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This introductory chapter begins with an explanation of the motivation behind the present volume. The author goes back to sometime in late 2009 or early 2010, when he first heard the phrase “we live in an era of smart phones and stupid people.” He recalls being both very amused and intellectually intrigued by this statement, not so much about what smartphones would eventually do to human intelligence, but more by how it could become an exceptional source of intelligence for businesses. The chapter then sets out the book's purpose, which is to demystify the mobile economy and take the uncertainty out of the process of harnessing the power of mobile data and delivering value to consumers. It concludes with an overview of the three parts of the book.

This chapter discusses the rapid proliferation of mobile devices. Consumer adoption of 3G and 4G technologies has outpaced all other technologies, with the Earth becoming home to 3 billion connections in the first 15 years, and projected to grow to 8 billion smartphone users by 2020. Technological advancements have reduced adoption costs and enhanced user experience. The global average cost of mobile subscriptions relative to maximum data speed has decreased 99 percent, decreasing about 40 percent per year between 2005 and 2013. However, the main reason behind the widespread adoption of mobile devices is the tremendous social and economic value generated by the mobile ecosystem. A report by the Boston Consulting Group showed that mobile technologies are a critical driver of the world economy, generating global revenue of almost $3.3 trillion and 11 million new jobs. Mobile phones have also fundamentally altered consumer behavior. Whether it is for entertainment or information gathering purposes, people are spending less time on traditional channels such as print, radio, and television, and more time on mobile devices.

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: tech mix. Tech mix can be described as a force that enables businesses to pursue omni-channel marketing. It has two dimensions. First, consumers today spend time on multiple devices (or multiple screens) and this sort of multihoming creates an interdependency between devices that firms can tap into. Second, consumers are exposed to multiple ad messages in different ad formats for the same brand across different channels at different points in time in their path to purchase. This creates potential omni-channel synergies. These two dimensions of tech mix influence consumers' behavior in non-trivial ways and have made digital attribution the holy grail of advertising.

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: location. For many decades, location-based marketing usually meant being able to target users at the level of ZIP codes. Every consumer in the same ZIP code received the same offer, presumably because they had homogeneous preferences stemming from similar socioeconomic and demographic backgrounds. However, in today's mobile economy, firms can know in real time which store someone is visiting, which aisle in the store someone is standing in, and in some cases estimate shelf location of the product someone is staring at. Consumers' location histories are very predictive of their product preferences. This means their locations will influence their responses to marketing offers.

This chapter predicts that several emerging technologies will soon be integrated with the mobile ecosystem and further amplify the power of the nine forces discussed in this book. All these technologies will create captive audiences, enhance connectivity, harness more robust data from new sources, and offer better experiences. Business solutions will thrive in the mobile ecosystem, which will remain the hub for many applications and will power amazing business and societal solutions. Some of the biggest advancements will come via wearable technologies that will harness consumers' biometric, neurological, and physiological data, giving birth to a new force that leverages a consumer's physical state of being.

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: time. It addresses questions such as: How can advertisers use time to their advantage to reach their target audience? Now that smartphones give advertisers the opportunity to reach an individual consumer in real time, what is the secret to getting the timing and the ad right? What is the best way to deliver a timely advertisement that will trigger a positive response? The chapter discusses advertising effectiveness based on time of day, advertising effectiveness based on day of the week, effectiveness of coupon redemption windows, the relationship between redemption windows and geography, and mobile advertising and its effect on different stages of the purchase funnel.

This epilogue presents a few closing thoughts about the impact of mobile technology on society at large. It argues that the future of mobile advertising depends on a bargain that consumers and firms need to strike with each other. Both sides will have to make some investments and offer some trust for this give-and-take relationship to prosper. Consumers will need to find better ways to strike a personal balance between their lives and mobile technology. They will need to make the choice about how much they let technology intrude and inform their lives. They will hold the key to how open or private they want to be with their data. But this does not relieve businesses of their responsibilities. They need to pay attention and take their roles very seriously in this ecosystem. They should surprise and impress consumers while helping them with their needs the way a butler or a concierge would. More importantly, they need to take data security and privacy issues seriously.

