The Retail Internet Of Things (IOT): Turning Your Store Into An App

Retailers are an innovative bunch. We adopt and trial new technologies at a more nimble rate that other verticals. In a world where shopper marketing, field marketing and consumer insights have all been merged into an unending list of “mobile path-to-purchase” solutions, the retailer gets an A for effort.

Before we celebrate our successes, let’s look at another vertical: Cities. Like stores, their consumers are changing, their services need to adapt. IBM invested approximately $350 million in smart city technology and marketing trying to reinvent the metropolitan centers globally and have perhaps made 10 % return on this effort. But 557,000 cities spend $4.5 trillion per year, 10% of the global GDP.

VP Schwartz head shot

According my colleague, Sascha Haselmayer, the CEO of CityMart in Barcelona, 0% of cities publish their needs, a mere 10% of cities engage with business that have new solutions and 70% only trust existing solution providers. Killer apps such as Shared Bicycles globally have taken 20 years to reach 0.1% of the market.

Why? Because cities look at a problem: Say, street lights for the blind and they focus on procuring a solution for street lights. Whereas, they should be looking to find a solution for the blind. Minnesota spent their budget on a talking street lights. Stockholm, on the other hand did not. It provided a device to its blind population that empowered them all the time (not just at street lights) and made them feel 90% less disabled and saved the city 20 million per year.

INNOVATORS UNITE!

Why am I talking about cities in an article on stores?

Because we need to understand the challenges we face and embrace what we do well in order to do it better.  Yes, are inundated with vendors that offer to change our world and it is a challenge to weed through the solutions and find pilots and trials. But we do.

I cannot tell you how many times I have sent an article on something that Jason Newport at Carat is doing with Macy’s and have been asked to investigate how we can do this in our store. Maybe it is because we feel that we are under siege in the retail vertical and need to trial and innovate?

Well to all the innovators that are reading this article, I want to ask you to explore a very simple sea change in the way you need to adapt the world in 2015. The retail mall, the city and the shopper are all about to change profoundly.

This change is not based on a technology as much as a new way of looking at the mobile landscape. Until now, we have seen the store as Minnesota saw their traffic light challenge: “How do we adapt our streetlights to service our blind population?”

Minnesota got their best and brightest on the task and solved this problem. However, we know that Minnesota should have asked a different question: “How do we best service our blind population?”

“Spend 90% of the time framing the question. And 10% on the solution,” as Albert Einstein once said.

Retailers are very good at finding solutions for “traffic lights.” We have trials and jettisoned countless solutions and won industry accolades for them in the process. We celebrate innovation but we often miss the ROI award.

THE APP STORE DILEMMA

What are the questions? Well perhaps they are:

  • “How do we drive more loyalty doorswing?”
  • “How do we better address showrooming in our stores?”
  • “How we build a better mobile app?”

Or maybe we need to refashion the questions with the independent, mobile empowered shopper at the center:

  • “How do I help the shopper find me?”
  • “How do I help the shopper reach the web through my portal?”
  • “What is a mobile app?”

Take our retail marketing departments. Our CMOs go to work every day and try to better position their products and services to the marketplace. They get to work and instead of marketing these products and services, they try and drive their app download.

Instead of marketing themselves they are marketing Apple.

Now, this understandable. Apple makes its money selling hardware. One of the reasons it has always succeeded is because it can bundle content seamlessly with an iPod or iPhone. To do this, Apple spends a large amount of its marketing dollars on helping developers. It publishes simple SDKs to help developers build better apps faster. Then they provide a virtual main street and allow retailers to publish their stores to their storefront.

There is nothing wrong with this; however, let me ask the following questions:

“What is a mobile app?” Could it be that our stores are apps? Could our shelves be apps? Could our products be apps? And the phone could be the trigger.

THE INTERNET OF THINGS

There is a new term in town, The Internet of Things (or IoT for those in the know). This is big. Why? Because it could force us to ask the correct questions.

The IoT is really an extension of good old machine-to-machine (M2M) communications. What the industry calls telemetry (tele – distance metry = measurement). With mobility, we have consumerized telemetry. Every modern phone has a compass, gyroscope, accelerometer ambient light sensor, proximity sensor, and many other ways of seeming sentient and smart. These sensors allow apps on your phone to also be smart and capture all sorts of information on the phone user and adapt accordingly. It also allows the app to transmit this data for medical, wellness, business needs to the cloud.

The phone was the first IoT thing. We took a rotary dial object, made it portable with a mobile network and then gave it all these smart sensors to allow it to be an ambient device.

In the IoT of 2015, everything you can shake a stick at has the potential of being an IoT thing. The lighting system in your store, the POS, the electric switches and garbage disposal units.  All inanimate things have the ability with sensor and business logic of becoming much more efficient and intelligent in their tasks.

So when a retailer looks at their store this year, do they want to think of putting their store on the app store or making their store into an app? When the digital web is becoming a physical web (See Google’s Github post: https://google.github.io/physical-web/),perhaps we need to repatriate the interactivity of our stores from the app store and infuse it into our bricks and mortar?

HOW DO WE MAKE OUR STORES INTO APPS?

