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State of the Mobile Industry 2016 MidYear Report
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State of the Mobile Industry2016 Mid-‐Year Report
It is amazing when you stop and think about what the last nine years have brought us since theiPhone was first introduced. The first advertisement for the iPhone aired on February 25, 2007 duringthe Academy Awards and released four months later. The smartphone craze took hold of us all. Now,78% of global consumers have smartphones (Deloitte, “2016 Global Mobile Consumer Trends). Indiahas reached 1 billion mobile subscriptions (2015, Telecom Regulatory Authority of India). 72% of 11-‐12 year olds in South Korea own a smartphone (2016 “Computer in Human Behavior”). AlthoughAustralia’s mCommerce growing nearly three times the speed of online, 4 billion people across theglobe still don’t have access to the Internet. This is most evident in countries with low GDP in Africawhere, for example, only 5% of Uganda’s population have smartphones.
Like any game-‐changing technology that alters human behavior, disruption crashes across everyindustry. The music industry has been turned on its ear by companies like Pandora, Spotify, Amazonand Apple. Spotify now has 30 million subscribers and Apple has between 11 and 15 milliondepending on the sources you read. Spotify belongs to the Unicorn group. Unicorns are thought to bemythical private companies that have ascended to $1 billion evaluation or more.
The sharing economy has also gained ground and disrupted status quo. 70% of consumers have usedcompanies like Lyft, Airbnb and Uber. Speaking of sharing, a mom who used her smartphone tocapture and post a video to Facebook Live as she tried on a Chewbacca mask from Kohl’s amassedover 153 million views.
Introduction
$3.1TIn revenue generated by mobile industry in 2015
$5.1B2016 sales generated by VR
(estimated)
We’ve seen the stats that talking on the phone is rated as an infrequent activity. That’schanging. Not because we’re making more phone calls, but because four in tensmartphone owners regularly use voice recognition. We convert voice to text, ask Siri,Cortana or Google Now questions or control our phones with our voice. Thesetechnologies are getting smarter and better at understanding us. Apple and Microsofthave opened up their voice recognition to developers. Companies are popping up likeviv.ai, made up of Siri developers, who plan to take building a simple intelligence foreverything to the next level.
Currently 1/3 of the top 100 retailers utilize beacons. This number is set to grow to85% by year’s end. Virtual Reality (VR) and augmented reality (AR) are knocking on thedoor of main stream. People have watched 1 million hours of VR content on SamsungGear devices according to Facebook’s Mark Zuckerberg. Meanwhile, Google sold 5million Google cardboard VR headsets.
That’s several numbers to process. While on their own, they make us think, but thedecisions drawn from them and resulting actions are what’s most important. We haveentered the time period where we have to assume that everyone is a mobile user. Insome form or fashion, whether it’s the device or indirectly because of the inception ofthe device, mobile drives commerce and innovation.
Introduction
30%Of Mobile World Congress attendees
booked travel using AirBnB
1.4B smartphones were sold in 2015 led by Samsung, Apple and Huawei. A big number that isn’tnecessarily a good number. Globally, Apple sales flatlined and were down in Q1 2016 by 16%. Androidsales increased growing Android’s market share to nearly 6 times that of iOS.
Android developer woes continue as the fragmentation increases. iOS enjoys the fact that they haveover 90% of phones on the same version and 98% distributed over two versions. Android is forced todeal with over 16 different versions and none over 20%. It only took 7 months for 84% of iOS users toupgrade to iOS 9. Meanwhile Android only converted 7.5% of users to Android 6 in 6 months.
Don’t rest your Android OS hopes on new smartphones to increase the number of phones with thesame version. Only 48% of consumers plan to buy a new smartphone this year according toAccenture, down 6 points from last year. More and more users are waiting to replace their phonesuntil it dies.
Devices
Top Smartphone Platforms3 Month Avg. Ending Feb. 2016 vs. 3 Month Avg. Ending Nov. 2015Total U.S. Smartphone Subscribers Age 13+Source: comScore MobiLens
Share (%) of Smartphone SubscribersNov-‐15 Feb-‐16 Point Change
Total Smartphone Subscribers 100.0% 100.0% N/AAndroid 53.1% 52.7% -‐0.4 Apple 43.1% 43.9% 0.8 Microsoft 2.8% 2.5% -‐0.3 BlackBerry 1.0% 0.8% -‐0.2
Male
Female
Gender
Android
iOS
OS
More than once a yearOnce per yearOnce every 2 yearsOnce every 3 yearsLess than once every 3 years
Frequency US smartphone owners purchase a new smartphone
Americans are tethered to their phones. 67% of Americans never try to unplug from technology. They always havetheir smartphone, tablet or laptop with them. Half of teens admit to being addicted to their phones. According toGoogle’sMicromoments, 87% of people always have their smartphone at their side, 68% check their phone within15 minutes of waking up, check their phones 150x a day and use mobile more than desktop to access the Internet.The same can be said for media access.
