Digital Initiative Summit: Big Messages, Small Screens, Many Choices

How do companies profit from the fact that mobile users are more engaged than ever? Panelists discuss "Monetization in a Mobile World."
by Carmen Nobel

In the land of the digitally connected, the mobile device is king.

The majority of digital media consumption happens on mobile devices, with smartphone and tablet activity making up 60 percent of digital screen time in the United States, according to a recent report from Internet consultancy comScore. Apps suck up the majority of that time. In fact, app usage alone comprises 52 percent of total digital media engagement, according to comScore.

So how do companies profit from the fact that mobile users are more engaged than ever, albeit in an increasingly crowded content environment? That was the question driving the panel discussion "Monetization in a Mobile World."

Panelists included Janet Balis (HBS MBA '99), partner and chief revenue officer at Betaworks; Glen Otis Brown, a senior director for Twitter's Twitter Amplify service; and Sunil Gupta, the Edward W. Carter Professor of Business Administration and Chair of the General Management Program at HBS.

Gupta, whose current academic interests lie in mobile advertising, mobile payments, and mobile commerce, described the difficult landscape confronting marketers in the world of mobile apps, in spite of their growing popularity. The average number of apps on a user's mobile phone is 40, Gupta said. But most people don't use even half of the apps that they download. And 50 percent of app usage comprises Facebook and games, he said.

"If I'm a brand, my goal should be a standalone app," Gupta said. "The challenge for all of us is, if the app is the way we interact with the brands, how do you get me to be one of your favorite apps?"

Gupta said that a successful app must provide obvious, unique value—and meet consumers where they live. As an example, he cited the grocery chain Tesco, which offers a delivery service called Home Plus. He explained how the company has posted giant pictures of various produce items in South Korean train stations, along with individual QR codes. Via an app, commuters can scan the codes to order any given item while they wait for their trains.

The panelists also discussed relatively traditional models of advertising, including video ads. Brown discussed his experience with Twitter Amplify, which lets broadcasters instantly replay video content on Twitter—sandwiched between brief clips from advertising sponsors. For instance, if a basketball player executed an impressive slam dunk on live TV, the play might soon reappear on a sports network's Twitter feed.

According to Brown, users' attention spans are somewhat proportional to the size of the screens they use. That means they're less willing to sit through an advertisement to wait for the video they want to see. "Since we started doing mobile video, we saw that the ads need to be shorter to get people to the content," he said.

Asked about the shortest advertisement to appear before a video on Twitter Amplify, Brown cited a one-second holiday-themed ad in which an elf briefly dangled in front of a Walmart logo.

The panelists also discussed the use of phones' location-tracking technology, as it pertained to advertising. It's been a subject of concern among privacy advocates, but not, apparently, among the majority of panel attendees.

"Have you ever gone back to your list of apps to see how many companies are tracking your location?" Balis asked. Few people raised their hands.

"How many people have turned off the location-tracking feature on their mobile phone" Balis asked. Hardly anyone raised a hand.

And then Gupta posed a different question: "How many people remember any mobile ad they've seen in the last month?" Again, hardly anyone raised a hand.

"And that's the problem," Balis said.

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About the Author

Carmen Nobel is the senior editor of Harvard Business School Working Knowledge.

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