Post on 20-Aug-2015
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Welcome to M&C Saatchi Mobile
agenda Introduction – overview of the market TRENDS 1. Smartphone penetration is slowing in established markets – while emerging markets are on the rise 2. The platform shift 3. Mobile ad spend to skyrocket in 2013 4. The year of the tablet 5. Mobile retail to explode 6. The evolution of the ad network, DSP’s & RTB 7. 4g to accelerate the rich media ad space 8. The rise of social and facebook on mobile 9. Apps vs. mobile web 10. The market is constantly changing
Source: Interna-onal Communica-on Union. Google
2+ billion people online Global internet population
(millions)
Source: Interna-onal Communica-on Union. Google
2/3 of the world left to go Global internet population
(millions)
Most of the affluent community are already online Distribution of global income
Source: UN Human Development Report, Trends In Global Income Distribu-on
Smartphone sales grew past pc sales Global internet device sales
Units
Source: Gartner. IDC. Strategy Analy-cs, company fillings. BI Intelligence es-mates
Tablets are starting to take over Global computer shipments
(thousands)
Source: Gartner. IDC. Strategy Analy-cs company releases
So the future is mobile G-20 internet access
Consumer Broadband
Connections (millions)
Source: Boston Consul-ng Group, Mary Meeker, Kleiner Perkins, Morgan Stanley Research, Berg Insight
Trend 1. Smartphone penetration is slowing in established markets while emerging markets are on the rise
Globally, we’re still early… Global smartphones vs. mobile phone users 2012
Global Users (millions)
Source: Strategy Analy-cs, interna-onal Telecommunica-ons Union. Note: Some users own more than one device
Most mature markets are now over 50%
France 51.4% Germany 48.4% Italy 51.2% Spain 63.2% UK 62.3%
Source: Comscore: October 2012 MobiLens report
smartphone growth is slowing US smartphone Market: year over year net adds
Users Added
(million)
Source: comScore. Nielsen
Most future US & UK smartphone buyers will be older & less affluent Smartphone penetration by age & income
Source: Nielsen
the focus is now on markets like china who now account for 25% of sales Global smartphone shipments
(thousands)
Source: Gartner. IDC. Strategy Analy-cs, Canalys, BII es-mates
developing markets such as brazil, Russia, Indonesia and China will drive much of the volume of growth in 2013. They will generate 70-80% of additional shipments this year – 38% of the global total.
Source: Canalys
Right now, mobile is a two-horse race Global mobile OS market breakdown
Source: Gartner. IDC. Strategy Analy-cs. BII Intelligence es-mates, and company fillings
Share of Global Unit
Sales
Android is the largest platform globally Smartphone Market Share by OS (global)
Source: Gartner
Partly because of high adoption in china Chinese smartphone market share by platform
Source: Analysys Interna-onal
And it’s the same two horse Race in tablets Tablet market share by platform
Source: Es-mates based on informa-on from IDC, Strategy Analy-cs and company filings
(millions)
However Apple is still dominating app revenue Mobile app revenue by platform
Source: iSuppli. Forrester Research. Company releases. BII es-mates
What will happen in 2013 1. Android is on the offensive and will be picking off
individual territories 2. Google says it’s activating 1.3M devices a day
3. By the end of 2013 Google shipments of android devices should pass 1 Billion
4. android will account for up to 70% of devices shipped
The global mobile advertising market was worth $6.43B in 2012
it’s forecasted to hit $23B by 2016
Source: Berg Insight
In the UK mobile advertising grew by 120% during 2012. growth on 2013 is estimated at 56%
Source: Flurry Analy-cs
However Mobile Is still the highest under indexing channel Ad spend vs. consumer time spent by media (2012)
The belief that the audience is too fragmented to be reached effectively WE can now directly target consumers more accurately than ever before: age location past location connection handset device content consumed language
The belief that Data And tracking is elusive Sophisticated tracking is now up to 99% accurate
We can track beyond the download – deposits, purchase, usage etc.