Ah, good question. Well the first thing that many well says is use a $20 beacon. This is a good answer. If you have an investment in apps and need to connect the app to the store, a beacon is a good solution.

But if you want to go IoT on the status quo and put the store back in the center, start to delight your mobile consumer by offering smartphone like services in the aisle and counter.

Does your store have Wi-Fi? Well a mobile consumer is a connected consumer. Let them offload their social Wi-Fi data needs onto your network. Act as a gateway to the web and be the concierge.

If this simple move did not intimidate Apple, they would not have made such a privacy fuss about nothing by hashing the phone unique identifier. (Privacy for pseudonymous consumers can be addresses without Apple’s deus ex machina approach.)

Wi-Fi offers the store (from basic VAS to super enhanced value):

  1. A way of being a social concierge
  2. Basic heat mapping of the store
  3. A digital hub to drive manufacturer promotions and smart coop dollars
  4. A loyalty platform to opt in shoppers and tether their phone to a OTT communication channel like email or SMS.
  5. A IoT network where every store now can communicate directly to a loyalist phone without the need for an app download.
  6. A proximity smart digital out of home engagement network to allow the store to identify and based on certain business logic drive street to aisle marketing for itself and its manufacture partners.
  7. A media network that can not only ask for coop budget from their manufacture partners but real media dollars to drive targeted, proximity-based engagement.

The store becomes the smart IoT things and the phone becomes the IoT trigger. The investment is back in the store’s domain and cannot not be disintermentiated.

Tie this engagement to wallet and coupon, and the solution becomes more and more sexy. And you thought IoT was something futuristic? Start being the innovators you are and begin asking the right questions.

Read on RetailTouch Points @ http://www.retailtouchpoints.com/features/executive-viewpoints/the-retail-internet-of-things-iot-turning-your-store-into-an-app


Gary is the CEO of Impact Mobile, Inc. and author of The Impulse Economy and Fast Shopper, Slow Store, which were published by Simon & Schuster, Atria Imprint. He also is working on a new book, covering the Internet of Things as the new app store. Schwartz founded and chaired the mobile committee for the Interactive Advertising Bureau (IAB) helping to establish a joint task force between the IAB, Mobile Marketing Association (MMA) and the Media Rating Council (MRC) to develop global mobile measurement standards for which he received an IAB award for industry excellence in 2009. He was elected for three terms as the Chairman of MEF North America and currently is the Global Director of Location Based Marketing Association; the Executive Chairman of 4More Innovation (Thinkwire platform on Twitter) and Special Adviser to The Wireless Registry.

Wild Turkeys and Mobile Innovation

Part II: Wild Turkeys (continuing from the Nov 26th post)

Here are three tips on identifying elusive innovation and finding a black swan. I had just returned knobbly kneed from a trip through South Asia and Russia. I attended three conferences and was just decompressing on Thanksgiving and felt obligated to continue the turkey analogy from the previous post.

1. Bottling Innovation

On the road at various industry events, the keynote always seems to start with innovation. The word has been peppered into panels and keynotes as in the place of the term “technology.” It is as if by magically by using the word “innovation” it will prime the techno-entrepreneur’s pump.

This is not a bad thing. It certainly gets the attention of the patriarchs. The Moscow Open Innovation Forum was keynoted by Dmitry Medvedev, prime minister of Russia, accompanied by the prime ministers of France and Finland. The World Summit Awards in Colombo, Sri Lanka, was opened by the country’s president, Mahinda Rajapaksa.

Innovation is associated with fresh ideas and out-with-the-old. At each event, the youth innovators are marched out bushy-tailed and bright-eyed. Mr. Medvedev and Virgin founder Sir Richard Branson posed smiling with the winning youth delegates.

The challenge is that while we all want to celebrate innovation, it is a difficult to bottle it. We find it hard to present it as a formula. Disruptive innovation is central for businesses that want to survive and stay competitive.

Incumbent players such as the wireless carrier want to appear light-footed and on the next wave, but the discussion generally gravitates to bemoaning the OTT competitors – that are never in the room – and proposing that the ecosystem is not sustainable.

There is unquestionably innovation, creativity and energy in the room, but we tend to present “wow,” and not the ingredients to cook up the same “wow” at home.

We chase mobile ideas to improve our retail business when, in fact, the sexiest thing about innovation is the resulting customers, sales and EBITDA.

2. Digital Inequality

Clearly, innovation is fueled by connectivity. I met with the Nikolai Nikiforov, Russian minister of communications and mass media and the youngest person in that country’s history to take over a ministerial position at the tender age of 29.

We talked about “digital inequality” in Russia and as well as other nations and how this is one of the biggest inhibitors of innovation. How can Russia future-proof its mobile network infrastructure to allow for universal access to high-speed Internet for the data-dependent business, education, health and entertainment services that will appear over the next decade?

“Electromagnetic spectrum is the crude oil of last-mile connectivity.” Mr. Nikiforov wants high-speed fiber with wireless relay into every community of 500 and above. The challenge is finding the funds and partnership.

When Peter Diamandis, the charismatic cofounder of Singularity University, took the stage, connectivity became a firebrand. “We have not started.” In ten years distance will mean nothing.

