12 Trends for 2012

12 TRENDS FOR 2012December 2011

12 TRENDS FOR 2012• We have been producing trends for clients for the past few years• Nothing changes on New Year‟s Day; all of these trends are already happening, but will grow significantly over the next 12 months, having a greater impact than in the previous twelve• We highlight what we think will happen next year, with implications for brands, rooted in what we have observed this year

12 TRENDS FOR 20121. Mobile Commerce2. Mobile Payments3. Mobile + TV4. Connected TV5. Mobile in China, India & Africa6. Mobiles Threat to Other Services7. Ecosystems & Walled Gardens8. Real Time Bidding & Automation9. Education Enabled10.Hijacks & Guerrilla Marketing11.eBay for Services12.Simplicity

1 - MOBILE COMMERCE• As more people have more advanced phones they are more willing to use them to buy things, rather than wait to use a computer• Smartphones outsold PCs in the final quarter of 2010, and quarterly shipments have seen double-digit year on year growth since that• Current levels of smartphone penetration are above 33% for the big in in Europe & the US, and above 50% for several demographic groups in each market

• Lots of data shows that people are shopping via their mobile more and more:• 10% of visits to eCommerce sites in the UK come from smartphones1• In the US two thirds of smartphone owners used their phones to engage in shopping activity (inc price comparison and product search) in Sept 20112• In Australia, a quarter of Christmas shopping-related searches in 2011 come from mobile devices3• Local transactions through Kenya‟s mobile money service M-Pesa now exceed Western Union‟s global transactions4• Sources: 1 – IAB UK, 2 – comScore, 3 – Google, 4 - IMF

• In response, more companies are unveiling mobile sites and apps• Many high street retailers, and online merchants now offer both mobile optimised sites and apps• Asos launched a mobile app after seeing 800% growth in sales from its mobile site• More and more brands are using QR codes to direct people from press and outdoor ads or even virtual pop-up stores to mobile sites and apps, to make the process easier• Charities are using mobile more, for example Toys „R‟ Us lets you donate a gift from a window display via QR codes• Easyjet has just introduced a Speedy Booking app, to take advantage of the new willingness to book through mobile

IMPLICATIONS FOR BRANDS• Brands need to ensure that their operations are optimised for people using mobile throughout the purchase process• This includes mobile search (organic and paid), mobile apps (not just for the iPhone, but also Android, Windows and tablets), and ensuring that sites work well with mobile• Any links for mobile should point to a mobile site, and any links online should recognise when a visitor is using a mobile device and automatically redirect for the best experience

MOBILE PAYMENTS• Mobiles have joined keys and wallets as items that people always carry with them – and are now starting to be used as wallets• Mobiles have been used for small in-store payments in Asia since the early 2000s, and this is spreading around the world• New technologies like Square and Google Wallet have emerged, and existing technologies like Paypal are adapting to allow payments

• Square started trading in 2010, allowing merchants to use a smartphone add-on to process credit card payments• It is now processing over $8m per day, has over a million merchants, and says that 70% of its merchants did not previously accept card payments• Near Field Communications (NFC) is a technology that allows mobile owners to „tap in‟ to make a payment, similar to using a transit system card or door entry system• Google Wallet, launched in May 2011, uses NFC to allow people to pay for goods in the US• There are currently over 250,000 terminals to accept payment through NFC in the US• Paypal is also embracing NFC, and even lets people make payments to each other by „tapping‟ their phones

• In 2012 we expect both Square and Google Wallet to expand outside the US• Richard Branson is now an investor in Square, and has also given Virgin Money a physical presence in the UK with the purchase of Northern Rock• Financial institutions like NFC as a means of payment because people are much more attached to their phones than their credit cards, and so notice more quickly when they are missing• The number of NFC phones is rising fast, with Samsung, Nokia, Blackberry, HTC, Motorola and LG all now selling devices• There may be issues around different standards (Google Wallet only works for users of one mobile network, for example) but mobile payments will become more widespread

IMPLICATIONS FOR BRANDS• Brands need to be aware of the new retail environment• Mobile payment is quicker and in many cases more convenient• Can you make special low-price editions to sit near tills for impulse buy?• Can you equip store staff with readers, to make purchase easier?• Can you have wandering sales staff at events, taking payment?• If NFC becomes popular, could you use it for anything else, for example giving more information in store, or allowing access to events?

