MOBILE WORLD CONGRESS:

Our overview

7 KEY TAKEAWAYS FROM MWC:

1 Your city is mobile

2 Sometimes you need to think beyond the operators

3 Rede!ning the idea of car as platform

4 Mobile blurring home and work

5 Finally some sense about partnerships

6 Reinventing products and services in a connected mobile world

7 The future of mobile payment is… everything before it

4 MAJOR TRENDS FOR 2013

1 Personalization at scale

2 Reputation economy

3 Loyalty and rewards

4 The New transaction

OUR SUMMARY:

A crowd of connected individuals

ABOUT THE AUTHORS

Greg Armshaw

Mark Jackson

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The bold statement that “this is the year of mobile”, has become something of an ongoing joke in marketing circles – how can such a statement be true when mobile as an industry is reinventing so quickly? The fact that certain brands view mobile as a way to leverage existing advertising and marketing messages has done nothing to help mobile’s cause and has limited the way that mobile has been utilized up until now.

Mobile World Congress (MWC) this year provided us with ample evidence of how much the industry has moved on. The new MWC venue is twice the size of the previous venue and plays host to a wider audience; from agencies and governments to consumer brands. It is beginning to set itself up as not just a trade show or conference but a place where everybody can learn how mobile is disrupting everything we do.

Just like mobile carriers and non-tech brands, we have all reached a time when we must understand the mobile ecosystem. We are close to having as many active mobile subscriptions as there are people on the planet and we will soon be able to communicate with pretty much everyone on a one to one basis. As both technology and this ability to easily communicate evolves, the very companies who provide the infrastructure of connectivity are under threat, facilitated by their own business model – which is slow to recognize the changing demands of consumers. As mobile carriers encourage data use, they also allow ‘Over the Top’ (OTT)services to sell products and services that don’t actually make money for the carriers. This creates the context of carriers as ‘dumb pipes’ (see Personalization at scale in our trends section for how this is being evidenced).

More and more, the people of our planet !nd themselves wedded to their mobile devices, whether it be a Nokia in the valleys of Tamil Nadu or an iPhone on the freeways of California. The whole of humanity is using the mobile device to communicate, entertain and to help with everyday tasks. And on top of that, the machines around us are starting to communicate with each other, independently of human intervention. So whether it be sensors managing our home heating more ef!ciently or vehicles independently calling emergency services after a signi!cant motor vehicle impact, the connected world around us is establishing an intelligence that presents huge opportunities.

Every one of these messages and sensor feeds creates data, which, if analyzed and/or integrated with other data, could provide value back to brands and consumers. It is in this fertile ground that brands can !nd a place to add value to their consumer communities.

Our paper therefore looks to build on this theme of the mobile connected consumer by splitting the contents into two sections. First, we have compiled the key takeaways from the exhibition "oor and reported what the companies representing the mobile industry are saying this year, plus we have also highlighted some of the innovative services that underpinned this. Second, we have included some broader consumer trends that we feel connect directly with these key takeaways and should set the context against which you can start to apply these learnings and begin to build on the paradigm.

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The use and misuse of the word ‘digital’ has perhaps blinkered us in the past and prevented us from seeing the opportunities within this world. Learning from this, we should remind ourselves that everything is mobile and it has become the fabric of our everyday lives to the extent that we should be able to have an open debate about the opportunities that exist for all.

In understanding and realizing this we discover that what’s important is that people have

become mobile and that the technology of mobile is secondary. Our purpose with this section of our paper is to highlight what we saw at the show, extract particular insights and provide you with an overview of the tours and keynotes. We’ll show how companies have challenged themselves to rethink what mobile means in order to stay relevant to the mobile consumer. We should all see this as a challenge and it should prompt us to think about the user !rst.

The Connected City installation at the show was the GSMA (global industry body for mobile carriers) showing the capabilities of a society that truly embraces the capabilities of mobile. They asked member companies to take a place on the stand to bring these capabilities to life.

AT&T took two areas within the Connected City (which it shared with Samsung) to show off the devices that will be hitting the AT&T stores in 2013. One new service due for launch is Toggle, which allows two profiles on a single device – most likely one for home and one for work. This new service acknowledges the fact that Bring Your Own Device (BYOD) cultures are becoming more and more common in the workplace and also that mobile phones are becoming a shared device in a family setting. The capabilities of Toggle are not new, but its existence is a further acknowledgement of the real-life situations that phone owners !nd themselves in.

