Global Mobile A Worldview                               August 2009  Consumer trends and practical opportunities in mobile...
Lead Contributors                    Sixto Arias                    Managing Director                    Mobext Spain     ...
CONTENTS1. Introduction. .................................................................................... 42. Highligh...
GLOBAL MOBILE A WORLDVIEWINTRODUCTION                                                                        1The mobile p...
GLOBAL MOBILE A WORLDVIEWHighlightsLandscape: Growing consumer familiarity with mobile devices. The increasing mass-      ...
GLOBAL MOBILE A WORLDVIEWInteresting factsIn its Q4 2008 results, Nokia estimated that global industry mobile volume in 20...
GLOBAL MOBILE A WORLDVIEWWorldwide consumer trends                                                                        ...
GLOBAL MOBILE A WORLDVIEW                                                                       4. Worldwide consumer tren...
GLOBAL MOBILE A WORLDVIEW                                                                 4. Worldwide consumer trends    ...
GLOBAL MOBILE A WORLDVIEW                                                                       4. Worldwide consumer tren...
GLOBAL MOBILE A WORLDVIEW                                                                    4. Worldwide consumer trends ...
GLOBAL MOBILE A WORLDVIEW                                                                4. Worldwide consumer trends     ...
GLOBAL MOBILE A WORLDVIEW                                                                                                 ...
GLOBAL MOBILE A WORLDVIEW                                                                                              4. ...
GLOBAL MOBILE A WORLDVIEW                                                                             4. Worldwide consume...
GLOBAL MOBILE A WORLDVIEW                                                                    4. Worldwide consumer trends ...
GLOBAL MOBILE A WORLDVIEW                                                                   4. Worldwide consumer trends  ...
GLOBAL MOBILE A WORLDVIEW                                                                          4. Worldwide consumer t...
GLOBAL MOBILE A WORLDVIEW                                                                            4. Worldwide consumer...
GLOBAL MOBILE A WORLDVIEW                                                                            4. Worldwide consumer...
GLOBAL MOBILE A WORLDVIEW                                                                                                 ...
GLOBAL MOBILE A WORLDVIEW                                                                           4. Worldwide consumer ...
GLOBAL MOBILE A WORLDVIEW                                                                4. Worldwide consumer trends     ...
GLOBAL MOBILE A WORLDVIEW                                                                         4. Worldwide consumer tr...
GLOBAL MOBILE A WORLDVIEW                                                                        4. Worldwide consumer tre...
GLOBAL MOBILE A WORLDVIEW                                                               4. Worldwide consumer trends      ...
GLOBAL MOBILE A WORLDVIEW                                                                        4. Worldwide consumer tre...
GLOBAL MOBILE A WORLDVIEW                                                                        4. Worldwide consumer tre...
GLOBAL MOBILE A WORLDVIEW                                                                         4. Worldwide consumer tr...
GLOBAL MOBILE A WORLDVIEW                                                                 4. Worldwide consumer trends    ...
GLOBAL MOBILE A WORLDVIEW                                                               4. Worldwide consumer trends      ...
GLOBAL MOBILE A WORLDVIEWComing to a 3rd Screen Near You!The iPhone Phenomenon                                            ...
GLOBAL MOBILE A WORLDVIEW                                                                   5. Coming to a 3rd Screen Near...
GLOBAL MOBILE A WORLDVIEW                                                            5. Coming to a 3rd Screen Near You!Th...
GLOBAL MOBILE A WORLDVIEW                                                                    5. Coming to a 3rd Screen Nea...
GLOBAL MOBILE A WORLDVIEW                                                          5. Coming to a 3rd Screen Near You!What...
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
Global Mobile - A World-view by Havas Digital
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Global Mobile - A World-view by Havas Digital

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This insights piece reflects on consumer trends and practical opportunities in mobile marketing.

The mobile platform boasts a dizzying number of options avaiable to marketers. The irony of mobile marketing is the enormous penetration of mobile and the enormous flexibility, with the ability for personal even tailored, communication.

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Global Mobile - A World-view by Havas Digital

  1. 1. Global Mobile A Worldview August 2009 Consumer trends and practical opportunities in mobile marketing
  2. 2. Lead Contributors Sixto Arias Managing Director Mobext Spain sixto.arias@mobext.mobi Chris Bourke Managing Director Mobext UK chris.bourke@mobext.mobi Phuc Truong Managing Director Mobext US phuc.truong@mobext.com Dimitri Dautel Managing Director Mobext France dimitri.dautel@havasdigital.com Mark Egan Director of Global New Business Havas Digital mark.egan@havasdigital.com© 2009 Mobext :: Havas Digital
  3. 3. CONTENTS1. Introduction. .................................................................................... 42. Highlights........................................................................................... 53. Interesting facts............................................................................ 64. Worldwide consumer trends: insights into what’s driving growth in mobile products and services...................................................................................... 7 • Asia: focus on Japan and South Korea. Leaders of the Revolution.............. 7 • Europe: focus on UK and Western Europe. High Growth........................................................ 13 • North America: focus on United States. Catching Up......................................... 20 • Latin America: focus on Brazil and Mexico. Growing Demand................................ 285. Coming to a 3rd Screen Near You!............................. 32 • The iPhone Phenomenon & the Touchscreen Revolution. ................................. 32 • Mobile Video/TV................................................................... 356. Mobile in the Mix: Opportunities for Marketers. .......................................... 377. Conclusion:  Putting Mobile in the Mix for your Brands................................................. 518. Glossary of terms...................................................................... 549. About us and contact details......................................... 55References. .......................................................................................... 57© 2009 Mobext :: Havas Digital
  4. 4. GLOBAL MOBILE A WORLDVIEWINTRODUCTION 1The mobile platform boasts a dizzying number of options available to marketers – including,but not limited to: text and multimedia messaging, content and display advertising adaptedfor mobile mini-browsers, “conventional” online content and display advertising for PC-likebrowsers (from newer smartphones like the iPhone and Android G1), mobile applications,mobiles games, paid search, as well as proximity-based interaction through outdoor media/displays and shortcodes used in integrated marketing efforts, both of which cover the “lastmile” for reaching consumers.The irony of mobile marketing is the enormous penetration of mobile (greater than 100percent in some countries due to multiple device ownership) and the enormous flexibilityof the aforementioned tactics juxtaposed with the ability for personal, even tailored, com-munication. To that end, Mobext believes that the mobile platform has enormous potentialto both reach fragmenting audiences and increase interaction between brands and thoseaudiences. Mobext helps advertisers develop tactics for their brands and feature the plat-form as an integral component of their marketing strategies. In this Insight report, we will tackle the following key questions: • What are consumers doing that is stimulating the growth of mobile marketing? • What are the evolving capabilities of mobile marketing and what should marketers do to leverage the channel? • How does this compare around the world, region by region? • What relevant case studies of successful campaigns offer insights about mobile marketing and advertising?We are always interested in your particular business issues and questions, whether you’realready a Mobext client or just want to know more about this subject. Please feel free to getin touch.Contact your local Mobext contact, the Media Contacts/MPG managing director in yourcountry, or an author of the Insight report. Phone numbers and e-mail addresses are at theback of this publication and at http://www.mobext.mobi.© 2009 Mobext :: Havas Digital