MOBILE + TV• People are increasingly using other media while they watch TV• The internet, and especially the mobile internet, is now providing a commentary track to popular TV shows• Over 50% of X Factor viewers in the UK used Facebook while they were watching1• 80% of American mobile internet users use the internet while they are watching TV; 36% say they look up information relating to ads that they see2• A contestant on Dragon‟s Den in the UK received over a million visits to her site while the programme she appeared on was on air• An average episode of the X Factor in the US receives 94,000 comments in social media3• Sources: 1 – Carat, 2 – Razorfish & Yahoo, 3 – Bluefin

• A mobile app Get Glue lets people „checkin‟ to show what TV programmes they are watching• Since mid-2010 it has grown to over 15m users, and some shows in the US get over 50,000 checkins while they are on• Programmers are taking notice of the data. In November it was announced that the three „new for Fall‟ shows in the US with the highest number of GetGlue checkins were all recommissioned• Another app, Zeebox, lets you see what programmes your friends are watching and discussing, or what programmes are being discussed most• This data could change viewing habits or be another tool to assess the popularity of programming• Finally, it‟s probably that 2012 will see the first events that mass audiences will watch through mobile – for example The Olympics

IMPLICATIONS FOR BRANDS• Be aware that people watching your ads or your sponsorships on TV may be actively using the internet• Make it easy for them to find more information – buy keywords relating to advertising content so that when people search they will find your official pages• Use social media around what the brand is doing on TV – engage in conversations, and make sure that there are people online to field queries or amplify good comments made in social media

MOBILE IN CHINA, INDIA &AFRICA• As transformative as mobile will be in the West, that‟s nothing to the impact it will have in other parts of the world, notably China, India & Africa• In countries where many people cannot afford a PC, the mobile becomes the main point of internet access• For example in the UK & US approximately 25% of mobile internet users rarely or never use a desktop – but it‟s over 50% in Africa, and nearly 60% in India1• Meanwhile smartphone shipments in China are now higher than those for the US2 – and there are more than 110m 3G subscriptions3• Mobile is likely to play a crucial role in its digital future• Sources: 1 – On Device Research, 2 – Strategy Analytics, 3 – Marbridge Consulting

• China is likely to become far more mobile as time goes on, as over ¾ of all phone subscriptions are mobile1• These users are now upgrading to smartphones; In 2011 over 340 different smartphone models were sold in China, 80% running Android2• & it‟s not just for entertainment – over 50% of mobile web users use mobile banking3• Smartphones are much less popular in India, but sport helps us see how popular the mobile web is. During the 2011 Cricket World Cup Final, 45% of the visits to the most popular cricket site came from mobile4• Mobile payments are also important in India – Nokia‟s Mobile Money is being rolled out by the Union Bank of India• Similarly, in Kenya 99% of all internet access is through mobile, but it‟s not all smartphones – a lot still comes through GPRS• Mobile is many people‟s experience of the internet in these areas• Sources: 1, 2 & 3 – Marbridge Consulting, 4 – ContentSutra, 5 – Communication Commission of Kenya

IMPLICATIONS FOR BRANDS• Put mobile at the forefront of your strategies in these areas• Make sure that the mobile technology that you use is appropriate for the local users• Include mobile payment – many people do not have bank accounts, but can pay through mobile systems like M-Pesa and Nokia Mobile Money

MOBILE’S THREAT TO OTHERSERVICES• There are signs that some of the first generation services and products are under threat as people move to more sophisticated, or cheaper services• Handheld gaming devices like the Nintendo DS are losing share to the convenience of mobile handsets with games like Angry Birds• Microsoft‟s Internet Explorer now has less than 50% of all browsers for the first time since its launch, partly as a result of the rise of mobile browsing• iPods sales are falling – in the most recent quarter Apple sold more iPads & iPhones than iPods• Digital camera sales are falling. As the cameras on smartphones get better, people are buying fewer separate cameras• SMS may also soon be under threat – many young people are now moving to cheaper services like the free messaging of Blackberry Messenger (BBM) or apps like WhatsApp that allow free messaging across different smartphone platforms

IMPLICATIONS FOR BRANDS• This should serve as a wake up call that the world moves on, and things that seem unassailable one year may be struggling the next• It‟s also an indication of how much mobile, and specifically smartphones are taking over, and changing how people use pre-smartphone devices• Brands need to look at their products & services and examine how many are under threat from mobile• Unless you offer a brilliant mobile experience you could be under threat a competitor who is

CONNECTED TV• TVs are fast becoming connected devices, able to connect to the internet, select programming, run apps, and show interactive advertising• Many TVs on sale now are designed to be connected to the internet through ethernet input and wifi• In addition new set-top boxes like GoogleTV and Boxee, and games consoles like Xbox also allow internet access through the TV