AT&T also demonstrated the capabilities of a connected home with its ‘AT&T Digital Life’ hardware and cloud service. It showed all the features that we have come to expect from connected home concepts e.g. home security, lighting control and connected appliances. It was interesting to note that AT&T are partnering with Samsung home appliances and the service will be available under license to other telco operators but will not require the AT&T infrastructure to make it work. It is clear that while AT&T Digital Life rolls up under its wireless division, it is also evident that this is one example of a telco diversifying with its own OTT services.

Ericsson and Telenor have been working with Volvo to help create a connected vehicle offering in the Nordic countries. Initially they wanted to solve a very simple challenge of heating up a car before the vehicle owner arrives at the vehicle. In a climate where temperatures can fall below -25°C this is an incredibly useful capability. Indeed Telenor is quoted as saying that Volvo purchases increased over 50% after the addition of this connected car feature. It is interesting to see that Telenor has now created a vehicle telemetrics consultancy team who are offering their services and hardware solutions to other telcos in other geographies.

YOUR CITY IS MOBILE1

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

As MWC grows, it creates opportunities for companies to share their own messages about how they see the future. Ericsson has started to build a reputation for doing this and has outlined solutions that it feels all companies in the mobile ecosystem should be looking at.

As part of the Connected City, Ericsson chose to feature a partner company called Ziosk, who provide a table top tablet solution for restaurants, allowing customers to order direct through this platform. Accessed via the cloud, Ziosk provides a way of managing orders across a number of venues – and they are keen to start integrating solutions and services on top. Looking at how they can use technology to enhance the user experience, it plans to work with retailers to personalize the service and to provide more speci!c preference-based offers, payment and content using the tablet. One of these ideas centered on making suggestions that complement the user’s meals, which will drive additional purchasing (when the intent to buy is there). This might include content that provides details of the provenance of the ingredients, messages from the chef or even educational games for kids that help them learn about nutrition.

In some ways, by showcasing partner companies at MWC, Ericsson’s purpose is to challenge the operators and make them consider how it can build better services for its customers. Known more for providing the infrastructure, rather than engaging directly with consumers Ericsson is making a clear statement (intentional or not) that either operators adapt or they face being disintermediated by others.

SOMETIMES YOU NEED TO THINK BEYOND THE OPERATORS

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

As we saw at the Consumer Electronics Show (CES), there are many businesses using MWC to challenge perceptions and address how to put mobile at the center of their businesses. There is no better example of this than the presence of Ford, a brand not usually associated with a mobile show.

Showcasing its SYNC platform, Ford is looking to push the idea of car as platform, or car as the ultimate mobile device – which goes beyond the idea of enhanced services built around just driving. Working with Microsoft and Nuance (the voice recognition specialists), Ford is trying to provide a framework which developers can build on top of. This will challenge the idea of the whole experience and test how it !ts into real-life situations. This includes obvious examples such as Spotify but also other apps such as Glympse, a messaging service that allows users to share their location for a limited time with a selected recipient using voice recognition.

Ford, has invited other auto makers to use the SYNC platform and thus create one standard across all vehicles, which opens up the possibilities of building a network against which more value can be generated.

REDEFINING THE IDEA OF CAR AS PLATFORM...3

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

Without doubt Samsung is one of ‘the’ brands to see at MWC, as is evidenced by its signi!cant presence as well as by the huge crowds it attracts at its stand, and so it is clear just how important it is becoming to the industry. At !rst glance you might think that the stand at MWC was simply a showcase of its growing range of devices, however digging a little deeper there was a lot more being talked about.

One feature was their HomeSync product, which it is slating as a home hub that seamlessly syncs across all your devices; helping you not only manage your content across devices but also provides streaming content services similar to Apple TV. Some of Samsung’s products that are part of the wider offering including its video discovery product which transforms your device (in this case speci!cally the Galaxy Note) into a universal remote control which, amongst other things, can transfer whatever you are watching from your TV to your device enabling you to take your TV show into the kitchen without missing a thing.

With a number of enterprises addressing the changing ways people are using their devices at work and home, Samsung showcased two great initiatives. With security a growing concern (now that more people want to bring their own devices to work) Samsung has teamed up with the National Security Agency in the US to provide Security Enhanced Android as part of a solution called Knox. This seeks to address many of the concerns around loss of business data. By simply toggling between work and home, users can ensure they have more control over their services. The other initiative was a wider feature called the Samsung Enterprise Alliance Program (SEAP), which looked at working with multiple partner businesses (from Oracle to Accenture) on understanding how to build an ecosystem around new business opportunities for enterprise. This is interesting for two reasons: First is the growing concern and dif!culty businesses experience by working with other dominant players (e.g. Apple), and the second is how to protect and grow new and exciting business avenues in a growing device-centric world.

