Velti mobile and digital multi channel landscape 2013 h1 13-03-13

M O B I L E L A N D S C A P E M O B I L E A N D D I G I T A L M U L T I - C H A N N E L

2 0 1 3 H 1

WHAT IS MOBILE & DIGITAL MULTI-CHANNEL ?

Channels

traditional + digital

face-to-face, telecall, mail, in-store

+ desktop, mobile, email, apps,

channel threading

Platforms

admin + fun + social

“the platforms that people use to trade with one another are far

richer than any single business could buiild” - Fjord trends 2013

connecting & sharing

CONNECTED CONSUMERS

Devices

desktop + mobile

full-screen smartphones

+ tablets, readers, laptops, desktops

TV boxes, gaming consoles, handhelds

multi-screening

SMS APP WEB FB TW INS YT MOBILE TABLET DESKTOP INSTORE

UNDERSTANDING THE RAPIDLY CHANGING

LANDSCAPE

Purpose: Assist clients to plan their strategic portfolio of digital investment initiatives.

How: Provide information on the mobile and digital multi-channel landscape to

assist decisions and investment trade-offs. Spot trends and tipping points.

Focus: Authoritative, accurate and recent information. UK based.

Insight. Our opinion on the trends.

In-scope: Identify key topics & trends.

Near-term tech trends.

Out-of-scope: Future-gazing trends.

Strategy review based on the trends,.. but we can help with that…

M O B I L E L A N D S C A P E R E C A P O F 2 0 1 2

DEVICE Smartphone penetration exceeded half the population for the first time at 51%.

OS Android breezed past Apple iOS and is heading towards 50% penetration.

TABLET Incredible growth, household penetration went from 2% to 11%.

.

RETAIL Mobile sales topped 15% of all e-commerce sales. Growth was 150% - 300%.

SOCIAL ‘instant sharing’ on mobile becomes largest digital growth activity

MOBILE DEVICES

What’s in people’s pockets?

Smartphone penetration powered ahead - now at nearly ⅔

Source: ComScore, MobiLens Dec 2011, Dec 2012;

• In UK and Spain, penetration has

continued to race ahead

• Penetration is now over 50% for

all these countries

• Average point change

is 12.5

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

56.5%

64.0% 65.8%

53.0% 52.6% 50.8%

53.8%

Dec-11

Dec-12

Source: ComScore MobiLens, Dec 2011, Dec 2012

OS UK 2012 OS UK 2011

Brands

36.6

47.7%

26.4

27.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

HP

Other Smartphone

Microsoft

Symbian

RIM

Apple

Google

• iOS and Android now have 75% share

• Samsung is now the No.2 smartphone owned in the UK

• In 2011, the top 3 brands were: Apple, HTC and RIM

Operating Systems

UK smartphones: Android, led by Samsung, is overtaking iPhone

Apple 28%

Samsung 26% RIM

14%

HTC 14%

Nokia 8%

Sony 5%

Samsung devices are now leading global share

“Samsung has ended Nokia's 14-year reign, dethroning the Finnish company”

Source: ABI Research, Oct 2012;

Strategy Analytics; Mashable “Samsung Dethrones Nokia as Top Cellphone Brand in 2012, Beats Apple”, Dec 2012;

“The only other Android vendor to eek a profit in recent history is LG”

“Nokia’s pseudo-smartphone Asha line has sold better than expected in developing markets”

9

Smartphone penetration will continue, but can only now slow in the UK and lead markets

Increased usage will continue to deliver exponential growth in mobile and sales

as the ‘late majority’ consumers continue to use the power of their mobiles

Source: ComScore MobiLens, Oct 2012 (figures rounded)

10

TABLETS

And other devices…

Tablet adoption curve was steeper than analysts expected

Source: ITU, New York Times, Wall Street Journal, Pew, US Census Bureau

Time to 10% penetration Time to maturity 40% penetration

? Tablet

• Tablets achieved 10% in 2011

• How long to will it take to reach 40%?

