Smart ways of making money with mobile – tips from an expert

The mobile content market is huge and lucrative, and a potential goldmine for anyone with the smarts and know-how to take advantage of it.

That was the motif of a talk by author and evangelist Tomi Ahonen at Mobile Media World 09 in Toronto on Tuesday.

Presenters and panellists at the event included global industry experts, C-level business executives and well-known thought leaders in the mobile marketplace.

Ahonen is author of nine books (including three e-books) on technology and telecom related topics.

SEE VIDEO – PROVEN WAYS TO MAKE MONEY WITH MOBILE

An expert in 3G technology and services, he lectures on the subject at Oxford University in the U.K. He also conducts seminars, workshops and training across the world on the creation of advanced digital services.

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“An opportunity of a lifetime”

The mobile industry provides “the greatest economic opportunity of our careers … of our life times,” he told a captive audience at the Mobile Media World conference.

To prove the point he cited an Informa Telecoms and Media research finding that the global mobile content industry, in 2008, was worth US$71 billion (around Can$75 billion). London, U.K.-based Informa provides consulting services to telecoms and media markets worldwide.

Ahonen emphasized that the $71 billion figure is only for mobile content market revenues, and doesn’t include revenues from text messaging or mobile data.

“Let’s put that in context. [Mobile content is worth] two-and-a-half times more than the total content industry on the Internet.”

Hollywood movies, he noted, are collectively worth a little less than $30 billion, the global music industry about $25 billion, and the global video gaming industry (the actual games), around $20 billion.

“And mobile content alone is worth as much as all those three – total worldwide Hollywood movies, music sales, video gaming software revenues – put together.”

In a little over a decade, he said, mobile has burgeoned into a gargantuan market – growing at 30 to 40 per cent a year.  And this growth remains unabated even in these times of economic decline.
 
The Sign of Four

After setting the stage Ahonen delved into the essence of his presentation — which focused on proven ways to make big bucks with mobile.

While there are really six key mobile revenue models, he said, two of these mobile shares with the Internet (Subscriptions and Advertising). The four other models were “invented by mobile.” They are: Personalization; Pay-per-view (with revenue share); Gifting; and Ego services

Personalization

This mobile revenue model, he said, was first developed and used by the creators of Hubbo (also known as Habbo Hotel), a social networking Web site and service aimed at teens.  

The site is owned and operated by Sulake Corporation, a Helsinki, Finland-based multimedia corporation.

The Habbo service, which began in 2000, was expanded to include 32 online communities (or “hotels”).  

Ahonen noted that while Internet has 1.3 billion users, while Habbo has 135 million registered Habbo characters (with around 75,000 new ones being created every day).

“This means one in 10 Internet users has created a Habbo character.”

The average age of a Habbo user, he noted, is 15 years. “So they do not qualify for credit cards, and don’t have bank accounts. But all these teens all have a cell phone. That’s how Habbo makes money. Its model is: allow users to personalize their Internet content and collect the money through mobile.”

He said last year alone Habbo generated profits of a 4.8 million Euro ($Can 7.5 million) last year.

“This idea is now being copied by all mobile social networks worldwide. It’s a standard element. We’re bringing it into many other areas within gaming.”

Pay-per-view (with revenue share)

This concept, he said, has been popularized by SeeMe TV, but was actually devised by a Singapore firm, Mobile1 (M1), with its service called MeTV.

Launched in January 2007, MeTV enabled mobile phone users to share video clips of themselves and make money at the same time.

Cell phone users would upload their 12-second video clips on to the MeTV site via multi-media messaging (MMS).

“The concept is each time you watch a video and pay 50 cents, one penny goes to the original creator,” said Ahonen. “So if 100 people watch my video I earn a Canadian dollar. If 1,000 people watch I make $10. If 10,000 people watch I make $100 … and there is no limit.”

He said the highest earnings he knew of was made by an Italian lady whose video garnered her 20,000 Euro (Can$31,290).     

Gifting

Credit for creating this mobile content revenue model goes to CyWorld the South Korean social networking site that’s used by 95 per cent of all 20-year-olds in South Korea., Ahonen said.

Launched in September 1999, Cyworld is a virtual world where every inhabitant has a private room and a circle of friends who bring gifts.  New Cyworld citizens (called “mini me”) get a bare room as part of their home page package. Their challenge is to furnish and decorate it and construct a personality for “mini me.”

Cyworld creators make money when residents decorate, by music or download music to adorn their room.
 
Ahonen said the gifting concept was honed by Flirtomatic.

This high-capacity, multimedia, messaging service currently has more mobile than Web-specific users.

Launched by London, U.K.-based Handmade Mobile Ltd. the service is targeted at young adults (75 per cent of users are 18 – 30 years old) – the service enables them to flirt, meet new people and have fun online.

A popular Flirtomatic gift, Ahonen cited, is the melting ice cube.

A picture message arrives from your friend on your cell phone of an ice cube that melts away.

“Say you’re stuck in traffic, or your air conditioning is broken – and a picture message arrives from your friend of an ice cube that melts away.  Or you’re sitting in a bar and flirting with a lady, buying her a drink. Your friend sitting at the other table shares your fun. He sends you an ice cube.”

He said creative firms can set up services enabling users to buy and send a range of gifts: flowers, chocolates – virtually anything.

Ego services

Flirtomatic also developed and fine-tuned this service, said Ahonen.

“It simply means that you can repair any damage to your digital persona … by paying for the privilege.”

One possibility, he said, is you’re flirting on Flirtomatic and people rate you.

“If someone gives me a bad rating I can get rid of a that, but I have to pay. Or I can try to find out who gave me that  bad rating and get back at them. Again I pay for that.”

And this, he said, is yet another innovative firms can make money on mobile by offering services that people really appreciate.

Mobile advertising

To cynics who would question how receptive people would be to mobile ads Ahonen had this statistic from Juniper: In 2008, 1.5 billion people had received an ad on their cell phone.  

Mobile, he noted, is the widest reaching advertising channel today and growing at a stupendous rate.

He said the most advanced mobile advertising market is in Japan – four in 10 Japanese have clicked on mobile ads. One reason for this is some of the most compelling mobile advertising is offered in Japan.

Ahonen recalled an engagement marketing campaign that Northwest Airlines (NWA) ran in Japan. The cornerstone of the program was an advergame where users had to look at a riddle and guess the city it referred to. The could respond via SMS.

“All the cities were NWA destinations, so if you wanted hints you could go to the free NWA mobile Web route map to get clues, and to their destination guides, where various NWA destination cities were described.”

The awards were very attractive and included:

  • A coveted grand prize every week … two people flown around the world first class
  • A daily prize of a round trip to anywhere where NWA flies
  • Everyone who guessed the city correctly (each day it was a different city) was awarded frequent flyer miles.   

And this, Ahonen said, is what engagement marketing is all about.

“It’s not banner ads or spam SMS. It’s the future of advertising on mobile.”

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