Broadband by Any Other Name Would Work as Fast

I was intrigued by recent figures from Comreg. They showed many impressive percentages, but in my opinion give a very unclear picture of Internet access and use in Ireland. The problems stem from three sources: − the definition of broadband, the obsession with ‘at home’ connections, and the research method (door-to-door).

These three issues combined lead me to the conclusion that we are significantly underestimating broadband use in Ireland and Internet use in general.
The report starts by stating that 54% have access to the Internet as do 48% of households.

Out of those who access the Internet, the percentage who connected with a home broadband connection is 52% (eircom broadband). 9% connect through wireless broadband, 9% with WiFi, and 6% with ISDN. 3% connect with cable (NTL) and 1% with a mobile broadband connection (3G).

The problem is that, with the exception of ISDN, all of the connections above are broadband, but by another name. (ISDN is midband). The term ‘broadband’ refers to the speed of the connection, (anything over 512kbps), regardless of the mode of connection. It doesn’t matter if the connection giving that speed is wireless, mobile, via a cable, Wifi or 3G. If they invent some new connection type next year, and that delivers data at more than 512kbps… that’ll be broadband too. Based on these figures, and with this more accurate definition, the total broadband connectivity of Internet users is actually 75%, − that is, 75% of Internet users use broadband, and this is out of 54% of the total population who have Internet access. Does this include broadband 'at work', cafe, schools and colleges...? These, in my opinion, will take care of most of the rest. In short, very few Irish Internet users will be accessing the Internet through anything other than a broadband connection. They may not be at home at the time, but that’s not the point, is it? It’s also true that mobile broadband has proved to be a lot more cost effective and efficient solution lately. If you’re a student, or you know which café to visit, it’s probably free! Other research shows that some are using the one broadband connection for TV, music downloads, Skype (VOIP) phone calls, radio and office/education purposes. And why not. It’s so much cheaper (NB/MIR 2007/1).

The report says that only 13% have dial up speed at home. I think that some of these may also have broadband at work, or university, or with Wifi through a laptop. The report doesn’t clarify. But, I’m more inclined to believe the number with only dial up access to the Internet is actually much smaller.

The report then says that only 4% say their broadband speed is 512 kbs or less, but this wouldn’t be broadband speed anyway. 28% say their connection speed is between 1 and 3mbs, which is a good workable speed, and 18% between 4 and 6Mbs, which is pretty fast. But intriguingly 51% of broadband users don't actually know the speed of their broadband connection at home. This begs the question − why do so many people not know the speed of their broadband at home? Are the researchers reaching the right people in the household? The ones who set up the connection? I think it’s a problem to be explored in more depth, and it may be a limit of door-to-door research. I’d have expected that more people would know their net speed, but this report suggests that that this is not the case. (Perhaps it’s simply the case that mobile broadband users aren’t at home.)

Growth, Drivers and the Future

Younger users’ consumption of online gaming, uploading photos, downloading videos and use of VOIP is driving increasing broadband speeds. An increase in the choice of connection vehicles, such as WiFi and mobile is also aiding penetration. Increasing levels of home broadband usage will soon affect bandwidth (contention) and home broadband speeds, though, currently most are happy with their home Internet connection. 3G is unlikely to encounter have such bandwidth issues in the foreseeable future, because there are no wires.

I predict the next year, especially with Christmas, will see an enormous growth in mobile broadband penetration nationally necessitated by poor home broadband access, and must have gadgets like iPhone and Vodafone / 02 3G. There will also be a huge growth in Internet access and use. The satisfaction levels with these modes of Internet connection are very high. Growth will happen mostly amongst younger groups, and those who don't own their own home. While such penetration is only at 1% currently, I think 3G could grow to as much as 10% or greater, bringing total broadband penetration/access among Internet users toward 85%, and total Internet use towards 65 or even 70% (taking into account the growth of non mobile access sectors). So many free Wifi hotspots have sprung up in Dublin in the last year and I’m sure the number will only increase. (This is huge, as, after all, Dublin is where half the county lives or works.) The online gaming industry will probably push Internet and broadband further, again, driven by the Christmas season. We can expect to see growth in Mobile Video and IPTV and these will increasingly be 3G enabled for many segments.

Some say that broadband speed is dropping, but this is a mistake stemming from the fact that they are only looking at individual cases of connection problems, and ‘at-home’ broadband. At-home broadband is becoming a largely irrelevant concept as laptops are increasingly prevalent and net enabled phones, or smartphones become commonplace. At the same time they note that dial up Internet access, and even fixed line telephone use is falling, while VOIP is growing. There’s a need to join the dots here. If 29% are making VOIP calls elsewhere and through other means... they are, of course, accessing the net elsewhere at broadband speed, and no doubt through the same mechanisms. It's the only way to get Skype to work properly.
iPhone and 3G, will push broadband and Internet penetration further in the coming year. Such must-have gadgetry has always driven technology take-up and net use just as the iPod made mobile music and related services like iTune super-popular. Downloaded mobile video and TV will also grow, and is gaining traction in countries such Denmark, Austria, Germany and Finland.

IPTV: TV Advertising to Fall Apart

For years now, people have been predicting the demise of TV and TV advertising. But there wasn’t much substance to these predictions and they seemed somewhat far-fetched. However, when Bill Gates makes predictions and acts upon them by launching Microsoft IPTV it is hard not to take notice. Actions speak louder than words after all, and Bills actions are big actions.