  5. 5. GLOBAL MOBILE A WORLDVIEWHighlightsLandscape: Growing consumer familiarity with mobile devices. The increasing mass- 2reach of text and picture messaging in Asia, Europe and America signals that mobile hasevolved from a voice medium to a multimedia communications channel. The next phase ofgrowth is being driven by consumer demand for digital photography, email, music and ac-cess to favorite Web applications, anytime and from anywhere.Possibilities: Measurable experiments central to learning new tactics. Given the diversepossibilities and the lack of a dominant approach, mobile marketing is at a relatively em-bryonic stage. A 2008 JupiterResearch survey of US marketers revealed that 26 percent ofrespondents engaged in some form of mobile marketing.1 These tactics include direct-re-sponse text and picture advertising and promotions (SMS/MMS), branded content, quickresponse codes (QR codes), paid mobile search, and banner ads. Advertisers who are ad-vancing their mobile initiatives see the channel as a new opportunity to reach consumers ina personal way. Marketers are learning that the mobile platform can be used to effectivelytarget individuals who have opted in to receive communications through text messages,shortcodes, mobile browsing and purchase of premium digital content.Recommendations. Given high SMS penetration in the US and Western Europe, Mobextbelieves SMS should be offered as a consumer response channel wherever possible, espe-cially for non-interactive media like traditional television, print and outdoor. As targetingbecomes available, for example, through location-based services like mobile search that arestill in an experimental stage, marketers willing to innovate can break through the clutter ofmarketing messages.Consumer guidelines from industry bodies like the Mobile Marketing Association (MMA)should be adopted by agencies to effectively plan their initiatives. For example, “pull” mo-bile marketing is a best practice supported by the MMA. Pull marketing, as in the case ofBluetooth, is where a consumer sees the opportunity to interact with mobile and activelyinitiates contact. A real world example of this best practice is going to the cinema, seeing aposter and downloading via Bluetooth an ad for an upcoming film or a ringtone for sound-track of the showing film. This approach contrasts with push mobile marketing, where a cin-ema randomly sends ads to consumers who pass by. Mobext recommends that marketersfamiliarize themselves with the MMA’s best practices, which are updated annually to guideimplementation of shortcode programs, interactive voice response, and off-portal mobileWeb sites. Several executives from Mobext have leadership roles in regional MMAs.Link to download the MMA Best Practice Guidelineswww.mmaglobal.com/bestpractices.pdf© 2009 Mobext :: Havas Digital
  6. 6. GLOBAL MOBILE A WORLDVIEWInteresting factsIn its Q4 2008 results, Nokia estimated that global industry mobile volume in 2008 was 1.21 3billion devices, or a shipment of 3.3 million units per day.2 Nokia is also estimated to com-mand roughly 40 percent of the global smartphone market.3Since the European launch of the ad-supported mobile virtual network operator Blyk inSeptember 2007, 200,000 16-24 year olds have signed up in the UK by invitation only (as of9 February 2009).4 On its Web site, Blyk cites case studies of SMS and MMS campaigns withresponse rates ranging from 34 percent to 67 percent.5According to a report from Monocle magazine, mobile TV in Asia reached a tipping-pointback in 2005 when South Korean teenagers downloaded an average of 16 minutes of short-form video each day.An NTT Docomo press release from February 2007 announced achievement of a 5 Gbpstransmission speed. 6 A few years ago, the announced goal was a commercially viable 4Gnetwork by 2010.7 Such a network could transmit contents of an entire DVD in under aminute. To put this in context, based on current 3G data transfer rates in US / Western Eu-rope, a DVD could take nearly a full day to download. Estimated* iPhones Around the World Brazil............. 400,000 Portugal..... 50,000 France.......... 1 million Spain............. 450,000 Mexico. ....... 240,000 US.................... 8 million (and 3.5 million iTouches with Wifi) Source: *Mobext estimates© 2009 Mobext :: Havas Digital
  7. 7. GLOBAL MOBILE A WORLDVIEWWorldwide consumer trends 4Asia: focus on JAPAN AND South KoreaLeaders of the revolutionFor decades, Japan has been the world-leading market for the mobile industry. An early-adopter culture is combined with well-funded telecom companies and a strong traditionof research and development. It is no surprise that the Japanese have pioneered many oftoday’s 3G mobile products and services. One representation of a market’s mobile sophisti-cation is the average revenue per user (ARPU) from data services as well as the percentageof total revenues that data services comprise. When measured along those two axes, Japanis far and away the world’s mobile leader.8 Philippines ($2.1 - 45%) Japan 40% Indonesia Singapore Hong Kong China New Zealand UK (average across carriers in the country) Source: Chetan Sharma Consulting, 2009 Germany Austria US Ireland Portugal Italy Belgium Switzerland Data as % of total revenues Czech Malaysia Norway 20% Netherlands Sweden South Korea Denmark Mexico France Finland Canada Israel Spain Russia Greece Turkey Thailand 10% Brazil India Asia Europe Americas $5 $10 $20 Average Wireless Data ARPU (USD) for carriers in a countrySouth Korea is another mobile powerhouse, where key outputs include pilots of 4G tech-nologies and trailblazing TV services. In Japan and South Korea, over half of all mobilesubscribers are on a 3G network.© 2009 Mobext :: Havas Digital
  8. 8. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends JAPAN AND SOUTH KOREAMobile InternetTo illustrate Japan’s strong demand for mobile services, the country’s population is 127 mil-lion, and there are approximately 110 million mobile subscribers, according to the year-end2008 figures from the TCA.9 Factoring in some duplication, the penetration has peakedaround 80 percent of the country’s population. In the mobile market itself, 3G accounts foralmost 80 percent. Explosive growth in mobile Internet usage is mirrored in a rapidly ex-panding marketing industry. In addition, Asians are much more likely to pay for select kindsof mobile content than people from other regions.10Willingness of adults in select countries worldwide to payfor select mobile content, by region, 2007 (% of respondents) NORTH LATIN ASIA EUROPE AMERICA AMERICAGAMERSI am willing to pay for access 8.5% 1.0% 1.6% 1.1%I am willing to pay a limited 29.5% 12.1% 13.0% 12.6%amount for accessThe activity is important but 43.6% 71.6% 53.7% 64.8%I do not want to pay for accessI do not mind receiving ads in 18.4% 15.2% 31.8% 21.5%exchange for free accessINSTANT MESSAGINGI am willing to pay for access 7.3% 1.0% 3.1% 1.3%I am willing to pay a limited 28.2% 13.8% 9.9% 8.9%amount for accessThe activity is important but 48.0% 76.3% 63.6% 67.9%I do not want to pay for accessI do not mind receiving ads in 16.4% 8.9% 23.4% 21.9%exchange for free accessMULTIMEDIA (MUSIC, VIDEO)I am willing to pay for access 6.1% 1.1% 1.7% 1.3%I am willing to pay a limited 29.9% 8.4% 9.4% 10.4%amount for accessThe activity is important but 42.5% 74.2% 57.5% 66.3%I do not want to pay for accessI do not mind receiving ads in 21.5% 16.3% 31.3% 22.0%exchange for free accessNOTE: ages 16+; numbers may not add up to 100% due to roundingKPMG International, “Consumers and Convergence II”, October 18, 2007Source: www.eMarketer.com© 2009 Mobext :: Havas Digital
