In the sports world, there is a long running – if often inane – debate between “the gut” and “the brain.” The debate is between what you feel and what you can categorize. There is also that debate in science and politics. In sports, perhaps because of its low stakes, the arguments are the loudest. Baseball in particular has this issue. A player may be flashy or be good at one eye-catching thing, like stealing bases. A closer look at his numbers reveals he isn’t that good (which isn’t to say he is worthless; sports are, after all, fun). Then there are players like Mike Trout, who you watch and are in awe, and then you look at his stats and gain a whole new level of admiration.
You have the same thing in tech. Every year it seems there is some new development that we all think will change everything and be around forever. A closer look at its business model or technological upside shows serious flaws, and it never recovers. Groupon is a good example of this. It looked like it was going to change everything, and had the largest (at the time) IPO in history, but two years later it still isn’t profitable, and seems poised to be a “whatever happened to…” story a few years hence.
The Hot Mobile Market
Then there is mobile. It might seem unfair to lump it altogether, as vast an industry as mobile is. Mobile still describes portable, connected, personal technology, and is separate from its stationary predecessors. The next development, the internet of things, blends permanent locations and mobile technology. We know this, intuitively – a quick look around shows everyone staring at a mobile device. We talk to friends, watch a movie, work, or just idle away a long wait by playing a game. All on our phone.
I could easily fill the rest of this article with her graphs, but it is probably more fun to read the report. If you are in the mobile industry, this is pretty much Christmas. It shows clear proof that mobile is going to become the dominant trend is how we consume all media. If you are a fan of mobile, and a dedicated user, this is even more exciting: it shows how this is not a passing fad or a brief sensation, but a genuine trend, and one that legitimately is changing everything.
Missing Mobile Dollars
Over at The Atlantic, Derek Thompson smartly points out something that is easy to miss: the incredible gap between mobile usage and advertising dollars (as a side note, this blog owes a lot of the way it thinks to both Thompson and his Atlantic colleague Alexis Madrigal, who do a remarkable job explaining both the tech and business side of things, as well as their impact). Television is still the leader in terms of media consumption, accounting for a full 38% of the time we spend consuming. Mobile is catching up, with a remarkable 20%. If that still seems like a large gap, consider for how long TV was the undisputed king, and how our addiction to it provided decades of satire.
However, whereas TV takes up 45% of advertising dollars, mobile is still at an astonishingly low 4%, trailing even print media and the radio (I’m unsure here if advertising for print counts classifieds, and for radio I know it largely counts used car dealerships).
Advertising Is Coming
Needless to say, we’re facing a gigantic shift in this as the market corrects itself and mobile tech figures out how to become more profitable aside from software. Right now, most of its revenue comes from licensed apps, which is unsurprising, but I think ultimately unsustainable. There will always be new apps, but there is a definite ceiling to how many useful, and therefore profitable, ones can come out.
So advertising will fill that hole. This evokes some wistfulness, to be sure. The mobile world certainly isn’t a pristine paradise, but it is a sun-dappled field compared to the halting world of TV, where every dramatic moment that fades into gut-punched silence in punctuated by a surprisingly loud blare for you to buy some chips, or a local news team dramatically reminding you that weather still exists so it might rain. It’s nice to have a refuge from that.
But unfortunately, the market doesn’t work with nice, and it will ultimately correct itself when it comes to mobile advertising dollars. In some ways that’s bad, but despite its inevitability, we know what happens when a business model doesn’t have a solid underpinning. It is comforting to know that, discomfort with advertising aside, mobile technology will be around for a long time, and has the ready cash to keep growing, changing, and making our world a more exciting and interconnected place.