MOBILE BLURRING HOME AND WORK4

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

Every year Qualcomm can be relied on to push boundaries and invent new ways of looking at the world of mobile. It does this regularly with par tners that are part of its investment network in order to showcase interesting new services. This year there were three standouts:

The !rst is a service called Qualcomm Life – this is a separate business started by the company to leverage the opportunities presented in health. It offers home health and wellness monitoring, and cloud distribution of the data in a partnership with services such as WebMD. Central to this is a physical device or hub which, working with a range of modern medical devices, allows a signi!cant number of different systems to connect to the service including gym equipment, medical health stats monitoring etc. The hub can aggregate the data produced, into a central location in the cloud, through a device that plugs into a wall socket. It can then connect or transmit to other services from caregivers, healthcare providers and hospitals. Qualcomm’s aim is to enable a community of companies who, using the Life framework and connectivity, can build on top of this by kick-starting initiatives around mobile health and creating the platform that enables an industry.

Second is a service called LTE Broadcast, which looks at providing an in-venue broadcast capability and augmenting this with a multiscreen development framework called AllJoyn to provide either venues, or a combination of leagues and brands, the ability to stream a variety of feeds to smartphones through an LTE enabled connection. Qualcomm chose to work with the NFL and Nascar as part of the showcase, which gave multiple special feeds from various perspectives such as the ‘coachcam’ or the ‘drivercam’. There are huge opportunities for brands here to leverage apps on the back of this, either as a VIP service or alternatively to drive purchase of other products in stadium and other value add services.

Third is VuForia, which is an established free-to-download Augmented Reality (AR) platform. Whilst AR has been around for some time (with companies such as BlippAR and Aurasma) what was more interesting was the way in which they had partnered with brands to deliver an experience. One that notably featured was a partnership between supermarket chain Wal-Mart and Disney and was set around the re-release of the animation classic Cinderella. They developed an app that, when downloaded, could be used in store and allowed young users to collect prizes placed throughout the store on promotional/way!nding material. Upon arriving at the actual DVD aisle or display, users could then activate a prize in the app, which they could then customize and interact with as part of the experience.

FINALLY SOME SENSE ABOUT PARTNERSHIPS5

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

With mobile phone subscriptions poised to outnumber the world’s population, the industry is showing signs of shifting its focus from connecting people, to connecting people and objects. Telefonica demonstrated its Insurance Telemetrics product, which promises to reduce teenage driver insurance premiums by up to 40% by installing a permanent monitoring device in the car. These devices assess whether a driver speeds, regularly brakes too hard, and evaluates urban and nighttime driving to derive the insurance premium. There may be privacy concerns for many but the savings are already enticing customers. Telefonica is also making this ‘Pago Como Conduzco’ (Pay for How I Drive) product available to other insurance partners in other markets. Whilst the concept of providing insurance for better performance has been around for some time, these new technologies will accelerate the insurers’ demand for your data and will result in an improved business for them and increased bene!ts to consumers. Additionally the secondary uses of data such as this could be many and varied. For example sharing high risk junction information with local government and navigation service providers.

Last year Mozilla talked about a new Operating System (OS) that was in development and in 2013 it of!cially launched the OS with an impressive collection of partners, including 17 separate telcos and four handset manufacturers. The plan is to be shipping phones this year. Many would question why Firefox, known for its browser platform, would do this in the face of such !erce opposition from both Apple (with iOS) and Google (with Android), and there are a few very speci!c arguments. The !rst is that it is a relatively light OS, demanding less in terms of processor power and this allows smartphones to be created with lower specs and thus lower cost. Next, is that basing the backbone of the platform on similar techniques already used to build websites (HTML 5, CSS, and JavaScript), there is a huge opportunity for more innovation on the platform to emerge. Brands and marketers looking to attract their next billion consumers in emerging (mobile-centric) markets are likely to adopt this OS as the platform of choice for these reasons.

REINVENTING PRODUCTS AND SERVICES IN A CONNECTED MOBILE WORLD.

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

By far one of the highlights of the tour, and the one that received the biggest reaction from those that attended the tours, were the services from eBay Inc. Rather than the service that most consumers associate it with, eBay chose to highlight a new B2B service offering at MWC which looks at addressing the threats and opportunities around mobile in retail. By looking at the infrastructure of services it has created around the delivery of its auction platform direct to consumers, eBay Inc. is looking to capture its existing services and !nd potential new business models for retailers, thus providing a complete end-to-end solution which included a number of features:

Red Laser, acquired by eBay in 2010, is a barcode-scanning app which allows users to check prices of products they !nd in store. Called ‘showrooming’ or ‘showcasing’ apps, the threat of these for retailers is that they turn the physical store into more of a showroom, where people use the store to look at the product but then choose to buy online, usually at a lower price. Many retailers have reacted negatively to this, even restricting access to connection when in store, but eBay Inc. chose to rethink this by augmenting the barcode scanning service with utilities that the retail store can build on top of. By understanding what people are scanning, Red Laser can now provide a range of complementary products and other incentives to drive purchase online and/or in store. By capturing the intent at the moment of interest, eBay Inc. is able to drive up purchase for those retailers who are willing to integrate the service into their offering.

