Mobile Web Is Not (Yet) Ready For Business Model Innovation

Here's Andrew Mason, CEO of Groupon:

I think that we’ll continue to see more companies ... who put us [Groupon] to shame a couple years from now with their rate of growth.

According to Andrew, Groupon grew so quickly thanks to its social features. What's going to drive web hyper-growth in 2012? The mobile web - but it's not ready yet.

Consider, the darling of early adopters this winter. It's up to a million users, growing through Twitter and app downloads - which is awesome. However, many are lost at every stage of the acquisition funnel - clicking the AppStore link, installing, learning the native UI. What if you could start taking photos & applying filters via the mobile browser - right after clicking that very first link? They'd probably be at 5-10 million users by now. Today, the website isn't even mobile-friendly.

Universal JavaScript APIs for mobile cameras are on their way (you can use PhoneGap in the meantime) - but not today, limiting growth opportunities for mobile-centric web services.

Another good example is online advertising (search or display), where every mobile click leading to a desktop page will convert at a disastrously low rate. This inhibits a lot of mobile innovation in pay-for-performance advertising - especially in e-commerce.

Mobile web has to get more mobile in order to facilitate business models of tomorrow. Let's do our part to make it happen!

Mobile Commerce - not iAds - Will Drive Growth in Mobile Advertising

Mobile commerce sales more than doubled this year, writes Bill Siwicki of Internet Retailer. Reaching 3.4 billion dollars by the end of 2010, it's already bigger than mobile advertising, estimated to be less than a billion dollars per year.

This is great for online retailers and also means that we're about to see a major shift in the way ad dollars on mobile are spent. There's a good chance that pay-for-performance ads, placed by online and brick-and-mortar retailers, will dominate mobile ad spending in a few years' time.

The beauty of e-commerce is in direct measurability of how advertising and marketing perform. As online retailers go mobile, enabling new revenue streams, they'll have a strong incentive to figure out the best performing mobile marketing channel (whether it's mobile SEM, display or retargeting) and spend as much as possible on customer acquisition. Their competitors will follow, driving demand for mobile inventory in a way that expensive branded iAd campaigns can't.

Then there is the local aspect. In his interview on Charlie Rose's show, Groupon's Andrew Mason talked about his vision of "the holy grail of local" - bringing pay-for-performance online advertising to millions of boutique businesses around the globe. Today's Groupon is doing just that, but in a very desktop-centric way with insufficient targeting (most of the business I get Groupons for in Vancouver are simply too far away). Not too long from now, Groupon and its clones will get into a bidding on war for highly targeted mobile inventory on behalf of their client SMEs. This will bring yet another monetization opportunity for developers & publishers.

The future is bright for mobile advertising and commerce as the market grows rapidly while geting more tech-savvy. Without a doubt, 2011 will be the most exciting year yet!

Organic Search as a Mobile Commerce Driver

Mobile marketing has always been a wild mix of technologies - from SMS, MMS and Bluetooth to branded iPhone apps. Choosing a tactic is often done based on a hunch, rather than hard data; ROI discussions are frequently limited to "X AppStore downloads" or "Y messages sent". But, in a market where "brand awareness" is one of the major objectives, this seems to work year after year.

Enter mobile commerce, where metrics play a far greater role. The space is heating up - there is a lot of creative experiments going on (look at the variety of commerce-enabled iPad apps in the Nielsen usability study alone!). Consumers are getting more comfortable with buying from a mobile device (thanks to the many appstores), which was confirmed by Google reps at the recent EMetrics. Mobile checkouts themselves are more vibrant and faster than ever before. Suddenly there is a lot of very different technologies competing for the m-commerce crown.

First of all, there are iPhone/iPad apps that have purchasing functionality integrated through an advanced API - Gilt and Amazon are good examples of that. The buying process is smooth but native UI implementation is quite expensive and faces fragmentation issues just like other apps. Existing e-commerce platforms like Magento are adding mobile themes & plugins to their default packages. Mobile adaptation platforms like those of UsableNet, Digby or our own Mobify Enterprise take an existing checkout flow mobile; mobile-only commerce solutions are also starting to appear. As an online retailer, what should you pick?

The answer is in the ROI. Online retailers report that conversion rates for mobile users using web checkouts are 70-80% lower than on desktop.Mobile users are already arriving in droves - through organic and paid search, affiliate marketing portals, email newsletters and so forth. Making existing online stores mobile-friendly (without breaking the URLs) is the easiest way to enter the mobile space - with an ROI that's guaranteed to increase over time. 300-500% conversion lift on mobile is there for anybody willing to invest in optimizing their web checkout for a small screen.

Whether it's a mobile stylesheet, Magento or Mobify, mobile web remains the logical first step to a complete mobile commerce strategy.