  9. 9. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends JAPAN AND SOUTH KOREAHandsets and devicesJapanese consumer trends suggest that the role of the desktop computer may soon beovertaken by radical new 3G smartphones, which bring together all the “must-have” fea-tures of computers, together with games consoles, camcorders and terabytes of memory.For marketers, the shift toward mobile computing creates opportunities for new servicesthat work with the new generation of smartphones – to make life more informative, produc-tive, and enjoyable.Cross-platformNew entertainment formats that work across media, including TV, Internet and mobile, addressaudience fragmentation while increasing interaction time between brands and consumers.Audiences at live sporting events are benefiting from new mobile services designed toenhance viewing experiences. Typically, an advance awareness campaign using outdoor,printed and online media is used to promote a mobile Web site. During the event, the siteprovides a news feed for event visitors, as well as deeper information such as team andplayer profiles. There are also branded downloads like games and wallpapers, that can beused after the event and shared with friends.For roaming events like golf and motor sports, mobile content can be targeted at audiencesusing infrared technology. By tailoring the content and experiences that make up a cross-platform campaign, Japanese marketers offer a variety of touchpoints that raise awarenessof the activity and increase interaction time with audiences while at the event. This leads togreater audience retention and return for the brand.© 2009 Mobext :: Havas Digital
  10. 10. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends JAPAN AND SOUTH KOREASouth Korean mobile TV producer TU Media reports that consumption patterns of mobilevideo differ from those of traditional TV, with commuting time, lunchtime and even indoorsduring office hours being most popular. Another insight is that South Koreans place moreemphasis on the quality of the content they consume over length. The most popular genresare live sports and news, according to CEO Suh Young-kil, who said so at CommunicAsia inJune 2007. Suh said that the average user watched for over an hour a day.11Broadcaster-produced content is not all that South Koreans watch on their handsets. Similarto a high-end sophisticated Webcam setup, the 1-year old SHOW Monitoring System trans-mits live video from a camera to a phone, perfect for security and surveillance.M-commerceThe m-commerce landscape in Japan demonstrates the potential future of the retail marketfor the rest of the world. M-commerce is expected to grow 45 percent to USD $26 billion in2011, compared to 2007.12 Shopping with mobile devices is already a mainstream activityin Japan. A 2007 study from the UK’s Guardian reported that three-quarters of Japaneseconsumers said they enjoyed online clothes shopping with their mobile device at least oncea month.13M-COMMERCE IN JAPAN, 2007-2011 (billions) 2007 $17.9 2008 $20.5 2009 $23.0 2010 $24.5 2011 $26.0Cybozu Media and Technology, 2007 as cited by US Commercial Service,“Japan: Service and Retail Franchising”, May 2008Source: www.eMarketer.comOne innovation, which has bloomed from NTT DoCoMo’s e-wallet devices, is called ‘Os-aifu-Keitai’. Customers wave their specially equipped phone over a reader device to usethem as e-money, e-credit cards, train/plane tickets, membership cards and door keys. Thewallet handsets have contactless integrated circuit (CIC) chips embedded, and there are50 million of these phones in Japan.14 The e-wallets have become hugely popular, for thesimple reason that they combine convenient timesaving services. Marketing and CRM ap-plications include bill payment, online banking, and loyalty programs, all of which illustratea rich opportunity for service providers who can introduce the e-wallet product elsewherein the world. The drawback is security vulnerability since so much personal information isconcentrated in a single device.© 2009 Mobext :: Havas Digital 10
  11. 11. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends JAPAN AND SOUTH KOREASouth Koreans are also as comfortable transacting in m-commerce as e-commerce. Mobiletrends blog mTrends reported that 63 percent of South Koreans make payments with theirmobile phones, nearly everyone buys ringtones, and 37 percent download mobile games.15Response MechanismsThe mass-market adoption of Quick Response (QR) codes givespackaged goods marketers an effective mechanism to direct con-sumers from product packaging to Web sites. There, they can of-fer product information and engaging promotional content andexperiences. Ambient media containing QR codes is used withinthe media mix to raise awareness, drive traffic, and in some cas-es provide deeper layers of information – for instance, about TVcharacters and plot lines.As evidence of the huge potential for QR Codes, a ‘What Japan Thinks’ report from 2008reveals that when the Japanese use a phone to request information about an ad, 42 percentscan a QR Code, and 35 percent send a blank email (to access the URL from the reply). Sur-prisingly, a third of those surveyed said they would type a URL directly to access information– exposing the myth that people won’t enter URLs on mobile devices. Indeed, URLs are a 16viable response method but should be kept to a minimum length.Social MediaOnline networks play a major role in Japanese culture, helping to foster a sense of commu-nity that is often missing from everyday Japanese life.Mixi, Japan’s largest social networking site, has more members accessing from mobile de-vices than PCs. Niche social networks, like Mobile Game (often condensed to “Mobaga” or“Mobagay”) Town from company DeNA, enable the Japanese to connect around passionareas, games, and minutiae, and have proven to be a big hit. The success of niche socialmedia demonstrates that the long tail of the Internet creates new opportunities for publish-ers and broadcasters alike.starting page game screen profile page avatar in virtual roomSource: http://www.techcrunch.com/wp-content/uploads/2008/08/mobagetown-screens.png© 2009 Mobext :: Havas Digital 11
  12. 12. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends JAPAN AND SOUTH KOREACyworld, South Korea’s top social networking site, started in 1999, and took off in 2003, theyear it was acquired by telco SK Communications. With near universal reach in the country,many young Koreans are “Cyholics” and the extension of Cyworld into mobile devices fur-ther increases Cyworld immersion. Cyworld has extended into the US, China, Japan, andTaiwan and still has more expansion plans on the horizon. Cyworld zone: MINI HOMPY Map, Video service ITEM SHOP MY PICTURE 1. Guest book 2. Photo album EMOTION 3. Friends list EXPRESSION 4. Diary 5. Plaza 6. BBS About service fees 7. Club Find subscribers 8. “My Cy” (settings) Registering for fixed payment© 2009 Mobext :: Havas Digital 12
  13. 13. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPE Europe: focus on UK and Western Europe High Growth Although still trailing the early-adopter cultures of Japan and South Korea, the UK and Ger- many lead the European region with 65 million and 49 million mobile subscribers, respec- tively. Individual mobile penetration is fairly saturated with a current 80 percent penetration of the European population.17 TOP FIVE COUNTRIES REPRESENTED 77% OF EUROPEAN MOBILE MARKET IN 2007 MOBILE PENETRATION AND SUBSCRIBERS BY COUNTRY IN 2007 80 145% 150% Percentage of Overall PopulationNumber of Individual Mobile Users (in millions) 133% 60 125% 116% 116% 111% 114% 113% 114% 40 107% 108% 112% 110% 108% 104% 100% 97% 20 86% 4 4 4 3 65 49 48 47 37 13 9 8 8 7 7 6 0 75% Germany UK France Italy Spain Netherlands Greece Portugal Belgium Sweden Austria Switzerland Denmark Finland Norway Ireland Number of individual mobile users Active mobile SIM penetration Source: JupiterResearch European Mobile Forecast, July 2008 (Western Europe) Mobile Internet The combination of more affordable and easy-to-use handsets like the iPhone, together with the roll-out of flat-rate data plans, popular email services from Yahoo! and Google, and deployment of faster mobile networks (3G and 3.5G), is fuelling steady growth of the mobile Internet. comScore estimates that one out of four Britons aged 15+ accesses the Internet using a mobile device.18 In the past, factors that hindered mobile browsing were a lack of knowledge about how to access the mobile Internet and a lack of awareness of flat-rate data plans. However, op- erators are increasingly bundling flat-rate data plans along with voice services. IAB UK an- nounced that the number of people on unlimited data plans doubled in 2008.19 © 2009 Mobext :: Havas Digital 13
