A New Wireless Registry for 50 Billion Things

When Cisco’s CEO, John Chambers, took the stage at CES in Vegas this year and announced that there was a difference between The Internet of Things (IOT) and the Internet of Everything (IOE), many cried “semantics”. But there is a difference and one that ripped across the US to the National Retailer Federation (NRF) Big Show at the Javits Centre in New York.

IOT, according to Chambers, is made up of billions of connected objects; however, IOE are the smart networks that are required to support all the data these objects generate and transmit.  What will help move the IOT into the IOE and drive what Chambers predicts to be a $19 trillion in new revenue by 2020?

IOE requires a universal solution to tie the billions of sensor data into an intelligent device and system agnostic solution.

To our detriment, we are so focused on the idea of a hardware (IOT) solving all our problems that we neglected that simple insight that all these hardware solutions require a method of managing the people and service behind them.

The industry needs a wireless domain (DNS) naming solution that can provide profile, tools and privacy controls to enterprise and the consumer.

When I was invited to sit on a panel at the launch of the new wireless registry (www.wirelessregistry.com) at the NRF show and I realized that this registry could be the silver-bullet platform.

50 Billion Things

When Cisco, Qualcomm, IBM and other set up shop at NRF to talk retail, the IOT verse IOE discussion continued.  Brand agencies such as Ogilvy were pitching a solution using Qualcomm’s wireless Gimbel platform to solve retail engagement in the store. Qualcomm’s Gimbel platform is essentially an IOE riding on Apple’s IOT’s iBeacons? Mobile Location Analytics (MLAs) companies that collect consumer behavioural analytics, are a big data IOE play riding on the IOT emitting from the phone and anchored to its MAC address

There are a proliferation of IOE solutions using different technology that require different CAPEX and resources.

Presently there are an estimated 10 billion sensors globally. This is predicted to grow to 50 billion sensors by 2020. Imagine the wireless noise we can anticipate as we move from city to city, street to street, aisle to aisle.

There are barriers everywhere:

  • On the consumer side we have option paralysis but more importantly simple human inertia.
  • On the retailer and brand side we have incumbent investments and IT budgets to navigate.
  • On top of all this stasis we have the DC beltway privacy folk crying “do-not-track”.

How will the consumer navigate this noise? How will the retailer, brand, entertainment provider select from the exploding list of vendors selling various solutions using LTE identification, WiFi MAC identification, Bluetooth MAC, IMEI, etc.

My Wireless Name

The phone in 2014 is becoming less of a Cracker Jack container that acts as a repository of millions of sundry apps, and more of an intelligent device that performs as a server that can manage our world through smart profiling and APIs.

Think about it. We have been hoodwinked by the OEMs to believe that an application store tethered to a phone can deliver any service, entertainment, widget. The app store was a marketplace to the world: clocks, measuring tapes, cash registers, coupon dispensers, shopping lists, ad infinitum.

Google’s acquisition of Nest is good example of the changing landscape where the app will live in the IOT and the device will simply be the profile and the auto-controller. The 94Fifty smart basketball, the Sensible Baby smart sensor monitor, the remote Vibeasy vibrator: all use the phone as the remote control manager.

A service such as The Wireless Registry can offer a naming protocol that can work agnostically with all the in-market sensor solutions and offer a central repository for a retailer, brand, and entertainment provider’s identity. Any existing wireless signal (SSID) that a coffee shop or a big-box retail transmits can now have a name (Starbucks, GAP, Walmart) with an accompanying sophisticated profile. A consumer that has a phone, tablet and PC can now attach a personal name and wireless profile to their MAC addresses.

When the retail and consumer wireless signals bump in the proximal world, the consumer profile can do a simple look up can see what offers, services, commerce is available to them based on their specific identity. The consumer can also block unwanted solicitation answering Jules Polonetsky and the Privacy Commission’s concerns around “do-not-track”.

Now the consumer is in full control of their identity and the phone becomes an intelligent server interacting with the world of wireless signals based on that consumer preferences.

While this solution can interface with existing apps on the phone, ultimately the profile and preferences can be baked into the OS as part of the devices DNA.

Until later. Yours truly from my MAC address aka “MOBILEGUY

Drones, Bras, Tattoos & Path to Purchase

There must be the equivalent of Moore’s Law for the speed of turning mobile intent-into-action and mobile path-into-purchase.  Technology and patents are rippling through the marketplace that drive measurable efficiencies for brands, retailers and their consumers.

This week Amazon predicted that small, unmanned drone aircraft could be delivering packages within a year. Many have viewed the fun look-see video showing a web purchase and immediate dispensing of a 2.3 kilograms box into the carriage of a buzzing drone and after a short flight, a smiling kid waiting for the package at the doorstep.