DSP’s and RTB changing the landscape
The 7 inch is reaching a new tablet market and becoming a more genuinely mobile device than than it’s larger cousin
Who is going to use the tablets? Device users plan to use as primary source of news & entertainment in 2013
Source: Belkin Survey conducted by Harris Interac-ve, Jan 16, 2013
Our predictions android will continue to take market share from APPLE Windows to stay a marginal player There will be more smartphone / tablet hybrid releases This year will be the year of the 7 inch
Almost ½ of all smartphone owners have purchased via their device In the last 12 months
Source: Mintel’s ‘Smartphone Purchasing Habits’ report from Nov.2012 (UK only)
Purchases via a smartphone internet users aged 16+ who personally own a smartphone
Source: GMI/Mintel
47% of consumers use their smartphone to search for local information such as a store they want to visit
Source: Local and the e-‐tailing group, 2012
46% look up a store’s mobile site & 42% check inventory prior to visiting a store
Source: Local and the e-‐tailing group, 2012
What you need to consider? Tablet customers are worth more to brands Know your brands mobile touch points – then research, prioritize & start testing Ensure you are mobile optimized Develop a multichannel acquisition strategy on mobile Include mobile search and local in your mobile strategy
Trend 6. The evolution of the ad network, The rise of demand side platforms, & the arrival of Real time bidding
The way brands and agencies buy mobile inventory is changing
We’re taking control of the buying process
ad networks are changing Traditional networks (inMobi, Millenial, Adfonic) are changing their service offering to become more sophisticated …Or being bought by larger telcos (AdMob / google, Quattro / Apple) which ads more precision to their data
How? Bidding directly on inventory via ‘exchanges’ Developing new tools that let buyers target consumers more accurately Developing their own ‘bidder’ or using white labeled DSP’s
What is a demand side platform? DSP Enables advertisers / agencies to buy ads and target consumers in real time
Identify consumer
type DSP locates
them Place bid Serve ad based on
value
DSP for mobile Lack of cookies has forced DSP’s to come up with alternative methods for delivering critical data If an advertiser chooses to increase downloads of a particular app the DSP:
All refined in real time
Learns patterns of
traffic
Creates profile of
traffic type
Auto adjusts bidding
strategy Maximizes
downloads
What will real time bidding bring to mobile? A system in which data on the bids, available inventory & the behaviour of consumers is crunched in real time Instantaneous bids for each impression based on data & smart algorithms that change constantly in response to audience changes Transparency
How will this effect marketers? The mobile DSP will transform the efficiency & effectiveness of buying mobile inventory. RTB can improve ad effectiveness by 20-150%* More & more agencies will have their own DSP Only knowledgeable specialists can handle these transactions successfully
*Source: ICD
Who will be using it? The Early adopters due to high Pricing The vast majority will be unwilling to break long contracts to get 4g
More rich media campaigns Currently most are run across wifi 4G will accelerate consumption – speed and more portable than wifi hotspots WE will see more: • Pre roll video advertising • Ads combining video, audio & interactive elements • Gamification ads • Ads utilizing APS’s
Until recently facebook’s problem with mobile has been well documented.
Their audience was migrating to the small screen but ad revenue wasn’t.
In 2012 facebook started the change – declaring itself a mobile first company launched promoted posts that appear in users news feeds and was soon making $500,000 a day Mobile accounted for 23% of Facebook’s $1.33B of advertising revenue in Q4 2012 - $305M mobile ads sold Their mobile app-install ads are now being used by 20% of the 100 top grossing ios apps to attract new users
In 2013 Facebook is rolling out it’s own mobile ad network Giving networks the ability to serve ads placed with FB on 3rd party sites & aps
What you need to know for 2013 Social networks will invest in deeper insight to enhance targeting on mobile Advancements will be predominantly Facebook & Twitter, but sites such as google & pinterest will be monitored for new opportunities Positive results have been seen though advertising on facebook’s app – set to improve with investment in targeting & consumer insight
In 2012 many expected the resurgence of mobile web. But is hasn’t panned out that way.
Android app revenues has doubled Q3-Q4
Facebook and others realized HTML5 was not the solution The pendulum is swinging back to apps staying for 2012
Apple store downloads on pace to hit 60B by mid 2013 Apple app store downloads
Source: BI Intelligence
Minutes Spent Per Month (billions)
Smartphone users spend more time on apps than web Total time spent using mobile web vs. apps
Source: Nielsen Smartphone Analy-cs
(millions)
Mobile app revenue is still growing fast Mobile app revenue
2008 2009 2010 2011 1012
Source: iSuppli, Forrester Research, company releases, BII es-mates
Because Most downloads are free Mobile app store downloads, free vs. paid 2012
Source: Garner, September 2012
Two-thirds of the 100 iphone apps that make the most money are free to download and generate 100% of their itunes revenue through in-app commerce
% of free and paid apps In iphone top 100 grossing
% of the top 100 grossing iphone Apps that use in-app commerce
% of top 100 grossing iphone Apps that are games
‘Fremium’ is the dominant model
Source: BI intelligence analysis of App Store data, Jul. 2012