For the consumer app experience it offers retailers, eBay Inc. again looked at how to transform the retail and digital experience, and this was demonstrated by its mobile app and retail installation for Toys R Us in the US. eBay Inc. worked with the retailer to act on an insight that a large number of people visiting the store do not know where to start and, often only know that they are shopping for a boy or a girl. They decided to install large interactive screens at the entrance of the store where they could capture visitors and ask customers whether they are shopping for a boy or girl, they then go through a number of potential interests/likes and !nally arrive at a list of recommendations that are available in store or online. Users then see a description of the product and crucially can use a ‘send to mobile’ feature which allows people to take the details with them, including location of the aisle, via the retailer branded app. Cleverly, eBay Inc. can augment the service using product recommendation. It is even able to integrate the online e-commerce history to help the retailer complete a sale by understanding what other products were in the user’s basket or advise them on incentives to drive them to purchase. This could be done using a number of payment methods provided by PayPal.

Another service worth noting is eBay Now, which is an amazing delivery service that will, for $5, deliver any item from any retailer within a city direct to your location. The application even shares your location so that you can be walking from one place to another and the courier will !nd you to give you your purchase.

We believe that this is a very clever move from eBay who, having a dominant payment solution already, is choosing not to just deliver a gateway technology for payment but also to understand how to help retailers drive demand and enable the shopping experience for retailers by pooling knowledge and leveraging a whole new set of products and services. Also, knowing that they are forecasting over $20 billion in revenue to come from mobile commerce in 2013, they are betting big on understanding the experience and must develop an offer where retailers can take advantage of all the knowledge without the same level of investment. Smart thinking.

THE FUTURE OF MOBILE PAYMENT IS.. . EVERYTHING BEFORE IT

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7 KEY TAKEAWAYS FROM MOBILE WORLD CONGRESS

THE CONTEXT With the record-breaking crowds, huge number of exhibitors and the multitude

of announcements at both MWC and CES this year, there is an overwhelming sense that both of

these shows have reached a tipping point. In previous years, the idea of devices being connected

was ‘the story’ and the innovation and exploration of technology was only just beginning.

Now, it is less about what is really ‘new’ and more about how the manufacturers make this

connected ecosystem work in practice. However, there’s a risk that in trying to understanding the

connected ecosystem, the focus becomes the technology rather than the behavior that it enables.

In this paper, we have therefore focused on four behavior-based trends that get to the heart of

the change affecting brands, as well as highlighting the potential of a well-connected consumer.

And by understanding this paradigm shift, we can explore what opportunities are out there.

PERSONALIZATION AT SCALE The idea of mass consumerism is being challenged by many factors

including technology, the use of data, unprecedented access, as well as the infinite scheduling options now

available with many services. How should brands change their products to be personal but still scalable?

REPUTATION ECONOMY Investing time and effort online in building your reputation capital will

no longer be derided and may, in time, become more valuable than improving your credit rating.

LOYALTY AND REWARDS Remember that forgotten stack of loyalty cards in your sock drawer? Many of

us are keen to build up points and be rewarded for our loyalty… but how to manage it all? Now, technology

has the answer in the form of frictionless loyalty; which dispenses with the hassle, leaving only the bene!ts.

THE NEW TRANSACTION Concerned with more than just financial transactions, this trend is

about the exchange between things, data and people: it’s about an empowered and connected

consumer who demands services in exchange for the wealth of personal data being recorded by his

or her digital self. As a result, embracing the concept of value exchange becomes the key to success.

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Popular commentary suggests that 2013 will be the year when a number of trends that have been hyped for many years !nally reach, in the words of Gartner: “their plateau of productivity”. Big Data, SoLoMo (Social, Local, Mobile), SaaS (Software as a Service), have ridden the wave of excited commentary but mainstream adoption has been limited to a few high pro!le examples.

Entertainment is an area witnessing an explosion of ‘over the top’ alternatives to traditional distribution models. Traditional models of purchase and ownership (Amazon, Net"ix, Spotify) have been subverted and consumers are becoming increasingly comfortable with the data sharing that these services demand. Consumers now expect the level of personalization that comes from sharing your purchase history with the service provider # but only on the basis that they get something signi!cant back in return.

