£100bn: The UK online economy is getting there

Yesterday I learned that the online economy in the UK is now worth £100 billion. This figure is the key outcome of a survey conducted by the Boston Consulting Group (commissioned by Google). The report shows that nearly 60 per cent of the UK online economy is driven by ‘consumption’, which consists of 2 different parts: consumer spending online (£50bn) and spending on Internet providers and devices  to access the Internet (£10bn).

I guess the significance of the £100 billion figure is that it accounts for 7.2 per cent of the UK’s Gross Domestic Product (GDP). With this percentage, the Internet economy has overtaken sectors such as construction, transport and utilities. The report states that this figure is likely to grow by 10 per cent each year, reaching 10 per cent of GDP by 2015.

The main things I took away from this survey and it findings:

  1. Internet in the UK is getting there – Although I’m slightly wary of the term “online economy”, the latest figures clearly show that the UK is heading in the right direction.
  2. There is still work to be done! Looking at the considerable gap with countries like Denmark and Japan, it seems that progress still needs to be made with respect to infrastructure (Internet across the UK) and getting everyone in the UK online.

Main learning point: the UK’s online economy seems to have grown considerably, mainly caused by a significant increase in online consumer spending. This figure is likely to grow substantially over the years to come, particularly as more (small) businesses start to fully embrace the Internet. However, there still seems scope for the British government to facilitate this growth by enabling infrastructure and stimulating Internet engagement.

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Social search: adding a ‘personal’ element to searching

Searching through Google has become completely ingrained in the way we look for information online. It provides search results based on a search term entered by the user. However, big search engine rival Bing and Facebook have recently tied up to create “social search”.

In a nutshell, this means that Bing will add “social signals”, based on people’s “Likes” on Facebook, to its search results. Users (provided they’re signed in on Facebook) will have the option of filtering search results by what their friends have “liked” on Facebook. For instance, when I search for “Dutch pancake places in London”, I will be able to see those restaurants “liked” by my Facebook friends. It’s a good way of ‘personalising’ my search results since a good number of my Dutch friends are likely to know a thing or two about pancakes.

Similarly, with the new “Profile Search”, Bing will return search results that have a greater “social proximity” to the user. Typically, when I search for “Pete Smith” in Google, I’ll get about 7 million results. With Bing’s new Profile Search, the results will have been filtered to show my Facebook friends and my friends’ friends, thus increasing the likelihood that I end with the Pete Smith I was looking for.

This new search functionality will kick in if Facebook users are logged into Facebook when they reach Bing or when they have “cookies” of data storing their basic Facebook information on their PCs or other devices. As a result, even when you’re not signed in (but have not unchecked the “keep me logged in” box) other users can still search Bing using your social graph. I can well imagine that this might lead to embarrassing situations in certain cases …

Even though I haven’t had a chance to test the new search functionality myself (Bing is looking for a UK release later this year), these are the things I’ve learned thus far:

  1. “Social search” adds a whole new dimension to search – It makes search results much more personal and relevant.
  2. The tie-in with Facebook sounds promising – Even though it’s early stages, this functionality has the potential to be extremely beneficial, both to users and brands.
  3. More privacy related issues are looming – With people becoming increasingly aware that an ‘online identity’ can be hard to shake off, the same goes for search results surfacing all kinds of personal information and content.

Main learning point: this link-up between Facebook and Bing introduces a new, exciting element to search. The ability to personalise one’s search results looks to become an important driver for search in the future. Some initial bugs still need to be ironed out, but I can imagine that future iterations of social search will revolutionise the way we search.

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Location-based mobile marketing: brands knowing where you are

Imagine that you walk around the streets of London and receive a text message on your mobile to let you know that you’re approaching a Starbucks coffee shop and that you will get money off your first cup. Future music? Big Brother? Absolutely not. Location-based mobile marketing has taken off, especially since the popularity of social applications such as Foursquare.

Recent campaigns by Starbucks and L’OreaI have helped me to learn more about how location-based marketing works. I’ve learned about two important differences. First, the difference between “mobile marketing” and “location based services”. Mobile marketing is all about using mobiles to market directly to consumers (mainly through SMS). Smartphones like the iPhone and the Blackberry enable location-based marketing whereby GPS technology is used to track where consumers are and to target advertisements or promotions accordingly.

