Thursday, July 19, 2007

Mobile Code Scanning: the Starting Point

These days, if you're a mobile operator, MVNO, dealing with mobile content or services, then you probably are involved in some form in mobile Code scanning (Otherwise known as 'Physical World Connection') . Many players in the space are being pitched with the technology, or will be soon.
Having been in the space for a short while, I've decided to share some of my notes on mobile code scanning, where to start, what considerations should one make when selecting a technology and vendor, what are the key challenges that one might want to focus on when launching code-scanning campaign and more.
I should be making two quick notes:
  1. In no way am I considering myself the know-all authority on this. This is an open discussion with whoever would care to comment, hopefully we'll get a useful discussion going.
  2. The following are my independent, unbiased (I'll try!) thoughts on the subjects, and should not be affiliated with any one vendor. I will try my best to not recommend or favor one technology or vendor over the other, only present the decisions points, the rest is up to you!

So, the first and most important step, I think, is to deal with two things that one can take from this:
  1. What can mobile code scanning do for you (, your subscribers, your audience, your shoppers,...)
  2. How can one monetize that (AKA revenue streams)

So what does Mobile code scanning do for you? (Let's drop all the marketing spin:) Mobile code scanning connects (your) subscribers to the infinite sea of content and services you put in for them, and they never seem to use. Why? because nobody types a URL on their mobile phones (OK, nobody refers to 99% of users). Because nobody knows how to get to, operate and enjoy that great/useful/amazing/... game/application/community/... that you (Operator) just paid to make available. Because keystrokes are a usability barrier on phones.
There are many ways to think about "increasing usability": Voice recognition, text recognition etc., one of which is code scanning. Essentially use the on-board camera to collect and obtain information from the physical object they are looking (and interested) at: an ad, signage, interesting site, informational note (bus schedule) etc.
The advantages in code scanning, compared to other usability methods mentioned, is essentially once you've educated your subscriber, it is very easy, (with the right algorithms) it is error free, it is far less vulnerable to the context you're in (if you're in a noisy environment, for example) and, it can deliver significant value to the user, instantly. For an operator, this could be a differentiator.

That said, there's a lot of marketing hype spread around. Let's keep one thing in mind: a CEO in the space recently said: "They (Subscribers-AR) don’t just wake up and say, ‘Hey, let’s go scan some bar codes.’" Mobile code scanning is an enabler, if you will. Its about the value that it brings the subscribers closer to.

With that in mind, the next step, and probably the most important one in this journey to mobile code scanning, is understanding the potential revenue streams for an operator. And those divide into the following three:
  • Increase operator content & services discovery & consumption: All operators in the last few years have heard the term 'bit pipe' all too frequently and had taken a move on it. A lot has been invested in content and services, licensing, distribution and marketing. An operator can increase their content revenues tremendously if they made finding and downloading it an immediate, obvious process. In reality, finding content that one wants and downloading it, is not easy at all. Same goes for services that would be very useful, but it's just too laborious to get to. Take mobile purchasing for example. Those sophisticated systems are usually SMS-based, and require the user to type in (correctly!) the merchant, how much they want to pay, possibly some identification etc... How many people would actually go about that? Imagine the alternative, where a simple code would contain most of the parameters required for the transaction, and all that is left to the user is to approve the transaction? consider the implied operator revenues in the messaging transactions and rev share opportunities.
  • Incorporate 3rd party brand campaigns: When speaking of marketing budgets of ad agencies and brands, everyone start dreaming...sweet dreams. Operators have unique standing in the mobile code scanning space these days: it is early days for brands to go directly into code-based campaigns, essentially because "how many of my audience will have the code reader installed and will know what to do with this stuff?". However, if an operator is involved, well they can enable the code reader on phones, they will run a couple pilots to kick-start the buzz etc. That's where advertisers will be happy to see increased site visits, increased participation in SMS campaigns and contests through codes embedded into their ads. That's where an operator can reel 3rd parties in and sign them on click-through or rev share deals like hot buns, and they'll love it.
  • B2B Mobile Code Scanning Services: There are many businesses that would benefit significantly from automation and communications at a much lower cost than commercial grade code scanning systems. They typically have little or no automation, their transactions would be managed manually and by the time the invoice goes out, resolving an exception would be almost impossible. The obvious use case would be the small couriers that lack automation and the existing solutions are just too complex and expensive. With mobile code scanning they get computing power and communications using far cheaper customized solutions than they would ever get otherwise. There's a lot to gain by offering code-based enterprise applications to this vertical.
Having looked at possible operator revenue streams that code scanning can enable or increase, there may be more, it is important to think what are the business models and the ways an operator can monetize on those streams, which is not a trivial task. Looking at that would also help in thinking of the acceptable business model with the technology vendor, such that the ecosystem is healthy and everyone's happy.

On the next posts I'll try to look at two issues: what do (I think) consumers care about and what should an operator be considering when choosing a technology (and) vendor.

Thanks for reading, looking forward to interact with your comments!


Anonymous said...

wow you are really gay for scott shaffer (pondering primate)

Amir Rozenberg said...

Thanks for the insightful comment!
I now got hold of comment moderation :-)