“Where you live and where you work do not need to be the same,” Mr. Diamandis said.

3. Crowd-Sourcing Innovation

So, for those of us that cannot cook up innovation, we know there is abundant creativity out there that we can tap into and global access and connectivity is making this possible. 

Apple has shown us that by creating a marketplace for ideas, developers have risen to the challenge. The app store is a case study in innovation: The smarts of Steve Jobs to provide an SDK and audience and the smarts of app shops globally in designing for every possible user need.

So there is much talk about how to best crowd-source innovation globally. After all the discussion of innovation and digital access, we can focus on harvesting business ideas that work.

Mr. Diamandis showed how his first X-Prize challenge of $10 million to build a reusable rocket to take humans into orbit generated more than $100 million in R&D.

This ability to link innovation with connectivity allows entrepreneurs such as Sascha Haselmayer, CEO of CityMart, to build a crowd-sourcing engine for more than 80 cities globally. His engine allows for ideas to be vetted and adopted all through a remote online process. Sascha’s engine is a blueprint for crowd sourcing retail innovation.

So innovation has a retail formula and it is:

Black Swan innovation = connectivity for all + a readily accessible global market place

Interview on Twitter, Blackberry & disruptive business models

While the market complains that the it is an overhyped initial public offering. Many of the detractors are using Twitter to voice their concern. Ironic, isn’t it?  Post IPO, the stock will most likely rise to $30 and wait for Twitter to show some lift in advertising revenue. This will come as the media dollars need a home and their are few options for the digital buyer.

Twitter has moved from a microblog to a trend-crowd-sourcing destination.

1 in 5 have accounts but more and more will use the service to scrap instant and succinct info from the web. With this as a unique value prop, Twitter will capture revenue and drive profit over the next 48 months.  http://watch.bnn.ca/#clip1036995

Andrew Hsu: The Invention of TOUCH & What’s Next

Bill Gates stood on the stage at the (now-defunct) Comdex show in Las Vegas in 2000 with his schoolboy smile touting the new “tablet PC.”  Penned on the tablet in Bill’s handwriting was “Tablet PC is SUPER COOL!”  Behind the stage a backlit sign read “experience the evolution”.

Microsoft evolution never became a revolution because the company’s disparate and factional divisions failed to work together to vision and implement a turnkey experience.

The revolution happened in 2007 with the launch of the iPhone.

(As with most industries) evolution is often interrupted by black-swan revolutions. Sound (voice communications), touch (pinch and zoom navigation), sight (Heads Up Display [HUD]) all changed the way consumer used the phone and is one of the gating factors in technology adoption.

Knowing what technology will help us evolve and what technology revolutionizes is more of a human insight that a science. Ergonomics help us rearrange the digital furniture; however, changing the way we connect with this communication device is profoundly human. What is beyond touch, what is the next revolution?

A Short History of Touch

Although Gates told reporters off stage in Las Vegas that how excited everyone was in Redmond (Developers were checking the tablet out to play with – “a very good sign,” he said) 6 months later warehouses were still full of the Tablets. Q2 shipments had plummeted 25% with a meager 100,000 total units sold.  Mike Magee, technology writer for the Inquirer wrote despondently that “This is another classic case of IT firms thinking they know what technology people will like, and failing to take off the blinkers.”

Touch appeared back in 1971 over a ten year period began to appear in the form of  infrared technology (such as the Hewlett Packard 150) which show up in various military applications. The IR matrix of beams are used to detect a finger touching the screen.

But the IR technology was expensive and the technology gained more mainstream adoption was “resistive touch”.

It was a simple concept. Resistive touch screens were built using two layers of conductive material (Indium Tin Oxide). The two layers were separated by a small pocket of air. An action was triggered when a stylus, or other object, pressed the top layer into contact with the bottom layer.

The limitation was it was like a pin board. You could tell the device where you were move the point of contact. But it did not have multi-touch functionality essential to pitch and zoom navigation.

Mass-market adoption was not an option:

  1. The screen wore out
  2. Required a stylus pen for accuracy
  3. The air pocket made the screen appear hazy
  4. OEMs had to build a clunky hole in the casing (as the top of the resistive sensor had to be exposed to user’s input)

This is the technology that Bill Gates was holding up at Comdex in 2000*. The unit’s resistive touch stylus was used to input into clunky dialogue boxes to input text and commands. The entire project was “resistive”. The Office team refused to build for the unit adding to the painful UX.

*[A technogeek aside: Microsoft's Surface touch solution uses Frustrated Total Internal Reflection (FTIR)]

Meeting Andrew Hsu

In 2013, I ran an event on connect screens in New York. I wanted to tell a story about the importance of the screen in the evolution of mobile phone design and adoption. I invited Professor Donnell Walton from Corning Glass, as well as representatives from Microsoft’s Surface team, Google Glass and was looking to find a speaker to explain “touch”.  Maybe I could locate someone from the scuttled Apple Newton team?

I found, much to my surprise (like an anthropologist that finds that we did not evolve directly from monkeys) that the precursor to the 2007 Apple iPhone was a skunk works project headed up by an engineer called Andrew Hsu.

