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M-Commerce 2.0: a $1Trillion efficiency opportunity?


At our ‘M-Commerce 2.0’ event in New York this month - looking at how personal data could revolutionise payments, advertising and media experiences - an eminent MIT professor suggested that within five years most small purchases will be conducted using mobile phones. He also estimated that 50-60% of the U.S. economy could be made more efficient using the data captured by mobiles, potentially saving a trillion dollars. How can we understand and navigate the extraordinary opportunities created by the combination of m-commerce, personal data and analytics?

As regular readers will know, we’ve discussed on many occasions on this blog and in our research the emergence of ‘personal data’ - data generated about individuals in real-time as they go about their daily lives - as a new class of economic and social asset, and how this is being investigated and promoted by the World Economic Forum (WEF).

As this cartoon from Reputation.com’s recent M-Commerce 2.0 presentation elegantly shows, the use of personal data can also raise concerns.

lemonade cartoon 20 oct 2011 personal data.png

Combining the most useful outputs from senior executive summits conducted in the last two weeks (from our New York M-Commerce 2.0 Brainstorm and the WEF meeting in Abu Dhabi) the rest of this short article provides an quick, state-of-the-art ‘multimedia’ primer for our readers.

M-Commerce 2.0 and the WEF’s Global Agenda Meeting

Building on our relationship with the WEF and to help bring the concepts to life in some key verticals, we set up a research and events programme some months back called ‘M-Commerce 2.0’ (described here). Our next event on this topic is in London on the 10th November, where we’ll discuss latest thinking with senior execs from the telecoms, media, payments, online and advertising industries as well as key entrepreneurs in the space.

At the WEF’s Global Agenda meeting in Abu Dhabi last week - a high powered gathering of 700 leaders and experts from government, industry and academia to set the agenda for 70 global issues for Davos and beyond - it was instructive that the ICT Global Agenda Council chose to focus on ‘personal data’ as its key issue and that the other councils (not least financial services, advertising and media) found this topic highly relevant to their issues too.

Introduction - what is M-Commerce 2.0?

M-commerce (commerce enabled by mobile connectivity) now amounts to far more than purchasing ringtones and other digital content using a handset. So-called SoLoMo (Social, Local and Mobile) Internet services are using the huge volumes of personal data being captured by smartphones to engage with consumers in innovative and potentially compelling ways.

At the same time, new intermediaries are looking to give consumers greater control of their digital identities and personal data to help them realize the economic (and social) value of these latent assets, rather than let corporations exploit this data without their knowledge or consent (the default position today).

These trends, and the technological and commercial innovation associated with them, open up many new - and potentially disruptive - opportunities and threats across multiple sectors (retail, advertising, banking, telecoms, media and technology) and have significant policy implications for government, regulators and ‘civil society’ in general.

Data is becoming so important to social-economic development, it has even been described by some commentators “as the oil of the 21st Century.” We call the combination of m-commerce with user control of personal data and new forms of real-time analytics ‘M-Commerce 2.0’. The benefits are reduced friction and transaction costs in day-to-day ‘B2B2C’ commercial processes - the $1Trillion efficiency opportunity.

The Concerns - privacy and misuse

Concerns over the potential inappropriate use of personal data are summed up by this amusing video from the American Civil Liberties Association…

The Opportunity - getting it right

Four recent articles and two great blogs are worth reading to start to appreciate the opportunity and how it might work:

1. A high quality thought piece on Personal Data from Boston Consulting Group (who have been working with the WEF Re-thinking Personal Data project team).

2. A short article on The Privacy Bomb - How to Tame and Feed ‘Big Data’ by Dr. John Clippinger, another member of the WEF project team, previously Co-Director of the Law Lab, Berkman Center for Internet & Society at Harvard University, and now with MIT’s IDcubed lab.

3. A recent article by AdWeek covering some of the start-ups in the personal data space.

4. A summary in the Harvard Business Review blog of a high quality Forrester Research report released this month.

5. Great blogs from two of the most passionate and articulate companies operating in the personal data services space today: Personal.com and Reputation.com.

There’s a lot more to this topic of course, and the opportunities for telcos to play a key role are many - acting as trusted ‘custodians’ of personal data (providing locker services), identity and authentication providers, trusted brokers. Telefonica and AT&T have perhaps the most enlightened and complete picture of the opportunity among the big telcos today, but the topic needs a very delicate approach. Telefonica will be sharing their thoughts at our London event next month, and we’ll be sharing more analysis with our readers ongoing.

In the meantime, we’ll leave you with a graph of a vote conducted at our recent New York event about how quickly the principles described above could, for example, impact the advertising industry.

We discussed this with the Managing Director of the Worldwide Federation of Advertisers at the WEF’s Abu Dhabi meeting last week and he described it as ‘very interesting’ and refreshingly different from the normal talk of cookies and traditional online advertising models…

chart for NYC MC2 oct 2011.png
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