Over a period of some years, the concept of a personalized service or product # especially in premium sectors # has resulted in an expectation of tailored products. It may be an engraved personal music player or a unique sneaker design, or it might even be a trip to Stuttgart to pick up your new sports car. Amazon’s Jeff Bezos believes that it is possible to give each and every one of the millions of users of Amazon.com a unique experience.

Brands should take note and at the very least they should be able to personalize their marketing. Take Adobe’s website content management system as an example; it allows a brand to show each user a unique home screen or product offering based on previous browsing, social graph or the user’s ‘signed in’ pro!le. The more data brands have about their customers, the easier it is to remove irrelevant products and provide pre-personalized offerings.

Of course, it is not possible to personalize unless a brand knows its customer. It needs to ask questions directly or else interpret the data that has been generated through interactions with the brand’s services or products. This is what the press calls ‘personal tracking’. Our Truth about Privacy study gives four steps to maintaining customer trust when tracking their data.

Our data says at least 72% of customers will share their data if you follow these steps and most will expect an added value service in return. An excellent example of how data tracking adds value to a product is Google Now, available on Android devices. Google Now takes your personal cloud of data and sifts through it to give you hyper-contextual and relevant information such as weather, traf!c, exchange rates, time zones and location information – all available with a single swipe.

However, be warned, do not expect all mobile users to have the same expectations of mobile services. At this year’s MWC, McCann launched The Truth about the Connected You research, which revealed mobile users have different needs and respond differently to messaging and content. This is important when it comes to marketing to them. See for yourself and discover your mobile personality at: http://www.truthprofiler.com/

PERSONALIZATION AT SCALE1

“For digital marketers this means the need, or rather mandate, to personalize each experience...”Kevin Cochrane, Adobe VP of Product Strategy and Solution Marketing

4 MAJOR TRENDS

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The auto industry has taken a signi!cant step forward in this area with many concepts shown at both MWC and CES this year. The technologies being developed as driver aids are about personalizing the driver’s interaction with the roads and environment that they regularly experience, as well as understanding the road conditions in real time. At the moment the aids are focused on safety but with open developer platforms, such as Fords SYNC, that same data could be used for any number of other services including personalized brand messaging. That same telemetric data will be critical for Insurers who look to add value and create new products such as the Telefonica/Generali Insurance Partnership (see our 7 key takeaways for more information).

The sector that is predicted to see the impact of this change most profoundly is health and wellness. 2013 should be seen as a watershed year in the way personalization is used and applied in everyday life. Consumer technology in health is not new, however, an evolution is now taking place and we are seeing products that go beyond single speci!c tasks and actually seek to in"uence behavior by being able to connect across your lifestyle and understand context.

This approach is extremely important for brands as a large segment of a brand’s customer base expects a personalized service and soon it will simply become a hygiene factor in many categories.

Being a part of the production process becomes even more of a reality to some with 3D printing, also known as additive printing. There has been a huge leap in the accessibility of this technology with Makerbot leading the charge in home-operated machines. It is entirely conceivable that the self -publishing evolution, that has become the new norm for aspiring music producers and writers, could soon affect the manufacturing and marketing of toys, gadgets, household goods and ornaments in the same way. Commercially, organizations like i.materialise are allowing designers to design, while the products are made to order using 3D printing technology. On the Nokia stand at MWC, event-goers were encouraged to create their own personalized shell cases for their Nokia devices.

WHAT DOES IT ALL MEAN FOR YOU?

How can your brand offer the ultimate personalization of your product?

Also what does this mean for your distribution and manufacturing processes?

Could additive manufacturing be used as a New Product Development tool? It produces no waste and products can be made to order leaving no items unsold.

How can you take advantage of this capability within your manufacturing and distribution processes?

PERSONALIZATION AT SCALE CONT’D1

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4 MAJOR TRENDS

With around 2.5 billion of our 7 billion-strong population (just over 30%) now having access to the internet, and with the typical internet user spending an average of 16 hours online per month, what if that time spent online could somehow cumulatively deliver value back to the user? This is the context of the reputation economy.

As our digital lives continue to expand to include increasing entertainment consumption, product discovery, purchase transaction and customer service; the concept of quantifying these interactions and using them as an asset is what is being termed your ‘reputation capital’. The principle is that an aggregate of your interactions could be a better re"ection and evaluation of your trustworthiness than more traditional measures such as credit history.

