Jul 13th, 2010 |
Why do so many companies struggle to drive revenue from mobile? Industry experts Tim Grace of Apartments.com and Nick Fotis of Cars.com argue that our industry’s current focus is on short-term marketing campaigns that fizzle out, rather than on legitimate product extensions that can be monetized for long-term success.
To correct this bias and share what they’ve learned, Tim Grace of Apartments.com and Nick Fotis of Cars.com will speak at Web 2.0 Expo New York this September in their session “From the Trenches: Monetizing Mobile”.
Tim and Nick recently spoke to us about revenue growth via mobile, mistakes they’ve learned from, advertising on mobile devices, and creating great user experiences on mobile devices.
Kaitlin: What’s the most important difference designers and developers need to consider when converting a website to a mobile version? Specifically if their focus is effective monetization.
Tim: For me, the most important consideration is to understand what users want to do with your content on mobile, which should guide your development efforts towards the most critical features, at least for your first mobile foray. This should align with your monetization goals and ultimately drive greater conversions, as the experience you deliver is laser-focused on the content that mobile users are most likely to engage with. Beyond that, the level of awareness you must have around different screen sizes, device types and browsers in designing for the mobile web is much greater than simply ensuring compatibility with IE 6, for example, in the desktop web world.
Nick: I agree with Tim – it’s all about consumer need. Our mobile strategy aligns with our overall business strategy, with the principle that serving consumer needs will build an audience. Once the audience is in place, the monetization will come. Our approach to our mobile website is identifying and optimizing the content that’s most useful to consumers in the mobile context (in our case, on or en route to the dealer’s lot).
Kaitlin: Do different platforms (Droid, iPhone, Blackberry, etc.) face different design challenges?
Absolutely. The primary issue with Blackberry, for example, is their browser, which offers much less in terms of UX polish and functionality than the WebKit browsers most other smart phones like iPhone and Android devices. Once Blackberry releases their WebKit browser (they’ve already announced plans to do so), it will be much easier to standardize design and extend richer functionality across platforms.
Kaitlin: Speaking of platforms, are you developing a site or app native to the iPad? Will you discuss iPad development in your session?
Tim: We are not in active development for a native iPad app, though it remains at the fore of our roadmap. Our goal is to do more than make our iPhone app fit the iPad screen resolution and create a rich, custom app for that device, which requires more deliberate planning. We have, however, taken steps to ensure our site experience isn’t degraded on the iPad. The largest issue we face there is with video compatibility, which certain not a problem unique to us. This has actually been a blessing in many ways, as it’s forced us to look at Flash alternatives which I ultimately believe will better position our video assets for future web standards.
Nick: We’re pleased with the way our site looks and functions on the iPad. Given usable experiences, most users will opt for the full version of a website as it has all content available, so we feel comfortable with this approach, particularly as long as the WiFi version of the iPad is most used. We closely monitor sales and adoption of the 3G version, and if it appears that consumers are using the iPad in situations where they may not have a WiFi connection available, we’ll reconsider our approach.
Kaitlin: How much of your monetization efforts for mobile rely on advertising? How does effective ad placement work on such a small screen? Related to this, do you have advice for potential mobile device advertisers?
Nick: Our advertisers fall into two categories – local car dealers and automotive manufacturers. Our core product – inventory listings – is essentially location based advertising. We have been successfully monetizing both our mobile site and our app with display advertising for auto manufacturers. It’s the audience – in-market car shoppers – that make our display positions successful. My advice would be to focus on audience selection in mobile just as you would online or in other mediums.
Tim: Our efforts have intentionally steered clear of the traditional mobile display ad approach, which appears to be the main thrust of this question. This isn’t to say we don’t believe in the monetization opportunities they offer, but our priorities remain with our core customer base of property advertisers and driving consumers exclusively to their content via mobile. Similar to Cars.com’s local dealer base that Nick mentioned, nearly all of Apartments.com’s content is advertising in some fashion, so our focus in showcasing that content via mobile has an obvious benefit to those paying customers.
Kaitlin: How do you create a product for audiences that aren’t necessarily technologically savvy but are slowly moving into the smart phone market?
Tim: Our answer to this is to have diversity in our product suite. On one end of the spectrum, we offer simple SMS services that allow even the most basic of feature phones to deliver our content to their devices. On the other end, we have our iPhone app that clearly reaches a more sophisticated mobile audience. That said, nearly all of our current traffic from mobile devices comes from iOS/Android/Blackberry, so our primary focus on remains on those users.
Nick: Simplicity has been our key. For consumers, we redirect them to a mobile site and try to provide them a useful site rather than overwhelm them with features. For our dealer customers, all of their listings automatically are pushed to the mobile channel, with no additional cost or effort. For our manufacturer customers, if they aren’t prepared with development resources, we’ll help them with ad unit or landing page development.
Kaitlin: You mentioned using SMS in your products. Could you go in-depth on this more?
