Revenue Enablers: Elements of a Wireless Portal

Revenue-enabling services are becoming important as web portals increase in sophistication and prevalence. Revenue enablers provide critical value-added enhancements to mobile portals, which otherwise would be simply stripped-down versions of their traditional web counterparts.

The unique features that form the underpinnings of a mobile portal are usability, personalization, messaging capability, real-time interactions, location-based services, and billing.

Usability: Making the User Experience Better
To generate revenues, the product or service has to be usable. As with traditional web portals, usability is critical to the successful adoption and use of a mobile portal by customers. Usability issues are of particular concern given the small screens and keypads on cell phones. Their miniature size imposes extreme demands for simplicity, brevity, and clarity on m-commerce application developers.

"Don't shrink applications - rethink them" is a central theme of mobile usability design. Nielsen Norman Group, a consulting firm that specializes in user interface research, did an experiment in which they gave twenty subjects in London a WAP phone capable of browsing the Internet and asked them to do a series of tasks such as buying books, stock trading, and retrieving information. It then asked the users whether or not they would use a WAP phone within one year. Seventy percent of the surveyed users said they would not. Jakob Nielsen, who coauthored the study, wrote, "Unless the usability of mobile Internet services and devices improves considerably, people will simply not use them and billions of dollars will be wasted."

In the race to make new technology work, the issues of interface/process usability - reducing confusion or creating better user experiences through improved process design - are often ignored. Business success, both now and in the future, will increasingly depend on a company's ability to improve users' experience first.

There are currently three main ways of enhancing a wireless customer's experience:

1. More portability. Customers don't want continuous technological change that forces them to learn something new every couple of months. They don't have time. America Online has shown it understands this need by keeping their customers' experiences consistent and simple. AOL has mastered the art of experience portability. This issue more than any other affects user acceptance of new technologies and services. Mobile experiences should be consistent and simple and involve limited learning time.
   
2. Increased ease of use. Customers want tools that are extremely easy to use. In any design activity, the top priority must be the user's experience, needs, and wants. For example, many programmers, in their zeal to present as much information as possible, overload screens with too much content. They often don't consider designing the application's navigation to be intuitive. Not surprisingly, users can easily get lost in the screen clutter.
   
3. No latency or delays. Mobile access should be fast and simple. The number-one priority for any web surfer is speed. Internet users' biggest complaints involve frustrating navigation schemes that require multiple clicks to get somewhere or long waits to view pages.

It is widely expected that speech recognition technology may improve a user's experience immensely. Speech recognition technology has particular advantages over the keyboard. Voice recognition technology is already quite effective with short, simple commands. Whether the technology can evolve rapidly enough to address the usability issues discussed above remains to be seen.


Personalization: Profiling Customers and Their Preferences
Mobile portals offer a greater degree of personalization than can be found on web portals. First-generation mobile portals used fixed menus, which lack the customization and personalization most users seek. Services such as Visto, Yodlee, and many others allow users to design and build their own mobile portals. Personalization software vendors, such as Broadvision and Vignette, are also addressing the challenges personalization services must face in the mobile Internet environment. The range of potential personal portal services is vast and will one day include diary and information management, entertainment services, advertising, deals notification, banking, and personalized links to other sites. Competition for the user-made portal market will be intense in the years to come.

How does a personalized portal work? Users who wish to build their own portals submit their profile information to the personalized service provider. Profile information includes the user's name, address, location, and billing details (the number of a credit card or a bank account), and even - because screen size affects the kind of information that can be viewed - the type of device used. They also pick the different information elements that they want to look at. These information elements can come from many companies. For example, Yodlee, which is the personalization engine behind many financial institutions, lets users monitor all their bank or credit-card accounts in one place. Once customers overcome their fear of someone having a 360-degree view of their information, companies providing personalization capabilities will gain an important competitive position in the value chain. However, personalization and privacy issues often conflict and remain a topic of debate.


Messaging and Real-Time Interaction
The incredible success of the short messaging service (SMS) caught many by surprise. In Japan, one of the most popular uses for NTT DoCoMo's i-mode service is sending text messages from person to person. Teenagers and executives alike use it to stay in touch with friends and colleagues. Similar services are heavily used in Europe as well. In both Japan and Europe, a single network standard makes SMS possible, convenient - and cheap.

For instant messaging to gain in popularity, it must work across multiple wireless-carrier platforms so that, say, a Sprint PCS user can send a text message to someone on an AT&T Wireless phone. Unfortunately, U.S. mobile operators use a mix of incompatible messaging technologies, making it difficult to send text to someone using a different wireless carrier. Ideally, wireless chat services also should be able to communicate with similar PC-based systems, such as AOL Instant Messenger and MSN Messenger.

