Monday marked the 10th anniversary of the first iPhone, an announcement that signaled the arrival of our current era of mobile, instant communication via smartphones and social media. It’s fitting that our first blog item this year takes a moment to reflect on this watershed event and its consequences.
In the decade since the iPhone’s introduction, smartphones and social media have ushered in a hyper-connected world, profoundly affecting our personal relations, our work, our economy and our politics. A few metrics underscore the scale and speed of these changes:
- Since 2007, the number of smart phone users around the globe has grown to an estimated 2.16 billion, equating to more than a quarter of the world’s population of 7.4 billion. Seventy two percent of Americans now own a smart phone. In China, with its population of nearly 1.4 billion, smart phone penetration has reached 52%.
- The year Apple introduced the iPhone, Facebook had fewer than a 100 million users. Today, Facebook has an estimated 1.7 billion users worldwide. Sixty-eight percent of U.S. adults are regular Facebook users.
- Worldwide, phone users sent an estimated 3 trillion text messages in 2016. That’s almost 23 billion messages per day, or almost 16 million messages per minute.
- More than 60% of Internet searches for products are initiated from smart phones.
Driving smart phone adoption has been a steady decline in device prices even as functionality and speed increased. The average global selling price of a mid-range smart phone fell from $440 in 2010 to $283 in 2016.
Data transmission costs have also declined. Since 2005 the cost of delivering one megabyte wirelessly dropped from $8 to a few cents. As a result, with social media platforms and messaging apps, the costs of communicating with millions of individuals instantly is approaching zero.
It’s difficult to overstate the impact of these changes. Consider that — through their social media activity, messaging and content sharing — billions of individuals have, in effect, “identified” themselves to marketers and millions of others in their networks. Consumers daily disseminate vast amounts of data on their personal activities and preferences. Never in history have we have had such a detailed, real-time window on human behavior and interaction.
These changes have happened so swiftly that we are still trying to understand the forces they unleashed. It’s difficult to escape the view that events such as the Trump victory and Brexit vote were in some way related to these changes. Hyper-connectivity seems to be changing how political power is acquired, distributed and exercised. That gives CEOs and other elites a reason to pause and reflect on what new risks may be emerging.
No sectors have been more buffeted by these changes than media and advertising. Instant communication and speedy mobile access to the Internet finally broke the back of the traditional media model. That model consisted of developing an editorial product that resonated with a definable following, then selling access to that audience.
But, in the hyper connected world, marketers have myriad alternative ways to access consumers, acquire information about them, and offer them goods and services, often just at the moment when they are most interested in a purchase. Media is no longer the gatekeeper to consumers or the most efficient aggregator of potential consumer demand.
In this environment, both legacy and “digital native” media brands are struggling to come up with new business models. News organizations are grappling with the issues of pay walls and sponsored content as revenue growth proves elusive.
On the operating level, the media’s scramble to attract and hold audience in this competitive environment has transformed the ways that newsrooms and reporters operate. Newsrooms closely monitor the real time flow of page views among their competitors for advertising dollars, creating a sort of crowd dynamic in reporting. Reporters are called on to write shorter articles suitable for mobile devices and post more frequently.
In a world of Twitter and customized LinkedIn feeds, the news media find themselves in the uncomfortable position of both competing with social media channels as well as having to adopt aggressive social media strategies to amplify the audiences for their editorial content and ads.
Casting a long shadow across the media’s strategic outlook is the duopoly of Google and Facebook. Data from the Interactive Advertising Bureau showed digital ad spending, powered by growth in mobile and video, rose 20% in the third quarter of 2016 to a quarterly record $17.6 billion. A closer look at the data showed that nearly that Google and Facebook accounted for 100% of that quarterly growth.
What does all this mean for marketing and communications strategies in 2017? That’s the question we will focus on in the months ahead.
When Steve Jobs wrapped up his presentation of the new iPhone at MacWorld on January 9, 2007, he clicked to a slide with only a quote from hockey legend Wayne Gretsky: ” I skate to where the puck is going to be, not where it’s been.”
In 2017, we will seek in these posts to help marketers and managers of brands and reputations skate to where the action will be — not where it’s been. We invite you to stay tuned.