Tim: SMS is a key part of our mobile strategy. As I mentioned in the previous question, we enable users to opt-in to receive an SMS message containing key information for properties they are interested in. While traction for this feature has seen only modest growth over time, we continue to look for ways to grow that service. We have also made this functionality available to our landlord/property management customers as part of a product we built to serve as the back-end of their mobile solutions. We allow them to choose a keyword that we associate with our short code (think “text APTS to 29999”) that they can market to prospective renters. After texting that keyword the consumer receives information about that property via SMS, including a link to mobile web page that offers property photos, pricing, etc.
Nick: Our overall business approach to date has been focused on car shopper contact to dealers, not creating products that involve outbound contact of shoppers. This approach is changing with time, as some features, such as search notifications (“Let me know when a Honda Accord under $20K is listed for sale near me”) are naturals for our site and for SMS. We’ll be entering into the SMS market within the next 12 months.
Kaitlin: In your session description you mention that you’ll discuss “ill-fated products/tactics and what we learned from these missteps.” Sounds like you had a few stressful moments in the Apartments.com and Cars.com offices. What was the worst idea that was implemented, and why were the assumptions behind it wrong?
Nick: To continue my answer from earlier, our biggest mobile misstep was departing from our strategy to create a one-off mobile-specific product for dealers – dealership specific websites. While this product didn’t require much effort from dealers, it did require a few things that we didn’t properly provide – most importantly, a strong plan for how these sites would receive traffic. Given the challenges of traffic, we weren’t prepared from a sales training and communication or pricing perspective to handle dealer frustrations around the site. The learning for us was to focus on extending the core Cars.com offerings into the mobile channel.
Tim: Our biggest misstep was misunderstanding the capabilities of our property management customers to actively engage in mobile marketing. The SMS-based product I described faced many initial sales challenges due to the simple fact that these customers did not understand how to merchandise their keyword or integrate a mobile marketing message into their existing promotional strategy. It was a sobering realization that we may have created an elegant product that no one quite understood how to use. Ultimately, we used this initial failure to tweak the product to better achieve market acceptance, but the lesson learned was that much of what we may believe as “mobile 101” is very much still an inside baseball concept to many marketers. Never underestimate the need for education when it comes to a young and rapidly evolving space like mobile.
Kaitlin: What is the traffic like to your mobile properties compared to your desktop properties? What’s the trend toward mobile adoption among your customers?
Tim: We get anywhere from 5-10% of our traffic from mobile devices, depending on the day of the week (mobile usage spikes a bit on weekends). Overall, our mobile traffic is up 200% YOY, which I largely attribute to the explosion in smart phone sales. I’d love to say that our product development and SEO efforts are the single driver behind this growth (they clearly have had an impact), but the simple fact is that we had zero visits from Android devices for most of ’09 and now they account for ~20% of our mobile traffic. Given that we do not rely on any paid traffic acquisition efforts for mobile, I believe our experience simply speaks to the size of the opportunity out in the market right now.
Nick: About 15% of our visits come from mobile devices, which includes visits to our mobile site and to our iPhone app. We launched our mobile site in 2007, and we’ve seen around 50% YoY growth in traffic. Our iPhone app launched in 2/2010, and today it receives about 20% more traffic on a monthly basis than our mobile site, which means that since January our mobile channel traffic has increased more than 200%.
Kaitlin: How are you helping the other half of the equation – car dealers, apartment landlords – with this switch to mobile? Is there much education that needs to be done?
Nick: I usually say that 20%-30% of my job is dedicated to education. We have a large and talented salesforce that communicates with a large and diverse customer base, with varied starting positions of mobile knowledge. From dashboards to presentations to ad hoc questions, it’s a challenge to deliver an ingestible but meaningful dose of information. We’re fortunate that we and our dealer customers have gone through the same evolution with the internet, so we built some understanding of how to introduce new platforms and some credibility with our customers that when we say mobile is important, they believe us. It can still be a challenge to convince the dirt lot dealer in Mississippi – or the Lexus dealer in Beverly Hills – that his customers are shopping on their phones.
Tim: I heartily concur with Nick’s answer – education is the #1 challenge in articulating why mobile matters and in selling product. For agencies trying to sell large brands on mobile, for example, the primary education challenge is to articulate which mobile tactics make sense, not whether or not mobile should even be in the conversation. For our property management customers, the barrier is still explaining why mobile is relevant to them and, as Nick points out, drawing attention to the obvious trends in consumer behavior that impact them. While I’ve seen some maturation in our market over the past 12 months, I suspect this will remain our primary challenge for some time.
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Kaitlin Pike is the Community Manager of Web 2.0 Expo. She can be reached @w2e or @kcpike.
Register today to see Nick Fotis and Tim Grace speak at Web 2.0 Expo New York this September. Use code webny10scm4 to save 25% on all conference passes.
