhere.  Please can someone allow me to put a false location on my tweets for a period to protect my privacy.

Celebrity – you want to tweet your latest update with your location. Would be good but this means you can be found by the hoards of fans who will mob you.  Please can someone put a 20 minute delay in my location.  Make it available but not in real time, unless I want to party with my fans.

Single female – I want to update Foresquare, but I am worried about …..  Please can my trusted location provider/ manager make my location available later, at some time period I am happy with.

 

The trusted service is to add a user control layer that adds a time delay to when your location become public.  Mr Operator, you could do it, but I expect that someone will do it before you.   Is this a big money spinner NO, this is about control, trust and loyalty; YES - think branding!

The WHAT principle and the WHO effect

The economic climate means that there is a focus on costs and revenue at the expense of opportunity and innovation.  “In the bank” is winning over even “in the bag”, but it is also true that you cannot cost cut your way out of recession, you need to trade. Balancing future and survival is as much an executive skill today as at any time in corporate history.

Companies who are taking the opportunity to adopt networked technologies, which have been developing over the last 5 years and in our view are starting to become stable enough to show promise, are likely to seriously enhance their ability to offer better services, provide unique customer experience, be more responsive, delivery on service promises and keep costs down, during these difficult times and the upturn.

A key driver for these pioneering companies in the adoption curve is how they handle and analyse customer and social graph data.  To explain this concept, this Viewpoint focuses on “The WHAT principle and the WHO effect”

We hope that our Viewpoint improves awareness, raises questions and promotes deliberation over lunch.

The WHAT principle

The focus of today’s higher value services is personalization – the making of your user experience, creating value from the reduction in churn and incremental service revenue, assuming that any incremental margin is not eroded by competitive pressures.  The focus on personalization is, to AMF Ventures understanding, a focus on WHAT:– what you as a user want to do; what service you want; what is needed now.  The sole benefactor is the individual, but does this create any value?  The assumption is that personalization provides focus, and that this focus leads to the ability to deliver engaging and personalized services including advertising.  This advertising being derived from the same advertising budgets, which is now redirected from other display channels.  Therefore does personalization actually create any new value and will it actually grow the overall spend of the entire market?

Commentators, consultants and media sellers will provide convincing evidence to back their own propositions and the purpose of this Viewpoint is not to debate the personalization opportunity but to introduce the WHO effect.  Whilst personalization will increase value for the provider [more effective marketing and efficient sales]; assuming that there is value for the user, it does not itself create new value for the entire converged industries.   However, personalization could create value, if the focus is on WHO and not WHAT!

The WHO effect

Personalization has been about the WHAT principle. This has focused on a single customer: ‘you’.  The WHO effect is the multiplier. The focus shifts from WHAT, to orientate on WHO you are doing something with.  In simple terms when you go for dinner, who are you with? When you are in a business meeting or seminar, who are you with? When you are at a concert, in school, or on holiday – who are you with?  The opportunity is that these ‘WHO’s’ are gravitating towards and enjoying the same experiences as ‘you’.  The additional profiles of those who you are ‘with’, can combine to create a new and incremental market value, assuming as a company you are able to reach these customer and deliver services that they want.

Consider the advertising issue created through personalization, it reaches you – one person in two billion.  The world is divided into two billion personalized worlds, only relevant to one person at any given time, and each person with an unequal bite of the advertising spend!  The WHO effect would suggest that as you are enjoying something with others, even though it is outside of their personalized preference, it is possible that it would be worth providing information on products and services to the group.  The WHO effect is the electronic ‘word of mouth’.  It assumes and depends on the fact that we adopt at different rates and some not at all. These issues provide the limitation to personalization and the WHAT principle, but opportunity to the WHO effect.

How WHO Works

WHAT based decisions are not using information in a sophisticated enough way. To move to the WHO based system, customer data needs to be understood in a more nuanced way. We think of data on 2 main axes: How ‘active the data is’ (static to dynamic) and ‘type of data’ (factual to behavioural)

Factual vs Behavioural.

Factual Data just is – date of birth, where you live etc.

Behavioural data is what you do, your footprint over time.

