Friday, January 03, 2014

Mobile offers local media a digital do-over

The good news is that you only have to worry about one tech trend in 2014.  But it’s a doozy. 

The trend is the dramatic shift to mobile computing, a communications revolution rivaling the arrival of the Internet itself. The fast-moving swing to mobile from desktop computing is changing everything from interpersonal communications to news consumption to commerce.  
For newspapers and local broadcasters seeking to recapture some of the audience, revenues and relevance that they lost in the rather inelegant way they stumbled into Internet publishing in the 1990s, the shift to mobile computing represents a rare do-over. 

Because the mobile universe is largely a work in progress, there is time for legacy media companies to create transformational products to delight consumers and attract a host of advertising, subscription and transactional revenues. 
Local media companies have two advantages as they mobilize for mobile:

1.  They are unrivaled in the local power of their brands, their content-creation capabilities, their ad sales staffs and their ability to market new products through their existing media.
2.  Owing to their largely inept responses to the initial emergence of the Internet, publishers and broadcasters know the pain of blundering into a new business paradigm without a deep understanding of the dynamics of the marketplace or a thoughtful strategic plan for capitalizing on opportunities and defending against threats.  

In the interests of preventing history from repeating itself, here’s what everyone needs to know about this disruptive, compulsive new technology platform:

At this writing, smartphones were buzzing in the hands of two-thirds of U.S. mobile users and tablets were present in a third of American homes, according to the latest research from, respectively, the Nielsen marketing service and the Pew Research Center. 

These statistics don’t take into account the enormous load of electronic goodies that changed hands over the holiday season. So, it is safe to say that Americans in 2014 will be even more wirelessly wired for individualized, on-demand information consumption than ever before. And I do mean wired. 

Fully 79% of the 181 million Americans who own smartphones reach for them within 15 minutes of waking up in the morning, according to a survey last year by IDC.  And here’s what they do: 78% check email, 73% browse the web, 70% use Facebook, 64% get directions, 60% play games, 57% search for information, 44% read news or sports, 43% talk and/or text, and 37% make or view videos.  

This has unhinged news consumption. In comparing preferred news sources among Americans, Pew found 68% chose television in 1991 vs. 55% in 2012, 56% chose newspapers in 1991 vs. 33% in 2012 and 54% chose radio in 1991 vs. 33% in 2012. By contrast, 30% of Americans named the Internet and mobile media as their preferred news outlets in 2012. A separate Pew study in 2013 found that the Internet is the top news choice for nearly half of those under the age of 45, as compared with the 17% in the cohort who favor newspapers. 

The mobile revolution is being powered by devices and data networks that are getting faster, better and relatively cheaper all the time. Apple says the processing speed of the latest top-of-the-line iPhone is 40 times faster than the original device released in mid-2007. The new 4G wireless networks being deployed by most carriers generally can download data three to four times faster than the 3G networks they replace. 

What will people do with this ferocious fingertip computing power? In addition to all of the above behaviors, they will watch copious amounts of video and shop. 

The researchers at Strategic Analytics predict mobile video consumption will nearly sextuple to 8.6 exabytes of data in 2017 from 1.5 exabytes in 2013. To put that in perspective, Google Chairman Eric Schmidt famously said that humans up until 2003 had produced only 5 exabytes of information since the dawn of civilization.   

Although the National Retail Federation at at yearend was expecting only a 4% growth in fourth-quarter sales in 2013, it predicted a 13% to 15% surge in online shopping for the period.  Starting earlier and more forcefully than ever before, mobile commerce represented a third of eCommerce on the Monday before Thanksgiving, according to IBM Corp. 

These (and other) new behaviors are shifting audience away from traditional PCs and laptops.  Noting that some 15% of digital page views were consumed on mobile devices by mid-2013, Mary Meeker, the Silicon Valley investor and analyst, has predicted that mobile use in 2014 will double to 30% of the world’s Internet traffic. 

That estimate may prove to be conservative. Facebook reported that nearly 70% of its daily users in September accessed the social site from mobile devices. BuzzFeed gets 50% of its traffic from mobile, YouTube serves 41% of its page views on mobile and Forbes delivers 35% of its views on mobile, according to a survey last fall by the DigiDay website. 

With so many eyeballs moving to smaller screens, advertisers are bound to follow.  Analysts at BIA/Kelsey predict that mobile advertising volume will triple from to $20.7 billion in 2017 from $7 billion in 2013. Significantly, they believe that half of the spend will be at local media, generating $10.8 billion in local revenues in 2017 vs. $2.9 billion in 2013. 

With so many moving parts to ponder, media companies have lots to do to scope out the mobile marketplace.  If they fail to make the pivot this time, there probably won’t be a third chance. 

© 2014 Editor & Publisher