Creative Destruction: Killer Apps and Killer Devices

The term "killer app" typically refers to the software application that is regarded as the sole driver for mass adoption of a particular hardware device. In the early days of personal computing, that killer app was VisiCalc. This software program is widely regarded as the spark that ignited the personal computing explosion.

In more recent history we are experiencing a complete reversal of the order in which the smart phone - in particular the iPhone - would seem to be the "killer device" that is regarded as the sole driver for mass adoption of an entire class of software applications. In the process, whole categories of products and services are falling by the wayside.

Back in the fall of 2006, I was sitting on the commuter train taking me to my job in Portland, Oregon and reading my daily edition of the Wall Street Journal. Somewhere in the middle pages of the Tech section was a mention of Apple's intention to introduce their cell phone to the market "sometime in the spring of '07." (If you recall, back then Apple was riding high due to the success of its "killer device", the iPod.) The article went on to say that Apple's version of the mobile device would include a fully functional web browser and an email client that fully supports HTML-formatted email. By the conclusion of that article I immediately knew that history would be in the making for two reasons: (1) this was the very first smart phone targeted directly to the consumer, and (2) Apple's core competence is Useability - with a capital "U".

Here we are three years later and the iPhone has proven to be the killer device and is now the Gold Standard of requirements for all mobile devices. The smart phone is truly the killer device because it has actually killed entire categories of hardware devices. First went digital cameras and then PDAs. More recently it appears that dedicated GPS devices are becoming extinct. Some people have suggested to me that perhaps satellite radio may be the next casualty. And now this just in: B of A is shutting 600 of their banking branches. Reason: online and mobile banking trends reduces needs for physical presence.

We are truly experiencing what Joseph Schumpeter called "Creative Destruction".

Privacy vs. Publicity

Mobile devices present unique opportunities in marketing because they identify the owner's geospatial position at all times. Location-based Services (LBS) is the buzz word these days as marketers are scrambling to find was to reach people with relevant advertising based upon where a person's mobile device is at any moment in time. The reasoning is that mobile devices have become so ingrained into people's lives that the devices are virtually inseparable from the owner. Ergo, if you know where the device is, you know where the owner is.

There is a debate going on in the wired world regarding online privacy whose outcome may have an impact upon location-based marketing in the wireless world. Earlier in July, a federal judge in Seattle upheld an earlier ruling that an IP address is not personally identifiable information. Says US District Court Judge Richard Jones, "In order for 'personally identifiable information' to be personally identifiable, it must identify a person. [um...yeah...] But an IP address identifies a computer."

Now his ruling was in a different context - in which the defendant in the class-action lawsuit is none other than everyone's favorite Big Brother. Apparently back in 2006 there was a software update that automatically installed anti-piracy software. The pain point is that the company violated its own end user agreement by harvesting IP addresses in the process.

But on the other side of the pond, the European Union in its arcane wisdom ruled quite the opposite. In their opinion, an IP address is personally identifiable information. In the same light, the New Jersey Supreme Court ruled that ISPs cannot disclose a subscriber's IP address to the police without a grand jury subpoena.Though this ruling was in the context of a criminal matter but it does set the legal precedence to be extended to the seamy (Under)world of Marketing.

If people are uptight about somehow being traced by an IP address on the wired Internet to the degree of possible legislative intervention, then it stands to reason that these same people's uptightness will extend to the wireless world - specifically with impact to location-based services. Are legislative restrictions on mobile marketing opportunities using LBS looming as a dark cloud in the horizon? True there are smartphones that have settings enabling one to disable the location-broadcasting capability of their devices. But there are enough people who don't want to take control of their own lives and prefer instead to dictate the lives of everyone else around them. Ya just never know what could happen.

So now I'm just scratching my head. How can a person be concerned about his whereabouts being tracked from his computer's IP address when at the same time, he's telling the whole world where he is and what he's doing at every moment of the day?!

Here's a fer instance: Twitter. It is so easy for me to know in real time exactly what city people are in, what restaurant they are dining in, what conference they are attending, and what room they are currently in within their own home. How do I know? 'Cause they are tweeting about it and telling the whole world, that's how.

And Facebookers? Heck! Not only do they tell the world where they are at and what they are doing, but they post pictures of themselves doing it too!