Evidence of its growing importance is shown in one notable example, the new banking startup, Moven. The company was built on the premise that a credit history only tells part of a story and that your activity through your online network is a reliable way of evaluating your trustworthiness. Additionally your activities could lead to the development of personalized products and services. Based on what they call a ‘CREDscore’ which, as well as being used to assess you for opening an account, will also change based on your ongoing account activity. For example, if you were to share a great new deal on a Moven product with your network, this would add points to your CREDscore and would, over time, entitle you to bene!ts such as reduced fees for various banking services.

With this, personal pro!les will become much more than something used and displayed within a social context like Facebook or the Google environment, they will become an identifying asset to be transferred or accessed across devices and contexts. Consumers will expect this regardless of operating system, product or service. With connectedness comes re!nement and, where the connected ecosystem becomes more attuned to the individual’s preferences, personalization will occur. The consumer’s likes and dislikes will essentially become a digital blueprint and will, in turn, develop the individual’s reputation capital.

We can see this in action with the Roku platform. It’s free to use once you have bought the device but it requires a payment pro!le – either credit card or PayPal – so that users can easily access content should they click on a paywall-protected provider. In doing so they have created a portable personal pro!le, which can be used to subscribe to discrete, sometimes competitive, services such as Net"ix and Hulu. Roku is currently non-committal about multi-channel pricing but if the user base grows it would surely have to consider negotiating discounts with the content providers on its platform, thus taking on a role similar to that of cable or satellite TV networks now.

In our previous papers we have talked about the increasing importance of Google, Apple, Facebook and Amazon. These companies acutely understand the concept of a transferrable pro!le and are building ecosystems to provide you with a pro!le that works across their product ranges – whether that’s search, maps, shopping or access to entertainment. The end of 2012 saw challenger Samsung rise to join the ranks of these four giants and the brand is now edging closer to real dominance due to both its range of products and services, and its constant innovation. Whether they consider each other to be competitors or not, it will be fascinating to see how the dynamics between these companies evolve. Partnerships will be key.

WHAT DOES IT ALL MEAN FOR YOU?

Being present where people spend their time is one of the foundations of marketing and advertising. As online destinations take up more of people’s time, an individual’s interactions will become a barometer of their preferences. One of the bene!ts that working in digital has long promised is being able to leverage the direct response capabilities of the communication and using a portable personal pro!le will help in understanding consumers as more complete individuals. Whilst this is something that will take time to mature, we are very close to seeing this in the marketplace. To get ahead, smart brands should be looking at ways to invest in partnerships with companies and service providers now.

REPUTATION ECONOMY2

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4 MAJOR TRENDS

The much-quoted law for storage capacity doubling in performance (and halving in cost) every two years – as well as Gordon Moore’s law of computing power – has been holding true now for almost half a century. What this means for marketers is that if you have the information about your customers, then storing it is a no-brainer due to the negligible cost involved. The caveat here is that privacy legislation must, of course, be strictly adhered to.

Customer Relationship Marketing – the direct one-to-one marketing through direct mail, SMS, email or telephone never went away, it has now been augmented by a massive new database – social communities. The data created is exploding in size augmenting the Big Data sources already available to companies.

Coca Cola now has over 57 million fans on its social network community and the top hundred brand pages have over one billion fans collectively. If you were to ask a traditional CRM agency to build a customer database of 57 million names, the likely cost would run to many millions of dollars: asking them to !nd out what other brands their customers liked would probably seem like an impossible request.

Hastening this increase in customer data is people’s propensity to carry out customer service transactions through social channels, many of which may be accessed through mobile devices that provide additional meta data such as location.

So as customer databases grow, harvested through whatever means, what can marketers do to maintain communication with those customers? Actually placing a value on this data is the !rst step to success. Customer communities can be nurtured through education, entertainment and utility, and advocacy and engagement can be encouraged through rewards.

Rewards can no longer just be a ‘thank you’ for a previous purchase. Viggle, the TV loyalty program, rewards its community members as they check into TV shows; watch the whole season and you may be rewarded with a burger meal, a coupon for a department store or a dollar value to give to charity.

Nestlé in the Philippines rewards its community members for interacting with its social community. Sharing content or commenting on discussion threads is incentivized, thus encouraging others to interact with the brand community and so making that community richer in the process.

Paid-for web service providers such as e-retailers, online photo storage etc., reward friend introductions most effectively as they see that a new customer introduced by friends, rather than through a direct sales channel, is more likely to stay with the service and subscribe.

Loyalty programs will grow to the point that any interaction with the brand can be rewarded at some level, and the brand can reward actions in third party environments with offers. This will all become easier with a portable personal pro!le. Rewarding customer interactions such as visiting a store to submitting a new product idea, and from sharing a promotion with a social community to trialing a brand partner’s product will all be achievable.