Users spend 3 hours a day on our mobile devices which is 17% more than desktop. Luckily, global mobile networkconnection speeds grew 20% in 2015 to help keep up with the high demand from users. “Help” becausesmartphone usage grew43%, app usage grew58% and time spent on smartphones grew117% in the US in 2015.
Smartphone owners in the US eat through an average of 2.5GB per month. Global data traffic grew 74% to reach3.7 exabytes per month by the end of 2015, that’s 3.7B gigabytes. The US consumed 9.6B gigabytes for the entireyear, up 300% from 2013. One-‐third of all North American web traffic now comes frommobile devices. For 60% ofsmartphone users, their smartphone is their primary Internet source. For a more global perspective, mobile hasgiven access to 2.5B people in developing countries. This accounts for about 40% of the developing world’spopulation. The GSMA predicts that number will be 3.8B in 2020 (nearly 60% of the population).
These numbers are nice but what does it translate to? Smartphones and tablets together account for 70% ofbrand’s digital engagement time according to comScore. 94% of smartphone owners use the device to search forlocal business information. 84% of smartphone shoppers use their phone in the store. Smartphone research is animportant part of the experience. Online pre-‐purchase researching (webrooming) is predicted to drive $1.8T inretail sales in 2017. Mobile is an important part of this.
Consumers want a seamless experience across all devices. Unfortunately, about half of consumers say theintegration between brick-‐and-‐mortar, online and mobile needs improvement. An excellent mobile experience isimperative for businesses trying to attractMillennials.
Mobile User Behaviors
48%
33%
25%
Initial Mobile Search
Search Engine Branded Website
Branded App
8BNumber of time
smartphones are checked in the US every day
Apple users spent $1.1 billion on apps and in-‐app purchases over Christmas and New Year making this2015-‐2016 holiday season the biggest ever for the Apple App Store. When you stop to consider theapp ecosystem was worth $0 before 2008, it ’s mind-‐boggling to think the ecosystem is predicted to be$101B by 2020. Marketers take note, mobile is 70% of consumers’ interactions with a brand accordingto Adobe Digital Index.
Americans spend over 3 hours/day onmobile. With nine out of every tenminutes spent in apps, app’simportance cannot be understated. Don’t expect your users to stay long though. 73% of app sessionsare 1 minute or less with an average of 72 seconds per session. Despite users visiting 25 apps permonth, 80% of the time is spent on their top three apps. Ten or fewer apps are opened per day by92% of smartphone owners. Messaging and social consume 34% of the time spent on mobile withentertainment and gaming coming in at 17% and 15%, respectively.
iOS and Android won the mobile OS wars long ago with a 98% death grip on smartphones. WhileGoogle apps enjoy faster growth, Apple is where the money is. The majority of the 638B appsdownloaded from 2008-‐2013 belongs to Google but the lion share of the $99B in revenue belongs toApple. Apple has made great strides to improve their app approval process by reducing the time from8.6 days one year ago to 1.6 days today. It’s important to make the 5.7M app developers around theworld happy.
These numbers sound great but the usage, or lack thereof, as time goes by can be disheartening (5%within 30 days). What steps can be taken to improve it? Minimize the information required. 60% ofusers decide not to download or continue usage after realizing how much information they arerequired to share. 43% will uninstall for the same reason. Make sure you have a quality app. 96% ofusers will install a 4-‐star app, 50% will download a 3-‐star app, but only 15% will download a 2-‐starapp.
Apps
62%18%
11%6% 3%
Reasons people looked at or picked up their phones
Notifications Killing time
Looking for something Accident
Other
1.62BApp downloads estimated
for 2016-‐2020
Onboarding communication is important. Onboarding with push and another channel like email orSMS during the first week of installation will increase the customer retention 130% over 2 months.Multiple channels are vital since 30% disable all mobile push notifications. If you’re lucky enough torank as one of the user’s favorite apps, 50% will opt-‐in to receiving push messages.
Optimize your push messages. Twenty-‐four characters or less increases conversion rates and addingan image increases the likelihood the customer will respond to a call-‐to-‐action (CTA) by 57%.Personalizedmessage sent to the app increases conversion by 27% and personalizedmessage deliverytimes (when they are usually engaged with the app) drives up conversions by 38%.
You’ve paid 40% more for an install on Android than you did last year. You have added 34% of usersbased on peer reviews. You’ve kept them through the first week. Now what? Keep up thecommunications. Find ways to keep the users engaged. 90% of users who engage with an app on aweekly basis for the first month of install will continue to use the app. By this time, a habit has formedand you have them hooked.
Apps can be a difficult and costly business. User expectations are high. If the app runs slow, 48% ofthe users will uninstall. 72% of users will uninstall apps if they rarely open it. However, users willrewardyour efforts if done correctly.