Dynamic vs Static

Static data is data that doesn’t change – your date of birth. Highly dynamic data is what is changing every minute – movement, current location etc. Some data is dynamic, but over long time periods – eg place of work, home address etc

Some dynamic data is repeated, ie there are patterns in it (such as the daily commute) that allow one to predict behaviours and events.

Clearly, if a service provider has a grasp of this information, they would be able to make better decisions about the user context and thus serve up better information or services to the user – critical for the limited real estate on even the smartest of mobile devices. 

Creating advantage

This WHO effect is not open to the traditional broadcast, TV and entertainment companies, although they are the traditional home of the display advertising budgets.  This service could be offered by Web companies, however as your profile and personalization has a dependency on your web access time, it could be difficult. The major benefactor of the WHO effect will be mobile companies as the mobile device becomes the platform to collect data, interrupt the connection and deliver the value.

Caveats

First: the opportunity to exploit the WHO effect is not open to companies who want to ‘control’ the user experience and developer environment such as Apple, they can only enjoy the WHAT principle. Open mobile platforms, open access services and developers who services work across all devices will be able to exploit the WHO effect. The multiplier value of mobile is not in knowing WHAT you are doing (location and attention), but WHO you are doing it with. 

Second: user pre-acceptance and buy-in is critical – “Snooping” behaviour has already blown up in a number of companies’ faces. Users need to be certain that data will not be misused, sold on or otherwise exposed.

Third: trust is critical.  Is your Brand value on of trust and what will the user trust you for?

Fourth: regulation and law.  This is a black hole of debate

Fifth: this concept is deeply embedded in “web as a platform concept” This is a change from domains, destinations and portals. A way to understand this is to view that owning a top level domain such as www.news.com is not important.  Users will never visit this site, but rather interact with the data that comes from this source via Twitter, RSS feeds, readers, blogs and social sites.  The stats on your site are not important, but rather where you content is consumed and how? Customer ownership, as per caveat one, is not important – owing the customers data is.

Migrating some original work to here - first posted in May 2009

would you like your voice search to be added to your digital footprint? comments welcome on blog

one of the joys of the android phone and some other services is "voice search"

Applications are as obvious as:

- sitting in the kitchen needing to convert lbs to Kg, hands are dirty, but you can use voice search to find out

- driving along and needing to find directions or a phone number

- leaving a voice reminder to do some action later

However, would you feel the same about this (voice oriented) data and the search results being added to your digital footprint as one you typed in.  I am starting to explore why we feel differently about our voice conversations than typed data.   If adverting appeared for a kitchen scale conversion on your TV after your searched would you mind?

All views welcome.

Long book review of Obliquity by John Kay

Obliquity – Why our goals are best achieved indirectly

I read a lot and I add most of my books to my reading lists and sometimes I blog about the book and what I like, mostly because it acts as a reference for me in the future.  However, this book is different, I 100% recommend it and it is an 11 on the volume scale of 10.   Many thanks to Rory Sutherland for the recommendation.

Obliquity is the principle that complex goals are best achieved indirectly.  The book explains why the happiest people aren’t necessarily those who focus on happiness, and how the most successful cities aren’t planned. And if a company announces shareholder return as its number one goal, perhaps we should beware: the most profit-orientated companies aren’t usually the most profitable.

Paradoxical as it sounds, if you want to go in one direction, the best route may involve going in another.  All that management theory of direct is undone in the book and it comes back to how to bring a team with you without telling them what to do.

 Obliquity is necessary because we live in an world of uncertainty and complexity; the problems we encounter aren’t always clear – and we often can’t pinpoint what our goals are anyway; circumstances change; people change – and are infuriatingly hard to predict; and direct approaches are often arrogant and unimaginative

John shows how we can apply the principle of obliquity to our own lives (why ‘muddling through’ can sometimes be the answer).

20 years after my MBA, here is a book that says that all those direct concepts they taught me provided a great framework, but as I have discovered anyway they would not help me enjoy work, that I have discovered myself and this book confirms what I have been doing.  This is not a self help book for accountants; it is a great book for entrepreneurs.

Here are the best bits for me, but in reality this doesn’t do the book justice.