Andrew developed and patented a capacitive touchscreen suitable for mobile devices way back in 1999. He developed a system which computes the location of a user’s fingers based on how they change the capacitance values of an invisible matrix of electrodes.  The capacitive touchscreen did not suffer from the various user experience drawbacks of the resistive touchscreen – it does not wear out, it does not cloudy the underlying display, and it does not require a big hole to be cut into the device casing.  But most importantly, it enables natural finger input.

This capacitive touch is not a mouse click. It is not a data poke with a Stylus. Andrew Hsu’s touch allowed us to communicate in a very human way with pointing and pinching space.

Don Norman is often quoted about touch.

“We’ve lost something really big when we went to the abstraction of a computer with a mouse and a keyboard, it wasn’t real . . . swiping your hand across the page  . . . is more intimate. Think of it not as a swipe, think of it as a caress.”

While mobile success is almost always based on interface and usability, it took seven years for Andrew Hsu to convince the industry to adopt the technology. Revolutions come in simple packages: text messaging, Apple’s mobile application SDK, gesture-based gaming.

We talk about the consumerization of technology; touch was the humanization of technology. In a world where data appeared cerebral and uninviting, we suddenly can interface in this data and content as we do with real object. The physical world became extensible and less scary.

From Click to Pinch & Zoom

In 2006, handset manufacturer LG trialled launched capacitive touch with their designer Prada phone. The LG phone had all the correct ingredients – capacitive touchscreen for intuitive finger input, high resolution display, and one of the first graphics co-processors in a handset. Prada brought style to the table and LG brought the insight that touch that would ultimately inspire the new mobile consumer.

But we had to wait one more year.

When Jobs returned to Apple he shut down the Newton project.  This legacy 1993 technology had poor handwriting recognition and had little traction in the market. But Andrew Hsu’s capacitive touch appealed to Steve Jobs UI sensibilities.

As a post Newtonist, Jobs once said “we are born with five styluses on each hand”.

When he introduced the iPhone, we knew that being able to move large format data on a small screen with a pinch and zoom changed the way the consumer saw their mobile device.  Where Steve Job went further than touch was his insight in designing a full edge-to-edge screen that had the dimensions of a letter size piece of paper.  The screen called out to be touched, worked on and paged through.

Although touch revolutionize the phone and lines weaved around the block for new product releases of Apple new “human” interface, the consumer was still nose-to-screen, bumping into lamp posts while elegantly navigating data a hundred miles away.

“Bump” (the file exchange application recently acquired by Google) and other application including NFC payment extending this love of tactile interface by promote social touch between other phones and public devices such as POS.

Gesture: Moving Beyond the Cool?

While touch is an important sense, sight is essential for navigation. The next revolution is to make data come to live seamlessly in the real world.

When we talk about HUD, we think of the new Google Glass and the opportunity to integrate data into our line of site. In parallel, see the world and the data behind it. Integrated cyborg solutions like Google Glass and future visions of embedded epidermal circuit (seen in Total Recall).

Microsoft had the lead in a new HUD interface using gesture.  XBOX Kinects was the one product that Microsoft was seeing growth in the consumer sector. However, the leviathan was unable to make this a multiscreen strategy fast enough.

Moving gesture elegantly to PCs and window phones never happened. There is a Kinect for Windows but it lacks the software for controlling the interface.

The Leap motion controller is a step forward.  A small multiscreen sensor box not tied to console in the dean but with the ability to tether like a dongle to a wide variety of screens and deliver better sensitivity to Kinect. It has multiple commands down to finger level accuracy.

Andrew Hsu still believes that touch is less ambiguous on the consumer navigation intent. “How can you disambiguate between “accidental” and intentional gestures.  The beauty of touch interaction is that you basically get user intent for “free” – a user typically only touches the device when he/she wants to interact with it.  The cases of accidental activation are much lower and easier to reject.”

Arguably HUD is a solution looking for a problem. Like the inspired Seque cycles, the inventor’s goal was to develop an urban consumer transport vehicle but he failed to get significant adoption. The Segue has now found a home with urban tourist touring groups and airport police. Why? It provided an elevated view with minimal multitasking: Ideal for tourists and law enforcement.

Andrew agrees: “What these technologies really need to address is what sort of “problem” they are trying to solve.  That is, with capacitive touchscreens, there were certainly a number of value propositions that arguably were superior to the previous (resistive) solution that helped transform/enable touch input.  Natural gestures (HUD) is still looking for a compelling value proposition”

Google Glass is a platform without a certain home. Will “super cool” it has not inspired the consumer. We have not seen the “a-ha!” that Jobs brought to the touch. We know new more intuitive human interfaces are coming. But we need a Steve Jobs to take the technology and humanize it for intuitive consumption.

Gary Schwartz is the CEO of Impact Mobile. Having been at the frontlines of the mobile industry for over a decade, Gary is the author of two books, “The Impulse Economy: Understanding Mobile Shoppers” and “Fast Shopper. Slow Store: A Guide to Courting and Capturing the Mobile Consumers,” both of which highlight the current state of the mobile commerce space and chronicle the significant impact that mobile is having on consumers, retailers and brands. Gary is also a chair emeritus for the Interactive Advertising Bureau and the Mobile Entertainment Forum NA and global director of the Location Based Marketing Association.