Apps
100%Google Play’s install lead over iOS
40-‐70Number of apps on
smartphonesEstimated revenue generated from app between 2016-‐2020$324B
According to a study from IAB last year, 50% of US respondents view content on mobile devices. Over35% watch videos that are longer than 5 minutes on a daily basis. We’ve talked about multiplescreens for several years but not only are they using mobile while watching TV, 22% of users arewatching streaming video while watching TV.
Mobile is having a dramatic effect on sporting events as the NBC streams the Olympics in Rio. This isnothing new as all of Wimbledon and soccer’s Euro 2016 was too. 17% of soccer fans watched at leastone match on their mobile phone and 40% stayed up-‐to-‐date with highlights, clips, stats and newsfrom the tournament.
Asmobile video grew 6x faster than desktop in 2015, it ’s making an impact on purchasing. Consumersare 1.8x more likely to purchase after watching mobile video advertising. This translates to 52% ofconsumers feeling more confident in the products they planned to purchase and purchases are upwith 40% of users buying a product after watching a video.
Possibly this rise is assisted by a retention rate that is 34% better than non-‐video ads. Users are alsomore likely to watch a video on mobile (83%) than desktop (53%). Retail (19%), tech (18%) andconsumer packaged goods (16.5%) understand this and combined, make up over 50% of all campaignsran during Q4 2015.
As the mobile video ad spend doubled in 2015, 87% of marketers rated video marketing as effective.The percentage of US marketers that plan to increase their spend rose to 65% for 2016. This is nopassing fad as consumers spent 39 minutes per day in 2015 watching video on mobile devicescompared to three minutes in 2011. Mobile trumps the plateauing desktop/laptop viewership by 15minutes.
Video
1.8xMore likely to purchase after mobile video ad than non-‐view
48%Of Millennials are viewing videos
solely on mobile
Of course social media is a big player in the amount of video watched. Searches for how-‐to videos onYouTube increased 70% over 2015. 74% of Millennials follow brands on YouTube. Not to be left out,Facebook logs 8B video views/day. However, 85% of videos on Facebook are viewed without audio.Get your close captioning ready. Twitter’s numbers aren’t too bad either. 82% of its users watchvideos and 90% of them watch on mobile devices. While YouTube users search for specific videos,Twitter users discover new content.
Mobile video is the golden child of marketing. The numbers are very positive. The largest downside isthat video advertising is one of the biggest complaints of users worried about their data usage. Ifthere was only a way to see if the user is on WiFi or using their carrier data plan and adjust contentaccordingly.
Video
8BFacebook videos viewed/day
1.3%
4.5%
7.2%
In-‐Stream Video Interactive Pre-‐Roll
Tap to Interactive Video
Video CTR
87%
27% 21%
In-‐Stream Video Interactive Pre-‐Roll
Tap to Interactive Video
Completion Rate
Mobile advertising is rising at an impressive rate taking spend from other channels even though thereare still issues that need to be overcome. A study fromMarketsandMarkets says the mobile marketingsector is set for a 4x growth in the next five years totaling around $29 billion by 2021. During thisexponential growth spurt ZentithOptimedia predicts that more money will go into Internet andmobile globally than TV commercials with digital advertising growing at 3x the rate of the rest of theindustry. The demand for advertising is boosted by large events like the Rio Olympics, the Europeanfootball championships and the US presidential election. The vast majority of the ad spend surge willbe mobile.
According to Outsell’s Annual Advertising and Marketing Study 2016, digital advertising andmarketing spend will equal “traditional” for the first time in 2016. This is great news on the surface.Unfortunately, mobile represents 63% of time spent online yet only 35% of the online dollars. Thiscontinues to be an issue that the ad spend doesn’t correlate with consumer behavior. Not only doconsumers spend more time on mobile, there is a higher lift in brand metrics due to mobile ads thandesktop in the US.
A theory to this brand lift is that mobile ads cover a greater portion of the screen causing them toappear more directly in the consumer’s field of vision. Desktop display ads can be easily overlooked.We are used to seeing desktop ads and where they are placed on the screen making it easier toignore them. Another theory is that mobile is closer to the point of sale. Unless you’re buying online,it’s rather impractical to carry your desktop everywhere you go. I don’t think I’ve ever seen a personcarrying a laptop, much less a desktop, into a store that wasn’t getting it fixed.
Mobile Advertising
1.4 1.3 1.5 1.42.3 2.7
3.3 3.7
Aided Awareness
Favorability Likelyhood Recommend
Purchase Intent
Percentage Point Lift in Brand Metrics for Desktop and Mobile Ads
Source: BSL and mBSL Benchmarks, U.S. Full Year 2015
Desktop Mobile
In just over a year of its launch, the Facebook’s in-‐app ad network has passed $1billion in annual run rate. Instagram reached over 200,000 advertisers. Click-‐thru-‐rates (CTR) for retail were measured at 0.52% (highest), electronics at 0.41% andentertainment at 0.40%. Unfortunately, 50% of clicks on mobile ads were accidentalaccording to GoldSpot Media. Ad clutter is cited as the biggest challenge of thedigital advertising experience by 54% surveyed by Ad Week and ad blocking grew41% globally.
