| The Revolution Mobile Marketing Report: Mobile Internet |
| Monday, 05 December 2005 | |
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Mobile's new opportunity - Will i-mode have the same effect in the West as it has had in Japan? Adam Woods looks at the chance of it taking over from WAP. Since it took off in Japan six years ago, NTT DoCoMo's i-mode service has been the mobile internet phenomenon that Western network operators have sought to match. Wireless Application Protocol (WAP) became the international standard, but it has never escaped the shadow of its rival's simpler, faster platform, and 3G services have not created consumer excitement on anything like the scale of i-mode, which has 42 million subscribers in its country of origin.Having launched in the UK through O2 on 1 October, i-mode needs to uphold this reputation in a market crowded with offers. But O2 is backing its i-mode portal with an £8.5m marketing budget and can boast 100 launch sites, from brands such as Egg, Interflora, BAA and the National Lottery. "The breadth and depth of content is a great achievement, and we won't stop there; we'll increase that as we go forward," says Grahame Riddell, O2 head of data marketing. He describes the embryonic i-mode service as a "solid base", and says O2 expects to add up to 100 sites by the end of this year. Many have yet to try the UK version, but know enough about i-mode to believe it's a big step forward from WAP. "I was in Japan a year and a half ago, and I played with i-mode. I couldn't understand anything, but it seemed like an improvement over WAP," comments Pamir Gelenbe, director of corporate development at mobile marketing company Flytxt. "I found it was much quicker and easier to use." WAP's selling point is its penetration. But, for consumer experience, ease of programming, cost and much else, i-mode is considered an advance. "A lot of people say it's like an ecosystem," says Gunnar Larson, director of mobile games at RealNetworks, which offers a range of its own content for i-mode. "It is a mix of services that look and feel the same across all suppliers. We are also active on standard WAP phones and services, and over the coming months we will be able to monitor the performance of both," says Larson. "Fingers crossed that both do well, but I am very confident that i-mode will." So how does it help advertisers? In Greece, where the number one network operator Cosmote launched i-mode in July 2004, subscriber numbers stand at 180,000, against initial forecasts of 120,000. Kerstin Trikalitis, managing director of Athens-based content creator WIN, cannot speak highly enough of the value that i-mode offers content owners. "The revenue share is very good, so content providers and media brands are much more motivated to provide updated, fresh, high-quality content. It is straightforward and to the point. You have a simple menu, you subscribe to each site in a simple way, you don't have long download times and it is much faster than WAP." From a brand marketing perspective, there are a number of selling points, most of which relate to i-mode's greater compatibility with the internet. The i-mail application, for instance, is a Blackberry-style email application, which proposes to offer a richer alternative to SMS. Also, the language used to create i-mode pages is cHTML, a subset of HTML, which means web developers can adapt existing web pages for i-mode without difficulty or cost. O2 estimates that an i-mode site can be constructed for £8,000 and, in contrast to WAP, programming will be compatible with all i-mode phones. "One reason we adopted i-mode is because we believe more business partners will find it easier to build i-mode sites," Riddell says. O2's range of i-mode content is certainly heavy on brands. "What it is doing is taking the best of the information, content and entertainment services that customers use on the internet and bringing them to mobile," says Riddell. "We have content providers that are using mobile for the first time - some of them are using it as a marketing tool and some are using it to monetise their content." Brand names The FT, The Times, Sky, Glamour, GQ, Nuts, FHM and Viz are among the media names offering subscription content. William Hill, Ladbrokes and Paddy Power are all taking bets through i-mode, while the National Lottery, which offers a web site, is planning to extend its SMS ticket service to i-mode. Streetmap (www.streetmap.com) and weather site i-meteo (www.meteoservices.be) offer content such as maps and meteorological satellite pictures, while Interflora (www.interflora.com) is ready to take flower orders by mobile. But the most revolutionary service could well be that offered by Egg, which allows customers to check their bank balance via mobile (see case study, p64). That facility is likely to be extended to balance transfers, with the potential for one i-mode user to transfer cash securely to another. Yahoo!'s comparative shopping service Kelkoo (www.kelkoo.com) is another brand adding i-mode to its portfolio of mobile experiments, having launched on Yahoo!'s WAP platform in July. "We are testing as many platforms as we can, but we believe i-mode is one of the next big things from a mobile perspective," says Greg Grant, Kelkoo UK marketing director. The fact that so many brands are keen to try out i-mode is probably down to the 86 per cent cut of revenues that O2 offers. "Content providers like the idea that they'll be able to keep a larger percentage of the revenue," says Riddell. "They can see we really want to make sure they can make a business out of it." Some believe O2 will not be alone in pushing i-mode for long. "I'm sure the rest will follow in the near future," says Ian Ebden, creative executive at digital