• An estimated 50m internet-enabled TVs will be sold by manufacturers like Philips, Sony, Samsung and LG in 2011• Apple is also thought to be working on a TV• Like smartphones, internet-connected TVs have operating systems, capable of running apps and programmes• The hardware manufacturers have app stores allowing you to download apps from media owners, games, and even social media apps like Facebook and Twitter to run on TVs• Social media apps will allow people to comment on what they are viewing within the TV interface, and see what others are saying• This will mean that the „Mobile + TV‟ activity mentioned earlier will also be taking place within the TV• There is also the danger that this will create new, restrictive ecosystems – see the next trend

IMPLICATIONS FOR BRANDS• Think about how your brand would fit into TV through apps & extra content• This includes games and entertainment, and also making sure that you are visible in social media & search when your brand is likely to be on TV• New opportunities within these environments include ads within the electronic programme guide (EPG), and pre-rolls in videos

ECOSYSTEMS AND WALLEDGARDENS• A few years ago people predicted the end of walled gardens – sites like AOL where you were encouraged to stay within the safe confines of the site for all your content, rather than to venture into the world wide web• The idea of the walled garden has practically gone, but it‟s being replaced by the idea of the ecosystem, both on the web and particularly in mobile• For example, changes at Facebook brought about by the frictionless sharing of apps like Spotify and news sites, mean that you can see news and music consumed by your friends from within the network; it wants you to stay within Facebook rather than leave to go elsewhere• Similarly, companies like Apple and Amazon have devices that give you access to a prescribed set of retail outlets for content – other content is either discouraged or impossible to use

• Facebook has added features over the past few years to encompass the main activities that people do online, from email, to news, to videos, to online shopping• Facebook doesn‟t lock you into the site, but through its platform on other sites (for example the Like button), or comments, it is never far from members wherever they are online• Facebook estimates that every month 500m people use an external app on Facebook or experience the Facebook app on other sites• One example of this is an integration with Ticketmaster that lets people see which other friends have booked the same event – and then pick seats near to them

• With mobile a handset is no longer just a handset. It needs an ecosystem of content and applications• Phones and other devices are not just sold on their capabilities, but on what they will be able to do in the future• Apple is in a powerful position because devices have access to a huge number of apps and games, in addition to lots of music and other content through iTunes• This is the strategy that Amazon is hoping to emulate through it‟s new Kindle Fire tablet. It gives (paid) access to the digital content available from Amazon, and uses Google‟s Android operating system• All of this will make it increasingly hard to consumers to choose which device to buy; it‟s not just about the device, but the content you can put on it

IMPLICATIONS FOR BRANDS• Be aware of the different ecosystems, and make sure that you are accessible by them, but not exclusively• For example, produce apps for all of the main platforms, but also be aware which your users are most likely to have access to• Similarly use the „Like‟ buttons, but not the exclusion of other social buttons (like „Tweet This‟ or +1)

REAL TIME BIDDING &AUTOMATION• The buying and selling of advertising will become more automated• In digital media supply outstrips demand, so traditional pricing models are not appropriate for many campaigns, bar the most sought-after content• Data volunteered and collected from web users can be used to target advertising• Audience behavioural targeting will become the norm, rather than contextual advertising, or traditional demographic targeting• Technology can automate the buying and selling process, with inventory being aggregated in „exchanges‟ on the sell side, and buyers bidding for audiences into those exchanges via „DSP – Demand Side Platform‟ technology on the buy side• Buyers plug into the exchanges to select what they want based on a number of criteria like demographics, content type, location, and the history of other sites visited• Advertising through exchanges can be more effective; some studies show what there is a higher ad visibility compared to standard network buys• This now exists for display, video and mobile

• At the same time more media is being traded through the Google and Facebook‟s advertising platforms, based on selecting and bidding for inventory• Twitter is also launching its own DIY platform to agencies to use to place ads on the site

IMPLICATIONS FOR BRANDS• Test, and learn from new technologies!• Identify which campaigns need to be bought manually, on premium sites, and which could benefit from the efficiencies of real time bidding• Investigate the options offered by Facebook and Twitter as ways of targeting people based on non-traditional metrics

EDUCATION• Education is vital, but is becoming more expensive due to cuts in public services across the world• At the same time technology is emerging that would help students and educators• The big changes in society brought about by digital media and the ease of communication haven‟t yet hit education, but they will do soon