The 2014 Ad Game Changer: Digital Maps

Gary Schwartz (16 September, 2013)

Of all the widgets and long-forgotten apps on your phone the one with most mobile mindshare is your map app. We have become a mobile society, and in the 2010s, map apps personify our wanderlust. When we open our mobile map, we have intent, direction and purpose. It is vitamin “M”: the ultimate upper and highly addictive.

And map real estate is hot: Apple buys Locationary, Embark and HopStop; Google buys Waze;  Bing is rumored to be in talks with FourSquare; Zillow, the map real estate tycoon, buys EasyStreet, and indoor mapping app company, Aisle411 raises a hefty seed round in the valley. As OEMs beef up their services, we are entering a new phase of map building. Location has always been a data grab. Now, the industry is starting to focus on monetising subway stops, street corners and highways across the world.

The principal challenge is that maps are a new and unique advertising paradigm, and the incumbent search business models, mostly designed for the web’s previous era as a stationary, desktop experience may need to be adjusted.
Galileo to Google

Google Maps, the grand daddy of digital mapping, was born in 2004 as a skunk works project by two Danish brothers in Australia.

First designed as a heavy client app, in 2004 the software came full circle as Lars Rasmussen and his brother were acquired by Google after making a web-based pitch. The same year, Google acquired Keyhole, Inc. and proceeded to use Keyhole’s mark-up language to launch Google Earth in 2005.

During the next five years, Google started to revolutionize digital maps. It is quite possibly the most exciting innovation effort by the company. Not since map mavericks Ptolomy, Copernicus and Galileo has mapping accelerated so profoundly. Within a few short years Google has redefined the way we see the world around us.

Google Maps rolled out road directions in North America in 2006 and their PC-based maps became the pre-GPS automotive assistant. However convenient and customizable, Google maps for the desktop were a print-on-demand version of London’s A-Z pocket maps. In many ways, a Google map printed out before a trip was no different from John Ogilby’s 1675 Britannia detailed strip maps that travels bought to find their way from Norfolk to Newmarket with inns, stables and other points-of-interest as well as clear directions and distances clearly marked. They balanced behind the horse on the coach seat as our laser-printed version would sit on our car dashboard.

But the small screen was the true game changer. The capacitive screen touch invented by Andrew Hsu, combined with the pinch-and-zoom mobile interface developed by Apple made complex map navigation simple, user friendly and, most importantly, mobile.

With multiscreen map adoption, Google Maps expanded. The company launched in Latin America and Asia, and started the subterranean mapping of subways in 2007. In 2008, a view from space; in 2009, a POV from the street and 3D rendering.  And more. Google mapped canals and bike paths, endangered forests and the ocean floors,  the moon and Mars and the ultimate conquest, Macy’s in-store experience.

This was phase one: Build a dominant innovative platform with simple APIs, establish market stickiness and trust by the point-A-to-point-B public.

Now add metadata

Google+ Local launched in 2012, allowing users to post reviews and images into pages hosted by third party sites. This year maps are becoming more customized, providing location-specific information on points-of-interest. While Google has maintained a focus on road navigation with its 2013 acquisition of the crowd sourcing road-warrior Waze software, the operative term on the new Google map is “explore.” Explore photos, recommendations, and restaurants.

Maps plus Google Glass makes the possibility of on-the-go exploration more immersive. Using the Google Mirror API developers can feed real-time GPS info and pre-rendered map images into the eye window of Glass wearers for “dexterous” driving, cycling or walking to the local mall. Glass becomes “a Segway for your head.” And taking maps to the edge of utility: Google Sky (which maps the stars based on your GPS location and vision angle) can be integration with Google Glass to show the outlines of constellations through a transparent filter to view the night sky.

Wow!

And then at the end of this epic journey, Google announces local advertising. Google Maps now allows short sections of advertisements to be placed directly onto the map itself. Local advertising is one of Google’s core business and Google Maps ad purchases are made through the same Google AdWords auction that buyers are already very familiar.

For Google this is simply a terrestrial version of browser-based search. When a consumer enters “Starbucks” in her browser, she finds links to buy “Starbucks Instant Coffee Bundle” on Amazon.com. When a consumer enters Starbucks in Google Maps, she finds local Starbucks to get the real deal (or if Tim Hortons is bidding, an ad for a competitively located Timmy’s coffee store.) Both these use cases involve path to purchase. One is virtual, the other is proximal.

Google hopes Map-based ads will follow the same digital success that Google has had with its search-based ads. Instead of auctioning AdWords at point-of-search, Google auctions ads at point-of-navigation.

Ptolemy what? There has to be more than just that. We’re just not fully there yet.

Don’t forget the Big Apple

Apple recognized the value of maps and knew that they had a Trojan Horse lurking in their mobile operating system in Google Maps. Google’s map app had become the dominant phonetop service with the most unique visitors of any app in-market. When Appl­e launched and preloaded its own proprietary map app in August 2012, Google’s traffic dropped making Facebook the winning app for unique impressions as well as time spend.