My point is this: technology is not the villain. Facebook and MySpace are not the villains either. It really doesn't matter what information we enter into our social site profiles or whether the information is accessible via API. We already broadcast so much about ourselves by what we say with our own fingers - on Twitter, in our blogs, and on our Facebook/MySpace/Bebo/etc. pages.

Companies like Zeta Interactive and Unbound Technologies build profiles of people based on publicly available information and make that intelligence available to marketers to build targeted, timely, and relevant messaging. So my advice is, if you're worried about what a marketer might know about you, then at the very least make sure you are selective about what you say about yourself on your social page and in your tweets.

And to the lady sitting three rows back from me on the bus: if you don't want me to know everything about what's going on in your life, your brothers's life, your pastor's wife's life, and your dog's life, then either lower your voice or hang up your cellphone and shut up!

Why Mobile Email Marketing Does Matter

People are using their mobile devices to talk to their friends and family, browse the Internet, to watch video and live TV, to take pictures and movies, to communicate with their peeps on social networks, to find out where the heck they are and where they are going, to play games, to buy things online, to broadcast the banalities of their lives in 160 characters or less, and much more. If people are using their mobile devices for so many things integral to their lifestyle, then how could it be possible that they would *NOT* be using their mobile devices to read and send email? I'm just asking a rhetorical question, actually. The truth is that email is the Number One data activity that people use their mobile devices for.

Why, then, are mobile marketers ignoring mobile email? Why are email marketers ignoring mobile email?

I subscribe to six of seven email newletters all tracking the mobile marketing industry. I have my Tweetdeck configured to display all tweets relating to mobile marketing and email marketing. No discussion at all about mobile email marketing. Nothing. Nada. Zip. Zilch. Bupkis.

Mobile email marketing has as much to do with traditional email marketing as mobile web sites have with traditional web sites. Savvy interactive marketers know that mobile web sites are not simply traditional web sites shrunk down to a teeny tiny screen. Likewise email marketers should regard mobile email as a totally different animal complete with a totally different strategy and totally different call to action. Mobile marketers need to realize that SMS and ad banners are not the be all and end all for the mobile channel.

Email marketers need to understand something about the medium that their message exists within. Computers are used to display the emails that they send by the billions to their subscribers. (I'm talking about legitimate retention email marketers; I'm purposely ignoring all those spammers out there.) Computers are not portable. They are tethered to either a phone line or an ethernet cable. Because of the immobility of computers, people are reading emails only at certain times of any given day. Laptops and netbooks? Wifi and Wimax? Oh puh-lease! Try using your laptop while standing in the subway. You get my drift...

People use their mobile devices to read their email anytime and anywhere; and I do mean anywhere. As an email marketer, I should know this. And further more, I should craft messaging specific to these on-the-go people. What message should I have for them? Perhaps an email displaying pictures of products at my retail outlets that -oh by the way, since they are out and about, why not drop by for an exclusive time-limited discount? Perhaps a news article with pictures and link to online video for late-breaking events? Perhaps pictures of my late night menu with driving (or staggering) directions to the nearest diner?

Mobile marketers likewise need to understand the medium that their messaging exists within. Text messaging enjoys the immediacy of response because people are more likely to quickly respond to a text message than check their email. But this advantage is short lived. I spoke with someone from Spain recently who said that he receives so many text messages that he ignores them now. Also, just how rich of a customer experience can you have in just 160 characters? Text-to-vote, text-for-coupon, etc. is nice, but it's not enough.

As a mobile marketer, I should think beyond 160 text characters. Have I really counted the cost of SMS messaging? How much to provision a short code? Do I really have $500 to $1000 to blow each month just on the short code alone? How spontaneous can my campaigns be with 6 to 8 weeks for every single wireless carrier to review my campaign brief and approve it to run on their network? How much longer can I keep paying for the cost of sending and receiving text messages? How much longer can I afford to ignore the fact that text messaging costs me 10 times per message compared to email messaging? Also, not every one has an all-you-can-eat text messaging plan. In fact, 45% of mobile device owners don't. This means that more than 4 out of every 10 persons I send a text message to actually pays to receive that message when at the same time, email is free. How about triggering the sending of an SMS message based on the response or non-response of an email message? That will greatly cut down on my costs and add some smarts to my SMS messaging program. What about mobile email to add to my mobile marketing mix?

