The 2016 edition of Mobile World Congress has come and gone, and the future of mobile has never been more intriguing. The product launches, major announcements, and speeches from MWC 2016 have widespread implications for carriers, advertisers, brands, and the future of our world. Here are our in-depth takeaways from Barcelona:
Changes to the market, carriers, and infrastructure
We’ve heard a lot about how we’re living in an ultra-connected, always-on world. When compared to previous generations, it can certainly seem that way. But we actually have quite a long way to go; only about 1% of all things today are connected. That number will rise, and very well may do so dramatically in the coming years, which has a few major implications for our world’s mobile infrastructure, carriers, and overall marketplace. In developed markets, we are developing a massive need for ultra-low latency, high connection reliability and availability, consistent user experience with high throughputs, and strong systems to be able to properly manage trillions of connections. What good is IoT innovation if a poor connection means our smart home is temporarily analog because it’s “buffering”? The story is a bit different in developing markets, where “getting the next billion online” is the key agenda item, as well as building out a reliable 3G/4G infrastructure to even provide basic connectivity.
Everything seems to be culminating in the “agenda 2020”, as every trend study or forecast seems to be hinging the next era of connectivity to that date. What is beyond? Well, that is for the next MWC to determine.
The ecosystem of the infrastructure suppliers certainly is in the middle of some dramatic change as carriers, IT companies, vertical representatives and disruptors all look for new ways to collaborate and develop solutions in this increasingly complex landscape. Carriers are looking for new ways to generate revenues as OTT providers, and MVNOs (mobile virtual network operators) are creating turmoil in their traditional marketplaces and customer relationships. Safe to say that we will be seeing some interesting developments and new players arising.[For more in-depth insights, view OgilvyRED’s paper The Dollars and Sense of Mobile Connectivity]
Content and advertising
One of the biggest topics throughout the week was video and virtual reality being key consumer drivers for 5G connectivity. Connection speeds are going to need to improve and prove ultra-reliable to keep up with the trend of video as the preferred and dominant form of mobile communication. An example of the increasing focus on video was BuzzFeed’s announcement on Tuesday of a new app dedicated solely to their video content. And they’ve not just created a pace to dump all their video content onto, but rather are developing their own original content for mobile video (see The Try Guys). This also means that the way content looks is changing, too. If you want to connect with your audience, you’re going to have to speak their language, and so we’re going to see vertical video continue to be a rising factor.
The overall video trend is affecting other formats, too. All content publishers now have to think mobile first, due to the rise of Facebook instant articles, Google AMP, and Apple News. These new consumption formats mean the days of driving traffic to your website are in the rearview and getting smaller—content providers need to serve up content to where the customers are, not ask them to go elsewhere to find it.
While mobile use is booming, mobile ad spend continues to trail woefully behind. Sir Martin Sorrell said that just 6% of overall spend is on mobile, despite the fact that over a quarter of consumer time is spent on the platform. Publishers and brands cannot yet switch to mobile only content until the ad dollars catch up to the user behavior, and that day appears to still be far out on the horizon. AOL was clear, that while 70% of their traffic is now mobile, switching to a mobile first/only model would kill their business in light of the majority of ad revenues coming from desktop properties.
And of course, content providers and brand marketers now have to deal with the very real prospect of ad blocking software. Its use is on the rise and shows no signs of abating. The responsibility falls on content providers and mobile marketers to create better content—whether it’s the content of a mobile ad itself or the content that is accessed on the other side of, and paid for, by that ad. Consumers need to feel that there’s value in the content or they’ll continue to find ways to bypass it. And the growth of ad blocking software options is making it much easier to do so.
Another interesting aspect, rolled out more broadly than at MWC 2015, is the possibility for operators to start monetizing the data they have about their subscribers. And, to use that data to enhance ad targeting. Whether this data is unique enough for the ad industry to pay premiums for it, and if it will create significant revenue potential for carriers, remains to be seen.
So how can brands respond? Create content that is not perceived to be advertising and thus avoid ad blocking and deliver entertaining or informative value to consumers.
