Mediation can save operators from data flood
Smartphone sales in Asia Pacific are rapidly increasing. According to a report by Frost & Sullivan, 54% of all devices sold in the region by 2015 will be smartphones, up from just 5% in 2009.
This exponential growth is expected to generate over $38 billion in data revenue for operators in the region, up from just over $1.3 billion in 2009. To manage this unprecedented growth in data and to profit from it, the industry needs to develop sophisticated ways to mediate all the different pieces of data within the ecosystem. This can be achieved through “mobile data mediation," which is the ability to access and integrate multiple sources of mobile data such as aggregated data activity and browsing history.
There are various ways in which this can be leveraged. In the past, mobile data analytics tools were used primarily to help operators understand their customers and to better manage data traffic. However, the operator’s ability to understand mobile browsing habits, coupled with aggregated data activity, can be used as a powerful targeting tool for mobile advertising or for content providers.
Many industry observers believe that mobile advertising is set to hit the mainstream. Chetan Sharma consulting conducted a survey that forecasts 100% growth in 2010 in the US, while Kelsey Group predicts that the market will be worth $3.1 billion in 2013, up from $160 million in 2010. This predicted rise is due to the growth in sophistication of the medium, and also the ability to closely target individual users.
For example, we recently saw a request for proposal from a mainstream brand that wanted to identify and target special promotions to “expectant mothers.” The mothers would be identified using a combination of age, gender, past mobile browsing behavior and categorization so that the advertising was specific to them. Mobile technologies are uniquely capable as a channel of this targeted approach and as a result, can clearly differentiate from other marketing channels such as direct mail, TV, billboards or online banner advertising. In addition, this level of targeting also benefits the willing user who will receive much more relevant advertising.
This targeting methodology could also be used by content providers such as retailers for online shoppers. Instead of displaying advertisements to customers, retailers could display individual products that are particularly relevant for users. For example, Amazon generates 33% of its revenue from recommending individual products to customers. Once the browsing experience becomes more user-friendly on mobile phones, retailers could do the same thing, but with a greater degree of sophistication.
It is not just the new smartphones that are driving increased consumption. Many data plans encourage subscribers to use more data on their netbooks or laptops via data cards. Operators heavily promote unlimited data plans in the North America, Europe and Asia Pacific. For instance, in Europe, incentives include notebooks and netbooks with free mobile broadband. These popular promotions have huge implications -- even at 5 GB per month, converting 6% of the world's PC users to mobile data usage will produce 4,000 petabytes of data traffic per year.
Operators need to start upgrading the capacity of their networks. 4G technologies like LTE and Wimax are designed for heavy mobile data usage, but large-scale network build-outs are incredibly expensive and time consuming. Operators need to look at ways to increase their backhaul capacity with offload strategies such as Wi-Fi. Cost-effective, rapidly-deployed options such as microwave backhaul are going to be popular as operators realize the benefits of this technology over rival technologies.
Another way for operators to handle the approaching flood of data is by reducing the amount of content sent over the air through compression techniques and reducing bandwidth usage through video optimization and network acceleration.
With understanding of consumers’ mobile browsing habits, coupled with aggregated data activity, operators will be able to provide services that are not only relevant to its consumers, but services that subscribers are willing to pay for.
John Giere is SVP for products and marketing at Openwave Systems.