  14. 14. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPEMOST MOBILE SERVICES WILL REACH CRITICAL MASS BY 2011ADOPTION OF VARIOUS MOBILE SERVICES, 2007 TO 2013 100% Percentage of Mobile Subscribers 80% 60% Mass market 40% 20% Critical mass 0% 2007 2008 2009 2010 2011 2012 2013 SMS 72% 73% 74% 75% 76% 76% 76%BROWSING/INTERNET 23% 28% 33% 38% 41% 45% 47% MMS 24% 26% 39% 31% 32% 34% 35% MUSIC 15% 22% 26% 29% 31% 32% 34% VIDEO/TV 8% 12% 17% 21% 25% 28% 31% GAMES 16% 19% 23% 26% 28% 30% 31% E-MAIL 8% 10% 13% 16% 19% 22% 25% IM 1% 2% 4% 5% 7% 9% 10%Source: JupiterResearch European Mobile Forecast, July 2008 (Western Europe)As a whole, most mobile services in Europe are forecasted to reach critical mass by 2011.3G will be mass market (greater than 50 percent penetration) by 2010 and 3.5G will be massmarket in 2012. By country, Italy leads the way with 20 million 3G subscribers, represent-ing 41 percent penetration. In 2007, Spain had 9 million 3G subscribers (25%), the UK has11 million subscribers (23%), and France and Germany 8 million subscribers (16% and 13%penetration, respectively).20Three popular consumer activities in the UK for the mobile Internet include listening tomusic (23%), accessing news and information on a mobile browser (20%), and accessingemail (13%).21Trailing the UK, the markets with the strongest uptake for the mobile Internet are Germany,Italy and Spain, respectively. The impact for the marketing industry is significant, as mobilemarketing advances from direct-response SMS campaigns and mobile Internet sites to newareas like 3G mobile video, picture messaging and branded games. Although digital adver-tising spend continues to grow in the region, mobile represented a fraction of advertiser’sinteractive budgets. The slice of the pie is predicted to increase globally over the next fewyears. Bernstein Research forecasted that mobile advertising worldwide would quadruplefrom $4.2 billion USD in 2008 (7% of online ad spending) to $17.0 billion USD by 2012 (19%of online ad spending).22© 2009 Mobext :: Havas Digital 14
  15. 15. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPEWORLDWIDE MOBILE AD SPENDING ($ BILLIONS AND % OF TOTAL DIGITAL ADVERTISING)20 18% 20% 16%16 16% 13%12 12% 10% 8% 8 8% 6% 4 4% 2.7 4.7 6.8 10.1 13.6 17.5 0 0% 2007 2008 2009 2010 2011 2012Source: Bernstein Research, “US Internet – The End of the Beginning“, May 2008Gadgets and devicesYears of phone subsidization in the UK have resulted in many upgrades to smartphone de-vices. Penetration is also high in Spain and Italy. Regional carrier O2 announced at the endof February 2009 that it had sold 1 million iPhones (over 16 months). This is surprisingly slowcompared to Nokia’s N95 smartphone, which reached the milestone in seven months in2007. Nevertheless, the iPhone effect on Web consumption is pronounced, even over othersmartphones. British iPhone users are twice as likely to check mobile email as the typicalsmartphone user and two and a half times more likely to access news or information througha downloaded application.23MOBILE CONTENT USED BY iPHONE, SMARTPHONE AND MOBILE PHONE USERSIN THE UK, JANUARY 2009 (% OF TOTAL) TOTAL TOTAL MOBILE iPHONE USERS SMARTPHONE USERS PHONE USERSAccessed news/info via browser 79.7% 48.0% 19.8%Accessed e-mail 75.4% 35.4% 13.1%Listened to mobile music 65.6% 40.5% 22.6%Accessed news or info via 55.6% 22.1% 6.3%downloaded applicationAccessed weather 55.5% 26.1% 9.2%Used web search 55.1% 31.9% 12.3%Accessed social networking site 54.8% 29.6% 12.7%NOTE: based on three-month average for the period ending January 2009; ages 13+comScore Mobile as cited in press release, March 26, 2009Source: www.eMarketer.com© 2009 Mobext :: Havas Digital 15
  16. 16. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPEIn the short term, all handset manufacturers will be affected by the economic downturn asconsumers wait longer to replace their mobile phones. In the long run, however, becauseof price reduction and subsidization from retail partners, the 3G iPhone will continue to ap-peal to more of the mass market, slowly eroding the market share of Nokia, Sony Ericssonand Samsung. Exclusive relationships between carriers and high-end handsets will becomethe norm.Cross-platformWith a view to fix audience fragmentation, leading broadcasters and producers are pio-neering new content formats to work across TV, the Web and mobile devices. TV producerEndemol launched a reality series for Bebo called “The Gap Year” which targets the highly ,desirable 18 to 24 year old age group, and secured sponsors including Canon, The Royal AirForce, Tourism Auckland and Tourism Australia.Channel 4 is a major player whose Short Cuts “catch-up” subscription service offers viewershighlight packages from its stable of popular entertainment programming. Celebrity BigBrother is a popular reality TV show that offered Channel 4 audiences free one-minute mo-bisodes (made-for-mobile episodes) from the series, along with 10-second ads. Trials of thead-subsidized mobisodes on Channel 4 mobile show high consumer demand. Advertiserinterest in mobile cross-platform offerings make this content viable for publishers, includinganything from animated banners and program sponsorship to interactive ads, pre and post-roll ads and viral trailers.CNN is another prime example of multi-platform distribution. CNN International has sev-eral prominent distribution deals for CNN mobile video content with telecom operatorsaround the world, including Vodafone, Sky, Orange and the previously mentioned TU Mediain South Korea. Source: http://cnnmobile.com/cnni_BN/services.do© 2009 Mobext :: Havas Digital 16
  17. 17. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPEA study from CNN International reveals that nearly one fifth of its viewers, 18 percent of theaudience, regularly listen to podcasts and one-third listen to online radio. A further 70 per-cent read magazines online and 74 percent say they watch recorded TV. CNN says the studyemphasizes the significance of mobile, which is often overlooked but has the same audiencesize that the CNN Web site had two years ago. CNN has responded to the increase in themobile audience by changing their fixed price of media inventory to a CPM-based model.M-commercePremium mobile content is dominated by entertainment (video, games, music). The fivelargest European countries (UK, Germany, France, Italy, Spain) will account for close to 80percent of the mobile content market by 2013.24 Meanwhile, consider the market for theearly content revenue driver, ringtones. Competition from paid-for music downloads, side-loaded music (where music is downloaded to PC from fixed-line Internet, then moved fromPC to mobile) and increased access to music through flat-rate data plans all factor into ring-tone revenue reaching a plateau and likely declining over the next few years.An example of a typical m-commerce transaction today is the service offered by Transportfor London, which allows people driving into the capital to pay the £8 daily or £160 monthlytraffic congestion charge via text messaging. As the m-commerce market develops, thechallenge for marketers is to design easy-to-use products and use clever campaign ideasthat educate consumers about how to use them.Finally, the global not-for-profit group GS1 is governed by industrial and retail groups inorder to standardize mobile technologies for accelerated adoption. Technologies includebarcode reader and NFC (near-field communication) applications.SearchGoogle dominates mobile browser-based searches in Western Europe, ranging from 63 per-cent in France to 88 percent in Italy.25 The data does not factor searching through all-in-oneapplications like Yahoo! Go or searching via bundled applications, where distribution dealswith carriers play a role.Top Mobile Search Brands By Mobile Searcher PenetrationThree-month average ending June 2008 (United States and Western Europe) top brand penetration second brand PENETRATIONFrance Google 62.9% MSN/Windows Live Search 9.6%Germany Google 85.1% Yahoo! 9.4%Italy Google 88.1% Yahoo! 19.5%Spain Google 82.5% MSN/Windows Live Search 12.1%UK Google 74.0% Yahoo! 16.2%Source: comScore M:Metrics MobiLens© 2009 Mobext :: Havas Digital 17