Real-time messaging must also be able to cross-connect channels. For example, in the foreseeable future, travelers will still most likely book flights through a travel agent or web site. However, if their flight is canceled, they can be notified on their cell phone and have the option to access an m-commerce application to pick an alternative flight. As this example illustrates, isolated mobile applications can provide limited value in an increasingly integrated environment, especially when used in conjunction with real-world or web-based commerce.

Location-Based Services
Location-based applications offer companies the opportunity to create new customer interactions. The following scenario illustrates how location-based technology works: You're driving through town when suddenly a row of red lights on a Gap ad displayed on the side of a building begins to rapidly blink. You point your cell phone at the ad and within seconds you're retrieving information about gift ideas and the locations of nearby stores. It's not as far-fetched as it sounds.

Or consider this: You want to see a play at the last minute and need to know which theater has perishable inventory. It is quite possible that retailers will offer perishable and location-based inventory - such as hotel rooms, product "specials," and tickets to events - at discount prices to local mobile shoppers in real time and allow them to instantly purchase items via their cell phone.

Location-based applications capitalize on the mobile network operator's knowledge of where the customer is at any given time. In addition, the operator has the capacity to develop a detailed profile of customer preferences over time. Currently, location-based applications are fairly rudimentary and based on zip code. Next-generation location-based service will use GPS technology to pinpoint your location within a few feet. In the near future, cell phone carriers will know a caller's location within approximately 125 meters of where the call or wireless web transaction occurred. Emergency service dispatchers will have the ability to locate people in distress who dial 911 from a mobile phone, which is a reason location-based technology has the support of the Federal Communications Commission (FCC). If carriers can provide exact user location data to 911 operators, they will most likely sell the same information to m-commerce companies.

The network operators anticipate that many m-commerce firms will use location-specific information to target their services, promotions, and advertising at their mobile consumers. For example, when merchants know a potential customer is in close proximity to their stores, they can offer the customer a wireless coupon, based on the customer's known preferences, to encourage him to come in and shop. However, while the vision is being promoted aggressively, it is not clear how realistic or useful location-based services will be in the future. Until the potential uses and benefits are better understood, it will be difficult to determine the profit potential.


Billing, Payment, and Settlement
On the surface, using a wireless phone to purchase a movie ticket seems like a simple transaction, but in reality it is very complex. Billing is a key requirement for a mobile portal's success. Many wireless services will require some form of payment - whether to the service provider for the purchase of a product or from the service provider to the customer for refunds or a customer reward program. Traditional payment methods such as credit and debit cards must be supported by the technology. Credit and debit cards have the drawback of requiring subscribers to enter card information into a mobile device. In addition, security concerns related to sending card information over a wireless network must be addressed.

To avoid these issues, mobile portals can offer subscribers the option of charging or crediting a transaction to their account. Given the choice of entering card information manually and dealing with security concerns or simply charging a transaction to a mobile account, most users will likely prefer the latter. The mobile operators benefit from having wireless transactions billed to an already existing account. They already have the customer information they need to charge a subscriber for m-commerce transactions, and these charges can be easily integrated with existing account fees. Ease of billing will be a key factor in differentiating the value each portal provider gives its customers.

Micro-payment scenarios are also emerging enablers of mobile commerce. For example, a mobile user wants to view the latest news from BusinessWeek. They access the BusinessWeek site and are charged $0.20 for the transaction. Such micro-transactions require a significantly different payment infrastructure than those of other payment methods. Instead of using a credit card for a purchase, customers simply provide their telephone number. They then receive an on-screen message asking for approval via a password. Once the password is authenticated, the money is billed to the customer's account at the network operator, such as Sprint or AT&T Wireless.

Micro-payments using M-wallets are becoming quite popular. For example, X.com is a provider of a M-Wallet PayPal service. PayPal is extremely popular in person-to-person commerce. Companies such as eBay offer PayPal as an authorized way of settling accounts after an auction.

Today's mobile operators are the best positioned to leverage their existing payment-processing systems while they extend their billing expertise into the wireless and value-added service arenas. Mobile operators are also well positioned in the prepaid and invoice micro-payment areas. They can use their expertise to address the full value chain - from authentication, identification, and authorization to end-user risk management, payment processing, and fund clearing. For other types of payments, however, the operators' role across the value chain will vary from just providing customers with database access to identity verification. They will continue to play an intermediary role with credit-card payment methods but will have a lesser degree of influence on transaction processing for direct debit. To support a full range of payment options, several mobile operators have partnered with banking and other transaction-processing agents.

If mobile portals are to be successful, they must incorporate some of the revenue-enabling features that we just outlined. Mobile devices already have to overcome constraints such as small screen size; therefore, mobile operators are obligated to create a compelling value proposition for users.



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1. See the Nielsen Norman Group's web site (nngroup.com/reports/wap) for the complete report.
2. Suzanne Baran, "Bloodhound Technology," Internet World, October 15, 2000.