The mobile industry is worth an estimated one trillion dollars. Trillion-dollar figures get thrown around quite a bit these days, especially after the worldwide economic crisis of 2008 and 2009. But we forget how extremely large a trillion dollars is. To put it into perspective, a trillion dollars is 1,000×$1,000,000,000 (a billion) or 1,000,000×$1,000,000; certainly, it’s not chump change.

Tomi Ahonen, author of Mobile as 7th of the Mass Media, puts it into perspective this way:

[The] books business is part of a bigger industry sector called print, which also includes newspapers, magazines, etc. A very big industry indeed. Employing millions on the planet. But is it a trillion dollar industry? No. Only about half that. How about television? Television broadcasts in every country. It’s a media giant. Actually, combined with radio, the broadcasting industry is still nowhere near a trillion, only about half that. How about advertising? Surely that is a giant global industry. Yes, it’s big, but also advertising is worth roughly half a trillion dollars, in very round terms. Well then the IT industry? No, another half trillion there.

Let’s move beyond the tech and media industries—let’s think big. How about bottled water? Drinks, milk, beverages. Let’s make this big. Pepsi, Coca Cola, Red Bull. Tropicana orange juice. Heineken, Budweiser, all the wines from France to Australia. Hard liquor, the vodka martini, shaken not stirred. A good Spyside single-malt whisky like a Glenlivet or Cragganmore or Tomintoul. Coffee. Tea. The worldwide beverages industry. Ok, it’s big. Yet, it’s not worth a trillion dollars in size.

The world total GDP—the total Gross Domestic Product for the planet—is about 55 trillion dollars. Our economy does not have room for more than a handful of trillion-dollar industries. Look at the countries. Russia, Spain, Canada, Brazil, India, Switzerland—most big countries on the planet—their total national output per year—do not hit one trillion dollars. Italy, France, and Britain are countries whose total domestic output exceeds a trillion dollars. That is the size we’re looking at. All of Japan is 4.5 trillion dollars. All of the USA is 14 trillion dollars.

But with all this money flowing into mobile, where does it all go? In FIG 14-1, you can see that voice makes up the majority of the market, taking in nearly $600 billion a year. Hardware is a distant second, with $200 billion a year, messaging $130 billion, and data—which accounts for basically everything I’ve discussed in this book—takes in about $70 billion a year.

Although the data market is certainly a much smaller piece of the pie, it isn’t chump change, either. So the question you might be asking is “How can I get in on the action?” How can you make a mobile product and make money from it?

Because we are not operators and we cannot charge users directly for data charges they incur, we have different six basic ways to make money from mobile data, that $70-billion-a-year-and-growing market. These are:

• Sell ringtones
• Sell wallpapers
• Sell games
• Sell downloadable native applications
• Sell subscription content
• Add advertising

The problem is that for all of its benefits, the only way you can make money from the mobile web itself is the last option: add advertising. Mobile advertising works, but it requires lots of views in order to be profitable. If you have a brand that can produce those views on mobile devices, then you can probably earn a decent return. For everyone else, it will hardly make the effort worthwhile.

Technically, you could sell subscription mobile web content as well, but it is problematic and often impractical for all but a few companies. Entering payment information on devices is difficult for the user to do, and the security capabilities on most devices are sketchy at best.

For the only ubiquitous and the most cost-efficient mobile platform, having no means of making money doesn’t help justify an investment. It is no wonder that most companies stick to the tried-and-true moneymakers: mobile content such as ringtones, games, and applications.

But what I don’t understand is why. Why aren’t more people making money from the mobile web? We’ve learned how to make money from web services and web applications. Users are more than willing to pay the appropriate fees for a useful service, and there is no better medium to provide useful services than mobile. So why haven’t we been able to apply this knowledge and experience to the mobile space?

From what I’ve seen in my journeys in mobile, the obstacles for making money in mobile usually come down to one or more of the following:

• Companies try to support too many devices too quickly. They underestimate the costs of adaptation, testing, and support (a topic I will discuss at length in Chapter 15).
• Downloadable applications are easy one-time wins but become distractions. They can make good money for a short time, but are hardly good long-term investments. Companies divert resources to create a revolving door of downloadable apps to sustain revenue, but end up oversaturating the market instead.
• Companies try to work with operators to put their content in front of a massive number of users. But the operators add too much cost and complexity and give little back in return.
• Companies are unable to produce enough traffic for mobile advertising to earn a profit.

There are numerous benefits to the user in a mobile web strategy, beyond financial gain. Having helpful information and services available to consumers in the mobile context can be used to boost foot traffic to a physical location, increase sales leads, boost brand awareness, and the list goes on. But for the sake of argument, let’s say that you want to make a return on your mobile investment—what do you do?

In this chapter, I discuss three approaches to making money in mobile technology—specifically, on the mobile web. However, I should warn you first that there is no perfect formula. In fact, if I had a foolproof answer here, I would most likely be sitting on a beach someplace and not writing a book. How to make money in mobile is an age-old question and one that the entire mobile community has struggled with for over a decade.

Obviously, there are several models that work; otherwise, mobile data wouldn’t be that $70-billion piece of the trillion-dollar pie. It is about finding the right model for your business and for your users. And in my experience, it has taken a little luck and good timing.