• by Fara Warner , November 3, 2008

The mobile Web's stunted growth

This was supposed to be the year the mobile Web went mainstream - or so said all the predictions.
But big challenges - such as the high cost of mobile surfing and continued control by telecom carriers over what content consumers receive through their handsets - are likely to push off significant consumer growth in the mobile Web for at least three to five years, say media analysts, marketers, and executives at mobile marketing firms.
"We often ask consumers in our surveys what are the barriers to usage," says David Chamberlain, principal wireless analyst with In-Stat, a technology market-research firm based in Scottsdale, Ariz. "The three that come up are value, marketing and technology. Consumers say, 'I don't know why I need it, and why does it cost so much.' Marketing is a problem because consumers don't know the applications exist. The technology problem is that it is too difficult to use, or consumers say, 'My phone doesn't do that.'?"

Working through those issues will be critical, say mobile analysts and media executives, if consumer usage is to increase to a point that will draw marketers and content providers to the mobile Web.

But few see those hurdles being overcome in the short-term. Chamberlain predicts it will be another five years before the problems are resolved - certainly not this year. "It's more like 2011, and then it will be eight to 10 years from now before mobile Web is commonplace," he says.

The biggest issue is bringing down the cost of using the mobile Web, says Michael Hayes, executive vice president and managing director of the North American digital practice at media-services firm Initiative, a unit of Interpublic Group.

"There is fairly low usage despite the huge penetration of mobile phones, which is about 70 to 90 percent, depending on what survey you look at," Hayes says. But mobile Web use is less than 7 percent, he says. Plans that include mobile Web can cost $70 and up. "That's expensive, especially for the mobile-savvy users such as teenagers," he adds. "They can't afford that."

By contrast, he notes that computer-based Web surfing took off because, in many cases, it was cheap or even free to use. Such a low cost of entry made it easy for consumers to get online and helped catapult the Web from an interesting technology for early adopters to a mainstream medium that drew marketers and content providers. So far, there are few competitive reasons for telecom carriers to bring down the cost. "We need to have unlimited mobile surfing for a reasonable price," Chamberlain says.

Marketers also face the technology hurdle of creating content and applications for the numerous platforms used by the various carriers. While devices such as Apple's iPhone have made it possible for people to surf Web content as they would from their computers, most people use handsets that require specific mobile applications built for the individual carriers' protocols to make them work properly.

The issue of usability is a big challenge, says Amy Mischler, vice president for identity and brand services at dotMobi; that's the company that oversees the domain ".mobi," one of several domains that are working to become a standard for mobile applications.

In a recent survey of 2,000 consumers in the United States and the United Kingdom, conducted by creative media agency AKQA for dotMobi, consumers said they'd tried to use the mobile Web but were turned off by poorly designed sites.

"The stigma goes back a couple of years," Mischler says. "The problem was that the sites were PC-based, not mobile-based, so they didn't work very well, and people haven't ventured out again."

Mischler says the survey also revealed that consumers were most interested in applications that were practical and helpful, such as mobile check-in for airlines or banking via their phones. "Ninety percent of the respondents said they would use mobile check-in, where your phone becomes your boarding pass," she says.

Publishing giant Hearst, whose magazine titles include Cosmopolitan and Good Housekeeping, says its consumers have shown interest in mobile applications that are useful.

"Our content is aimed at women who like practicality," says Sophia Stuart, director of mobile at Hearst Digital Media. "We did ethnographic surveys to understand the gaps in her day when we could be most useful."

That led to putting the entire database of products that have received the Good Housekeeping seal of approval onto its mobile site, m.goodhousekeeping.com. "We wanted to give her that information when she is out there shopping, not when she is at home," Stuart says.

For Cosmopolitan, the company took content from the magazine and put it online in forms that took advantage of the mobile technology. The site offers fake "emergency" calls for women who decide they want to dump their dates. Users pay 99 cents for Cosmo to call them when they need a convenient excuse to leave, or, perhaps more precisely, "Ditch that dude."

Stuart says it was important for the company to look at what consumers would need because using phones for anything beyond talking or texting people is such new behavior for consumers. "Consumers don't know why they would want mobile content," she says. "So we have to think about those issues for them."

But low consumer use is keeping many marketers from stepping into the mobile Web. For now, says Initiative's Hayes, that may not be a bad thing.

"We tell clients that there are a variety of key platforms, and one them is mobile. It is in the top three," he says. "My advice in mobile is to have a strategy, but you don't need to dump a lot of money into it."

At least not yet. Hayes, along with Chamberlain and other analysts, do expect that the mobile Web will at some point be as popular - if not more so - than the computer-based Web.

"People will gravitate to this because there is a compelling audience in the mobile fanatics out there," Hayes says. "They are not a subculture, they are the pop culture. Once the cost structure and usage gets solved, advertisers will follow. They are salivating to reach this audience because they are so hard to find with traditional media."