PURELY CREATIVE – An apology and clarification

Back in early November we wrongly reported in our editorial blog From my Hat to my Shoes, that PPP had levied a fine of £800,000 against a company called Purely Creative for a misleading scratchcard campaign that attracted 15 complaints. This was wrong. The company fined £800,000 by PPP was in fact Churchcastle Ltd. NOT Purely Creative.

Churchcastle was fined for a newspaper campaign that used a PRS number to claim prizes for word search competitions which racked up huge phone call costs. The company also bombarded people with up to four promos a month.

Purely Creative was not involved in this at all. Purely Creative is looking to minimise the effects of a harsh European Courts of Justice (ECJ) ruling on PRS promotions that it feels we're made "by the ECJ based on what Purely Creative sees as the wider implications of the ECJ’s extreme interpretation of paragraph 31 of Schedule 1 to the Unfair Commercial Practices Directive implemented in the UK by the Consumer Protection from Unfair Trading Regulations 2008.

Purely Creative seeking to try and get the effects of this minimised as it effects the whole PRS industry.

The basic question before the ECJ was very specific: it concerned whether, if a consumer has been told he or she has won or will win a prize, it is a breach of the law if the consumer has to or may incur any cost whatsoever in claiming that prize. The ECJ said ‘yes’, even if it is the cost of a local rate telephone call, a short bus ride or a postage stamp.

The ECJ’s interpretation will have an operational impact on all businesses and charities in the European Union that operate promotions that offer prizes. National Lotteries are not exempt. As such we are surprised by the scope of the ruling and believe that other businesses and institutions will be equally surprised once they become aware of the full implications.

In October the ECJ upheld its ruling. More on this in January.

Once again, apologies to Purely Creative who were not fined by PPP and have never been so.

2013: a challenging year for operators?

This week saw leading analysts Accenture publish – with some fanfare it has to be said – its predictions for the communications, media and entertainment industries and finds that times are getting tough for all three sectors as they all chase the same consumers and each tries to ‘own the customer’.

Particularly at risk are network operators, who, says Accenture, can no longer rely on churn to sign up new users, but have to actively attract them with better services, better devices and better prices. But they are having to do this against a backdrop where the likes of Google, Facebook and Sony – not to mention Apple – who are not only doing a good job of offering services that consumers want that tread on the toes of operators, but also own the delivery channel and the devices.

According to Accenture, the only way that operators can try and survive is to create their own ecosystems – and that increasingly means partnering.

In fact we are at the dawn of an age of MNO partnerships unlike anything we’ve seen before. From a consumer point of view its great as it means better services and, with the possible exception of overpriced 4G, better prices.

But its not just the telcos that are facing problems. The whole value ecosystem around communications and media is changing. What’s interesting is how this has been driven in large by arguably the three major players in the digital space; Apple with hardware, Amazon with ecommerce and Google with search advertising.

Of course, there are many other organisations such as Facebook and eBay you could look to as well, but it is the way in which these three have leveraged themselves into the media and communications markets and shaped business models around them where we can draw our lessons.

What many organisations operating in the communications and media space need to be asking themselves is “How do my economics fit into this new world, and how do I preserve, protect and diversify my revenue streams?”

Organisations need to consider how they can participate in the new models around them. How can I, as a broadcaster, explore ecommerce services? How can I, a mobile operator, deliver a better and more integrated hardware experience for my customers than I have previously? How can these companies better leverage brands and new content?

For communications service providers, the age old question of voice and text revenues remains, as well as how they finally begin to properly monetise data services. It’s not a new question, but it’s as critical in 2013 as it’s ever been.

Life is now multiplatform. So how do the different screens we have as part of our daily media lives interact with each other and what forms of creativity and technology are required to orchestrate the consumer experience across those screens?

One immediate challenge for the content industries will be how to respond to the potential trend of the all you can eat subscription models moving towards an à la carte world. In the next five years, we will see fewer people spending the same fixed sum with one provider on a monthly basis, as they move to spend more with a number of different direct providers to suit their content needs. All this will be enabled by new “super platforms” that high speed broadband can make a reality.