Mobile email marketing does matter. It's time to break down the barriers between these two channels in the minds of the marketers. It's time for creative thought. Both text and email messaging can be highly complimentary on the mobile device. Enterprise marketing platforms should enable marketers to construct effective integrated cross-channel campaigns in which subscriber data is available for targeting, personalization, and reporting across both communication channels. Responses or non-responses to messages in one channel should be used to trigger follow-ups in the other channel. Give your customers options in how they want to receive communications from you, and what types of communications they want to receive depending upon each channel.

Have you experienced any effective campaigns combining email and SMS? Leave me your comments. I'd like to hear from you.

Beware of Co-Reg in Mobile Marketing

MediaPost yesterday reported that a new organization, Mobile Advocacy Coalition, was formed. It intends to ask the Federal Communications Commission to specify that technology companies that act as "mere conduits" aren't liable for wireless ads that violate the Telephone Consumer Protection Act, according to the group's attorney, Scott Delacourt, a lawyer at Wiley Rein.

The main reason why this lobbying group was formed was response to the Ninth Circuit Court of Appeal's recent decision in a lawsuit against Simon & Schuster and mobile marketing company ipsh!.

In a nutshell, Simon & Schuster are the defendants in a $90M class action lawsuit stemming from a 2006 incident. Laci Satterfield filed the suit after her young son is said to have received a text message in the middle of the night warning him that the "next call you take may be your last." The text was a promotion for Mr. King’s book, "The Cell." Though the text message was sent in the middle of the night, I'm not aware of whether the child woke up in the middle of the night to read said text message.

First of all, you should get to know a bit more about the Ninth Circuit Court of Appeals. Headquartered in San Francisco, this is the same group of enlightend individuals that ruled in 2002 that it was not legal to recite the Pledge of Allegiance because it contains the words "under God".

At the heart of the matter is the federal Telephone Consumer Protection Act (TCPA) that makes it unlawful to generate automated calls to mobile phones without the "prior express consent of the called party." The Ninth District Court of Appeals holds that text messages sent to mobile phones is the same thing as voice calls. The TCPA applies to automatic telephone dialing systems (ATDS), equipment that has "the capacity to store or produce telephone numbers to be called, using a random or sequential number generator and to dial such numbers."

But here's where the hair splitting begins. The appellate court wasn't concerned with whether the system used to the send the text messages was an actual ATDS. They felt that the proper question to ask is whether system had the capacity to be used as an ATDS. With no evidence presented during the original trial to the contrary, the court overruled the original judgment and ordered the case back to trial.

The sequence of events that lead to that fateful text message being sent on that fateful night is commonly known as "co-registration". Ms. Satterfield did not directly opt-in to receive text messages from Simon & Schuster. She became a registered user of Nextones in order to receive a free ringtone. During the registration process, she checked a box which read, in part: "I would like to receive promotions from Nextones affiliates and brands" - boilerplate verbiage used in co-registration. The appellate court rules that Simon & Schuster is neither an affiliate of Nextones nor is it a brand of Nextone. Therefore, the text messages they sent in this campaign were unsolicited - a violation of the TCPA.

Co-Reg is a widespread tactic used for lead generation especially in email marketing. It is one means of generating new leads and customers. But it's also one source of messages that recipients classify as spam. Irritating as it is, email spam is nevertheless tolerated a lot more than SMS spam - partly because mobile phones are considered much more personally than the so-called personal computer, and also partly because people originally paid for each text message while email is free.

Mobile marketers should continue to follow this case because it has direct bearing on our industry. While co-registration may be an acceptable lead generation tactic used in email marketing, the case of Satterfield v. Simon & Schuster, Inc. indicates that mobile marketers should proceed with extreme caution if not avoid it altogether.

Why Genachowki is Good for Mobile Marketing

The news of the day is that Julius Genachowski is getter closer to becoming the new chairman of the FCC. Mobile marketers should take special note to this nomination proceeding because the beliefs and the decisions of the FCC chairman have a direct result upon this nascent industry. Why? Because mobile phones at their most basic definition are radio transmitters and receivers. As such, governmental regulations regarding mobile phones fall under the broad umbrella of the FCC. This agency was created by the Communications Act of 1934 which called for the creation of a governmental agency to regulate communications by radio and wire. Since the government considers all cellphones to be radio receivers and transmitters, their usage is controlled by the same arcane rules and regulations that apply to AM and FM radios. Therefore any ruling that the FCC makes will have an impact upon the mobile marketing industry.