Digital video ad viewability continues to be a top campaign objective in the US. Theaverage viewability rate for digital video ads worldwide was 47% for Q1 2016according to the ad platform Extreme Reach with little variability in ad lengths of 15or 30 seconds. The low viewability could be directly related to mobile ads taking 2xlonger to load than desktop (Media Ratings Council).
While the initial reports sound great for mobile marketing and advertising. There isdefinite improvement in meeting the consumers where they are, but it ’s still a longjourney ahead. Speed may kill but slow kills video.
Mobile Advertising
95%Growth in mobile advertising in 2015
75.9%Of all digital ad spend will be mobile by 2020
Ad blocking has certainly been a hot topic the first half of 2016. PageFair reports that 419MM people(22% of the world’s 1.9B smartphone users) are blocking ads on the mobile web. Mobile browsersthat block ads grew 90% during 2015. This is nothing new to Asia where 93% of people who block adsreside. The number of North American and European blockers numbers only 14MM combined. Tuneexpects this number to grow from 24.6% in the US and UK in early 2016 to 80% by late 2017.
Who’s leading the charge? Millennials. The 2016 Reuters Digital New report found that 18-‐24 yearolds block ads at a much higher rate than any other demographic. This does not paint a rosy picturefor marketers eager to communicate with the highly desired younger generation. This youngergeneration is also more willing to pay to get rid of ads. However, this number is still not great. Amajority, 61%, of the younger users are unwilling to pay anything, compared to 82% of over 65 year-‐olds that don’t want to pay a dime.
As the battle between publishers and ad blockers continue to wage, UK operator Three unveiled plansto trial ad-‐blocking technology at the network level. This would effectively eliminate all ads for bothmobile web and in-‐app. Welcome news to users who are tired of ads eating into their data usage,especially with video ads on the rise. Publishers are less than joyous at the thought of losing 10% oftheir revenue over the next 4 years, an estimated cost of $78.2B by 2020.
Even though the industry understands a root cause of ad blocking adoption is a poor user experience,this hasn’t translated into visible action to improve the issue, reduce privacy concerns or the increasein malware. It’s time a regulatory group oversee the industry to put some teeth behind an industrythat is in such conflict.
Ad Blocking
90%Growth in downloads of ad blocking mobile browsers in
2015
$78BCost to publishers who
don’t respond adaquately to ad-‐blocking software threat
Every year I hear the same ol’ line “SMS is dead” or dying. The rumors of its demise continues to bemisstated, at least when it comes to marketing and business use. Credence Research estimates theA2P SMSmarket will expand at a CAGR of 4.9% over the next six years and be worth $78MM by 2022.Two trillion messages are expected to be sent via A2P in 2017.
To support the use of SMS marketing techniques, BIA/Kelsey predicts a 40% growth rate of revenuesgained by spending generated by SMS in 2017 ($16.8B). Why shouldn’t it? 75% of mobile phonesworldwide are enabled to receive SMS messages and expected to rise to nearly 90% in the next 10years making it imperative that companies include SMS in their marketing mix.
SMSmarketing campaigns have produced seven times greater effectiveness than email campaigns. Inthe US, they are permission-‐based that yield consequences to companies that don’t adhere to theindustry regulations. These regulations have reduced the amount of SMS marketing messagesperceived as spam to only 10%. With the fragmentation of OTT messaging apps like WeChat andMessenger, lack of push consumer usage, restrictions placed on brands by the publishers and themultitude of social media channels to maneuver, SMS is still an effective channel for brands to reachtheir customers.
SMS
$16.8BRevenue generated fron SMS
marketing in 2017
2TMessages expected to be sent via A2P in 2017
While we’ve seen the traditional players like Facebook, Twitter and LinkedIn plateau, social media as achannel hasn’t. Other players have certainly picked up the baton and continue to run full steamahead. Smartphone users get their news, are driven to websites and spendmost of their mobile timeon social sites and apps.
Social users are mobile. Of the 2.3 billion active social media users globally, 85% or 1.97 billion ofthem are active on mobile devices. Parks Associates revealed that 80% of US smartphone owners usesocial networking apps at least once a day with 35% of them spending at least an hour a day on socialmedia via their mobile device. comScore posted that 61% of social media time spent on thesmartphone is in-‐app. This is an 8% year-‐over-‐year increase and poised to continue to grow since appsare built for functionality and providing the smoothest experience possible.
As the big 3 social platforms begin to stagnate, Instagram accomplished in less than six years whattook Facebook nearly seven, hitting 500 million users. While 80% of its users are outside the US, theyhave now reached 95MM images and posts shared daily from around the world.