• Video is a great way of teaching anything from cookery to craft but it‟s also great for more formal education• The Khan Academy is a video site that has over 2,700 videos explaining everything from basic arithmetic to physics and finance• All videos are free to watch, and most are shorter than 10 minutes• Many universities put their lectures online on video sites, or as podcasts• YouTube is launching an education service, giving schools access to over 450,000 educational videos (with no comments allowed)

• Google Hangouts let people have video conference calls of with up to 10 people within Google Plus• Performers like Will.i.am use them to talk to fans; but other musicians use them to give lessons• Hangouts could be a very useful tool for holding virtual seminars on subjects

IMPLICATIONS FOR BRANDS• There have been lots of initiatives where brands have got involved with schools in areas of sport, nutrition and more, but why not help enable a new era in education?• We may be entering a new, more DIY age, and there could be a place for brands to help enable communication and resources, for example sponsor physics or maths hangouts?

HIJACKS AND GUERRILLAMARKETING• Digital media, and particularly social media have helped information to spread more quickly• Brands need to be able to act and respond to events quickly, and this will lead to more hijacks and guerrilla marketing• Brands can act quickly and do things in the short term, often at the expense of competitors

• Two recent examples:• Samsung hijacked the launch of the iPhone 4S in Sydney by opening a store a few doors away selling the new Galaxy S for $2• Only 10 were sold at this price each day, but this ensured a queue for Samsung near to the Apple store• Samsung also hijacked the „iPhone‟ with their most recent ad, mocking Apple fans in their queue• “I can‟t have a Samsung – I‟m creative”• “Dude – you‟re a barista‟

IMPLICATIONS FOR BRANDS• Brands need to be in a position to act on events whether they are done by competitors or happen in the wider consciousness• 2012 has lots of big events including the Olympics, Euro2012, and the US Election• All are perfect for opportunist marketing, and produce incidents that are likely to be seen by millions very quickly, and could be used for unofficial and irreverent marketing• Beyond this, what are your competitors‟ marketing calendars?• Also, be aware that what you are doing may get hijacked – how can you protect yourself?

‘EBAY’ FOR SERVICES• More and more people are turning to the internet to find people as well as things• As a result the eBay auction model is being adapted and localised to allow people to find the services that they want• It‟s also helping employment become more flexible• In the UK the number of people making a living from online selling has doubled in the past year1; soon more people around the world are likely to be selling their services online as well as goods• Source: 1 – Collect+

• The three most interesting companies are Fiverr, Zaarly and Roamler• Fiverr allows people to sell their services – what they would do for $5 – ranging from design and art to writing, to tourist advice• Zaarly lets you find local people willing to help you out, for example decorators, removals people, and so on, by posting briefs and then letting people bid on the work• Roamler is a Dutch service that lets people sign up (with their location) to say that they‟re available for work. Prospective employers issue requests for staff; anyone local can apply

• All three services provide flexible ways of working for both employers and employees• Zaarly claims to have over 100,000 users across the US and has raised over $15m in funding• Examples of tasks bought include: • A critique of DJing skills • Translation • A private yoga lesson • Rescuing lost keys from a drain• Services like this seem like the natural extension of local marketplaces

IMPLICATIONS FOR BRANDS• Get involved!• Think about what you could buy, and what you could sell• Major brands are now very active users of eBay to sell goods, especially excess supply• Could you use any of these services to sell excess capacity, or even recruit short term staff?

SIMPLICITY• People now navigate the web using a wide range of devices, operating systems and browsers• It‟s increasingly important for sites and applications to work as simply as possible, and be usable on a range of screen sizes• Sites don‟t need to be too polished, if that is at the expense of speed and usability Users want sites to look professional, but often they don‟t need too many features, they just need to features to work on multiple platforms

• Similarly, don‟t over-complicate what users need to do to respond• Pepsi ran a competition with the X Factor in the US that just required users to email a photo from their phone – a capability that is built into every smartphone• There was no app to download, nothing to scan• Converse ran a location-based treasure hunt competition in the UK that simply showed pictures of the Converse logo on objects like phone boxes. Locals were able to identify the places and find the shoes. No checkin was needed• & some restaurants now run their sites as blogs – the only content is a daily upload of a photo of the menu

IMPLICATIONS FOR BRANDS• Are your sites and online presences as simple and straightforward as they could be?• Are they accessible from all devices, in all operating systems?• Are any campaign metrics easy enough to encourage widespread participation?

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12 Trends for 2012

by Dan Calladine

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