Page

Quote

Comment

Perface

Our customers did not use these models for their decision making either.  They used them internally and externally to justify decisions that they had already made

So very very true of most consulting - where is the true value add of direct?

25

Philosopher Alasdair MacIntyre

"a fishing crew may be organised and understood as a purely technical and economic means to a productive end, whose aim is only or overridingly to satisfy as profitably as possible some market's demand for fish [..] Not only the skills, but also the qualities of character valued by those who manage the organisation, will be those well designed to achieve a high level of profitability.  And each individual at work as a member of such fishing crew will value those qualities of character in her or himself or in others which are apt to produce a high level of reward for her or himself.

Is sustainability achievable if we teach this?

27

Jack Welsh  "The job of a leader and his or her team is to deliver to commitments in the short term while investing in the long term health of the business  [..]  Employees will benefit from job security and better rewards. customers will benefit from better products or services. Communities will benefit because successful companies and their employees give back.  And obviously shareholders will benefit because they can count on companies who will deliver on both their short term commitments and their long term vision.

The roads to profit are not always direct.  Is profit maximisation a primary even a goal.

40

An old story tells of a visitor who encounters three stonemasons working on a medieval cathedral, and asks each what he is doing.  'I am cutting this stone to shape,' says the first, describing his basic actions. 'I am building a great cathedral,' says the second, describing his intermediate goal. 'And I am working for the glory of God,' says the third, describing his high-level objective. The construction of architectural masterpieces required that high level objectives be pursued through lesser, but nonetheless fulfilling, goals and actions.

Should we all have higher level objectives, or do we even need to understand them?

79

No one will be buried with the epitaph "he maximised shareholder value"  The epitaph of men such as Ford, Allen, Disney, Jobs reads instead: "He built a great business, which made money for shareholders, gave rewarding employment, and stimulated the development of suppliers and distributors by meeting customers' needs which they had not known they had before these men developed products to satisfy them.'

Approaching high -level objectives in an oblique manner, they achieved many supporting goals

82

The actions of the man who buys us a drink in the hope that we will buy his mural funds are formally the same as those of the friend who buys us a drink because he likes our company. But it is usually not too difficult to spot the difference, and the difference matters.

‘Honesty is the best policy, a man who acts on that motive is not an honest man,’ wrote Archbishop Whately. If we deal with someone for whom honesty is the best policy, we can never be sure that this is not the occasion on which, perhaps after many years, they will conclude that honest is no longer the best policy.

We do better to rely in people who are honest by character rather than honest by choice, because character is enduring and predictable but polices are not.

83

The foresters saw the tress, but not the wood.  You cannot necessarily deduce that properties of the whole by adding up the properties of the individual parts

86

Goodharts Law, who observed that as soon as government adopted monetary targets the aggregates they targets changed the meaning and significant

You get what you measure

87

The stonemason committed to the glory of God will build a better cathedral than the stonemason who is motivated entirely by the bonuses offered and scourges threatened by the employer

Working on translating this into goals for CEO and shareholders

97

These latter problems (geopolitical, complex business) are best tackled not by moral algebra, but obliquity; they involve high-level objectives archived through adaptation and iteration, with constant rebalancing of incompatible and incommensurable components that are imperfectly known but acquired as the process foes on.

100

I have never seen an analysis that didn't define the businesses the executives liked as stars and the ones they didn't want as dogs. 

So true – you get what you pay for.

104

Such failure of imagination is inevitable. If you could have anticipated the functions and uses of the personal computer, you would already have taken the main steps towards inventing it.  To describe a future political movement or economic theory or line of philosophical thought is to bring it into existence.  Most of what will be important in the future is outside our knowledge; it exists only in the future. The direct approach demands a capacity for prediction that we can never possess.

Any large corporate – read this again and again.  When it still makes no sense, buy start-up.

122

I described a spectrum of problems.  At one end were those - like noughts and crosses - best solved directly; at the other were those - the pursuit of happiness - best achieved obliquely. There is an analogous spectrum of decision-making styles, from direct to oblique.

