THE FUTURE OF MOBILE CONTENT

By Lai Kok Fung, BuzzCity CEO

Take a look at the mobile internet today: the vast majority of content – say 80% - is fee-based (ring tones, games, even sports scores), the remaining 20% is available to users for free and is supported by advertising. By 2010 and possibly even as early at 2008, I expect this ratio will flip. Why?

Right now the main thing that’s stopping people from using the mobile internet is price. Data costs are artificially high because telecom carriers – who invested massive amounts of money to purchase 3G spectrums – are targeting the upper end of the market – yuppies with blackberries.

But now it is starting to become cheaper for consumers to get online using a mobile phone:

HALF THE PLANET

By Hisham Isa, Vice President (Marketing)

Nearly one out of every two people on this planet will own a mobile phone by the end of the year, according to UK-based market data company “The Mobile World”.

“The Mobile World” estimates that this month, mobile phone subscriptions will pass the 3 billion mark and by December some 3.25 billion consumers will own a mobile phone. These figures are after correcting for individuals who own multiple phones. Sixty-five percent of all handsets made this year will be sold in emerging markets.
I find these numbers to be staggering. Think about it. At the beginning of the millennium, broad segments of people across the world had no access to a phone, much less the internet. A friend of mine who served as a Peace Corps volunteer in Africa in the early ‘90s used to travel half a day – longer if his bush taxi broke down – just to make an international call. No more.
Our data at BuzzCity confirms the trend. We track advertising impressions and user traffic, both of which directly correspond to mobile internet usage. During the second quarter of the year, we delivered more than 1.2 billion advertising impressions. This is a three-fold increase from the first quarter.

At the same time, page views by Indonesian and Filipino users are up 9 – 10 times; user traffic in the US doubled quarter-on-quarter. We are seeing consistently high traffic in Africa, where BuzzCity delivered 500 million ad impressions in three key markets: Kenya, South Africa and Nigeria. Advertisers come from a variety of industries, including mobile entertainment companies and financial institutions.

Niche marketing agencies have adopted mobile advertising whole-heartedly, but traditional agencies are still holding back. They seem unsure of how to enter the mobile marketing arena.

A piece of news this past week out of San Francisco should have ad buyers on their feet, though. Nielsen – the company synonymous with TV ratings – has purchased a well-respected mobile data company called Telephia, which tracks all aspects of consumer phone usage.

“We follow content wherever it goes across all platforms,” a Nielsen executive was quoted as saying by The New York Times.

The Telephia acquisition may help standardise matrix and measurements. It’s also a recognition that mobile advertising is coming of age.

Like internet publishers, we are able to offer advertisers detailed click logs and analytics, including a demographic breakdown (gender, age, ethnicity, geography, phone model and software) of users who click on a banner. Coming soon, we’ll add targeting by hour-of-day and mobile operator.

Mobile ads are normally sold on a pay-per-click basis. But in response to some agency requests, BuzzCity has also started offering CPM (cost per thousand) packages. CPM enables media agents to buy in bulk and re-sell ad banners in the same way that they sell other media.

Online mobile business models were at first predominantly based on the sale of content by publishers. Since the end of last year, though, we've all noticed a decline in paid features and the rise of ad-supported content. Consumers, for example, expect to access information about the weather for free. Even a lot of games and pictures can now be downloaded at no charge. The rising number of mobile eyeballs makes it viable for advertisers to foot the bill.

These consumers will also demand a diverse range of content – a premise that drives social networking platforms, because from the executives hanging around the corporate water cooler to rural women lining up to draw water from a well, people have always congregated to talk, share stories and trade information. Now, in the 21st century, individuals across the globe are increasingly congregating via their mobiles.

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More on this subject and the challenges & choices in "Monetizing Traffic" from Kok Fung at Mobile South Asia, 10th - 11th July 2007, Dhaka, Bangladesh

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CONNECTING THE UNWIRED

By Lai Kok Fung, BuzzCity CEO
Life doesn't progress like a spreadsheet.

I think that's one of the biggest lessons I've learned over the past eight years, since leaving a secure job at Kent Ridge Digital Labs in 1999 to launch an internet startup with three colleagues. Today, that startup – BuzzCity – is a vibrant mobile service provider delivering content to consumers in over fifty countries. By the end of the year (2007), we expect to add another 8 markets in eastern and central Europe. We currently serve more than 1 billion mobile advertising impressions every 3 months, have multiple revenue streams and are not overly dependent on any one market.

 

But it hasn't always been like this. In fact there have been moments when we wondered how to carry on. This week, I'd like to share with you a bit of our company's history and the lessons we've learned along the way.

Before forming BuzzCity, I was a researcher specialising in pattern recognition. We worked with barcodes and taught computers to recognize faces. Some of the technology was adopted by government agencies and Singaporean government-linked companies. However after a few years, I was tired of simply publishing papers and I really didn’t like the idea of our technology servicing only a select group of people. I remember a particular moment when I was at an underground station, watching commuters enter and exit the trains, and I thought “What a pity. My work has nothing to do with them.”

REFLECTIONS FROM THE RIVER GANGES

By Lai Kok Fung, BuzzCity CEO

I stood on the banks of the River Ganges – one of the holiest sites for the Hindu religion – watching people throw cremated ashes of loved ones into the river’s holy waters. Religious pilgrims voyage to the northern Indian state of Uttar Pradesh to bathe in the river, drink its water and visit one or more of the 1500 temples located here in the town of Varanasi. It’s one of the oldest continually inhabited cities in the world and devotees believe that someone who dies by the river will be freed from the endless cycles of reincarnation.

After a few busy days in Mumbai where we hosted the Mobile Monday, I traveled to Varanasi for some reflections. I’ve always wanted to see the Ganges for myself. It is the city of the Lord Shiva, and the Lord Buddha is said to have preached his first sermon at a nearby town. Over the centuries, the city has produced prominent Indian philosophers, poets and musicians like the sitar player Ravi Shankar, who had such a huge influence on the Beatles. And for anyone who has benefited from an Ayurvedic massage – yes you can thank the people of Varanasi for that as well.