(After a few geographical faux pas) Apple started to establish its own relationship with the map consumer. But Google Mappers are loyal. When Google launched its new map app for iOS 6 in December there was a 30 per cent rush of Apple folk upgrading to the new operating system (MoPub.com). Affinity to a map app had influenced these consumers’ mobile behaviour. Quite remarkable.

However, Apple is committed to build a map following. While the company no longer needed to pay licensing to Google, which was good, the key reason for ousting Google Maps was that maps had become a data pillar. By replacing Google, Apple had direct access to a wealth of consumer data and potential advertising revenue.

Yahoo! Maps, Bing Maps, Nokia Maps, and MapQuest all use the NAVTEQ electronic map feed (best known for its automotive navigation services), and like Apple now, they own their own consumer data layer, which is crucial for generating advertising and marketing revenue on maps.

Bing is the major map contender.  In September, the company added 13 million square kilometers (316TB) of aircraft and satellite photography to its service. Microsoft’s large investment in Facebook in 2007 ($240 million) led to the 2013 decision adopt Bing as FaceBook’s mapping and search provider. To do this effectively, and compete with the market-leader, Google, Bing needs to beef up and differentiate its map offerings. Bing has already rolled out “Local Scout” which helps consumers find food and fun across all its screens. Rumors of a FourSquare acquisition (or possibly financing) may be part of this grand strategy.

(Microsoft acquisition of Nokia did not come with their HERE maps assets. Nokia’s HERE maps include road networks, traffic patterns and urban landscapes and as licensed by major properties such as Garmin, Oracle and Amazon.com. Will Nokia take the lead as the premier mapping and location services across different screens? Will they just sell off the asset to Apple after the Microsoft acquisition is complete?)

And the open-source mapping movement is also growing. Washington D.C.-based startup, MapBox, provides more custom navigation and interesting APIs built on top of Open Street Maps. Open is good and allows developers greater flexibility and affordability; Foursquare uses MapBox’s services to display its users’ check-in histories. However MapBox is not preloaded on your Android or Apple phone and while they have an iOS mapping SDK they have no Android footprint. MapBox will certainly play a roll as an embedded technology in sites all over the web; however, it is unlikely that they will be a standalone consumer utility on top of your phone and tablet.

With the proliferation of WiFi networks in retail, vendors such as Cisco drive mobile mapping solutions for shoppers that join the free network. The maps allows for hyper-local, custom mapping that includes restroom as well as promotional information on retail stores.

All of these digital map offerings are entering the mainstream at a time when advertisers are questioning consumer engagement on mobile, and trying to understand how best to follow their consumer in a contextual and relevant manner. Brands and retailers are re-evaluating the way we sell and, more importantly, engage across multiple screens. Their assumptions on path-to-purchase, built during the era of the desktop web, are no longer fully valid and reliable. The classic consumer narrative of home-to-store has changed and retailers and brand can no longer simply hire a Director of Shopper Insights and hope for the best.

Advertising and marketing is about providing a consistent message at aisle, and checkout, wherever the shopper finds the retailer. If the advertisers wants to get back in the game, possibly the most exciting place to be right now is on the map. When the consumer and shopper opens their map app when they have intent to meet someone, go somewhere or buy something. All this drives commerce. Maps provide unadulterated path-to-purchase.

Narrative: Going beyond advertising

So what is the new advertising paradigm for maps? Maps have layered functionality: terrain, roads, satellite, traffic, public transport and images. Then there is the exploration layer: recommendations and general points-of-interest. And now Google has provided an additional local advertising layer.

However, the adding an advertising layer may not prove to be effective in a map environment. There is more value to the exploration layer. Yes, maps help us move in a utilitarian fashion from Point-A to Point-B and that is why Waze and other transit acquisitions have been so important.  But maps also have a very non-utilitarian function.

Maps help the consumer simply “explore” and is what will ultimately connect map users to brands and content owners. Maps tell stories because precisely they have a beginning and an end, and are defined by intent and clear purpose.

Instagram, Twitter, and Facebook already situate the user’s photos and comments at a latitude and longitude: a country, a city, a bar. However these social graphs are not map applications and location is an important but secondary metatag.

The opportunity is to build a new bespoke map layer for brands and content owners. Think map first.

Startups such as Findery and CityMaps have map based UGC (user-generated content) engines. Where is the content input engine for brands? How can brands visualize content and actively map this data across all their customers’ screens?

One company called Mapiary, based out of Singapore, is developing the tools to allow brands and retailers to layer rich navigation onto the map. How can Unilever’s Becel margarine be more relevant to power walkers globally? Or how can Heineken weave narrative into a city pub crawl? Diageo, can map a DJ tour for Smirnoff. The NYTimes can map their 36-Hour travel series in a rich contextual manner. This is new digital cartouche and as important as the underlying map.

Where is the new vision of brand advertising? After all the innovation that Lars Rasmussen (Google Maps) and John Hanke (Google Earth) brought to maps we surely need to go beyond paid search models and allow owned content to become a rich and valuable layer in the 2014 map.