  18. 18. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPESocial mediaSteady demand for user-created content combined with social tools continue to fuel thegrowth of social networks. Flat-rate data-plans are set to do for social networking whataffordable broadband did for the fixed-line Internet. Consumers use more of everything.As of January 2009, 13 percent of UK mobile phone users access social networking sites. 26Nielsen Online estimates the figure to be nearly 2 million people, or 23 percent of mobileWeb users.27 Facebook is already the fourth most popular mobile Web site, competingwith BBC properties, Google, and Hotmail.28 The growth of social media for mobile dem-onstrates how user behavior is evolving from checking weather or airline flight status totime-intensive interaction.TOP 10 UK WEBSITES, RANKED BY UNIQUE MOBILEINTERNET AUDIENCE, Q3 2008 (Millions) 1. BBC NEWS 1.7 2. GOOGLE 1.7 3. BBC WEATHER 1.5 4. FACEBOOK 1.5 5. WINDOWS LIVE HOTMAIL 1.0 6. BBC SPORT 1.0 7. eBAY 0.9 8. YAHOO! MAIL 0.9 9. SKY SPORTS 0.8 10. GMAIL 0.6NOTE: accessed at least once during each month of the quarterNielsen Online, “Mobile Media View” as cited in press release, November 24, 2008Source: www.eMarketer.comResponse mechanismsA milestone was reached in Britain, following in Japan’s footsteps, when market-leadingdaily tabloid publisher The Sun carried out a large-scale pilot of QR code technology in2007. Consumer response was confirmed a success due to 11,000 readers responding toQR codes during the first few weeks. A pullout supplement that ran in the tabloid educatingreaders about using QR codes was a key factor in the pilot’s success. With big advertiserslike Sky, Twentieth Century Fox, News Corp International and Ladbrokes all participating in© 2009 Mobext :: Havas Digital 18
  19. 19. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UK AND WESTERN EUROPEthe pilot, it is clear that usage of QR codes will grow over the medium term. Nokia handsetseven come with QR-reading capability pre-installed.29Another example of QR integration is this year’s launch of the Volvo C70. The pan-Europeanmarketing campaign to launch the vehicle includes QR codes in print media as a method ofpiquing consumer curiosity and extending a mechanism for further information gathering.Finally, Mobext recommends that marketers note the key differences comScore noted be-tween late 2007 and late 2008 for receptivity and response to SMS ads in Western Europe.Just about all industries that saw increased volume of SMS ads also had a decreased re-sponse rate. Conversely, all industries that delivered more SMS ads year-over-year had anincreased response rate. This trend will be an important to keep an eye on.30 As is the casewith email marketing, mobile marketers will be delicately striking a balance with consumersamong promotional offers, message frequency, and response rate.SMS ADVERTISING AUDIENCE AND RESPONSE RATE IN SELECT COUNTRIES IN WESTERNEUROPE, BY PRODUCT CATEGORY, AUGUST 2007 AUGUST 2008 (THOUSANDS AND % CHANGE) RECEIVED SMS AD RESPONSE RATE AUGUST AUGUST % CHANGE AUGUST AUGUST 2007 2008 2007 2008Downloads for mobile phone 40,792 35,915 -12.0% 4.4% 3.9%News or informations 25,929 22,122 -14.7% 2.8% 3.2%Mobile phone or plan 32,222 31,574 -2.0% 4.6% 4.7%Entertainment 12,644 11,230 -11.2% 4.3% 5.1%Total mobile and media sectors 111,587 100,841 -9.6% 4.1% 4.1%Clothing/fashion 3,982 5,503 38.2% 5.8% 6.4%Restaurants 1,037 1,424 37.3% 11.6% 15.5%Cars 4,407 3,731 -15.4% 11.2% 7.9%Food 1,413 2,162 53.0% 9.2% 12.6%Financial services 8,963 9,956 11.1% 3.7% 4.7%Consumer electronics 3,957 4,647 17.4% 6.3% 6.7%Travel 5,779 6,602 14.2% 4.9% 5.8%Total non-mobile or media sectors 29,539 34,024 15.2% 6.2% 6.8%NOTE: France, Germany, Italy, Spain and the UK; three-month averages for periodsending August 2007 and August 2008comScore M:Metrics as cited in press release, October 31, 2008Source: www.eMarketer.com© 2009 Mobext :: Havas Digital 19
  20. 20. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESNORTH AMERICA: focus on UNITED STATESCATCHING UPThe US mobile services market had long lagged behind Asia and Europe. However, theUS market has accelerated quickly, thanks in large part to the iPhone. As of June 2008, theUS market had 226 million mobile subscribers and reached the same penetration of 3Gsubscribers (28 percent) as the top five countries in Europe. The actual number of US 3Gsubscribers was 64 million.31Mobile InternetDemand for mobile Internet services has skyrocketed in the last two years (US audiencegrowth of 74 percent),32 thanks to the combined uptake of flat-rate data subscriptions, amassive increase in 3G subscriptions, and of course, the iPhone. With quick iPhone prolif-eration, US mobile Internet penetration (50 million people, representing 18 percent of mobilesubscribers) is higher than the UK and many other Western European countries.33mobile internet penetration (by market) 18.2% 16.9% 16.0% 13.5% 13.2% 12.4% 11.9% 9.6% 7.1% 4.3% 2.2% US UK Canada France Italy Spain Russia Germany China Brazil IndiaNielsen Mobile. Mobile Internet penetration amongst mobile subscribers. Latest estimates(US, February 2009; EU, Q1 2009; Canada Q4 2008; BRIC Q1 2008)Source: The Nielsen Company, The Global Online Media Landscape, April 2009© 2009 Mobext :: Havas Digital 20
  21. 21. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESMessaging continues to gain traction through mobile devices, with 53 percent of Americanmobile subscribers using SMS, 26 percent using MMS, 15 percent using mobile email and12 percent using instant messaging services. 34 Lastly, mobile video is growing – up to 10.3million Americans are watching mobile video. The penetration rate is still in the single digits(5 percent of American mobile subscribers), a mere blip compared to the estimated 50+percent penetration of mobile video in Japan and South Korea.35Although consumer mobile Internet services continue to grow in the region, the mobile plat-form still represents a tiny fraction of US advertiser’s interactive budgets. eMarketer predictsthis ratio to grow from less than 3 percent in 2008 to 9 percent in five years’ time.US MOBILE ADVERTISING SPENDING, 2008-2013(Millions and % CHANGE / % OF TOTAL ONLINE ADVERTISING SPENDING) 10% US Mobile Advertising 9.0% Spending + % change 8% 7.1% 6% Mobile Advertising 4.7% Spending as a % of Total Online 3.7% Advertising 4% Spending 3.1% 2.8% $1,410 (41.7%) $2,390 (69.5%) $3,330 (39.3%) $995 (30.9%) $648 (35.0%) $760 (17.3%) 2% 0% 2008 2009 2010 2011 2012 2013NOTE: includes mobile message advertising, mobile display advertising and mobile search advertising.eMarketer, February 2009Source: www.eMarketer.comGadgets and devicesBetter marketing of smartphone multimedia features, including photography and music,has driven a dramatic upgrade cycle in the past few years. Price is a key driver since mostoperators subsidize phones. Smartphones now comprise nearly a quarter of the US hand-set market.36© 2009 Mobext :: Havas Digital 21
  22. 22. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESTelecom subsidization makes the 3G iPhone affordable (USD $199) to the mass market. Asalluded to previously, the iPhone has been instrumental in advancing mobile data services,with 84 percent of iPhone users using email, 82 percent browsing news and informationsites, 59 percent using a news and information application or widget. A surprisingly high 31percent of iPhone users watch mobile video (likely a mix of QuickTime movie trailers andYouTube, as heavily promoted by Apple), compared to the 5 percent market average.37service penetration by smartphone type, us (% OF RESPONDENTS) 64% Browsing: news info 82% 62% 72% E-mail 84% 44% 25%Applications: news info 59% 29% 28% Access SNS 44% 28% 19% Music 60% 28% 6% Video 30% 21% 7% RIM Downloaded games 32% 11% iPhone 7% Respond SMS ads 6% Smartphone 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%Source: comScore MobiLens November 2008Research firm NPD noted that Research in Motion (RIM) was the top vendor in the US marketin Q1 2009 due to a two-for-one promotion, overtaking the iPhone 3G, and pushing marketshare to 50 percent. RIM’s BlackBerry Curve, Storm and Pearl were among the five most popu-lar models. Meanwhile, the most formidable challengers over the next few years may prove tobe Google’s Android-based phones, which ranked fifth (the T-Mobile G1).38It took Apple two and a half months in 2007 to reach the one million units sold mark. On itsrecent earnings call, T-Mobile announced that it has sold its one millionth G1 phone basedon the Android open-source operating system, meaning it took Google six months. Never-theless, it is still an impressive feat considering the incredible anticipation and fervor for theiPhone. The traction has T-Mobile forging ahead with additional handsets based on Android.Not to be outdone, Apple announced that with the release of its latest iPhone 3G S in lateJune sold 1 million units in 3 days.© 2009 Mobext :: Havas Digital 22