Social Media
50%unique visitors access via mobile on LinkedIn
1510
257
Monthly Active Users
Facebook Twitter
100
300
Daily Active Users
Snapchat Instagram
Thanks to social media sites like Pintrest, social traffic has become the second biggest driver of trafficto websites only behind direct traffic. With heavy social use, mobile shopping follows. A study fromCriteo surveyed UK adults finding that social media users are more likely to purchase onmobile – 19%of daily Snapchat users and 15% of daily Instagram and Pintrest users are buying via mobile every day.This makes sense because users are only a click or two away from buying. It’s about convenience.
All is not bright in the social media world. Twitter saw a slight decline in quarter-‐over-‐quarter monthlyactive users in Q4 2015. Ironically Facebook Reactions introduced by Facebook in February gets a sadface as they failed to gain momentum with users. It’s a case of users requesting something that intheory sounds great but doesn’t get used. While ‘love’ is certainly the most popular of the newreactions at 50.8%, ‘love’ accounts for less than one-‐sixteenth of the amount of likes in the sameperiod. Good news, either users are much more apt to react to positive posts or users are postingmore positive posts than negative.
We’ve seen a lot of movement in social recently, including Facebook adding reactions, adding bots toMessenger and the splitting off Messenger from the Facebook app. The established 3 have to keep upwith the newcomers and some are finding it difficult to do so they are buying the smaller guys likeFacebook or selling themselves like LinkedIn. What will Microsoft do with LinkedIn? That remains tobe seen.
Social Media
16x Love
35%
56% 64%
44%
20% 35
%
51%
35%
17% 21%
23%
22%
FACEBOOK INSTAGRAM SNAPCHAT TWITTER
Heavy users Light users Non users
How social media usage impacts propensity to buy on mobile (% of users that buy on mobile)
WhatsApp passed 1 billion users worldwide as of February 2016 sending 64B message/day, less than 18 months after the purchase by Facebook. Six out of the top ten apps are messaging apps. Facebook owns the top two and three of the top ten. With 80% of smartphone users’ time spent on 3 apps, the importance of the messaging apps cannot be understated this year. Even though these chat apps have seen exponential growth in the US, it doesn’t mean advertisers will be getting in on the action anytime soon.
Messaging
$1MMRecords sold by online vinyl seller in 8 months via conversational
commerce
Ignited by mobile internet and smartphone growth, mobile messaging apps have strengthen andsolidified their position as an alternative to SMS with social media elements like group chats andphoto sharing. These over the top (OTT) services are just getting warmed up in the US. China has beenleading the way with WeChat making commerce a large part of the platform and giving the users amuch richer experience.
762
1000
100
WeChat (China)
WhatsApp (US)
Telegram (Russia)
# of Monthly Active Users (in millions)
Like the early days of social media, marketers are experiencing similar conundrums. Where do theyfocus their efforts? There are so many different chat apps with no clear winner globally or locally inthe US. User’s aren’t necessarily exclusive either. 72% of Snapchat users are also active on FacebookMessenger, 54% on WhatsApp ad 51% on Skype. With no standard or regulations like SMS has, appmakers are concerned, and rightly so, about spam and abuse thus restricting marketer’s capability ofreaching their customers.
Facebook has experimented multiple times with advertisements and marketing on the messaging apponly to end the trials. Fortunately, they have given marketers chatbots and now there are 11,000chatbots for users to try. Given the drawbacks of apps, there is a demand for bots. They are easy tomaintain and update since they don’t live on the smartphone itself. They will not replace apps butcomplement them.
KLM found that users want private messages. Users are more likely to respond and have longerconversations when the messages are private instead of public. Brands can bring a consistent level ofservice. Bots also reduce the initial response time improving the customer experience. Currentlythere are 10,000 companies developing artificial intelligence (AI) chatbots to match the demand forthe smoother experience.
Messaging apps have a few more years left on them before Rich Communication Services (RCS) startscompeting and solving the problem users are going to have soon. The fragmented messaging appmarket is going to reach a point where consolidation is going to be required. Only the strong willsurvive similar to what we saw with social media. This time it’s going to be controlled by the carriersthough.
Messaging
Other mobile mesaging
25%
IM apps75%
Mobile messaging traffic share
Other mobile mesaging
98%
IM apps2%
Mobile messaging revenue share
It’s hard to deny the importance of email in the customer journey nor is it believable that email isdead. Like technologies before, it is transforming. It must with the advent of mobile. Mobile emailaccounts for 15 to 70% of email opens depending on your target audience, product and email typeaccording to eMailmonday’s “The Ultimate Mobile Email Stats.” Litmus “Email Analytics” (March2016) says that 55% of email is opened on a mobile device. Experian reports that 65% of total emailopens occurred on a mobile phone or tablet in Q4 2015 up from 54% the previous quarter.