This chapter discusses the importance of businesses striking the right balance in consumer lives while leveraging technologies. On the surface, it is very easy for businesses to get discouraged by consumers' seeming resistance or inhibition to advertising. However, what lies beneath the surface is different. On the inside, consumers do have appreciation for advertising, albeit at varying levels. This is reflected in four behavioral contradictions, which are particularly striking as business becomes more aware of the immense and untapped power of the mobile economy: (i) people seek spontaneity, but they are predictable and they value certainty; (ii) people find advertising annoying, but they fear missing out; (iii) people want choice and freedom, but they easily get overwhelmed; and (iv) people protect their privacy, but they increasingly use their personal data as their currency.

This chapter discusses the need for businesses to leverage mobile technologies in order incentivize customers to walk into their store at any given point in time. They can also influence who they want walking into their stores by combining their historical data with real-time signals from mobile devices. The key is to know who their customers are. In the mobile economy, knowing the customer starts with identifying each customer's multiple personas. For instance, depending on context, customers can be in “parent mode,” “work mode,” or “family mode.” The remainder of the chapter looks at several contextual questions and the role that mobile data can play in answering them. These questions include: Why is the customer there? What does the customer want now? How is the customer feeling now?

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: crowdedness. Not all crowds are created equal. There are many crowds that are pleasurable to be a part of, such as the 20,000 people in a sold-out arena for a rock concert or a championship basketball game. However, crowds have also been shown to make people want to escape, which they can do through their smartphones. Consumers immerse themselves in their mobiles phones “as a means to avoid unwanted encounters” and gain a sense of control over their space and privacy. The smartphone also allows advertisers a way to approach consumers at stressful times. If the advertiser knows how crowded a consumer's surroundings are, perhaps a mobile message or advertisement can provide a safety valve or much needed diversion for people?

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: saliency. Today's consumers may find advertising annoying, but they fear missing out and would prefer not to waste time in the trial-and-error process of searching for what they need. They want choice and freedom, but they also get easily overwhelmed. Imagine an ideal world where we don't need to scroll down and squint to find what we want. We don't need to refine and repeat our search or make a tough call. We always get the “best right answer” with the least possible effort. This is referred as saliency or the position effect. Consumers want to see the best right answer stand out on their screens. Advertisers, retailers, and other marketers want their message to be that “best right answer.”

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: trajectory. An individual's trajectory is the physical, behavioral trace of his or her offline movements. Firms can measure when we walk past their physical stores, when we come through the front door, when we walked up to the second floor, and so on. Trajectory has three dimensions: time, route, and velocity. Time includes the starting and ending point of the trajectory and the day of the week. Route is not location itself, but rather a way to determine how similar someone's spatial trajectory is to others. Velocity contains information about how fast the individuals are moving. Underlying these three dimensions is a fourth and far more granular dimension called semantics. Semantics takes a number of factors into account, such as the likelihood that someone may visit a certain store, how much time they spend there, how much time they spend moving to another location, and how related or unrelated those two stores are.

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: social dynamics. Recent studies have shown that the social company we keep changes our behavior. This is our social context. Beyond our individual location at any given time, our social context influences how we interact in real life as part of a group of friends, as a couple, or with family members. And these behaviors are fundamentally different than how we behave when we are on our own. The chapter discusses the impact of social dynamics on mobile purchases, the importance of group composition, and digging deeper into consumers' personalities.

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: weather. Weather is ubiquitous and omnipresent. Scientific literature tells us just how strongly weather can influence our behavior, our moods, and our short-term, medium-term, and long-term decision making. One study showed that when our moods change, weather can account for as much as 40 percent of that change. Weather also offers that special ingredient that helps improve our understanding and find ways to make advertising a lucrative win-win for businesses and customers: lots and lots of data. The chapter introduces a mix of academic studies and business success stories, which show that the value of weather as a very influential driver of behavior. It discusses how weather affects mobile purchases and drives sales of big-ticket items.