BNN Interview on the “Battle to Monetize Maps” discussing the positioning of Apple, Google & Microsoft. http://t.co/M1Pa0Qcijd 

Gary Schwartz is the CEO of Impact Mobile. Having been at the frontlines of the mobile industry for over a decade, Gary is the author of two books, “The Impulse Economy: Understanding Mobile Shoppers” and “Fast Shopper. Slow Store: A Guide to Courting and Capturing the Mobile Consumers,” both of which highlight the current state of the mobile commerce space and chronicle the significant impact that mobile is having on consumers, retailers and brands. Gary is also a chair emeritus for the Interactive Advertising Bureau and the Mobile Entertainment Forum NA and global director of the Location Based Marketing Association.

Jump, Tap, Exit. (Jumptap & Millennial)

by Gary Schwartz (14/08/2013)

Jumptap may be the last man standing of the incumbent mobile ad networks to have their exit. The acquisition by Millennial Media, its erstwhile competitor, in a predominantly stock transaction, may not be the glory finish that many had hoped.   What does consolidation mean to the mobile ad world?

Good things . . . in the long term.

Grooming a network

George Bell came on as the new Jumptap CEO in 2010 to ostensibly position the company for an exit.  Bell was the ideal candidate coming from General Catalyst and being an accomplish network deal maker. Back in 1996, Bell took Excite network public.  Apart from a few digital faux pas such as turning down the then two-year-old startup Google offer of $750,000 for their search engine, the Excite network continued to grow with impressive revenues through 1998.

Over the past two years, under Bell’s leadership Jumptap has grown its position in the crowded media market establishing global partnership into markets in Asia and vied for the budgets of digital agencies, direct response and brand advertisers and the inventory of publishers globally. And mobile budgets have grown for all mobile ad network stakeholders.

In Jumptap’s M&A prep this year, the company took in a $27.5 raise from WPP, Keating Capital and General Catalyst topping their raise to date at $121.5 million. A significant number. Key was Jumptap’s decision to bring on board John Hadl a mobile media veteran and rainmaker who advised Millennial Media, Admob and Quattro Wireless.

2013 was its make or break year.

Patents alone

On patents alone, Jumptap should hold significant market value. After the first patent was issued in June 2009, Jumptap has received 52 patents; at an impressive IP quota of one monthly. It has many more published patent applications in the pipe.

George Bell, has advocated from day one for IP differentiation and has continually stated that patents underscore the company’s commitment to ad targeting and smart ad solutions. The company holds a good spread of patents from ad targeting, coupon selection, bid optimization (realtime bidding) and the management of third-party data.

Augme Technology’s (a mobile media company) lawsuit against Millennial Media over ad targeting last year, patent mud-slinging seemed to be the first indication of a mobile ad war.

The Millennial Media acquisition may not vindicate the hard work and positioning on patents and network growth and may speak more to the general mobile ad market ennui.

Ups and Downs

The mega valuations that Admob and Quattro Wireless commanded from Google and Apple respectively four years ago soon rang hollow after Apple shelved Quattro’s platform and mobile ad sales showed halting growth.  It seemed that the online leviathans were just building a mobile ad network and waiting. Mobile buying remained challenging – there was not the scale and simplicity that is required to attract media dollars.

Then last year the market began to heat up with cool results: InMobi received strategic investment from Softbank,  Opera purchased AdMarvel  and Millennial Media, after trying for a Quattro-like exit, opted for an IPO which was surprisingly successful.

Markets results remained challenging. Velti and Augme, both of which had transitioned their business to mobile advertising away from their traditional higher margin mobile marketing business, showed slowing growth.

Of the ad networks, Millennial Media was the closest to turning a profit and generating consistent positive operating cash flow. Now with its expanded holdings what should the network focus on to grow?

“Cross Screen”

There is an oft-quoted line in technology that many are over optimistic in the short term and overly pessimistic about the long term.

In the short term mobile revenues will grow slowly and organically as budgets move into digital. However, in the long-term there is tremendous opportunity to accelerate these budgets if we can manage to simplify the mobile buy across all digital touch points.

Jumptap’s Unified Audience Exchange and their previous partnership with 24/7 (which has credibility on the PC side) was a sign of a multiscreen ad strategy. Networks like Jumptap and TapAd had begun touting the importance of a cross-channel ad buy.  Paul Palmieri, Millennial Media’s founder and CEO mentioned Jumptap’s expertise in cross-screen media a key asset to their network.

Brands want to follow their consumer across their many interactive screens. Google, Facebook and Pandora have made their mobile offering increasingly advertiser-friendly. Larry Page on his quarter call last month said that Google wants “ to make advertising super simple for customers. Online advertising had developed in very device specific ways with separate campaigns for desktop and mobile. This made arduous work for advertisers and agencies, and meant mobile opportunities often got missed.”

Digital consumer engagement has become a top priority for advertisers and publishers. There is a trend to make mobile advertising easier to buy. Online, mobile and offline media need to be seamlessly connected. Targeting across multiple screens (not just mobile) is essential for brands drive conversion and path-to-purchase.

Millennial will need to navigate through a rash of nimble new start ups in the space (App Nexus, Adelphic, Native, Nextage, Media Math). Consolidation, simplification and cross-screen budgets will help Millennial but it will be difficult for this public company to pivot.