Unfortunately, in 2015, eConsultancy stated that only 21% of companies say they have an advancedmobile email strategy. This is unfortunate since email accounts for 23% of “journey interactions”between brands and consumers. Email is up 270% year-‐over-‐year according to Kitewheel. Yet, brandsare failing their customers. Only 32% of marketers preview emails in various email clients andbrowsers, including mobile, before sending. This is a sad commentary on state of email and mobileleading to immediate deletion or worse – users unsubscribing.
Progress is being made in the implementation of mobile-‐optimized templates by 66% of marketers.However most of these templates do not support dynamic content allowing for personalization in theemails. Marketers who optimize their messages for mobile with an entirely responsive email designsee improved results in B2B (40.7%) and B2C (38.5%).
It’s time the industry catches up. I’m still surprised with today’s emphasis onmetrics that 20% of B2Band B2C brands don’t know what impact optimizing their email design for mobile has on results.There is no reason to send emails that are not optimized for mobile. The industry has past the tippingpoint. Time to get on board.
40%47%
27%29%
52%
18%8%
35%
55%
Always Sometimes Never
Do you use your mobile device to sort through your emails before you read them
14 to 18 19 to 34 56 to 67
70%
12%
2%
8%13%
0%
68%
25%
10%
16%
5% 5%
68%
29%
18%15%
6%2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Delete it Unsubscribe Read it anyway Look at it on my computer
None of these File it
If you get an ugly email, what do you do?
58 to 67 19 to 34 14 to 18
Google handles 2T searches annually. Mobile accounts for more than half ofthese searches. Google Search rated as the forth most popular app overall in theUS. It’s more important than ever to understand how people are searching. So,now that we know apps aren’t going to kill search anytime soon, how are peopleusing search?
Voice is becoming an important part of search as 20% of all Android searches areby voice. The average search length is 3.6 words. Two words adding to the stringlength is “near me.” Mobile comprises 88% of all “near me” searches growing ata rate of 146% year over year. Scott Beatty noted that by 2019, 141B localsearches will take place in the US alone. In early 2015, mobile took over desktopfor local search volume and the gap is widening dramatically according to BIAKelsey.
Although 77% of searches on mobile devices occur at home or work, mobilesearch triggers quick online and offline action. These searches drive continuedresearch, visiting a retailer’s website or store, making a purchase or even callinga business. Yes, we do still use phones tomake calls. 56% of these calls are madein less than an hour of the search. 80% visit a store within 5 hours of mobilesearches.
Search
77%Of mobile searches are at home
or work
88%Of “near me” searches are
completed on a mobile phone
24.20%
36.60%
24.00%
9.10%
6.00%
Daily
Frequently
Occasionally
Rarely
Never
How often do you use a phone to search for a local business?
Not all mobile searches are created equal. The context differsbased on location. For example, food and shopping rule in-‐storesearches. Shopping queries are twice as likely to be in the store.Restaurants and travel trump on the go searches. While at homeand at work, searches for arts & entertainment and technologyreign supreme.
If Google’s Mobilegeddon wasn’t enough for you to warrant amobile-‐friendly website as non-‐optimized sites lost around 10% oftheir traffic, 45% of people either look for a similar business orrefuse to do business with companies who disappoint on mobile.
Are you relatively unknown? Don’t fret. 78% of people havediscovered a business they didn’t know existed by searching ontheir phone. So take heart, if you play your cards right, you can befound.
Websites aren’t the only links that Google tracks. Google hasindexed 100B links within apps. With nearly two-‐thirds of thesearches going through Google, users can search and either betaken to your website or a link inside your app. Everything issearchable. Forget Internet of Things, Google’s giving you Searchof Things.
Search
The number of coupon prints has been declining 10% annually the past two years. Nothing tostress about as load-‐to-‐card mobile and digital coupons have quintupled in that same period.Nearly everyone with a smartphone will search for coupons this year to find the best deal andthe greatest value. 55-‐63% of smartphone owners used a mobile coupon on their phone in Q42015 according to Nielsen.
Millennials cannot get enough of this discounting method as 96% of Millennials have usedmobile coupons. 47% of Millennials have increased their usage in the past year, higher thanbaby boomers by 21 percentagepoints.
It’s long been known that coupons and offers sent through SMS have outperformed otherchannels like print (10x) and email (6x). Effectiveness isn’t the only change that is happeningwith the increased usage. Nearly half of shoppers will switch the purchase because of a coupon.SMS and QR codes prompt 50% to make a direct purchase after receiving the offer. If you wantto increase mobile payment activity, 60% would be more likely to use mobile payments afterreceiving amobile coupon.
36% of customers would like to receive coupons based on location and 39% would spend moreif the coupons were personalized. Speaking of location, there were 11MM coupons deliveredvia beacon in 2015. This number is predicted to grow exponentially to 1.6B by 2020.