  23. 23. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESCross-platformIn response to growing changes in audience behavior, owners and producers of televisioncontent are designing new formats and adapting their business models. For example, the12 to 34 year old audience MTV serves watches less broadcast TV. In order to address thistrend for the top show “The Hills”, MTV created a virtual version of the show that has al-ready attracted over two million users. In addition, MTV provides mobile streams of theshow that are simulcast with the TV broadcast. According to MTV, it had 1 million streams of“The Hills” in Q1 2008.CBS launched quiz format “Million Dollar Password” as a modern update on the classic “Pass-word” game show. The program gives its audience choice and control about how to watchthe series, with TV episodes, catch-up clips for the web and a casual game for mobile.The long-running series America’s Next Top Model is another TV format that has devel-oped a mobile game to reach its audience. Many American marketers believe it is up tothe broadcasters to invest in achieving sufficient audience before they invest in advertisingcontent for Web and mobile. A few brave brands are jumping in. History has shown thismentality pays off – advertisers in novel ad formats and new media benefit from significantlyhigher awareness and recall than advertising in tried and true media.© 2009 Mobext :: Havas Digital 23
  24. 24. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESM-commerceUnlike Japan, Americans are not accustomed to using their mobile phone to pay for goodsor services. According to a Nielsen Mobile press release a year ago, less than four percentof Americans have engaged m-commerce. However, data usage is an indicator of sophis-tication and ease with the mobile platform. Half of all data-service users say they expect toparticipate in mobile commerce in the future. Nielsen’s research found that men are morelikely than women to use their phone for commerce. The biggest hurdle for m-commerce issimilar to the original challenge that faced e-commerce. Forty-one percent of data users notconducting mobile commerce cited security as their biggest concern.39Ticket value for m-commerce will grow over the medium term in the US, from cheap itemslike mobile content to more expensive items like clothing. Mobext recommend that market-ers assess their own businesses. Are your customers prepared to engage in m-commerce?What infrastructure is necessary to accommodate them?US ONLINE RETAILERS THAT HAVE A MOBILE COMMERCE SITE,OCTOBER 2008 (% OF RESPONDENTS) Have mobile commerce site: 4.4% Do not have mobile commerce site: 95.6%Internet Retailer, “Website Design, Content and Rich Media”,conduced by Knowledge Marketing, January 2009Source: www.eMarketer.comFollowing the notion of Osaifu-Keitai, Texas Instruments has been testing cashless pay-ments where consumers attach a one-square-inch sticker with an embedded RFID chip totheir mobile device. The goal is to offer a tap and go payment service that doesn’t requireconsumers to install anything on their mobile device.© 2009 Mobext :: Havas Digital 24
  25. 25. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESSearchAs in Europe with the fixed-line Internet, Google also dominates browser-based mobilesearching in the US (63 percent compared to 35 percent for Yahoo!), although Yahoo! hasa stronger mobile search presence in the US than in other countries.40 Again, there aremultiple types of searches not captured here – “on-deck” searches, local searches, andapp/widget-based searches. Nevertheless, the fact that Google is synonymous with searchbodes well for the company in the mobile sector.An intriguing shakeout will be the battle of services from Google (GOOG-411), Jingle Net-works (1-800-FREE411), and other free directory assistance providers and the mobile opera-tors’ fee-based services for directory assistance. Mobext believes that the end result can onlybe an inevitable loss of the carriers’ revenue stream from directory assistance.Social mediaAmong smartphone users in the US, mobile browsing has quickly evolved from quick hitsof checking information like sports scores and weather updates to longer visits of browsingand interacting with content on social networks. Mobile social networking and blogging is anincreasingly common daily activity. In fact, more than four times as many Americans access asocial networking site or blog with their mobile device on a daily basis than did a year ago.41 “Soon after the launch of the 3G iPhone, Facebook, with one of the most popular iPhone applications avail- able, surpassed MySpace in mobile usage in the U.S.” Source: Nielsen Online, Global Faces and Networked Places: A Nielsen Report on Social Networking’s New Global Footprint, March 2009Besides Facebook and MySpace, mobile community MocoSpace announced that it reached6 million users at the end of last year, primarily through word-of-mouth among its youngmembers.42 As more people ramp up their use of social media while on the go, mobile willdo what the hyperlink did for Web sites, speeding up the flow of communication and ignit-ing communities – all of which will make the world feel smaller.Another social network and micro-blogging service that has exploded onto the scene isTwitter. According to comscore in March 2009, worldwide visitors to Twitter.com increased95% from 9.8 million to 19.1 million.At its core, Twitter is a communication platform that enables its users to quickly and easilysend and read each others’ updates (known as tweets). Tweets are text-based, have a limitof 140 characters and can be sent via Twitter.com, SMS or through external applications viaAPI (application programming interface).© 2009 Mobext :: Havas Digital 25
  26. 26. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESMedia companies such as Viacom and Time Warner to name a few have quickly adoptedTwitter through its many media outlets. By doing so, media companies and regularly usersalike have another method to quickly disseminate (and receive) information to Twitter users.A recent example that demonstrates the effectiveness of Twitter as a communication ve-hicle (as well as other social media for that matter) was the sudden death of global popicon Michael Jackson. Once it was announced by the media (TV, radio, on-line, etc.) thatMichael Jackson had died, tweets containing “Michael Jackson” comprised 22.61% of thetotal tweets (http://mashable.com/2009/06/25/michael-jackson-twitter/). Therefore, if usersfollowed the many media outlets via Twitter or linked to their friends through the service,the immediate global awareness of Michael Jackson’s death occurred in minutes. A “gallery’ of Twitter ‘Followers”7 Things to know about Twitter….http://net.educause.edu/ir/library/pdf/ELI7027.pdf© 2009 Mobext :: Havas Digital 26
  27. 27. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends UNITED STATESResponse mechanismsOne of the highest profile uses of mobile response has been on the popular American TVshow American Idol where viewers are encouraged to use shortcodes to vote for their con-testant of choice. As a show sponsor, telecommunications giant ATT benefits from textvoting through messaging revenues. However, ATT also received widespread criticism forsending unsolicited text messages to subscribers that promoted the show.While campaigning last year, US President Barack Obama encouraged people to sign up forcampaign updates by providing their mobile numbers to have an additional channel by whichto communicate with supporters. Nielsen Mobile estimates that 2.9 million mobile users re-ceived the text with the announcement of Joe Biden as Obama’s running mate.43A number of US brands have been actively using shortcode marketing, including Coca Cola(as part of its “My Coke Rewards” program), Subway, Arby’s, Papa Johns, Domino’s Pizza,Pizza Hut, BestBuy, Foot Locker. 44 As long as there is a perceived value exchange, US con-sumers are willing participants.US MOBILE PHONE USERS WHO HAVE RESPONDED TO MOBILE PHONEOFFERS, BY OFFER TYPE, MARCH-APRIL 2008 (% OF RESPONDENTS)Responded to a text message for a product or service 70% 17%participated in surveys sent to my mobile phone 42% 10%responded to an e-mail offer for a product or service 30% 7%responded to a web offer on mobile phone’s internet browser 22% 5%responded to a coupon offer for a product or service % of responders to 18% mobile offers (n=193) % of all respondents 4% (n=800)NOTE: ages 15+Direct Marketing Association (DMA), “Mobile Marketing: Consumer Perspectives”July 2008 cited by Marketing Charts, July 21, 2008Source: www.eMarketer.com© 2009 Mobext :: Havas Digital 27
