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On-Device Portals By-Pass Content Discovery & Mobile Search Shortcomings; But Do They Also Point the Way To Wider Markets & Greater Revenues?

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In-Brief: On-Device Portals (ODPs), a new generation of client applications that leverage the handset’s capabilities to deliver a more appealing user experience, increase service awareness and streamline content purchasing are breaking on to the mainstream, as this recent FierceMobile Content post shows. The focus has been on how ODPs can help mobile operators and content providers deliver an immersive user experience, providing a ‘wow’ factor through the use of rich graphics and targeted content. But this column from Jakomi Matthews points out that brands and – specifically – the music industry can harness ODPs to deliver users 24/7 access to content as well as updates, promotions or special offers.

http://www.fiercemobilecontent.com/story/on-device-portals-what-s-after-wap/2008-05-13

This year is indisputably the break-out year for ODPs as brands discover new ways to use the client application to engage users on their mobile phone. However, most of the excitement has been around using ODPs to deliver on-off promotions or similar time-based schemes. Such strategies miss the point and ignore the value-add an ODP represents. It’s not just about plugging an item or event via the mobile phone idle screen; it’s about extending their reach from the PC to the mobile in a way that is relevant, personal and valuable to the content/brand owner and the consumer.
Why ODPs and not WAP sites? Because ODPs quite literally deliver the goods. Trawling WAP sites is not only a chore; it’s a clunky and slow experience that users are actively avoiding. Consider Opera’s State of the Mobile Web: First Quarter, 2008. Report http://www.opera.com/mobile_report/ It found that full Web surfing comprises more than 77 percent of all traffic. Content on WAP and .mobi sites accounted for only 23 percent of mobile Web traffic. What’s more, this share continues to decline as more consumers become more comfortable browsing the Internet on their phones.

In contrast, ODPs are designed from the ground up to deliver content via easy-to-use, slick interfaces that can also be programmed to give users a huge and welcome say in co-creating their content experience. Because everything is delivered OTA (over-the-air) content and offers can updated on the fly by the brand/content owner. Users can access all this offline, a great way to enjoy mobile content without waiting for downloads (a result of network latency) or suffering bill-shock (a result of high data charges).

And ODPs don’t just deliver a great user experience; they also allow brand/content owners to collect the all-important customer data directly from the client software – including handset type, location, individual preferences and click patterns.

And speaking of clicks, ODPs take the pain out of finding and enjoying content. Put another way, ODPs simply deliver the content (and so delight the customer). In comparison, other methods – such as navigating portal menus and searching for content using mobile search services – are slow, tedious and can try users’ patience. In fact, research shows ODPs require 80 percent fewer keystrokes than surfing/searching WAP sites and are 20 times faster.

No wonder the last months have seen more software clients with more features and functions come online. Today ODPs are much more than rich media billboards; they are engaging and interactive applications that enable users to vote, blog, communicate via instant messaging, participate in quizzes, connect with friends via social networks and buy stuff.

Against this backdrop, expect to see more brand/content owners make ODPs the centrepiece of their content-selling strategies. After all, what other technology allows them to have a branded presence on the handset, interact with users one-on-one, and – best of all – take 100 percent of the sales and advertising revenues generated?

But don’t just take my word for it. Gartner, a global technology research firm, has also concluded that “the off-deck ODP model for content delivery will become more prevalent as organizations become more confident in their ability to deliver effective mobile applications outside the mobile operator portals.” [JAKOMI: DO YOU HAVE THE LINK?] It based this view on a case study of an ODP that the ABC (Australian Broadcasting Corporation) launched for the Australian election to deliver users news and related content. ABC reported 15,000 downloads and, on Election Day, counted over 250,000 (!) page impressions. The ODP was built by Oplayo, a Finnish mobile media company specialized in off-deck solutions such as ODPs. Since 2005 Oplayo has deployed over 15 million ODPs.