(And before we tackle any ensuing U.S. Federal Aviation Administration regulatory issues of landing a package in a backyard ball hockey game or logistical issues such as possible “drone chasers” who maybe on the hunt to pick up drop offs nationally, let’s talk bras. . . )

While Bezos was pitching Drones, Microsoft announced research on sensors built into female lingerie, which collects EKG activity near the heart that predicts a “cookie snack attack” and sends a notification to the smartphone.

The month before, Motorola joined other patent holders such as Nokia/Microsoft that are positioning epidermal haptic feedback tattoos to speed up the connection between wanting-to-connect to the phone and connecting.

Blink

All of the above future-facing ideas are attempting to do one thing: anticipate intent and eliminate barriers.

In short, these solutions optimize the process of turning mobile intent-into-action and mobile path-into-purchase.

From purchase to delivery, from munchies to mobile warning, from tattoo sensor activation to phone activation is ideally all one blink, no needless hesitation, no undue thought.

In The Impulse Economy book, I spent 300 pages discussing the value of impulse. All mobile action is predicated on a paving a smooth path. Any bump en route drives precipitous drop off and abandonment.

Intent to take action (such as buy, opt-in, download) is a fragile thing and on a mobile device this dance between the seller and the buyer is even more perilous.

A Better Mouse Trap

The entire purchase process is like designing a good mouse trap.  We see a call-to-action (trap well positioned at the mouse entrance); the good price or value proposition (cheese); quick ramp up to the product (platform) and a fast trigger mechanism to close the deal (hammer).

While our response may be based on previous advertising or experiential conditioning the sale is all based on how well the brand has built the process. Many brands focus on the pickup and well they should but sitting pretty on the physical or virtual shelf is not good enough. P&G labeled the sitting pretty moment: FMOT – the “First Moment Of Truth”.

(No not “Follow Me On Twitter”)

This is the moment when the customer sees the product and in a 5 x 5 (5 seconds by 5 foot) moment throws that product into the shopping basket. But we know that many shoppers will leave their shopping baskets and exit the store if the line is too long or the checkout is too cumbersome.

Moreover, shopping is not a linear process. We may research the product in what Google calls the ZMOT (zero moment of truth) and only rebuy the product if the product performs in the kitchen, livingroom or bathroom. (What the FMOT folk at P&G call the Second Moment of Truth)

Coining a new efficiency law

But for all this shopping science, the consumer is very grounded in decision and reward. To close a deal, buy a product, opt-in to affinity programs, the industry needs to find ways to speed up the purchase cycle.

We know the famous Moore’s Law shows that the number of transistors on integrated circuits doubles approximately every two years. Martin Cooper coined the mobile spectrum equivalent of Moore’s Law that spectral efficiency has doubled every 30 months since Marconi patented the wireless telegraph in 1897.

There is a mobile path-to-purchase law to be coined.

Intent-to-action efficiency doubled every X months. As an industry, ideas that work are the innovative ideas that drive this efficiency, optimize process and speed up the loop from call-to-action to action.

What is X?

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

Mobile Black Swans and Turkeys

Part I: Tame Turkeys

On the return flight home for Thanksgiving this week, I read Nassim Taleb’s book The Black Swan and decided that tis the season to draw profound parallels between innovation and poultry.

And so while busy stuffing the family turkey I thought about how this all applied to my world of consumer engagement, retail sales and payment.

Here are my insights:

  • Chickens: Bertrand Russell’s wrote an anecdote about the benevolent farmer in 1912. The fat and happy chicken thinks the farmer is a benevolent protector until it is hauled away to the slaughter house.
  • Turkeys:  Nassim Taleb, in his book The Black Swan, says that the same holds true for the Thanksgiving turkey. However, he adds that the surprise for a turkey is not a surprise to its butcher.
  • Swans: So the black-swan question for the marketing community is: How do we play the role of the butcher not the turkey?

Moving your retail business from a step-by-step evolutionary growth to revolutionary, black swan transformation is not easy. In fact, it may be impossible. Corporations find it difficult to reinvent from within. However, to be aware of the nature of outliers and revolutionary innovation is a good first step.

You can rename your CIO: Chief Innovation Office, your CTO: Chief Transformation Officer and your CDO: Chief Disruption Officer. However this is all for nought if they cannot identify swans or at least the turkeys.

Look to social media. There is a succession of ever faster black-swan innovations starting with email and ending in SnapChat’s self-destructing messaging. Microsoft did not anticipate Google search, Google did not anticipate Facebook communities; Facebook did not anticipate Twitter micro-blogging; the same holds true for Instagram’s social picture publishing or SnapChat’s peek-a-boo messaging.  The same applies to retail as well as broadcast, payments, health, advertising to name a few rudely disrupted verticals.