What he’s saying in speeches, and predicting is also a lot more subtle and specific than the mutterings of crystal ball gazers heretofore and I think he’s absolutely right, and what he predicts is, in fact, inevitable. The time frame is the only thing that is in question.

In speeches he’s saying that the TV advertising business model, where the vast majority of traditional ad spend goes will fall apart over the next five years, when the new type of news-on-demand interactive TV formats come into their own. Google, and Yahoo! also have IPTV offerings, and services like Joost, Babelgum, 4OD stimulate this growth.

That’s the technology, and how often have you seen articles on the net telling you there is a new offering that will change everything. However, this is different! (Don’t they all say that?) I think this is different because three things are happening in tandem and when these all move together, change happens. Yes, firstly the technology has developed and advanced, but secondly society has also changed with peoples’ behaviours and media expectations shifting through YouTube, Video on demand and UGC. And finally there are necessary major economic shifts, through advertising, to pay for it all. That’s the full set of requirements for technological and social change. These are the three elements that explain why VHS succeeded where Betamax failed and then why DVD outstripped them both; why vinyl gave way to cassette, CD and then downloads changed the music industry forever; and also why IPTV will rock the world of TV advertising and change it forever. (In fact, more recently Amazon are trying the same trick for books with Kindle).

Yes, the technology is changing, but also peoples’ behaviour and the economics to pay for it all is shifting also. The technology has advanced as has the broadband speed to deliver the new formats, but also net ad spend has increased, by around 17% worldwide last year. While it’s still only a small proportion of total ad spend, in many countries it’s on a par with, or bigger than newspapers, radio and outdoor. Over perhaps 5 years, this is a tectonic shift in the world of advertising. TV ad spend however is the mother load and when this starts to come netwards you have to take notice. Bill Gates is predicting this will happen before we know it.
Traditional advertisers are therefore presented with opportunities, challenges and new paradigms to come to grips with. It must be understood that the net simply isn’t like TV, even though you can watch TV over the net. If you don’t take this on board, the TV advertising you deliver over the web simply won’t be effective. There are two reasons for me saying this:

1) The net is a 2 way active and interactive medium, while TV is a one way passive medium and consequently...

2) The net viewer is in active mode, rather than a passive one, so therefore has a totally different set of expectations and behaviours.
It’s TV, yes, but sent through a different channel, for an audience in a totally different state of mind.

TV is passive. Marshall McLuhan called it a ‘cold medium’, because you do nothing. The viewer simply sits back and video and audio wash over them, their only action being to change channel – if they can remember where they put the remote, it’s that long since they actually did anything (imagine losing your wireless mouse, or keyboard?). The modern net, with web 2.0, is not only active, it’s a super-heated hyperactive zone of multi-tasking – the opposite end of the scale, with viewer/users collaborating, communicating, sharing, viewing, reading, talking, listening and contributing to the medium all at the same time at super high speed. When you sit in front of a computer, your role, your expectations and your control is totally at odds with the TV experience. And consequently, where with TV people have to watch long tranches of boring ads because they have no choice but to watch, change channel, or put the kettle on; with IPTV they do have a choice and will ruthlessly flash to something more engaging in the blink of an eye immediately forgetting what they’ve just seen.

So, what can advertisers do to address this viewer promiscuity? Several things in fact and all of them have the IPTV web viewer firmly in mind. The IPTV viewer expects to be offered the capacity to engage with a product or brand on the Internet, (something they are never even offered on traditional TV). IPTV ads therefore need to offer some incentive to engage, like a special offer or reduction. There needs to be a URL to visit and view the product, if they have the time, or somewhere within the ad to register their interest for later, if they don’t. They might be given the capacity to leave contact information, or ring a special phone number on their mobile or work number and this number will relate to this specific ad campaign, not the whole company. In short, ads need to be tailored to the needs of the viewer. They need to have their requirements, interests and availability to the fore to ensure optimal success.

Online, there is also the capacity to know far more about the specific viewer of an ad than on TV. National research projects, like Net Behaviour’s MIR/NB Report means we have a very clear idea of the demographics of the Irish people who visit pretty much any site or Internet software, their frequency of doing so, and a whole tranche of other activity, such as their online purchasing activity. Pre and post ad view and click tracking can tell a considerable amount about viewers interests both through the sites they visit and where they go on these sites. Registration and social networking software means you can know each viewer's age, sex, interests, friendship networks and even what they buy. Ad view capping software also means that ads aren’t wasted through several views of the same ad, but rather views can be evenly spread amongst those who would have most interest, and only shown the optimal number of times to ensure the message has got across, but not too many to irritate.

So, while there are challenges presented to IPTV advertisers, these are completely outweighed by the important new opportunities the Internet offers, and the increased the capacity to make a sale. In short: For TV, getting the viewer from the point of actually seeing the TV ad to buying a product is largely in the lap of the gods, if they even remember seeing the ad. For IPTV advertisers on the other hand, they have a much greater say in what a viewer does immediately on seeing their product advertised. The audience is offered a much greater opportunity to engage with the message on the spot. They can explore the products specifications and price, learn about the producer, and even interact with the ad message asking the advertiser to contact them at a later date, and all without interrupting their reason for being on the site hosting the ad in question. They can also much more easily take the desired action – buy the product.

So, in conclusion: in this instance I think Bill Gates must be 100% right. TV advertising will move towards an IPTV model before we know it. The technology is there, the consumer will prefer it and the advertising will be more effective and efficient. But, the ad industry must just take on board that while it is a TV message, the Internet is a totally different channel, and one much better suited to engaging with the consumer.