Delivering content to the user’s phone is just part of the attraction of ODPs. They also enable brand/ content owners to show mobile advertising and keep the revenue. Mobile advertising can take the form of news ticker, banners and splash ads. As brands and their agencies become more confident and convinced of the effectiveness of mobile advertising, I have no doubt they will turn to ODPs to deliver the customized and targeted messages that are critical to the success of all integrated marketing campaigns.

How are operators dealing with the increased interest among brand/content owners is going off-portal and therefore direct-to-consumer (D2C) via ODPs. Predictably, there is a backlash in some markets, but, for the most part, mobile operators recognize this is less of a competitive threat and more of a revenue-generating opportunity.

I’m hearing in the industry that operators even encourage brand/content owners to offer ODPs that users can download via the mobile operator portal. Why? Because mobile operators are beginning to realize they are not the best content retailers and they want their portals to be associated with the brand/content owners who are. They enjoy a halo effect of being in the company of brand content/owners that users know and love. The model is catching on and the list of brand/content owners coming on board with their own ODPs in the U.K. alone includes MySpace, YouTube and the BBC

More importantly, operators who can offer users a variety of cool and customized ODPs via their portal can benefit from data charges and other arrangements. (Granted, it is a smaller rev-share than operators could exact from partners in the past, but even without a lion’s share of the revenues operators can win big.) Trials of ODPs I’m aware of consistently demonstrate ARPU increases up to a whopping 50 percent higher than if users were left to surf and sift through content on a WAP portal. ODPs also benefit operators in another way: They receive a commission on all sales as well brand association prior to the ODP hand-off.

We know about the benefits of an ODP strategy, but what are the costs? We know that some companies, as part of an aggressive land-grab strategy, have gone so far as to build and offer ODPs for free. However, common sense tells us a free model is hardly one that is sustainable over the long-term. How long these providers will be around to offer ODPs and support their existing customers remains to be seen. Other ODP providers charge a flat build fee coupled with a monthly management charge, and still others charge no build fee but expect a significant rev share. Choosing the right provider depends on your business model and objectives.

One thing for sure: An ODP is fast- becoming a key component of competitive arsenals as more brand/content owners discover the advantages of a 24/7 presence on the handset. Success stories include Audi, Pepsi, Xfactor, Pop Idol, Lynx, Kylie, Ozzy Ozbourne, Joss Stone and many more.

In line with my business focus on digital media and specifically the music industry, I miss a discussion on the benefits for recording companies, so I’ll start one here. Do ODPs also represent a viable route to market for record labels as they pursue D2C campaigns? Taken from a country perspective, the costs of rolling out a campaign via downloadable client software may appear prohibitive. But when seen on an international level, the ROI is quite attractive. In fact, an executive at Universal Music recently revealed that ringtones from some artists can bring in as much as GBP100,000 per month.

To be clear I’m not advising music content owners to base their D2C strategies entirely on ODPs. However, I do advise them to make ODPs part of the mix. Put another way, music content owners should have both a WAP site, to reach the great masses of music fans worldwide, and ODP presence, to target specific user segments, geographies and interests – and let’s not forget the benefits attached with being able to present mobile advertising to a captive and relevant audience.

ODPs also close the circle to ensure users don’t only see content; they can buy it as well. Think of ODPs as a natural extension of Web-based storefronts, a convenient catalogue of content delivered direct to the phone that they can explore on their own time and terms. And the fact that these ODPs effectively plug into Web-based payment engines should ensure even greater uptake by brand/content owners over the coming year. As mobile consumers become more accustomed and comfortable with mobile commerce, the sky is truly the limit.

 

 

Author

  • Wayne Rosso

    Wayne Rosso has worked in music and technology for decades. He has worked with such artists as Aerosmith, Bee Gees, Crosby, Stills & Nash, Public Image LTD., Beach Boys, Phillip Glass, Fkeetwood Mac, Rick James, New Kids on the Block, Slash, Evanescence and scores of others.

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