Retail payments is a classic chase-the-tail solution mashup. But payment vendors have been more astute. The FIs ran a two-sided business to establish MasterCard and VISA credit services. The FIs have fought to be a part of any POS and prepaid activity in retail. With the emergence of digital payment, payment incumbents have aggressively invested and acquired companies in the mobile POS space (VISA/Square) and as well as in the cloud (VISA/Playspan).

VISA’s purchase of PlaySpan was particularly forward thinking. PlaySpan allowed gamers to buy virtual swords and pumpkin seeds for their virtual battle grounds and farms without leaving the game. Frictionless commerce engineering: meet VISA’s present day  V.me.

But even leviathans like VISA and MasterCard have been sidelined to commodity commerce rails.While they make nice transactional revenue, Amazon, iTunes, PayPal and Playstore and other consumer commerce portals have made the card credentials second fiddle. They discount the interchange and grab the CRM and big data.

Shopper marketing, Shopper engagement all follow similar twists. But not always evolutionary:

SMS was the black swan technology revolutionizing communication for the unsuspecting (but delighted) wireless carriers. We all thought QR codes, mobile apps and NFC would supplant this messaging channel.  WhatApp, Skype and Viber all have eaten away at the peer-to-peer traffic; however, for brands, SMS, and for some successful apps, the notification channel, remains the main opt-in and content delivery channel of choice.

Black swan on the horizon? iBeacons, WiFi Direct or LTE Direct? Maybe.

Proximity engagement is essential for a brand or retailer to drive path into purchase.  Shopkick and Beacons are valuable but are ultimately broadcast solutions.  Future solutions such as LTE Direct promise to extend the retail network and add more intelligence and peer to peer interactivity to this engagement.

However, in all the above cases it is difficult, if not impossible, to identify one strategy, vendor, agency that will bring revolutionary black swan ideas.

When attending events whether speaking or listening, it all seems so easy. Innovate they say. . .

Well so my friends, the innovator’s dilemma maybe just to avoid becoming the turkey.

Happy Thanksgiving!

 

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.

BNN Interview: Challenges with Twitter’s biz model pre-IPO

BNN 5 minutes: The Business News : October 4, 2013 : Challenges Facing Twitter’s Business Model and its Upcoming IPO [10-04-13 12:20 AM]

  • Positive: Twitter is NATIVELY mobile and will not have the same questions that FaceBook had on its IPO – i.e. What is your mobile strategy?
  • Positive: Twitter has an owned-content advertising model which is less impression based and more brand ENGAGEMENT. 
  • Challenge: Twitter is an social aggregation hub. We see lots of auto-twittering without visiting the social platform from third party sites. (See page 61 in their S-1 filing)  Referred to as blind tweeters (syndicated from other sites), these are a big slice of their user base.  This is an impression-based advertising challenge.
  • Challenge: Twitter is an advertising company. Specifically, mobile advertising with 65% of the revenue coming from small screen. The mobile advertising space is in a bubble. Same old story: Big growth in revenues, but no profits. The breaking bubble is evident in Jumptap’s exit to Millennial Media.
  • Challenge: Although the US is Twitter’s home it needs global growth. There will be global pressure from competitors like SINA WEIBO in China and LINE in Japan.

http://watch.bnn.ca/#clip1017318

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.

Interview: Battle to Monetize Maps (Apple, Google & Microsoft)

BNN : September 06, 2013 : The Battle to Monetize Maps: Apple, Google, Microsoft . . .  [09-06-13 PM 4:00 PM]

Mall Busting with Wal-Mart, Facebook & Zappos

Samsung strikes a deal with the beleaguered Best Buy to subsidize their rent with a store-in-a-store initiative. Borders exits the mall and last-man-standing Barnes & Noble seems to becoming a living room chachka vendor with more book browsers than book buyers. Zappos Labs runs field research in malls and Facebook launches a commerce strategy (again).

Is a retail dust bowl about to blow through the mall nationally? Or is this a digital tempest in a tea cup?

We know that online commerce is booming but it still accounts for a small slice of America’s mall business. Undeniably, this $200 billion digital business (ComScore) is expanding scope daily.

If there was ever a digital demarcator, it is the soap business. When Unilever and P&G, the markets main consumer package goods companies, begin to sell soap on Amazon, and when Wal-Mart begins to ramp up its online business, leveraging its 4,000 stories and 158 warehouses as an online distribution network, then mall property owners possibly need to rethink their role in bricks and mortar.

Inertia as a strategy

Malls are entertainment destinations. Always have been. We go to the mall for a movie or latte just as we bundled the family into the Buick 60 years ago to go shopping. But if Best Buy and Barnes & Noble leave the mall, what is left to attract the consumer? Hours of gizmo browsing and cook-book thumbing gone.

Browse-verse-buy business has whittled way the margins of many stores making Blockbuster and Gamestop digital road kill. It forced Target Chief Executive Gregg Steinhafel and Kathee Tesija, Target’s executive vice president of merchandising to cry uncle on “showrooming” in a memo to its suppliers in 2012.

