I was recently perusing a home-decorating magazine and came across an ad for a company that described itself as the world leader in woven, outdoor, tubular furniture (or something like that). I laughed at the description, thinking that if we describe ourselves or our companies in granular-enough terms, we could all be world leaders in something.
Which brings me to this wireless article. Did you know that virtually every wireless company out there claims to be the leader in something? But, to the uninitiated, the subtleties of what distinguishes one world-class wireless company from the next world-class wireless company can be pretty confusing.
So let me try to help by first proposing a framework for thinking about wireless companies. (I’ll try to limit the discussion to those pieces of the wireless industry that directly touch wireless advertising and m-commerce.)
What types of companies are needed to conduct wireless advertising and m-commerce?
To oversimplify, you need, at a minimum, several groups of players: advertisers (of course), ad platforms that can serve and track the ads, and companies that own the space on which the ads appear. Added to this, you may also need content providers or content aggregators that create the editorial context in which the ads appear, wireless Internet service providers (ISPs) for people who are using personal digital assistants (PDAs), plus ad networks or another entity to actually sell and service the ads. Oh, and if you want to do something out of the box with your m-commerce or wireless ad message, you may need to plug in the services of various wireless application service providers (ASPs).
Geez! No wonder there is room for everyone to be the world leader of something. Over the next several issues, I’ll be taking a look at each of these categories in some more detail, but for now, here are some key things to remember:
- Most wireless companies in the m-commerce and wireless ad space perform more than one of these functions. This is to be expected in a nascent industry such as wireless advertising. Frequently, industry pioneers find that they must take on multiple roles to propel their services or products into the marketplace. You therefore find a company that is primarily a technology company, such as an ad platform, also acting as a channel to sell wireless ads. Does it want to be in the ad-selling business long term? Probably not, but to get the platform adopted as a standard, it may need to play this role in the short run.
- Next, it is not unusual to see companies — in addition to taking on multiple roles — shifting from one core business model to another, depending on how the market evolves. One of the complexities of performing multiple roles is that the underlying economics of the various business models can be extremely different. Companies end up in a schizophrenic situation as they simultaneously try to reconcile the demands of a subscription business, a fee-for-services business, a licensing business, and a commission-driven business. Ultimately, one or possibly two business models must dominate for a young, small company to have sufficient focus to succeed. Which business models dominate, however, may go through several iterations as companies find and solidify their niche in a complex and shifting marketplace.
What does all of this mean to the customers of these companies?
Figuring out who actually does what and, even more important, who does what well is not an easy task. Everyone is striving to be a leader, but the categories in which the various companies play overlap tremendously.
So keep reading, and we’ll try to figure it out together. In the meantime, have fun figuring out in which category you and your company are the world-class leaders.
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