The other difference worth noting is the one between “ push” and “pull” marketing. It’s the distinction between brands pushing (unrequested) information out to users (“push”) and users actively seeking information from brands (“pull’). The “geo-fencing” technology as used by Starbucks and L’Oreal is a good example of pull marketing. For example, in Starbucks’ case, users who have registered an interest in food and drink will get an SMS offering them money off Starbucks Via coffee at a nearby branch when they enter an area owned (‘geo-fenced’) by the coffee company. Shopkick is another channel that brands use to reward people for visiting their stores or buying their products.

In short, the main two things I’ve learned thus far about mobile location-based marketing are:

  1. Mobile location-based marketing is definitely on the rise – Especially with the popularity of apps like Foursquare and the large number of smartphone users, this is an obvious channel for brands.
  2. The ability to target and customise ads – With “pull” location-based marketing, users are able to indicate preferences and sign up for brands of their choice. Also, the GPS functionality in smartphones provides brands with invaluable information on customers’ shopping patterns and geographic locations

Main learning point: I can imagine that location-based mobile marketing can be somewhat of a daunting prospect to users. The idea that brands know where you are and can target you accordingly is a slightly scary one. However, with users’ ability to opt-in to specific brands or promotion schemes, the benefits of location-based services could well work both ways!

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Windows Phone 7: Microsoft mobile goes user-led!

Can Microsoft reverse its mobile fortunes? This week I learned about the launch of the new Windows Phone 7 operating system to be implemented into mobile devices by manufacturers such as HTC and Samsung. Where Microsoft’s previous operating systems were seen as aged and not particularly user-friendly, Windows Phone 7 seems to be breaking with old habits. “A butterfly coming out of a caterpillar” was probably the best description that I came across. The consistent theme of all reviews thus far is that the new mobile operating system is much more user-friendly and intuitive than any of its (Microsoft) predecessors.

I feel that the main things that stand out from the Windows Phone 7 operating system are:

  1. A simple touchscreen – Only a few buttons and no complicated buttons.
  2. A dedicated “search” button – Search made easier and more intuitive.
  3. ‘Live tiles’ – Square blocks that provide quick and easy access to the phone’s main functions.
  4. No static icons – The icons can be easily customised e.g. to show new email messages (both corporate and webmail!) or Facebook posts.
  5. Tight integration with Microsoft Office Mobile suite – Easy access to e.g. Outlook and Word applications.

Main learning point: the iPhone might have just found itself a true competitor in Windows Phone 7. This new operating system looks promising in its simple looking user interface and integration with a range of Microsoft Office applications. It will be interesting to see whether developers will jump on the chance to create bespoke apps for Phone 7 handsets. At the moment, Windows Phone 7’s prospects are looking very bright as it seems like Microsoft got its mobile proposition right for the very first time!

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Moving to the cloud

This morning I looked for some more information on the “TMA” that French Connection is developing. I haven’t yet been able to work out what “TMA” stands for but I understand that it is a system which will enable French Connection to link and integrate between its different channels and devices. More importantly, I found out that this platform will be based in the “cloud”. This made me think about what that means: what happens in the cloud?

At the most basic level of understanding, I learned that cloud computing is Internet based. Until the introduction of cloud computing, data and applications could only be hosted on physical client-servers. Storing data in the cloud changes all that. The cloud makes things accessible through a web browser. It thus makes it easier and quicker to provide scalable data or applications. Users typically don’t have to worry about the “back end” of the cloud computing architecture, which comprises various computers, servers and data storage devices.

Particularly small to medium sized enterprises (SMEs) seem to be in favour of cloud computing since it saves them the expenditure involved in the more traditional IT infrastructure setup. But also big businesses like French Connection and Universal are increasingly hosting their often complex (and data-rich) eCommerce systems in the clouds. These are systems that regular users can interact with. Well-known providers of cloud based services are Amazon, IBM and Oracle.