However, muscling your supplier’s prices down is a pharic victory. Even with the volume sales of Target and Wal-Mart know that they need to move some of their business into the cloud. During Wal-Mart’s August 2013 earnings call it announced that eCommerce sales rose by 30 percent in two trailing quarters. Neil Ashe, Wal-Mart’s CEO indicated its total online sales could pass $10 billion in fiscal year 2014.  This is only two percent of the stores earning and only 12 percent of Amazon which sales totaled $61 billion in 2012 but it is a marked trend and a harbinger of the exodus of earns from the mall.

What incumbent stores presently have in their favor is inertia.  The cloud and the mall are still not fluidly connected. Although each shopper is armed with a mobile computer which has the capability of scanning, sourcing and saving the consumer in every aisle, there are too many hurdles and friction between the idea of digital buying and the products within arms reach.

The mandate of any red blooded digital retailers is to eliminate this inertia.

No-click Cloud Checkout

Apple’s iTunes, Amazon and Paypal built their business on simplifying checkout: making sure that the act of buying does not get in the way of intent to buy.

One-click checkout or combining stored customer credentials with a simple password is the sole reason that these companies continue to grow their market share. Their UX team would tell you that every informational and graphic design is based on optimizing clicks to checkout. Each click makes a precipitous drop off and abandoned shopping carts litter the web.

But digital checkout demands trust and mindshare. Even online real estate barons such as Facebook have been unable to enter this market.  Although “Social” and “commerce” seems natural allies, Facebook has not been able to delivered on its promise to leverage its millions of customers to shop cross-channel.  The company launched Facebook Credits in 2009 and phased them out last year. “F-commerce” experiments abound. Remember Facebook + Amazon + P&G partnering in 2010 to change the world. Unilever followed suit launching a storefront on Facebook for its Dove brand. Retailers including JCPenney and Gamestop have attempted to monetize their Facebook community by opening stores inside the Facebook network. After underwhelming results they shut their virtual doors.

Apple and Amazon have proven that community plus one-click checkout works. These digital wallet holders started their business explicitly to sell stuff. And they are poised to remove the inertia from online shopping and with it the last refuge of the mall owner. Online shopping provides advantages with an endless aisle allowing for access to more sizes and categories. According to Nielson the average basket size is much larger for consumer package goods ($80 online to $30 offline) and beauty purchase ($30 online to $10 offline).

The question is that when the households put soap and diapers on their shopping list will they log into Amazon to buy Dove Body Wash 24 Ounce Bottles (Pack of 4) and Pampers Sensitive Wipes 7x Box?

Baked Beans & Apple Pie

The last refuge of the American mall maybe a can of baked beans and fresh produce. If the household shopper wants to grabs a can for dinner tonight or smell the oranges and squeeze the melons before buying, then off to the store they will go. Grocery stores are big box convenience stores.

However, should mall owners that are grocery-anchored feel safe? Their clientele should come from a weekly shopping list.

Well, hold your Kraft peanut butter!

The traditional grocery retailers are faced with increased competition. In March, Wal-Mart opened grocery concept stores about a tenth of the size of their supercenters. With big box and online retailers entering the grocery space, specialty grocers capturing the “foodie culture” consumer and brands creating direct relationship with the consumer, perhaps this is not a safe bet for mall owners.

Google Wallet, ISIS and other phone wallets promise to make in-store shopping more digitally fluid, but what is the digital wallet never makes it to the mall.  Online grocery shopping has grown five fold over the past eight years to $25 billion. Tablets devices have made shopping more leisurely and couch commerce has accelerated.  With CPGs moving their diaper and detergent business into the mainstream online stores like Amazon, the inertia may soon come from the home.

Poaching People

Since Tesco opened their virtual grocery store on the subway in Seoul, Korea two years ago, scan and shop on-the-go signage has become more common. While it is still a media gimmick, it has the potential of becoming a way of luring the shopper online. In every mall or transit hub America at least one brand has attempted to use the in-mall media to engage with the shopper and move them into their cloud store.

In CNET interviews with Zappos Labs’ (an Amazon-owned online retailer) the Director, Will Young, confesses that his team sits around malls stalking shoppers. Their goal is to emulate these shoppers’ behavior online. Young is asking “How can you make the digital experience feel like the in-store experience?”

Whether they succeed or not, there is no question that malls need to re-evaluate their passive media deals. When a brand buys signage on an ad impression basis but uses this media to poach customers then this signage perhaps should not be sold as an impression but as a “mini-storefront”.

Mall owners nationally are holding strategy sessions to evaluate how technology is affecting their business. These stakeholders need to re-evaluate their real estate assets and start to see media as leasable square footage.

Part Two: Mapping the Mall (to be continued)

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.