  28. 28. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends BRAZIL MEXICOLATIN AMERICA: focus on BRAZIL mexicoGROWING DEMANDAfter years of limited Internet adoption and slow broadband growth, Mobext sees a greatgrowth curve ahead for mobile services and interactive marketing in Latin America. Theregion has had economic growth for two years in a row, led by Brazil and Mexico, the coun-tries with the most Internet users in the region. Latin America’s growth is significant becausemobile will be the primary Interactive screen for a new generation of consumers. FormerMobile Marketing Association President Laura Marriott noted in July 2008 that mobile pen-etration in Latin America was six times the PC penetration.45 “Mobile is not simply viewed as an extension of the Web in BRIC (Brazil, Russia, India, and China), as it is in the US, West- ern Europe and parts of Asia-Pacific. Mobile is the Internet for an increasingly large and attractive consumer segment – an important distinction for marketers to keep in mind.” John du Pre Gauntt, eMarketer Senior AnalystMobile Internet and content consumptionMOBILE SUBSCRIPTIONS AND PENETRATION WORLDWIDE, BY REGION2005-2008 (MILLIONS AND % OF POPULATION) NORTH LATIN middle east EUROPE ASIA-Pacific total AMERICA AMERICA and africa2005 224.8 691.7 820.0 232.0 188.2 2,156.7% penetration 68.4% 73.1% 22.8% 43.1% 18.9% 27.6%2006 251.5 801.8 1,058.1 296.1 271.7 2,679.2% penetration 75.9% 90.4% 29.1% 54.4% 26.7% 34.3%2007 277.0 889.2 1,363.0 362.4 379.9 3,271.6% penetration 82.8% 100.8% 37.0% 65.8% 36.6% 41.3%2008 294.0 938.1 1,686.5 425.6 475.1 3,819.4% penetration 87.1% 106.6% 45.3% 76.3% 44.8% 46.5%NOTE: numbers may not add up to total due to roundingIDATE and ENTER, “Mobile 2009: Markets Trends”, sponsored by Oesía, February 5, 2009Source: www.eMarketer.com© 2009 Mobext :: Havas Digital 28
  29. 29. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends BRAZIL MEXICOeMarketer predicts Brazil’s already hefty 140 million subscriber base to grow to 176 millionby 2012.46 Popular consumer behavior includes; 51 percent using text messaging, 15 per-cent sending receiving photos, and 11 percent accessing music, videos and ringtones.47Given that a high proportion of Brazilians are pre-paid users, promotions such as free air-time or alert services have proven extremely popular.Content revenues are a high growth area. With 73 percent penetration of mobile, 40 per-cent mobile subscribers accessing the mobile internet, and only 5 percent actually usingthe mobile internet (adoption rate), Brazil represents both the largest market in the regionfor mobile services as well as the largest upside potential.48 Mexico’s mobile market grewat a rate of approximately 15 percent per annum, reaching more than 70 percent penetra-tion by close of 2008. And, at early 2009 Telmex’s sister company, América Móvil (Telcel), stillaccounted for around 72 percent of the mobile market. Deployment of 3G service in bothmarkets translates to richer and more interactive mobile content experiences and advertis-ing campaigns.MOBILE PHONE PENETRATION IN MEXICO, 2003-2008(% OF POPULATION) 2003 29.1% 2004 36.3% 2005 45.1% 2006 52.6% 2007 62.6% 2008 70.3%Comisión Federal de Telecomunicaciones (COFETEL) with company reports,“Telefonía Móvil”, March 19, 2009Source: www.eMarketer.comGadgets and devicesAs noted previously, Nokia commands roughly 40 percent of the global smartphone mar-ket, but saw a precipitous drop in its Latin American operations in Q1 2009 compared tothe same quarter a year ago.49 The variety of Nokia’s smartphone portfolio provides a majorstrategic advantage, including a wide variety of high-end, mid-tier, and basic models.However, Mexico City-based América Móvil, the largest mobile operator in Latin America,started selling the iPhone last year and quickly amassed backlogs of consumers. The lowersubsidized price of the 3G iPhone will continue to extend the phone’s reach throughout the© 2009 Mobext :: Havas Digital 29
  30. 30. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends BRAZIL MEXICOregion. Apple may be able to leapfrog key competitors like Nokia and RIM to take a market-leading position for Latin American smartphone sales.Cross-platformBrazil’s growth of online advertising has the potential to be a major catalyst for cross-plat-form content consumption. Although 3G services are still early, Brazilians are already awareof cross-platform content. An April 2008 study by Accenture demonstrates that Braziliansare divided in their demand to watch television on their mobile devices (59%) versus theirPCs (51%).50 Fiat, an active mobile marketer, launched a campaign last year with display ban-ners on a local carrier and showing video on the mobile Web site.Federico Pisani Massamormile, CEO of Hanzo and chairman for the Latin American regionof the Mobile Marketing Association, sees participatory TV contributing to future mobiledata revenues.5 1 Mobext believe that this trend bodes well for publishers (and their market-ing partners) that are developing content for key audiences including teens, young adultsand mobile professionals.SearchTwo mobile operators dominate the playing field in Latin America, Telefónica and AmericaMovil. In 2007, Yahoo! announced availability of its oneSearch mobile search product forArgentina, Brazil, and Mexico and distribution deals setting oneSearch as the default searchengine for both companies. Not to be completely excluded, a few months later, Microsoftannounced an alliance with Telefónica to distribute Windows Live Services (Hotmail, Mes-senger, and Spaces, but minus Search) on all Telefónica handsets, expanding on availabilitythat already existed in Argentina and Chile.Meanwhile, Google’s mobile strategy has been centered on its own Android platform ratherthan distribution deals. Google is betting on consumer mindshare and reputation for peopleto use Google with their mobile devices. This has been a successful strategy for Google sofar, as demonstrated by the market share for browser-based searches in Europe and the US.The more the pendulum swings in the market toward full-featured smartphones, the strongeran effect Google has on the market. On the other hand, the more people that use handsetswith only basic email and Web access, the more influence mobile operators and handsetmanufacturers influence the regional mobile search landscape.Social mediaIn addition to US-centric social networks MySpace and Facebook looking to penetrate theLatin American market, the two biggest social networks are hi5 and Orkut in Brazil. Hi5launched hi5 mobile in August 2008 and is optimized to run on a variety of phones, includ-ing but not limited to, the iPhone, RIM’s BlackBerry, Nokia, Motorola, Samsung, LG, andSony Ericcson handsets. The mobile version of the Orkut Web site has been out for a year© 2009 Mobext :: Havas Digital 30
  31. 31. GLOBAL MOBILE A WORLDVIEW 4. Worldwide consumer trends BRAZIL MEXICOand the Orkut Mobile App has recently been released. Like Facebook’s feature of uploadingmobile photos directly to profiles, Orkut also allows users to directly upload mobile photosto their Orkut profiles.AirG is a social network player for “on-deck” users as partof a white label service. Its mobile social network servicecovers 19 million mobile users through Telefonica’s Movis-tar brand in Ecuador, Peru and Venezuela. Custom brand-ed as Conexion Latina, the service allows users to com-municate to peers with features like photo profiles, instantmessaging, photo and video sharing, blogging and usersearching. AirG reveals some characteristics of its userbase: a majority of its users spend more than one hour aday in the community; nearly 60 percent don’t own a PC;six in ten have at least a high-school education; and thefive most popular handsets used to access AirG retail forless than $100 with a service contract.Thanks to a bright outlook for social network growth inLatin America, mobile communities will be one of the pri-mary drivers of future mobile usage. View Facebook profiles on your mobile© 2009 Mobext :: Havas Digital 31