To get some idea of what's in store, take a quick look at Genachowski's background. He's a former legal counsel of the FCC, having served for former chairman Reed Hundt. He also served as a high-level executive at IAC/InterActiveCorp for a number of years. IAC is the entity behind a number of well-known Internet brands including Ask.com, Match.com, Evite, Citysearch and Urbanspoon. So one would hope that during his time there, he's developed a keen understanding of how real the Internet is as a facilitator of commerce. One would equally hope that he will carry into the FCC this same understanding. Already he's given some indication that "he gets it" as he said last Tuesday that he is in favor of the Obama tech plan which calls for the U.S. to increase its development of broadband Internet and reform a $7 billion federal phone-subsidy program to help cover the costs of offering broadband in rural areas. This means that Internet TV and radio have an opportunity to develop further under the Genachowski administration.

Genachowski also supports network neutrality. This is a good thing because it promote a free market underhindered by restrictive practices of ISPs and telecom providers. In 2005, during the Bush administration, the FCC supported network neutrality and declared that consumers are entitled to access the lawful Internet content of their choice, run applications and services of their choice, and plug in and run legal devices of their choice. The FCC also said consumers have a right to competition among network providers, application and service and content providers. With another supporter of network neutrality in the FCC under the Obama administration, expect to have more rulings in favor of the consumer.

As reported in the LA Times, the FCC is expected to begin formal investigation as to whether consumers are harmed by exclusive deals between handset makers and wireless telephone companies. All you Palm Pre and Apple iPhone owners should take note of this. When asked by the Senate Commerce Committee, Genachowski said that he would "ensure that the full record on the issue is reviewed and act accordingly to promote competition and consumer choice."

What does this all mean to consumers though? For one, it does not necessarily mean that breaking AT&T's monopoly on the iPhone with its subsidy automatically leads to higher prices. The subsidy of the device can easily be spread out over more wireless carriers.

Mobile marketing needs mobile devices and it needs mobile broadband. What's happening at the FCC will play a huge role in how this industry shapes out over the long term. Keep your eyes and ears open! Stay informed!

Are Marketers REALLY Ready for Cross-Channel?

I recently purchased a couple of items last weekend at Sears. The checkout lady asked me if I wanted to sign up for Sears' email marketing newsletter. Huh? Usually I'm asked if I want to sign up for a Sears credit card and receive a 10% discount on the spot. Turns out Sears is really pushing their employees to sign up customers for the email newsletters - in fact, giving them incentives for doing so. Maybe this isn't a nation-wide drive, but it's certainly happening in my neck of the woods.

Acting on a tip, I went to the Sears.com web site to opt-in for text alerts on deals.


The text response was something that I'd expect following mobile messaging best practices. Good summary of what I opt-ed in for. Good explanation of how to opt-out.


But wait! What about an invitation to opt-in for email newsletters? Sure, sears2go.com is a nice mobile-optimized site. But what about using this text alert opt-in event as an opportunity to invite me to opt-in for email marketing?

To be fair, the web site features both email opt-in and mobile opt-in side by side on the same page. But why not use mobile messaging as a lead source for email messaging, and vice-versa? I also opt-ed in to Sears' email marketing campaigns and received the standard welcome email.



And, as I suspected, no mention of opting in for mobile events. A missed opportunity for cross-channel marketing!

I've been monitoring a lot of what marketers are talking about - both in their blog posts, their Tweets and so forth - looking to see if anyone is making the connection between mobile and email marketing. One thing is becoming clear to me: very very few mobile marketers are talking about email marketing and equally rare are email marketers talking about mobile marketing. For example, in her 200-plus page book, "Mobile Marketing Handbook", Dushinski devotes a mere 5 sentences to the subject of mobile email. In their almost 300-page book, "Email Marketing an Hour a Day", Mullen and Daniels are likewise a tad light on ideas for cross-channel marketing. But to their credit at least they do mention US Airways' tactic of combining Print and SMS as channels for generating opt-ins to email marketing.