As has been the case at many trade shows over the years, autonomous vehicles were a major part of MWC 2016. There’s a lot involved in the growth of autonomous vehicles, and the need for a fully-operating IoT tops the list. Vehicle-to-vehicle communication is just part of it, but the growth of smart cities is paramount too. Autonomous cars will need to be communicating with traffic signals, pedestrians, and the surrounding buildings.
The IoT has massive implications for manufacturing. GE said that a 3% increase in efficiency will be worth 1 trillion dollars in business value, and that efficiency can be achieved through digitization. Industrial companies care about outcomes, not marketing, and so if digitization can address efficiency needs it can clearly have a profound impact on the bottom line.
Connected machines means the face of the industrial workforce will change. Workers in the future of manufacturing will have be comfortable working with data, and the need to create analytics or interpret them will be paramount. Right now there exists a big skill gap in the market that combines knowledge of manufacturing and knowledge of technology, data and analytics, and there is opportunity for people to cross over and combine expertise in these fields to shape the future of industry.
And whether a large manufacturing machine or a connected home appliance, the IoT means a massive increase in data, and thus, the need for security. Security is needed not only to prevent a massive machine from a critical attack that could halt production, but also to protect the overwhelming amount of data that will be created as a result. Consumers have shown the willingness to offer up their data if it’s part of a value exchange, but security has to hold up its end of the bargain, too.
On the other end, the marketing industry is still searching for ways to embrace IoT at scale. Currently, IoT is scaled where it produces outputs and utility. Marketers are still searching for killer use cases and a widespread rollout of the technology among the consumer population. In retail environments, beacons in connection with digital signage seem to provide some promise, as well as incorporating IoT with adjacent product benefits such as health trackers and athletic apparel (see Under Armour’s recent acquisitions).
MWC dedicated two keynote sessions to the topic of inclusion with speakers from Mastercard to Unicef, and Roshan (Afghan Telecom), Tata, Google’s Loon and mFish. The lineup showed the massive need for infrastructure investments beyond pilot programs as they can provide dramatic improvements in financial, human rights, health and educational standards.
Like he did last year, Facebook founder and CEO Mark Zuckerberg used much of his keynote speech to speak about Internet.org and its mission of bringing internet access to every corner of the globe. It’s a noble endeavor, and potentially a very lucrative one, but increasing connectivity around the world is only part of the battle.
Much was made of the staggering amount of people in the world who are still not connected to the digital world. While we heard lots about 5G, there’s no question that it’s a first-world issue. The majority of the world is either not connected at all, and if connected is still on 2G speeds and reliability. While we know that much of the world still needs better connections, it’s important that proper in-depth research is done to identify the demand for mobile services on the local level. This will help make the case for building the infrastructure needed to connect folks around the world to the internet.
But even when previously offline communities join the digital world, we must be cognizant that content must be tailored to the specific needs of those who are accessing it. Local mobile content needs to be created though local communities, not out of boardrooms in faraway places.
Virtual Reality was everywhere at MWC 2016. The most iconic image of the week came from Samsung’s event, with the entire crowd wearing VR headsets as Mark Zuckerberg walked right down to the stage while nobody noticed. And during that event, Samsung announced they were giving away free Samsung Gear VR headsets to anyone who preordered their new smartphones. LG also said they’re giving headsets away. So it’s clear that VR is at a tipping point—are we on the verge of mass adoption? Or will VR go the way of the 3-D television?
The former seems more likely than the latter, given the players (Google, Apple, Facebook, etc.) behind advancing VR technology and content. Zuckerberg talked about VR as a natural progression in how we communicate and tell stories, and mentioned the ability to “share entire scenes” as the future. If that’s the case, there is great opportunity for brands to create richer and more immersive experiences than ever before. Those who get it right will set up camp on the next frontier of communications.
MWC yet again showed the massive innovation potential in the connectivity landscape. And while any individual company will be challenged to fully embrace or own a singular space, it is apparent that collaboration across an ecosystem of players is the path to succeeding in this energetic field with economical and social benefits galore. There is certainly no lack of opportunities.