Millennial’s mobile use and their desire to find a good deal yields a very bright future for mobilecouponing. Combining purchase history, geo-‐location tactics like beacons, CRMs and analyticswill create a perfect storm to see this marketing tactic skyrocket as coupon offers areindividualized and delivery targeted.
Couponing
1.6BCoupons delivered annually via
beacon in 2020
39%Would spend more if mobile coupons were personalized
Mobile is no longer a small subset of commerce. Shopify found that more than 50% of e-‐commercetraffic is driven by mobile. Business insider forecasts that by 2020 mobile will account for 45% of theUS’s $632B total e-‐commerce sales. Verizon found that 56% of US adults bought a product or serviceusing an app in 2015. That number grows to 70% when it comes to Millennials. Starbucks has 16MMactive users of their mobile app and processes 8MMmobile payments per week.
Mobile affects more than purchases through websites, it touches individuals and in-‐storetransactions. Ovum says that 1.61B users will process $271B in 2019, up from $15B in 2014. Venmo, aP2P payments app in the US, said its users sent and received $1B during the month of January 2016,2.5 times the volume it handled in January 2015. US in-‐store mobile payment volume is predicted toreach $75B this year according to Business Insider. This estimate is three times the projected volumeput forth by PackagedFacts in their report Mobile Payments in the US.
While we saw a drop in mobile retail penetration for the first time in Q1 2016, the US holiday spendon mobile increased 59% so the drop is understandable and short-‐lived. What’s behind thismovement? Convenience. Timing couldn’t have been better for the transition in the US as the switchto EMV was painful to consumers and merchants were required to replace their old, tired credit cardterminals to newer hardware that could acceptmobile payments. It was a perfect storm.
According to the Consumers andMobile Financial Services 2016 report, 45% of consumers use mobileout of convenience. Mobile phones are always within reach, unlike the desktop or the store. Peopleby at home in front of the television, in bed at night, on lunch break, on their commute or at homeover dinner, in other words, wherever they’re at. In most cases, convenience is trumping usability.
Mobile Payments and Commerce 59%US holiday spend on mobile
increase
8MMMobile payments per week
at Starbuck
Last year, mobile influenced $1 trillion in retail sales. Over half, 51%, of purchases made byrespondents of a recent UPS study were made online. This affects in-‐store traffic as half of theshoppers who purchase online, ship to a physical store. Nearly half of these shoppers made additionalpurchases. Marketers are seeing the importance of mobile in this mix. In 2016, mobile will trumpdesktop’s importance according to 76% of marketers.
We are starting to see an improved focus on mobile as 68% of companies have integrated mobilemarketing. However, in a study by Episerver, just under half of the top international retailers still don’toffer an iPhone app. There are still top retailers that haven’t made the investment in a mobile-‐friendlywebsite. Several take longer than 10 seconds to load which is a killer considering that 50% willabandon a website if it takes that long to load. Yet, 61% will contact a local business if the website ismobile optimized.
CMS Report determined that 57% percent of users won’t recommend a business not using a mobileoptimized website. Mobile apps and truly mobile-‐friendly websites must factor into any retailer’sstrategy. Keeping the business at the top of their customer’s mind will ensure that their products arenever more than a click or tap away.
While shoppers are buying more and more online, they still value the physical store. The physicalstore still provides values and experiences that cannot be replicated by a website or app. Of course,that depends on the customer service and with only 36% of shoppers saying they have experiencedhelpful associates when returning items, retail isn’t off to a good start on that one.
Retail: Mobile Influence
80%Consumers use a
smartphone to shop
79%
73%
55%
55%
54%
0% 20% 40% 60% 80%
User reviews
Investigating price
Investigating a range of color choices
Looking for a more detailed product …
Interested in whether the product is right …
Reasons that US female beauty buyers use their mobile phones
while shopping in-‐store
A few years ago it was showrooming that was the fear of brick-‐and-‐mortar stores. Then there waswebrooming. It ’s time to quit complaining about how people shop and provide them what they needto keep doing business with you.
Shoppers use their smartphones in your store, nearly 80% of them. They compare prices withcompetitors (36%), research products (36%), access coupons (31%) and access confirmation emails topick up products that were purchased online (25%), for example. These numbers swell anywhere from5-‐8 points higher for 18-‐34 year olds according to PwC.
Deliotte found that digital influences 49% of in-‐store sales. Mobile came in at 28%. However, with75% of female shoppers using smartphones in the store to investigate pricing, that number soundslow. No matter how you measure it, mobile affects shopping, whether it ’s online or in the store. Weknow the store isn’t going anywhere. With 90% of the retail spend happening in the stores and 70%taking place within 15-‐20 miles of home or work, retailers must figure out how to enhance theirefforts with mobile to address cost, control and convenience.