Alongside this, there will be considerations for advertisers as the pull of more targeted, interactive experiences continues to challenge traditional linear advertising models. In particular, will we reach a point in 2013 where the whole industry can move together? Or will individual media owners still be wrestling on their own with the risks and challenges of moving to a new world of advertising?

The way in which we look at social will also change. Content providers, operators and broadcasters alike will evaluate whether it is simply a form of marketing, or whether it can become a form of actual distribution for getting their content out to their customers.

2013 is shaping up to be quite an interesting – not to mention challenging – year. I’m rather looking forward to it….

Christmas is coming... and m-commerce is ready to get fat

As Christmas approaches, I am getting very excited. I can’t hardly sleep for anticipation. I pace. I fiddle. I can’t concentrate. No, not because I am counting down the days until Santa arrives at Telemedia Towers, but because soon, very soon, the deluge of predictions as to how much commerce will be done on mobile around Christmas are but days away from deluging my in box.

It’s my favourite time of year. Everyone, usually, gets very carried away about how much shopping people are going to do over mobile this year compared to last and how the mobile retail revolution is upon us. It validates me and makes me not feel like such a dork for doing all my Christmas shopping on my phone for the fourth year running. I am, it makes me feel, not alone.

But while I wait, Verdict Research has looked into how much commerce is going to be done via mobile by 2017 and concluded that, in its words, “m-commerce is set to grow a whopping 504% between now and 2017 – resulting in almost £1 in every £4 spent online being through a mobile device in 2017”.

What? Only 25% of online shopping being done on mobile by 2017? Really? Already there are more smartphones in the US than normal phones (51%, a milestone reached this week) and sales of smartphones and tablets combined are likely next year to outstrip PC sales. By 2017, the way everyone will connect to the web will be via a smartphone, a tablet, or some sort of combination of the two (a smablet?). Now, a lot of this will be via wifi, but is it still mobile or is it online?

In fact, it doesn’t matter. It will all be digital commerce and by 2017 I don’t think any organization is going to really care where the sale comes from, so long as it comes.

What I think we will find is that most ‘e-commerce’ will be initiated from something running what we think of today as a mobile OS, and so, even if its running off wifi via a tablet on someones’s desk (or even a laptop come to that) its m-commerce.

What Verdict’s findings overlook is the natural convergence that is happening between devices, networks, operating systems and people’s habits. Touch screen devices – smartphones, iPads, Andriod tabs, even the Surface – all offer a much better user interface than desktops. They are also cheaper, more flexible and convenient. They are going to be the mass market tool for web access in 2017 (if not long before – I reckon they are already well on their way to being so, as Christmas data will reveal: the reason I am so excited).

What Verdict does get right (well, sort of) is that it believes that consumers will use mobile to research what they want to buy, but won’t actually purchase through mobile because, they don’t feel comfortable transacting through mobile.

Here, the researchers have a point – up to a point. Right now there is some consumer wariness about paying using mobile payments. But there are two things wrong with this argument.

Firstly, most commerce transacted through mobile devices can be done through PayPal, iTunes, or sites that have stored card details. It is not different to online shopping in that regard – its just a different device.

Secondly, mobile payments that actually use mobile are already starting to gain consumer trust here in 2012. Thanks to charity donation initiatives, the rise of Payforit and the use of in-app payments for gamers, gamblers and consumers of adult are starting to get people using m-payments. Initiatives underway by everyone from banks to retailers to network operators are going to see the use of m-payments rocket – not by 2017 but during 2013.

I believe that by 2017, mobile will be THE payment tool of choice for most people.

So, while I am excited about Christmas and all the positive reinforcement I am going to get from the analysis, I am also looking forward very much to Christmas 2017 (only 1825 sleeps away!) to be proved right: everything will be mobile and your kids will marvel at how ‘online’ used to be accessed from a big box that sat on a table.

Happy mobile shopping!