So what's the deal? Could it be that agencies and corporate marketing departments have constructed walls of separation between mobile and email? Both are interactive online channels. Why aren't there more real-life examples of cross-channel marketing campaigns combining the best of SMS and email? Could it just be that marketers themselves aren't yet ready for cross-channel marketing? Are mobile marketers coming from backgrounds other than email marketing? Are email marketers keeping their feet firmly entrenched in their channel? Or perhaps the answer is the most simple: it's all still new and we're all still trying to figure it all out.

If you're a marketer in the interactive space, what's your forte? Mobile? Email? Both? Is your organizational alignment preventing you from implementing effective cross-channel campaigns? Do you have any real-life examples of effective cross-channel campaigns? Let me hear from you!

Life In Between the Spaces - Mobile Marketing Opportunities

I have just completed my analysis of a simple survey I ran in early May. I sent out a series of tweets inviting anyone to take my Mobile Usage survey. Some of my tweets were focused to attendees of various marketing conferences that were taking place at the time. Considering that I wasn't giving anything away to reward survey responses, I'm pretty happy with the 42 that I got. Here's a summary of what I found. Compare my survey respondents with your personal observations to see how much they line up.

As expected from the audience that I targeted with my survey, the majority (74%) of respondents said that their mobile device was a smartphone - with Blackberries and the iPhone combining for 68% of all devices.



If this percentage is indicative of the whole population, then I would say that these results seem to support the consensus opinion that WAP is going away as more and more people are purchasing smartphones for their personal use along with the rich Internet browsing experience that they provide.

I asked what people use their mobile devices for, giving them a list of 11 different tasks, with an additional 12th option to fill in. Talking on the device was the #1 usage (it is after all a phone), followed by text messaging, reading email, surfing the web, and using the built-in GPS. The high percentage of people texting on their devices certainly is consistent with what we all know.

But, while the people use their mobile devices for a wide variety of different activities, they primarily use them for talking and for reading email. This finding supports other surveys similarly reporting reading of email being a highly common usage of mobile devices.

Mobile devices are truly personal - it is perhaps the most personal device ever. People interact with their mobile devices at all times during the day and night, using it to both fill in downtime between activities, and also as a defined scheduled activity itself. I especially love the 12% of the people who were honest enough to 'fess that they use their mobile devices while in the bathroom. (Yes, my hand is raised too.)

Which brings me back to the subject of email. People are interacting with their mobile devices "in between the spaces" of their lives. So when they are reading their emails, they are typically doing so less than 5 minutes each time. So just as people do snack in between meals, people are snacking on mobile Internet content in between times of consuming rich Internet content.

Some of the data seems to debunk a bit of posturing going on in the blogosphere lately regarding email and social media. There remains a strong correlation between people who surf the Internet (including social sites) and those who read email. Consider this:
- Of the people who don't use their mobile devices to read email none of them use their devices to surf the Net either.
- Of the people who do use their mobile devices to read email, almost all use them to surf the Net (91%). Of the people whose primary usage of their mobile devices includes reading emails, almost all also use their devices to surf the Net (86%).

- Of the people who don't use their mobile devices to surf the Net, some still use them to read email (25%).
- Of the people who do use their mobile devices to surf the Net, every single one of them uses their devices to read email.


So it would appear that all the talk about social sites replacing email is just that - talk. I believe that social sites and email are complementary communication channels, not competitive.

There is also a strong correlation between using the mobile device for reading email and for text messaging.
- Of the people who don't use their mobile devices for texting, half still use them to read email.
- Of the people who do use their mobile devices for texting, the majority also use them to read email (83%).

- Of the people who use their mobile devices to read email almost all also use them for text messaging (91%).


So what conclusions can I draw from my informal mobile usage survey?
(1) People use their mobile devices to snack on mobile Internet content in between the spaces of their lives
(2) Email reading is a BIG part of daily mobile usage activities.
(3) There is a strong correlation of usage between email reading, web surfing, and text messaging.

The final takeaway is that people are highly engaged with their mobile devices. Savvy interactive marketers must NOT treat SMS marketing as a vertical, stove-piped, siloed (call it what you will) marketing channel. Neither should these marketers treat email marketing as a stand-alone channel. Successful interactive marketers MUST recognize that owners of smartphones are a target rich group of people (I'm including myself in that mix as an iPhone owner) and that mobile cross-channel campaigns are going to be the big winners.

Email me if you'd like a copy of my survey results. I'll send you the results in a pivot table that you can slice and dice for your analytical needs. No personally identifiable information was collected in this survey.