agency Moonfish. "I-mode really does cut the time and cost to market for people who are trying to go mobile, whereas WAP is full of barriers. I think they will roll the dice again with i-mode, and they would be right to." But, as mobile industry watchers point out, i-mode in the UK has forces against it, from the limitations of handsets to the growing penetration of 3G services from operators such as 3, Vodafone and Orange. Tough market While its rivals will no doubt monitor i-mode's progress, they are undaunted by this competition. "I-mode provides access to certain sites; it did well in Japan, but hasn't set the world on fire in Europe," says 3 marketing director Graeme Oxby. "It's what we'd call a 2G, GSM service, so, for us, it's not desperately important." Though i-mode is not specifically a 2G or 3G application, there is no doubt that the market is likely to be less welcoming to i-mode in the UK than it was in Japan in the late 1990s. "There's a real collision of technology now," says Bob Pike, chief executive officer at mobile solutions provider Digital Rum. "When NTT DoCoMo did it in Japan, there was no competition. But i-mode is internet-based, so it renders better, and the bandwidth is getting better. How many customers O2 gets will depend on how many phones it gets out there." O2's launch range of phones from NEC and Motorola come with an i-mode button, allowing instant connection. Subscribers don't pay for the time spent online but for the amount of data they use - at a rate of £3 per Mb. As with the internet, most sites on the network offer some free-to-access content, but most operate on a subscription basis. Though i-mode is effectively a portal and O2 strictly controls the sites it offers, this portal allows brands to control their own mobile presence rather than plough content into an operator-branded service. "We are in charge of our site and what content we offer and when," says Larson. "We have a strong brand in the gaming world and are careful with it, but that is even more true for big brands such as MTV and Coca-Cola. With a site like this they can give the brand experience they want." Most growth in mobile internet revenues is off-portal and, as brands such as MTV and The Sun head out on their own, some believe mobile portals are already losing their magnetism. "Portals have done a great job in educating users and bringing brands into mobiles, but now that content providers have the idea of engaging with people through mobile phones, most of the new developments are going direct to the consumer," says Anil Malhotra, Bango VP of marketing. Richard Watney, managing director of Java-based mobile shopping site Reporo.com, says it has signed brands such as CD WOW!, Firebox, Blackwell's, PC World, Lastminute, Amazon and John Lewis. "The main reason to go off-portal is that you can be cross-operator and retailers don't need a bespoke solution for each operator portal," he says. Certainly, i-mode requires a boost before it can be seen as a serious mass-market alternative to WAP, so Gelenbe believes mobile marketers should not get too excited. "How many people will have i-mode in the next few years?" he asks. "Even in European countries where it has launched, it's the exception. From a brand perspective, marketers should focus on WAP, SMS and MMS because i-mode will be niche for a long time." WHAT IS I-MODE? - I-mode is a new platform for accessing the web over mobile devices. It has an always-on functionality not dissimilar to broadband, with no need to 'dial up' to make a connection - The service uses cHTML (compact HTML) and therefore web pages can be easily adapted for mobile, in contrast to WAP's WML language, which calls for an entirely new set of programming - NTT DoCoMo launched i-mode in Japan back in 1999 - More than 50 million people worldwide use i-mode, although at least 42 million of those are in Japan, where one in three are i-mode users - NTT DoCoMo started to license i-mode to network operators in Europe in April 2002, and the service is now available in 22 countries around the world. In Europe, the Netherlands, Germany, Belgium, France, Spain, Greece, Italy, Ireland and Britain now all have an i-mode service - O2 has initially made four handsets available - two from NEC and two from Motorola - and is offering web browsing, email, picture messaging and up to 10 monthly subscriptions free to contract customers until at least the end of 2005 - The £8.5m advertising campaign O2 has rolled out behind its i-mode launch is its biggest since it broke away from BT in 2001 EGG OFFERS BANKING ON I-MODE First Direct customers have been checking their accounts by text message for as long as the Japanese have been using i-mode, but Egg aims to go one better on O2's new mobile platform with an interactive service. Research conducted before the launch of its new Egg Money account told the bank that its customers wanted more interaction. At the same time, O2 was looking for a banking partner for i-mode, which is said to offer better security than WAP, and further research found that more than a quarter of Egg customers use O2's network. Egg's i-mode site, which launched with the new service on 1 October, offers users the ability to check Egg Money balances and Egg Card transactions by mobile - and that's just the start. "We can potentially develop it in the near future to allow consumers to move money between their Egg accounts and accounts they hold with other providers via mobile phone," says Egg spokesman Mark Maguire. "Transactions are covered by our online guarantee. We stand behind the security in place and service we offer." © Copyright Flytxt Ltd 2006. Unauthorized use of any content constitutes a material breach. |
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