The direct decision maker perceives a direct connection between intentions and outcomes; the oblique decision maker believes that the intention is neither necessary nor sufficient to secure the outcome. The direct problem solver reviews all possible outcomes; the oblique solver chooses from a much more limited set. The direct problem solver assembles all available information; the oblique decision maker recognises the limits of his or her knowledge. The direct decision maker maximises his or he objectives; the oblique decision maker is continually adaptive.  The direct problem solver can always find an explanation for his of her choices; the oblique problem solver sometimes just finds the right answer. The direct decision maker believes that order is the production of a directing mind; the oblique decision maker recognises that order emerges spontaneously – no one fully grasps it. The direct problem solver insists on consistence, on always treating the same problem the same way; the oblique problem solver never encounters the same problem twice. The direct decision maker emphasises the importance of rationality of process; the oblique decision maker believers that decision making is inherently subjective and prefer the emphasise good judgement

Corporate vs entrepreneur

126

A prisoner of brutal and arbitrary captors, Stockdale had unusually little control of his fate. But accounts similar to the Stockdale paradox are reported by survivors of other extreme experiences. One lesson from these great survivors is that realistic possibility of accomplishing high-level objectives even without a knowledge of future states or any control over current actions

Away days may not be good at setting the new agenda!

128

The most successful twentieth-century US president, Franklin D Roosevelt, understood very well that goals and action must constantly be revised if high-level objectives are to be achieved. Roosevelt described his approach as one of ‘bold, persistence, experimentation’. ‘Try something,’ Roosevelt went on. ‘If it fails, admit it frankly, and try another.’

129

Roosevelt, like Lincoln before him, understood that the scope of this authority was inescapably limited by the imprecision of his objectives, the complexity of this environment, the unpredictability of the reaction or others and the open-ended nature of the problems he faced. All these factors mean that even the most powerful men in the world must proceed by choosing opportunistically from a narrow range of options.

Liking this

135

Suppose I went swinging off my course and came in two days late, and they asked me ‘Where have you been all that time, captain?’ What would I say to that? ‘Went round to dodge the bad weather,’ I would say. ‘It must been dam’ dab.’ They would say. ‘I don’t know, I’ve dodged clear of it.”

The hero is not the captain who sails obliquely round the storm but he captain who takes his ship through it.  The diplomats who might have dissuaded an invasion of the Falklands through oblique approaches would not have been congratulated on their achievements, but the politicians who attacked the resulting crisis directly were admired for the resolution.  The intelligence agents who anticipated an attack on the Twin Towers were not praised for the prescience, and the risk managers who warned banks about the impending nemesis were fired.  It is good for reputation to succeed against the odds. But is often better for reputation to fail against the odds than to improve them.  IN an uncertain situation the effect of improving the odds is never obvious either before the vent or after it.

137

And yet the success of obliquity remains paradoxical.  Surely you must do better if you intend to achieve something than if you don’t?  The metaphor of the blind watchmaker illustrates that the answer to that question is often no.  If the environment is uncertain, imperfectly understood and constantly changing, the product of a process of adoption and evolution many be better adapted to that environment than the product of conscious design

Agile software design

150

Not long ago, even people who experience it did not believe it.  Like the bewildered Russians, they found it self-evident that things would work better if someone was in charge. … Many people who seek to build ever more centralised business organisation, or to institute a global financial architecture, still do not really take the implications of this evidence on board

Is Google truly open?

151

Hayek observed that: “nobody has yet succeeded in deliberately arranging all the activities that go on in a complex society. If anyone did ever succeed in fully organising such a society, it would no longer make use of many minds, but would be altogether dependent on one mind; it would certainly not be very complex but extremely primitive – and so would soon be the mind whose knowledge and will determined everything

The Matrix will not work and no one can  rule you, but can a complex state.  Is there a role for mirrors?

154

Yet for years I (John key) struggled with the idea that if profit could not the defining purpose of a corporation, there must be something else that was its defining purpose.  If business did not maximise profit, what else did it maximise? Iw as making the same mistake as those victims of the teleological fallacy who struggled for centuries with question like “what is a tiger for?”  Tigers are good at being Tigers – that is it.

There is no defining purpose of these activates distinct from the activates themselves. Those who direct business must try to balance a multiplicity of objectives and meet the many and incompatible demands that individuals and other organisation make upon them.

