Worldwide Chairman and CEO Ogilvy & Mather, Miles Young, was a delegate at the China Development Forum held on March 23-25, 2013 at the Diaoyutai State Guesthouse in Beijing, where he delivered a speech on the growing importance of mobile internet.
Here is transcript of the speech:
Our topic today is mobile internet. I wonder whether, these days each word is equally as important as the other. I suspect that the word "mobile" is the most important of the two - and that in a funny kind of way the word "internet" - without it - is becoming a little bit old-fashioned.
The new era is all about mobile. We all have the statistics. There are 2.4 billion internet users, and 1.1 billion smart phone users. 63% of the latter use search every single day. However, I must say that my favorite statistic in this area is that 20% of British young adults would rather starve for 24 hours than go without their mobile!
But there's also a problem with the word "mobile." It describes a device, used in the sense of a medium or a channel. But I think it's more interesting to talk in terms of what the mobile enables. For the first time in human history communications or transactions are no longer confined to a fixed or planned state of time. And it escapes the constraints of physical terminals. You don't have to be somewhere to transact, you can do it on the go, anywhere. So to me the new era is all about "digital mobility" - what the mobile enables.
Last month I was at the Mobile World Congress in Barcelona. You could sense that there was a tipping point there. Of course, for a few days you do feel you're at the very epicenter of the world. But you also see that "digital mobility" has become the real issue - not anymore just the topics of competing operating systems, of the rise and fall of the various device players, or of the latest flurry of new apps - however important and interesting these things are.
So I think we can open the debate to address the significant business, marketing and social implications of digital mobility in the future. There are three points worth considering.
The first is that I believe that mobile is miscast as the great new advertising medium which will sweep away all in front of it. Of course there is some role for mobile in advertising. Clearly, it allows advertisers to capitalize on the short interactions at relevant moments. Advertising at the time of a price comparison in a store is highly valuable. There are impediments: such as the lack of advance reporting for mobile campaigns, the small screen size, and the logistical difficulty of supplying some of those formats across device types and platforms. However, these are slowly being dealt with and will to some extent be resolved. Nonetheless I am convinced that mobile will transform from being a mass market phenomenon into being a true mass medium for advertising. We should also remind ourselves just what we are talking about: it currently captures about 1.3% of advertising revenues globally, and even more in China. It might double in five years, which would make it still relatively modest. The fundamental reason why mobile will never be just another mass medium is precisely because digital mobility, first and foremost, is a platform providing services to users, and not for disrupting them.
This is my second point. The real value of "digital mobility" is that it is a service platform. It is about a whole new world of connectedness between people, information and services - putting those services in the management of the interaction right in the consumer's own hands. For business users there are two great opportunities here. One is that mobility has become socialized: social media campaigns on mobile garner more re-tweets and followers than identical campaigns on the desktop. In this sense, mobile is much more an influence medium than an advertising medium. A second is to recognize the real value of location-based services in creating a value exchange between the brand, the retailer and the customer. To me this opens up a very interesting opportunity to see "digital mobility" as a strategy for driving up the value of the individual customer. In a sense I am talking here about reinventing the classic formulae of CRM and loyalty marketing. China as a market has been all about driving penetration, seeking new customers. But the time is coming when retaining customers - customer loyalty - will be as or more important. Let's not forget that your best customer - according to our research - is worth about 8x the value of an average customer. "Differential marketing" - treating them differently and talking to them at the point of consideration of purchase - seems to be a major - but relatively unexplored - future benefit of digital mobility.
My final point is about the broader implications of digital mobility. We are seeing swathes of new forms of interactions which essentially enable customers within society. On-the-go health information is on our doorstep: Nebusoft is working with Chongqing to develop a health cloud; there are services for farmers - Planet Mobile has a very interesting program here called Nong Xin Tong. And, in Kenya, M-Pesa is the most robust mobile-based finance and payment system in the world.
What all this says to me is that the old adage that "content is king" is an understatement. Content will be everything, and you will live or die by the quality of your content. What digital mobility does is to put new demands on that content. It has to be relevant, consumable, interesting, stimulating - and all of that while you are "on-the-go." This is the real excitement. So as businesses and governments have to become content creators, we need to reflect again on the relationship between the mobile and the internet. Isn't it odd that we always describe the "mobile accessing the internet." I think the perspective needs to shift to the other way around. We need to ask ourselves how the internet can mould itself to the demands of mobility, because they are very different to what's needed when you are sitting at home at your desktop. In other words, digital mobility is going to force us to re-think the way in which we curate and produce content in the future.
In all these senses, "digital mobility" needs to be on the strategic agenda of any business. It will be front and central in the future.