In short, the main things I’ve learned about cloud computing so far are:

  1. Cloud computing provides a viable alternative to large-scale and expensive IT infrastructures.
  2. It provides users with easy access to data and other virtualized resources.
  3. As a result of the flexible nature of cloud computing, data or software can be provided on demand.

Main learning point: I’ve learned about the basic workings of cloud computing. As time progresses, cloud computing will be offered in a variety of shapes and sizes. The key underlying principle is that the “cloud” makes physical client-servers redundant. The flexibility inherent in cloud computing is probably its biggest selling point. In future posts I will look into cloud-based service platforms and related security issues.

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Use Greplin to search your online life!

I often wonder whether people manage to keep track of all their online communications. Do you remember whether you received a message from a friend via Facebook or through LinkedIn? Greplin intends to solve this problem. Its proposition is fairly straightforward: find all your personal data locked away in the cloud at lightning speed.

The process is fairly straightforward. I first signed up with Greplin and then signed in with Facebook and LinkedIn to start, allowing Greplin to index both. When I then ran a search query (using the Google-like search box), Greplin presented me with real-time results as I was typing. It’s a pretty easy way of finding public and private data that you have locked away on sites like Facebook, Twitter or Evernote.

Greplin only launched in beta about 1 month ago, but these are the reasons why I think it will be a great success:

  1. The range of platforms that it can index – Greplin enables searching of a wide popular platforms varying from Facebook to people’s Gmail accounts.
  2. It’s easy to use – Typical searches are likely to be of an ‘ad-hoc’ nature and Greplin facilitates this by providing a simple search process.
  3. Real-time results – Like Google Instant, Greplin offers you with real-time results whilst you’re typing in your search query.

Main learning point: Greplin is here to stay! Only in the second month of it’s launch in beta, it has already been oversubscribed. I can see why; Greplin offers users easy access to all the public and private data that are locked away in the various online networks they are part of.

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How the iPad has overtaken the DVD player

Now that’s news! Today I learned that Apple’s iPad is poised to have the quickest adoption rate of any electronic device ever. What does this mean? Recent research shows that the iPad sold 3 million units in the first 80 days after its release in April, with a current sales rate estimated at 4.5 million units per quarter. This means that the iPad has surpassed the DVD-player as the quickest adopted electronic device ever. Just for the sake of comparison: the DVD-player only sold 350,000 units in its first year …

These extraordinary figures made me wonder about the reasons behind the iPad’s success. I don’t (yet) own an iPad myself so I have to rely on my limited experiences with the device and opinions from others. Clearly, the sales figures don’t lie, but there still seem to be 2 camps, let’s call them “advocates” and “skeptics”, who each have their own opinions about Apple’s latest success story.

Why the iPad will conquer the world? – 3 common arguments by the advocates:

  1. It’s Apple! – From the introduction of the iPhone, Apple definitely has got its users locked in tightly into its designated apps and services (the ‘Apple ecosystem’).
  2. It’s user friendly – Don’t let anyone tell you otherwise, the user experience on the iPad and other Apple devices is easy and consistent.
  3. It’s got the “first-mover advantage” – Apple was the first to bring touch-screen technology to a mobile device and it hasn’t looked back since.

Why the iPad won’t conquer the world? – 3 common arguments by the skeptics:

  1. Look at its limitations! – An often heard criticism is that the iPad is only good for entertainment purposes; you’re stuck if you want to do anything beyond email or simple word processing.
  2. The competition is catching up rapidly – Tablets by the likes of Cisco, Samsung and BlackBerry are catching up rapidly, concentrating on some of the functions the iPad is currently lacking (e.g. camera, expendable memory and built-in phone).
  3. Android will become the standard – As an operating system Google’s Android is more versatile and will be implemented across a wide range of tablet devices. Android will thus become the default operating system for tablets.

Main learning point: the iPad has done phenomenally well in the first 7 months of its existence. It will be interesting to see how the iPad will continue to perform and if any of its competitors will be able to catch up. Also, will some of the “skeptics” turn out to be right in their prediction that Android will become the default tablet operating system? It all remains to be seen, watch this space!

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