Business do not maximise anything. The most successful business leaders like Marks or Walton or Gates pursued the unquantifiable, but entirely meaningful, objective of building a great business. 

Am re-thinking some objectives for 2011

157

The theory of rational choice dominates economic thinking today, and its influence has spread to politics, psychology and sociology. By denying maximisation, we deny relational choice, obliquity therefore contradicts the theory that has been the most influential doctrine in the social sciences for at least 40 years

So I have only been taught one method – shame on the system.

158

Rationality is defined as consistency, and consistency is formally equivalent to maximisation. So rational individuals are necessarily engaged in a process of maximisation.  If there is a flaw in this argument it must lie in the equation of rationality and consistency.  Behaviour may be consistent, but not rational in any ordinary sense of the word.  To commune every night with fairies at the bottom of the garden is certainly consistent, but hardly rational.  But even if it is possible to be consistent but not rational, surly it is impossible to be rational but not consistent.

Sometimes we want things that are incompatible. We want to eat cream cakes, but also remain slim and fit.  We want to give up smoking,, but was also want another cigarette. We want a secure retirement but we do not want to save. Our expression of preference seem to be contradictory

159

There is nothing irrational about want incompatible things.

Irrationality does not even lie in resolving incompatible demands in different ways at different times. Visiting a foreign city, you have a recommendation for a local restaurant. You go there, and you like it. You choose fish, and it is excellent – so good that you return the following evening. And now you choose lamb, why? Maybe you have acquired new information since you previous choice. Maybe your tastes have change.  But neither of these explanations is necessary and neither is probable. Obliquity says that you want whatever is currently the subject of our direct pursuit.

Is a digital footprint a good prediction tool?

160

But these ‘explanation of why your behaviour is consistence are hopeless.

166

Judgement and experience tech us which models to use on which occasions

172

Different people will form different judgements in the same situation, not just because they are have different objectives but because they observe different options, select different information and assess that information differently; and even with hindsight it will often not be possible to say who was right and who was wrong. In a necessarily uncertain world, as good decision doesn’t necessarily lead to a good outcome and a good outcome doesn’t necessarily imply a good decision or a capable decision maker. The notion of a best solution may itself be misconceived.

Should learn this as I will quote it.

173

The skill of problem solving frequently lies in the interpretation and reinterpretation of high level objectives. 

Steve Jobs reinterpretation of Morita idea of the iPod, solutions to problems people did not know they had.

174

To understand obliquity requires perceiving that the answer to that question is to present not an alternative solution but an alternative way of thinking.

… based on a different set of values and beliefs

175

(when) The direct approach is simply impossible, do something and start. Don’t solve it all at the outset

the value is who you are doing it with....

 
 
For sometime now I have been advocating that there is more value in knowing who you are doing stuff with than you on your own.  Orange at Glastonbury have done something special.  With a very high res photo of the crowd you can confirm you were really there and start to link up with who else was with you. This is also a foundation of digital reputation, I said I was there and now can prove it, using "open technology"  Yes the ticket sellers know who you are and could sell you next years concert and other interesting gigs, but now the world knows who you are and what you like ( assuming you want to tag yourself in)  eHarmony wants to match by preference,  this allows you to find that match after the event.  http://glastonbury.orange.co.uk/glastotag/
It also looks like some where not there - but are tagging themselves into the photo in odd places and dual tagging.  Cool just to have the "badge"
Not so great if you happened to tread on someone's toes, who is now trying to find you.... but so what.

Orange dropping all you can eat - will this effect advertising

FT - Orange weighs dropping 'all-you-can-eat' mobile data plans (Source TelecomPaper)

 

Orange is thinking about changing its pricing approach for mobile internet services because 'all-you-can eat' plans were 'unsustainable', France Telecom-Orange CEO Stephane Richard told the Financial Times. If it starts charging heavy mobile data users more, the operator would be following AT&T and O2 UK in this direction. Richard explained that Orange thinks, as do its peers, "that the explosion of data traffic on mobile networks cannot be managed with unlimited pricing plans". The operator "must consider different approaches combining limited access and quality of service", he added. The CEO also revealed that France Telecom could spend as much as EUR 7 billion on acquisitions to meet its stated objective of doubling emerging market revenues over five years. While stressing that there were no ongoing talks, he said France Telecom was 'potentially interested' in Orascom Telecom's African assets.