Tablet ownership doubled - from 9% to an amazing 19%

Source: Ofcom International Communications Market Report, Dec 2012, data Sep 2012, Oct 2011

0%

5%

10%

15%

20%

25%

UK Fra Ger Ita USA Esp Aus

19%

15%

10%

23%

20%

24% 24%

2011

2012

• Growth is now proving to

be more rapid in some

countries than others

• Spain and Australia lead

the way in rapid adoption

of tablets and readers

It’s no longer all about the iPad

Source: YouGov UK,“Tablet ownership and behaviour”, 28th-31rst December 2012

• One year ago, iPad share in the UK was estimated at about 75%

• Kindle Fire is now the top tablet reported for gifting

48.1%

263.0%

26.8%

402.5%

-27.7%

77.4%

4Q12/4Q11 Growth in Tablets – global data

Globally Apple leads, huge growth from Samsung and Asus

Source: International Data Corporation (IDC), January 2013

• Close to 53 million tablets

were sold worldwide in Q4

2012, a 75% increase YoY.

• From Q4 2011 to the same

period in 2012, Samsung

and Asus had the biggest

growth but Apple is still in

the lead.

• Tablets sold globally in Q4

– 22.9 million iPads

– 7.9 million Samsung

– 3.1 million Asus

Apple

Samsung

Amazon

Asus

Nook

Others

Tablets are predicted to sell 60% as many units as PCs by 2015

Source: Guardian, IDC and Gartner PC v Tablet forecast to 2015; European

Technographics, Consumer Technology Online Survey, Q4 2012, 1530 european adults

• Apple's iPad is forecast to still

have almost half the tablet

market by 2015

“Compared to Italy and Spain, where tablets are more likely to be used

outside the home, eMarketer believes tablet usage is more akin to PC usage

in the UK and Germany, where the devices are often used at home.”

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6

The tablet is not confined to one room in the house, it is well shared and well liked

Tablets are used for email, gaming and levels of shopping are twice that of smartphone

Tablets can empower better conversion rate through touchable and swipe-able content

Multi-screening consumer behaviour - both sequential and simultaneous

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CONSUMER

BEHAVIOUR Multi-screening

Source: This section contains US Data

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8

• Consumers are reporting greater usage

of almost all digital communication tools

• The greatest increases are reported in – email

– social

– text

• There are one or two major variations by

country, notably ‘voice’ growth in

Germany and ‘IM’ growth in Spain

• Other data shows there are massive

variations in preferred channels by age

WhatsApp pushed a record-breaking 18 billion messages on December 31

st

Source: Ofcom International Communications Market Report, Dec 2012, data Sep 2012

We are all communicating more, in digital

1

9

Multi-screening is the new normal

• Consumers’ time is now spread between devices – simultaneous and sequential

• Google research found 90% of people move between devices to accomplish a goal

Source: Google, The new multi-screen world: understanding cross-platform consumer behaviour, USA, August 2012

Smartphones are the most frequent simultaneous usage device

Source: Google, The new multi-screen world: understanding cross-platform consumer behaviour, US, August 2012

Nielson TV and tablet, simultaneous use, selected countries including UK, April 2012

• 78% of UK TV viewers also simultaneously use a smartphone in a typical day

• 80% of UK tablet owners do the same (but as yet, fewer owners)

2

0

2

1

While watching TV, people browse the net and communicate

• Two thirds of the UK

population already browse

the net while watching TV

• Almost 40% are second

screening in relation to the

programme they’re watching

- browse

- chat

- share

- participate

o

o

o

o

o

o

d i g

i t

a

l

Source: Deloitte/GfK all respondents, UK nationally representative, Jun 2012

2

2

Our different devices have different role emphasis

Keep us productive

and informed

Keep us

connected Keep us

entertained

Source: Google, The new multi-screen world: understanding cross-platform consumer behaviour, USA, August 2012

One in five shop on their smartphone - barriers still exist

Source: Adobe, 2013 Digital Publishing Report: Retail Apps & Buying Habits, US data, January 2013

• Twice as many tablet owners reported shopping on their tablet versus mobile device

• The survey showed 67% of tablet and smart phone shoppers only use apps for their

favourite stores

2

4

Consumers often take a digital multi-channel path to purchase


• When shopping, sequential multiscreening and channel threading is commonplace

• 67% reported they start a shopping activity on one device and continue on another

