Gustavo Ballvé on November 16th, 2010
Corporate Strategy, Food for thought, Home, Industries, Investment Themes, Media, Mental models, Portfolio Management, Tech

As we said in the previous post, setting aside some time to read “building block” material is vital. Now for the more serious material: this first article had us thinking about Marketing/ Advertising in the “sooner-than-we-think” future, and how disruptive some technologies can be. It’s one of the most interesting fields these days, but as usual we wonder a lot, ponder a lot but try to do very little, that is, we only act with very strong conviction.

Why the Best Online Marketing May Be Headed Offline – As we discussed this article over the weekend with one of our readers, we agreed with him that while QR codes are very interesting it can get pretty bizarre, as the story’s main photo shows. He mentioned the neater solution of something like Google Goggles (in a near future, of course) which could take the game to the next level. We also agree with him that QR codes seem to be an intermediary step. We were reminded of the already sometimes impressive “augmented reality” apps on mobile devices – such as Layars, that we’ve seen working on iPhone and Android.

One idea behind augmented reality is this: as you’re walking down the street and holding your phone’s camera in your hand, the phone can recognize (via GPS) that up ahead you have a coffee shop, a restaurant and a bookstore. Now imagine hyper-local advertising served right there and then. Now imagine it going “social” via FourSquare or simply social search, for instance, above the coffee shop you would read “2 of your friend like this” and if you want just click on the review by someone you trust… while the shop now serves you with a $2 coupon. What are the conversion rates for something like this? What is it worth?

It’s powerful, game-changing stuff.

All this is very interesting, but think about it in terms of investment analysis in these intersecting realms of Media/ Advertising/ Technology: what does this say about “sustainable, understandable business models/ competitive advantages”? In this case we’d argue that we can’t afford not to investigate this trend, although our approach is, as always, “wonder a lot, ponder a lot, get to know a lot but do very little” – that is, only act with very strong conviction, which is rare. We don’t have to do anything, our mandate is not to “be in the latest trend”. We can also always investigate the “picks and shovels” way and consider players like Cisco or Google itself, on both Search and Android fronts.

Finally, can there be other businesses where the competitive scenario is being so fundamentally altered by technology and social media?

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