 

I question if the operator has thought through this strategy - http://blog.mydigitalfootprint.com/could-consumer-ignorance-hurt-mobile-advertis

 

 

Could consumer ignorance hurt mobile advertising?

Summary

Virtually unlimited mobile usage tariffs means that advertising is perceived as free from the users perspective, as there is no additional cost of bandwidth to the user.  These tariffs have lead to an unprecedented growth in mobile applications and the emergence of  a new eco-system. However,  "all you can eat" pricing models for mobile have become increasingly risky with the advent of new devices and operating systems from Apple and Google.  With the prospect of a return to a pay per something, users may change their view of "free" advertising and this could lead to a change in behaviour, as they will be un-willing to pay for the bandwidth for the advert.  Whilst this may seam ridiculous to anyone who understands, explaining to the user they have the wrong perception or that this is not the reason for a significant monthly bill, could be difficult.  This viewpoint therefore opens the debate; "Could some selfish business decisions be destroying the mobile eco-system that has just been created and what scenarios are worth considering?"

Unlimited Growth

We have all benefitted from the introduction of unlimited mobile tariffs.  Voice, SMS and data usage has exploded.  Economically it made sense to the operator as they had spare capacity and in reality "unlimited" has caps but these caps are set so high that a user was unlikely to reach them.  

Mobiles (smart phones) have evolved and today, web site and applications (inc games) for mobile are now built with an advertising model in mind and with this has come the download requirements of, in some simple cases, banner ads to some thing complex such as video and multimedia.  With network improvement, the ability to deliver a near web experience, advances in connection management and now the iPad, users can find it easy to get close to, or pass their "unlimited" data caps.

Mobile applications driven by adverts work and the application method of delivery made up for a number of early shortfalls in network constraints and mobile web browser capability. However, due to the improved experience and performance of the mobile there are now less reasons for a Brand to have a specific mobile version.  However, in this move adverts are also served in full form from the web to the mobile.  This transition will become more important as Apple looks to force applications to use their own iAd serving technology and analytics.  These forced change are likely to speed up the migration from mobile specific application to webapp - just adding a web address and icon to the mobile desktop and also removes the dependence on apps stores as the controlling point.

So what has changed?

Apple launched OS4 with a 7th temple, which is the ability to deliver a fabulous advertising experience as "most of it sucks".  The move is to deliver emotion and interactivity as this will help the developer community who want to build advertising revenues in exchange for free apps.  This advertising experience does come at a cost - bandwidth. OS4 also introduces background processing (multitasking), "yippee!" says the developer. However this means that the phone can hack thought the battery really quickly and chat to the network constantly.  Pushed updates become streaming.

Changes to the OS and how much data phones require for a great experience mean that the unlimited data package become very attractive to the user and advertiser as they don't care about bandwidth, developers love it as they can deliver the real time applications and services they want for mobile. However, for the operators who are already struggling with capacity, this becomes a real headache and introduces value chain conflicts.

Implications

If the operators choose, and the evidence is currently pointing to this fact, to remove from the market unlimited packages, or such a high cap it is perceived as unlimited and lean back towards some form of pay-by-how-much-you-eat model then there could be some significant changes to the market as the users, device and applications guys try to reduce a swing to a doom loop scenario.

Here's the crunch.  For those reading this we can find arguments why all of the above is not a concern, however, the issue may not be the reality of the situation we find ourselves in, but from the user perception, it could be very real.  If the user believes that there is a cost, irrespective of reality; they may change behaviour!

The simple newspaper headline that reads "Your paying for advertising" is difficult to counter with the argument that informs a user how big an advert is in bytes and that there is a trade for free services.  If the reason for adverts is interactivity and engagement then a technical explanation may not be that useful or that someone is exploiting your data to sell you more.

Behavioural or targeted adverting depends at some level on understanding the user which is an output from the analysis their data - My Digital Footprint.  If users find that the real monetary cost of sharing that data is too high, it kills the input.  If users find that the real monetary cost of engaging with ads is too high, it kills the value.