Retail: Mobile Influence
72%Marketers believe mobile will be more important to brand than
desktop in 2016
$4BUS retail sales in 2015 driven by beacons
10xIncrease in retail sale driven by beacons in 2016 versus 2015
South Korea recently announced an Internet of Things (IoT) network that will be available across theentire country at a low cost of $0.30-‐2.75/month. This would be a much larger endeavor for the USsince South Korea is about the size of Maine. However, the growth of the IoT is astounding.
Vision Mobile reports there were 4.5 million IoT developers in the world at the end of 2015 and willmore than double by 2020. Samsung announced it will spend $1.2 billion over the next 4 years.Mobile operators, telecom firms and tech companies spent over $31 billion on IoT-‐related acquisitionsand investments between 2011 and 2015. Research firm Ovum tracked 76 deals across eight sectors.According to the research firm IDC, the global IoT market will be worth $1.7 trillion in 2020 with 50billion connected things (according to Gartner). Between Q3 and Q4 2015, the number of proximitysensors increased from 3.35MM to 5MM.
Let those numbers sink in a little before we look a little closer…There are 10 million telematicsinsurance polices in Europe and the U.S. By the end of 2015, 17.9 million smart homes exist in Europeand North America with estimated growth to reach 35% of all households by 2020. Globally we use 97million wearables that produce, wait for it…15 petabytes MONTHLY. A petabyte is a million gigabytes.By 2020, according to Berg, there will be 228 million connected wearables shipped.
Internet of Things
$53.8BSales generated in 6 years(Grand View Research)
97MMWearable devices in 2015 generated
15 peteabytes of monthly traffic generated
Earlier I mentioned proximity sensors. We cannot forget those. According to Juniper Research, nearly1.6 billion coupons will be delivered annually to consumers via beacon technology in the next fouryears. That’s up from around 11 million last year when we saw 46% of retailers deploying beacons. Anestimated 85% of the top 100 retailers are expected to install beacons by the end of this year. Onereason for the optimistic estimation comes from a study from Horizon Media which found thatbeacons offering special discounts would “definitely influence my buying decisions,” and retailershave reported significant higher redemption rates with beacons delivering coupons than by othermeans.
I would be remiss unless I brought attention to a few downsides to the above sunny outlook.Currently, consumers aren’t that enthused about smart homes. 62% see smart home products asbeing to expensive. 64% state that smart home products are difficult to use. It’s unfortunate that wehave run into the same VHS versus Betamax issue in the 1970s and 1980s. What’s worse is that it ’snot just two but a couple of handfuls of different “standards” fighting for supremacymaking it difficultfor not only consumers but developers as well.
The other downside comes with 1.6 billion coupons delivered via beacons. How long beforeconsumers turn it off and effectively shut down the beacon network after being harassed with toomany messages as they walk through the store. Understanding the customer completely, theirbehavior, their wants, their needs and their desires are going to be more important than ever ifbusinesses expect the customers not to block them from the most personal device they have.
Internet of Things
1.6BCoupons delivered annually to consumers via beacons
(Juniper Research)
Apple brought the wearable market to the forefront with their smartwatch. They now control two-‐thirds of the world’s smartwatch shipments according to Canalys. However, the astounding number tome is 1,683. That is the number of prototypes that OmSignal designed before settling on the OmBraafter noticing the gap in wearable brands that cateredto women.
Although Apple owns the smartwatch industry, they don’t own the wearable market. This is becomingmore evident as the industry matures as Apple Smartphone sales dropped over 63% in Q1 2016(1.5MM) from Q4 2015 (4.1MM). The holiday season is over for the Apple Watch. Meanwhile theindustry is set for an 18.4% rise in sales (Gartner) and 38.2% rise in shipments (IDC). Tomake matters“worse” for Apple, only 13% intend to purchase a smartwatch this year.
What is driving the increase in wearable sales? Fitness wearables like Fitbit lead the wearable sectoras a whole. The lines between fitness and watch are going to continue to blur until they areindistinguishable over the next three years. These fitness devices are cheaper and have more obvioususes than current smartwatches that are seen as more of a luxury device than a practical or helpfulone.
Wearables
57%Wearable use increase
in 2015 60-‐80Times per day Apple Watch owners look at their device
Microsoft Acquire LinkedIn
Nokia Acquires Withings
CLX Acquires Mblox advanced enterprise cloud communications
ShopAdvisor Acquires Retailigence
Sailthru Acquires Carnival.io
Telenor Acquires Tapad
Notable Mergers and Acquisitions (through June 2016)
Judd Wheeler
Judd Wheeler draws on more than 20 years of digital marketing and consulting experience
for companies ranging from startups to Fortune 500 companies. Judd has produced the first
mobile conference in Oklahoma, presented as the keynote speaker internationally and wrote
“160 Characters of Less: How to Increase Customer Loyalty, Drive Sales and WIN with Text
Message Marketing.” Judd Wheeler works for 3Cinteractive, whose focus is enabling mobile
consumer engagement to extend connections between consumers and brands to increase
loyalty, brand awareness, and results.