  32. 32. GLOBAL MOBILE A WORLDVIEWComing to a 3rd Screen Near You!The iPhone Phenomenon 5 the Touchscreen RevolutionArguably, no other handset has jump-started mobile marketing globally as much as theApple iPhone. Along with the iPhone, a rash of touchscreen mobile devices are on themarket, including but not limited to, the iPod Touch, BlackBerry Storm, G1 Android, HTChandsets, Samsung’s Star and Preston, and the upcoming Nokia N97 and Palm Pre. Withthe current pace of innovation in handsets, sales of smartphones worldwide are set to dra-matically increase.SMARTPHONE SALES WORLDWIDE, 2009 2013(% OF TOTAL MOBILE PHONE SALES) 2009 14% 2013 38%Informa Telecoms Media, “Mobile Operating Systems: The impact of open source andimportance of user experience” as cited in press release, March 20, 2009Source: www.eMarketer.com “Even in this challenging economy, consumers are migrating toward Web-capable handsets and their supporting data plans to access more information and entertainment on the go”. Ross Rubin, director of industry analysis, The NPD Group, in a press release, May 4, 2009 Source: eMarketer, June 2009Apps (or widgets) on these handsets have challenged the notion that a browser is best forusers to interact online. Like the peripherals ecosystem for iPods, developers are incrediblybusy creating apps for the growing iPhone consumer base (35,000 applications and count-ing). Apple’s App Store, having recently celebrated its one billionth download from iPhoneand iPod Touch users, has sparked comparable stores from competitors (Android Market,BlackBerry App World, Nokia’s upcoming Ovi Store, Microsoft’s upcoming Windows Mar-ketplace for Mobile).© 2009 Mobext :: Havas Digital 32
  33. 33. GLOBAL MOBILE A WORLDVIEW 5. Coming to a 3rd Screen Near You!NUMBER OF MOBILE APPLICATIONS DOWNLOADED BY US SMARTPHONE OWNERS,BY MANUFACTURER, MARCH-APRIL 2009 (% OF RESPONDENTS) APPLE RIM PALM MOTOROLA TOTAL n=104 n=237 n=56 n=84 n=8300 2% 32% 23% 36% 27%1-5 15% 46% 50% 37% 44%6-10 22% 15% 18% 13% 14%11-15 15% 4% 5% 4% 5%16-20 18% 1% 2% 4% 4%21-30 10% 0% 2% 0% 2%31+ 17% 1% 0% 7% 4%NOTE: numbers may not add up to 100% due to rounding. Compete, Inc. provided yo eMarketer, May 2009 iPhone leading the field in Apps – total downloads and range of App cat- egories – largely based on the novelty of its Touchscreen functionality and its lead in working with App developers for iPhones...LEADING MOBILE APPLICATION CATEGORIES DOWNLOADED BY US SMARTPHONE OWNERS,BY MANUFACTURER, Q1 2009 (% OF RESPONDENTS IN EACH GROUP) iPHONE RIM PALM MOTOROLA ALL OWNERSGames 79% 26% 44% 33% 37%Music 55% 12% 20% 27% 28%Entertainment 78% 19% 16% 24% 26%Weather 57% 18% 19% 24% 24%Navigation 33% 22% 9% 27% 21%News 43% 16% 20% 18% 18%Social networking 35% 21% 9% 11% 16%Utilities 42% 10% 15% 18% 16%Business 25% 11% 5% 16% 13%Travel 29% 11% 2% 10% 12%Finance 32% 11% 5% 17% 11%Productivity 27% 6% 15% 14% 11%Sports 23% 13% 7% 10% 11%Education 23% 6% 9% 12% 9%Photography 20% 5% 5% 10% 9%Books 23% 3% 11% 5% 8%Healthcare and fitness 19% 3% 13% 8% 8%Lifestyle 29% 3% 2% 10% 8%Reference 28% 4% 5% 11% 8%Other 2% 4% 5% 4% 4%Compete, Inc., “Smartphone Intelligence Report” as cited by MediaPost, May 5, 2009Source: www.eMarketer.com© 2009 Mobext :: Havas Digital 33
  34. 34. GLOBAL MOBILE A WORLDVIEW 5. Coming to a 3rd Screen Near You!The iPhone’s Safari browser is able to render a Web site as-is. Therefore, it may be tempt-ing to think that the mobile Internet is now simply an extension of the fixed-line Internet.However, a touchscreen interface still requires design and content differences for a user “onthe go.”As a result, when building out a mobile presence, marketers have to keep in mind theseimplications for the mobile Internet:• Different menu sizes: due to the limited display, most menus take up most, if not all, of the visible area. Menus have to be concise.• Direct linking: tailoring to the “on the go” mentality is key. It is imperative to minimize the number of levels a consumer has to drill down. When producing content for mo- bile users, provide direct links that enable users to quickly and easily retrieve nuggets of information.• No rollover/mouseover effects: the main gesture for touchscreen handsets is swiping for navigation. Whereas a hovering pointer exists with a laptop or desktop computer, a touchscreen device does not have an equivalent pointer. Marketers and content produc- ers accustomed to menus and panels expanding with a mouseover action need to adjust and provide an alternative compelling user experience.• Limited scrolling: another best practice is to minimize scrolling to a single direction and also to limit the amount of scrolling necessary.• Utility of apps/widgets: there is a finite amount of room on handsets. That said, users will make room for apps that provide the most benefit, whether that benefit is productivity, savings, income, or entertainment. Avoid creating an app/widget without a clear benefit or else it will eventually be part of the apps “graveyard” (with adverse brand image effects).© 2009 Mobext :: Havas Digital 34
  35. 35. GLOBAL MOBILE A WORLDVIEW 5. Coming to a 3rd Screen Near You!Mobile video/TVOutside Asia, mobile video/TV is a medium for much of the world that is far from main-stream. With some exceptions (including the examples we have cited as well as operatorslike 3 Italia and Swisscom), one of the obstacles is investment, a chicken-and-egg situation.Marketers believe broadcasters should invest in the medium but many are reluctant to do sowithout accompanying advertising revenue. Therefore, the primary income stream for videoservice providers and content owners is subscription revenue, which leads to the secondhistoric challenge with mobile video/TV-network infrastructure and handset development ineach region capable of supporting a video-consuming mobile audience.TYPES OF MOBILE APPLICATIONS DOWNLOADED BY US MOBILE PHONEUSERS*, DECEMBER 2008 - FEBRUARY 2009 (% OF RESPONDENTS) GAMES 61.6% LOCAL DIRECTORY APPLICATIONS 53% MUSIC APPLICATIONS 50.5% CHAT/INSTANT MESSAGING 40.1% 31.6% SOCIAL NETWORKING APPLICATIONS 10.3% VIDEO PLAYER APPLICATIONS 9.1% NONE OF THESE 1.5% NOT SURENOTE: n=497, * who have downloaded mobile applicationsSkype survey conducted by Zogby International, provided to eMarketer, March 17, 2009Source: www.eMarketer.com Video/TV applications will take some time to reach critical mass, but will surely gain popularity in years to come.As mentioned previously, the iPhone 3G has ignited all kinds of consumption, includingmobile video. US mobile video operator MobiTV is slowly building, having reached 6 mil-lion subscribers.52 A key question is how content owners choose to apply the lesson learnedfrom the Internet content explosion – paid subscriptions for premium content giving way tofree content distribution. Given bandwidth costs and a limited viewing audience, ad-sup-ported models are unlikely to be sustainable in the near term.© 2009 Mobext :: Havas Digital 35
  36. 36. GLOBAL MOBILE A WORLDVIEW 5. Coming to a 3rd Screen Near You!What’s more, because mobile video requires more bandwidth, a key consideration of itsgrowth depends on the mobile carriers. Can their networks support more users consumingmobile video? A prime example of the carriers’ weariness of mobile video is that fact thatATT recently prohibited the use of Slingbox mobile’s iPhone app on its 3G network; it canonly be used via wifi. These network constraints may be addressed as carriers introducenext generation data transmission technology such as WiMax and LTE.How much of an impact will YouTube have? Consider the recent deal forged with sportscable network ESPN for an ESPN video player on YouTube. Chances are, YouTube will con-tinue to be a tremendous force on the digital video landscape for the foreseeable future.The launch of a Hulu iPhone app could also prove to be a game-changer for mobile video,both in the US and overseas, depending on the success of Hulu’s international efforts. Source: http://www.flotv.comFrom an advertising standpoint, marketers have already proven that they can successfullyattract audiences to watch mobile videos about products or services they find relevant. Yetthe hurdles of scale and a fragmented marketplace mean that mobile video/TV advertisinghas a long way to go before being regularly considered alongside other media vehicles.While these are the same hurdles podcasting faces as an advertising medium, mobile vid-eo/TV has a much brighter outlook in the longer term. While podcasting has a small headand a very long tail, mobile video/TV will have a much larger head of content, thanks toestablished producers (television networks) porting their professional content across plat-forms. Again, Mobext can help you navigate this area to optimize your marketing spend.© 2009 Mobext :: Havas Digital 36

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