Apple feels more gravity. What to do?

by Gary Schwartz  (24/07/2013)

In a post-Job’s era is Apple losing its innovation edge? While in Q3 ’13 results, Apple was upbeat on earnings, its revenue outlook dropped precipitously.

During a conference call with analysts to discuss its quarterly performance Apple’s CEO Tim Cook pointed to enterprise and horizontal product growth:

“From a growth point of view for Apple, our key catalyst will always be new products and new services in existing categories that we are in and in new categories. In addition to this, we have opportunities in distribution in terms of expanding our retail stores, expanding our online store.”

Apple continues to hold ground as an aspirational brand but the market for high-end devices is fast becoming saturated and the only growth window is low-cost devices in emerging markets.

Tim Cook tries to sound bullish: “I don’t subscribe to the common feeling that the high-end smartphone market is at its peak. I don’t believe that, but we’ll see.”

However, while some operators still are required to meet volume guarantees made to Apple, this will not continue. Consumers are no longer buying new phones based on glamorous launch campaigns that tout better cameras, higher-resolution displays or a reduction of a millimeter in its profile.

Apple’s needs to keep its loyalists buying across its portfolio of screens. Apple must focus on its multiscreen strategy with ‘Maverick’ and continue to expand its cloud and iTunes wallet positioning.

From Singapore to Moscow: Is OPEN a four-letter word?

by Gary Schwartz  (23/07/2013)

I recently returned from speaking in Singapore at the regional CommunicAsia conference and Rasia.com event in Moscow. Innovation was a central theme.

In Singapore I was in a discussion with Google, SingTel and Microsoft. I asked Doug Farber, managing director for Google in Asia-Pacific, if mobile innovation is stifled when there are only a few power brokers that control the mobile ecosystem.

Google has always had a “healthy disregard for the impossible,” Mr. Farber said. Agreed. However, while Google has a healthy internal innovation culture, is it allowing the ecosystem to do the same?

I recall Richard Kramer from Arete Research’s jab that in mobile O-P-E-N is a four-letter word.

There are only a few powers that are trying to lock the mobile ecosystem: Apple, Amazon, Google, Facebook, Microsoft and Du. And while Apple and carrier networks are unabashedly closed fiefdoms, Google’s Android empire may not be truly open.

“But,” Mr. Farber said, “I am the open guy.”

“Open only on the front end,” responded Bill Chang, CEO of group enterprise at SingTel.

Outside of a few global plenipotentiaries, mobile developers have had to pick from the crumbs at the table.

Twenty-five applications command 50 percent of the app store revenue. The billions in revenue do not feed many mouths. The average developer lives on $5,000 per month, which is a bread-and-water diet of $60,000 per year, said Richard Kramer. “Where are the developer’s yachts?”

Hardware innovation has flat-lined and power is exclusively in the hands of Apple and Samsung.

The yearly CES announcements have underwhelmed and recently left the Las Vegas melee altogether. Another handset release with faster “mega” screens does not excite the crowds. With $75 smartphones entering emerging markets, smart has become a commodity.

SingTel’s Mr. Chang said in a market where companies are “cost-cut to death, it is difficult to drive innovation forward. Mobile-first is a challenge.”

Mr. Chang talked about the importance of the CIO is this process. He plays the initialism game that we all do at public events: “The CTO is now the chief transformation officer and the CIO the chief innovation officer.”

But what does that really mean to companies trying to navigate the mobile marketplace?

The CIO never had power, said Michael Thatcher, chief technology officer of Asia for Microsoft. “It is only when something is broken they have power. How can we advance this and stop being tech centric? Stop being reactive. Follow the money.”

But is there money in mobile innovation?

Outside of the big six ecosystem players, there are few that command significant market share. We live in an “app store economy” where we all need to play the piper 30 percent and never own the customer. To make money on Apple’s SDKs or Google’s, dominant big data position is difficult.

The social leviathans are also closed.

Facebook has built a business on connecting people. With its post-IPO revenue focus, it has worked hard to create a media buying tollgate on the impressions and big data that it owns.

In social portals there is little big data sharing and little opportunity to make money as an outside developer. It is a bigger issue for the entire social ecosystem.

The more that these social portals try to leverage these assets to generate revenue, the less socially authentic they become to the consumer. Our social spaces have become more like driving down the public highway.

Social portals such as Tumblr and Instagram have generated such value in the market because they remain authentic – pre-revenue and pre-commercial, of course.

Everything is disintermediated. App stores and social portals are all controlled by Facebook, Amazon, Apple, Microsoft and Google, and somewhere we all have to pay the piper.

Telecommunications is the history of open and then closed systems, from RCA closing down FM Radio and early television.

It is the same recent history of Apple disintermediating the wireless carriers with an “Internet device” and then turning around and using the same iPhone to shut down the mobile Web with a closed App Store.

Are we entering another closed loop where innovation becomes stifled? What does this mean for business?

Google sponsors the ship, “Unreasonable at Sea,” to sail around the world evangelizing entrepreneurism and innovation. How can we make the power brokers more unreasonable at home?