 

Given that eco-systems require trusted players who can balance risk and reward together and be reliant on complex inter-dependences; mobile is no different.  However, it would appear that some of the players are trying to play for themselves rather than the community.

Scenarios to ponder over coffee

  1. Restrictive

in this scenario the user decides to restrict their use and applications to focus on a few that are a priority and will not experiment or discover.  This could have a significant impact on social media tools and applications.

  1. Blockers

in this scenario the user decides that they are unwilling to pay for the bandwidth and introduces a blocker service to prevent their costly bandwidth being used.  This in turn destroys the fee advertising model and an outcome could be that the user ends up paying for applications.

  1. Selective

in this scenario the operator decides to become selective about which handsets can have unlimited (capped) data plans and which handsets are forced to have a PAYG data pricing model.  This forces users into a choice and device manufactures start to work with the operators to produce devices in tune with the network to gain a competitive advantage.

  1. Side-Load

in this scenario PAYG could lead to more applications being downloaded by sideloading on the PC or by WiFi. If so, developers could be affected in ways that are hard to predict. But it may affect apps being advertised on the device.

  1. Doom loop

in this scenario the operator changes the pricing and this in turn creates all the dis-benefits for the advertisers, device guys, applications developers and users.  Mobile slows and mobile operator valuations dive.

  1. Intelligence

in this scenario the middleware and platform companies work with the operators and seek out methods and processes to compress, reduce, focus, profile and select data and services that should use the limited wireless network, that is expensive.  Can data/ ads be cashed locally on the device and selected as needed or side load them using wifi or other alternative networks, or put on hold until bandwidth cost is not an issue.

  1. Advertising pays for the bandwidth

a somewhat difficult scenario to comprehend, but in this scenario the advertiser takes on the cost of the bandwidth.  However this is full of complex conflicts such as - I want to deliver the best ad, but it costs to much.

  1. No change

in reality - this is not a scenario.

Reality check

Those reading this know that 'most' mobile advertising is very bandwidth lean, as it a blend of:-

i)                 an invitation with the consumer to interact, normally in the form of a banner. The reality being that for most consumers most of the time, this is likely to be negligible in terms of cost across a month.

ii)                a landing page, which they land on if they click on a banner - again negligible.

iii)              call to action at the landing page, which unless it involves rich media (eg video), is also likely to be small in terms of bandwidth

We know that users respond differently to ads and services on a mobile to the web but it is possible that the Apple OS4 interruption of advertising will be heavier on bandwidth, however, over 50% of iPhone ads are viewed over WiFi (2010) probably driven by speed as opposed to cost reasons. One could postulate that this trend would therefore be accelerated with the re-introduction of pay-as-you-go pricing!

All that said, users are users and their perception is how we need to live our business life - from their view point not ours.  Reflecting on the original question; "could consumer ignorance hurt mobile advertising?", one could say this is the wrong question and it should be "is the mobile eco-system strong enough to defend itself against selfish desires of certain key players?"

Starbucks adopts "My Digital Footprint" business model

Coffee giant Starbucks will begin offering free wireless Internet service at its 6,700 US stores next month and free digital content through a partnership with Yahoo!  Starbucks said the free Wi-Fi service would be available from July 1 through US telecom giant AT&T. Starbucks currently offers two hours of free Wi-Fi to customers who have a Starbucks card.  The coffee chain said it also plans to offer free digital content to customers, including free access to websites such as that of The Wall Street Journal, which currently charges online readers for full access to WSJ.com.

The "Starbucks Digital Network" will launch this fall and will offer "free unrestricted access to various paid sites and services," Starbucks said in a statement.   It said launch content providers will include Apple's iTunes, The New York Times, Patch, USA Today, The Wall Street Journal, Yahoo! and Zagat.

So what and where is the model?  Each customer will log in with a unique identifier which will create a customer specific digital footprint. Obvious next step is to mine the data for customer specific preferences and analysis to deliver targeted advertising.  

Assuming they are allowed to inspect your data, the question is will Starbucks be able to determine who you drink coffee with and mine your social graph?