LOYALTY & REWARDS3

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4 MAJOR TRENDS

The rewards company, Kiip works with application developers to facilitate these branded rewards to mobile app users. Users can be rewarded with a coupon when they reach a new level of their favorite game, or as in their new !tness section, when they reach a personal !tness goal.

On the Ford stand at CES we saw its ecosystem of brands, which centered on its electric vehicles, enabling you to evaluate your carbon footprint. Should a company wish to emphasize its green credentials, then it would be appropriate to reward consumers as they hit their carbon footprint reduction goals. At MWC, Telefonica demonstrated its partnership with insurance company Generali. By installing a monitoring device in your car you could be rewarded with savings of up to 40% for careful driving.

In Singapore, commuters who usually travel during peak times but who elect to travel at non-peak times are rewarded on the government program InSinc. So far the program has given out a total of over US$270,000.

Starbucks has been quick to learn this lesson of adding value service in exchange for customer loyalty and has added location-based third party store and service discovery through its mobile app. By looking at which partners its customers are most interested in they are able to develop mutual loyalty incentives or simple joint promotions.

WHAT DOES IT ALL MEAN FOR YOU?

This type of program can only be effective if you have the right data. So brands need to identify the behavior they want to reward and either build their own program or partner with other companies who are already tracking behavior in that area.

The more we learn about consumers and the way they use products and services, the more brands can incentivize them with added-value rewards.

LOYALTY & REWARDS CONT’D3

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4 MAJOR TRENDS

With the major holiday shopping season over, it is clear that online shopping is as important as shopping on the high street. In the USA, the post -Thanksgiving shopping day known as Black Friday even has an established online brother: Cyber Monday. Shopping online is a growing part of the retail experience with increasing numbers moving towards the convenience of buying certain goods online. Published data suggests that in retail sales, $1 in every $10 is spent online.

A study for inMobi, by OnDevice Research and DecisionFuel, looked at the mobile device’s role in media consumption, transaction, general activity/usage and also in"uence on purchase. Collectively measuring what they called ‘mobile centricity’ they found an inverse correlation between wealth and mobile centricity. Many advanced economies such as the UK, US, Japan etc. have learned to use the internet and web-based services through a PC and so are less comfortable completing transactions on a mobile device. Interestingly, emerging economies such as Brazil, the Philippines, India and China, who have not gone through the same PC learning ground, are perfectly happy completing web-based activities using a mobile device.

Different devices are now !nding speci!c roles and consumers are experiencing this in their everyday lives. As people become used to shopping online they have found that different devices can be used to enhance the shopping experience.

On the high street, a practice known as ‘showrooming’ is becoming increasingly common. The consumer scans barcodes in store to get information about products, including price, but they then buy the product elsewhere. This effectively turns the store into little more than a glori!ed showroom.

Smart brands are !guring this out and at MWC a new sub trend emerged. Some brands are now rethinking their businesses to enable a platform, using existing expertise and, through investment, they are managing to create new services for business. eBay demonstrated this at the show. It outlined how it built its auction business, invested $4 billion investment in R&D retail products and then acquired other services that it felt could help retailers capture loyalty in new and interesting ways. Rebranded as eBay Inc., it has packaged its services for retailers and is using products like Red Laser, the scanning app for price checking, building on top of payment and delivery plus they have looked to provide an end-to-end infrastructure that could help reinvent how retail works by combining a number of factors across both the physical and digital experience.

When it comes to purchase, perhaps surprisingly, the desktop has now taken second place behind the tablet. As it !nds its niche as a recreational device, the tablet is now the preferred way to order online with the average order size increasing to $123, compared to the $102 average for desktops/laptops. As paying with mobile is set to become commonplace, brands like eBay Inc. is quick to respond, bringing a number of products and acquisitions together to help businesses with showrooming by facilitating payment and delivery options.

WHAT DOES IT ALL MEAN FOR YOU?

All this is important because brands and companies need to gain a deeper understanding of this evolution in order to ‘!sh where the !sh are’. Think about developing products and services that sit over the top of this evolving change in behavior of consumers. Understanding this as a connected seamless experience that links digital and physical spaces will reduce the ‘friction’ in the consumer’s experience and can then be used to add value.

The key to the new transaction is moving beyond a payment de!nition and becoming about this exchange of frictionless products and services, thus cutting out the manual work. Done correctly, consumers will reward you with their loyalty, as there is still a desire for an ongoing brand experience.

