Through The Looking Glass: Trends in Mobile Technology

Q. Boyer

Depending on the market analyst providing the prediction, consumer mobile web browsing is predicted to overtake fixed browsing sometime in the next nine to 36 months. While such usage metrics are not adult industry-specific, data collected by adult mobile networks reinforce the point; mobile usage, far from hitting a plateau, continues to increase substantially over time.

Given this clear trend toward more mobile consumption and the corresponding decline in revenue derived from fixed-browsing consumers, it is imperative for adult companies that haven’t done so already to fashion an effective mobile strategy. A good place to start in crafting such a strategy is to obtain an understanding the state of the consumer market with respect to device and operating system browsing share, some of the differences between those varying technologies, and options for how to approach consumers in the diverse and increasingly global mobile market for adult entertainment.

When assessing device and operating system market share, there is an understandable tendency on the part of a lot of analysts, and American analysts in particular, to focus solely on smartphones and tablets.

When assessing device and operating system market share, there is an understandable tendency on the part of a lot of analysts, and American analysts in particular, to focus solely on smartphones and tablets. According to the experts interviewed by XBIZ, however, it’s a mistake to take such a narrow view of the mobile sector, given that many smaller and emerging markets still have seen relatively little penetration by next-gen devices.

Karel de Beule, co-founder of Kimia Solutions, told XBIZ that his company distinguishes between three basic market types: advanced, emerging and what one might call lagging markets, which tend to involve more impoverished regions. Examples of advanced markets include the U.S. and E.U., countries with substantial penetration of smartphones. Within these advanced markets, the market share of the two dominant operating systems – Apple and Android – varies country by country, de Beule said, noting that the iPhone market share is larger in the U.S. than in Spain, for example, where Android enjoys the larger share.

In emerging markets, like Latin America (LATAM) and Southeast Asia, de Beule noted that Android is growing rapidly, but feature phones still hold a significant share of the market. In lagging markets, like Africa and India, de Beule said that feature phones still hold the lion’s share of the market, making them very difficult markets to monetize for companies that limit their efforts to marketing smartphone and tablet-friendly content.

Terry Jackson, CEO of Adult Moda, concurred with de Beule, saying “it is important not to ignore the feature phone market yet.

“There are a lot of companies making a lot of money by promoting content to Asian and Latin American markets with feature phones simply because of the massive volumes involved,” Jackson said. “In general, feature phones still make up a large percentage of the traffic.”

On AdultModa’s network, Jackson said, feature phones still comprise 82 percent of the traffic, with smartphones commanding only 16 percent, and tablets a relatively sliver at 2 percent. Obviously, much of that traffic is from developing countries, where smartphone and tablet use will presumably expand as the infrastructure to support them comes into play, but for the time being, clearly it makes little sense to target such markets with content, sites and apps that cannot be installed or viewed by the vast bulk of consumers.

Even if a company makes the strategic decision to consider only smartphone and tablet users as potential customers, it is still crucial to drill down deeper and consider how the market is divided among the various operating systems and device types, Luiz Martinez, founder and CEO of Cool Mobile, told XBIZ.

“All players in this market must think about fragmentation strategies if they want to get their traffic optimized as much as possible,” Martinez said.

Martinez noted that while Android holds a market share of approximately 80 percent in Spain, in Serbia, a country recently added to the list of areas that Cool Mobile serves, Android’s penetration is only at about 20 percent, underscoring the importance of avoiding a “one size fits all” approach to the smartphone and tablet sectors.

Of course, there’s much more to consider than just device and operating system types when optimizing for geographically far-flung mobile markets; there’s also the question of what is possible, and permissible, in each area, including from a legal and transaction processing standpoint.

“Without a doubt, local billing and regulations are the two biggest factors that put the adult industry off exploring direct to consumer business models to complement their fixed line strategies,” said Julia Dimambro, founder and CEO of Cherry Media. Dimambro noted that the variation in laws and billing regulations “actually requires totally different business models in the services you create at a fundamental level.”

“Cherry has licensed content to media companies and mobile network operators in over 40 to 50 countries over the last 10 years and in order to cater for these regulations, we actually have a full team dedicated to manually editing content to the 30-odd different grading levels required to sell mobile erotic content globally,” Dimambro said.

Beyond the limitations imposed by varied legal and billing structures, mobile operators must also account for variations in the physical nature of the different devices used by consumers, including screen dimensions, resolution, and other factors. Ben Kierle, commercial director for Reporo, detailed some of the techniques that Reporo uses to effectively serve ads and other content to users of varying mobile devices.

“We have many different creatives and sizes which dynamically change dependent on the screen width and resolution of the device making the request,” Kierle said. “We have certain types of ads such as what would be known on the desktop as an IM or floater. We have two versions; a static floater which would work on any smart device, and a floater which scrolls up the page form the foot of the page in to the screen, disappears as the user scrolls down the page etc. —essentially a much smoother - looking and less-intrusive design of an ad type that only works on devices of a specific version of an operating system or higher. We have several other ads which transition from one ad to another, such as spinners which give a higher CTR.”

Gian Carlo Scalisi, sales director for BitterStrawberry, described a similar approach and philosophy, saying that BitterStrawberry employs a sophisticated “filtering, analyzing, pre-sorting and redirecting system that detects the country, device, operator/IP range and connection” used to determine the best converting offer for each specific target.

“Doing this, we find ourselves in the position in which we are able to push the user to the offer where he/she will convert best: where the portal is optimized for that device, where the content fits the type of available connection, where the genre and language match the needs of the user,” Scalisi said.

Another facet of the current mobile market on which analysts agree – for the most part, at least – is the increasing importance of tablet devices within the mobile market. Every company contacted for this article reported seeing a steady and continuing increase in tablet usage on their networks, with BitterStrawberry reporting that the amount of traffic received from tablets on their network doubled in the last year, a trend the company expects to continue through this year.

One minor disagreement between some of the respondents queried for this article centers on whether tablets should be considered mobile devices at all. Kimia’s de Beule said that while tablet use for consumption of adult content is clearly on the rise, his company considers tablets “more of a web device than a mobile device” – at least within the context of adult entertainment.

“This is different from our games business where the tablet segment is a core part of our product strategy because of the lucrative app market for free-to-play games,” de Beule said. “As you cannot monetize on adult apps for tablet, we don’t see a clear way in the app market for adult.”

AdultModa’s Jackson, however, begs to differ, saying that “we believe as long as they run a mobile OS, they are mobile devices.”

The disagreement is an exceedingly minor one, though; both these two companies and their competitors anticipate a sustained increase in tablet use in the foreseeable future, making the devices an important consideration for adult entrepreneurs and developers, whether they see tablets as more like smartphones, or more like laptop computers.