THE NEW TRANSACTION4

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4 MAJOR TRENDS

A CROWD OF CONNECTED INDIVIDUALS Social mobility – the ability to ensure your own destiny is determined by your own actions and not circumstances beyond your control – is fundamental to the American dream. Now as we enter a global age of social mobility, brought on by a tipping point of technology and service, it means that we are only restricted by our ability to dream – and make a video about that dream.

As individuals, we are probably at the most commercially empowered stage since the end of the 19th century. Some of this empowerment is active and some of it is passive; all of it requires a rethink about the norms that we have been working with since Sylvan Goldman invented the shopping cart in 1937. “My shopping data is not me” is an insight from our Truth Central research, which has shown that people do not consider their shopping data to be too personal to share. Indeed the personalization of the shopping and discovery experience is reaching a level of maturity so sophisticated that there are many people who can feel alienated when they spend any time away from their own personal technology. A segment of our customers are savvy enough to share their data. Those customers can help improve service and personalization for everyone else.

Anyone who uses Amazon or Net"ix and buys a movie for a friend or relative will no doubt see how suggestions are then driven by a choice you have not made for yourself. The mere fact that one finds this irritating is due to our reliance on a personalized suggestion service.

The data that builds a more personalized service is being generated through activity on our mobile devices. The more experimental brands are already working with ways to harvest and act on this data. Could 2013 be the year to increase investment in this area?

Hopefully you’ve just read something that will spark your own ideas about how you can help your brand to innovate… and if you would like to learn more or take a deeper look at some of the insights please contact Isabel Castens our Trends & Technology Catalyst at isabel.castens@mccann.com

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GREG ARMSHAW CHIEF TECHNOLOGY CATALYST, MCCANN WORLDGROUP ASIA PACIFIC

Greg has always worked at the leading edge of technology implementation and design. As part of the McCann Worldgroup Technology Catalyst Team, he is focused on identifying

best-in class solutions and technologies that enable clients to deliver utility, education and entertainment to their customer communities. Working with startups and established companies especially in the areas of Social Utility, Location-based Services and Mobile to deliver innovative client solutions.

As Media Systems Manager for Universal McCann EMEA, which he joined in 2001, he project-managed the development and deployment of media and consumer research analysis software to clients in over 30 countries, pulling data from multiple sources before campaign performance dashboards were commonplace. In 2006, he moved to Hong Kong as Senior VP, Regional Technology Director for McCann Worldgroup Asia Paci!c. In these posts, he has delivered solutions to such clients as GM, Microsoft, Motorola, SC Johnson and Nestlé, among others.

Earlier, he was Commercial Manager at WPP company KMR Software where he was instrumental in the successful transfer of analysis from the desktop systems to the web, for both TV and mixed-media planning. During his time here Greg was involved in projects to merge and segment major customer and market research databases for clients such as Barclaycard and Centrica. An engineer by training, he transferred his talents into the communications sphere once he realized that technology was not only a tool for improving the ef!ciency of operations but a game-changer for how consumers would interact with brands, products and corporations – as consumers, employees and partners.

contact me: greg.armshaw@mccannwg.com follow me: @innovasian

MARK JACKSONCHIEF TECHNOLOGY CATALYST, MCCANN WORLDGROUP EMEA

In November 2010 Mark Joined McCann Worldgroup in Europe as Chief Technology Catalyst, focusing on delivering innovation and technology enablement for global clients including L’Oréal, MasterCard, Coke, Nestlé and Nespresso. This has involved understanding the future vision for each organization and working with the agency and clients on de!ning the role that technology can play across new and emerging platforms and how to build a roadmap that can rede!ne business models.

Mark, along with the Technology Catalyst team worldwide, is also involved with working on de!ning and setting core trends with clients. This includes writing speci!c white papers on future forecasting around new technologies and also doing speci!c workshops and tours at key events such as the Consumer Electronics Show and Mobile World Congress.

He began his professional career as a designer/developer then moved to project management, working for a small specialist digital agency providing outsourced create and development services to some of the larger agencies in the UK, there he worked on brands as diverse as Carlsberg, Nike, HSBC, BSkyB and Formula One.

After 7 years, and following a brief stint working client-side with bespoke tailoring brand Hardy Amies, he moved on to develop his own consultancy and was eventually headhunted to lead the digital offering of a new startup agency. This involved developing key strategic partnerships in the UK and UAE, building core infrastructure applications and digital marketing strategies for government organizations and major construction companies in both countries.

From 2008 Mark was digital client service director for McCann Manchester applying digital strategic thinking across all key accounts acting as digital lead and managing strategic aspects of large engagements.

contact me: mark.jackson@mccannwg.com follow me: @sparkyj

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ABOUT THE AUTHORS