• Mobile is the most common starting point for shopping activity

2

5

Sequential paths - more start on a smartphone than anywhere


• Based on the type of task at hand and the role of each device

• Consumers primarily rely on search, rather than links or URLs to switch device

2

6

Sequential paths are based on the task and role of device


• On tablet the most common starting point is for shopping and travel

• Consumers rely on search, rather than use links or URLs to switch device

2

7

Mobilise your paths-to-purchase and common consumer pathways

Deliver the best brand experience across ALL of the digital channels, platforms, devices

used in common consumer pathways – requires board-level support for innovation

Analysis of effective marketing spend demands improved channel attribution

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m-COMMERCE

In a challenging economy

High Street slowdown as the fear of triple dip looms

Source: ONS Retail Sales statistical bulletin, Dec 2012

• The growth of 0.3% in December

2012 was the lowest YoY growth

in a December since 1998

However e-Commerce is still growing steadily

Source: ONS, Dec 2012

• In December 2012, eCommerce

was 10.6% of all retail sales

• UK eCommerce has grown

steadily at around 8-10% per

year

• IMRG/Capgemini forecast that it

will grow by 12% in 2013

• Many pure ecommerce e-tailers

are still growing rapidly

Spend per buyer is already highest in the UK

Source: eMarketer, Jan 2013

• Online customer spend in the UK

is the highest of any country

• Average B2C ecommerce sales

per person in the UK rose to

$3,585 per person or £2341

in 2012, up 8.5% against 2011

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Mobile traffic and mobile sales grew massively

IMRG e-retail sales index

• Mobile sales in 2012 were up 304% • Conversion rate on mobile devices doubled from 1.3% Jan 2011 to 2.6% in Jan 2012

• 42% of consumers reported browsing the internet whilst watching TV over Christmas

from their tablet (19%) and smartphone (26%)

IBM Digital Analytics Benchmark

• Mobile sales in 2012 were up 200%+ • Mobile traffic Dec 2012 was 24.2% of online traffic

• Sales Dec 2012 was 20.3% of all online sales

• iPad traffic in November tripled year-on-year

Source: IMRG e-retail sales index 2012

IBM Digital Analytics, UK Online Retail Christmas Shopping Recap Report 2012

• iPad exceeded both Android and the iPhone generating online traffic to retail sites in the festive run-up

• Android and iPhone traffic grew YoY by 30.2% and 35.3%, respectively,

• iPad traffic tripled. 300% YoY.

• In November, the iPad accounted for 11% of all online traffic in the retail benchmarking study

Tablets generated more online traffic than smartphones at Christmas

Source: IBM, UK Online Retail Christmas Shopping Recap Report 2012; : IBM, Black Friday Report 2012;

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Conversion rates vary – devices with different role emphasis

Source: Richrelevance, Mobile Shopping on Boxing Day 2012 (analysis of 322 million shopping sessions in UK-based retail sites)

• Desktops delivered the highest conversion

• Despite having a lower conversion rate,

iPhones produced a bigger AOV

• Apple devices deliver higher AOV than non-

Apple devices, however, their share of

mobile sales dropped

• According to the IMRG/CapGemini, mobile

conversion rate has doubled in a year from

1.3% in Jan 2012 to 2.6% in Jan 2013

Mobile and instore - 2 worlds connected

Source: comScore MobiLens UK, Oct 2012

IBM Institute for Business Value, 2012

GroupMNext Aug 2012

• Whist there is much concern from

some quarters about ‘showrooming’,

a global IBM study with 26,000

consumers found 80% of shoppers

made their purchases in-store.

• More worrying is that 35% of those

would contemplate buying the same

item online next time…

• A WPP study in the US found that if

the price difference in-store vs. online

was greater than

$5 or 2.5%, most

customers would

leave.

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Don’t worry about arguments for defence, or channel- switched sales, focus on the opportunity

Incremental revenue in this context means simply this:

grow digital faster than competitors

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SOCIAL

“Today there’s no argument, Facebook is a mobile company…

...it allows us to reach more people, and we’ll be able to make more

money for each minute people spend with us on their mobile devices.”

Mark Zuckerberg

Social media reach

• Potential reach via popular

platforms is high

• Facebook is the clear leader

• Penetration (and hours spent)

is starting to reduce for the

first time in established

territories - ‘Facebook fatigue’

53% 52%

45%

18% 18%

3%

23%

33%

0%

10%

20%

30%

40%

50%

60%

-

20

40

60

80

100

120

140

160

US

A

Turk

ey

UK

Fra

nce

Germ

any

Italy

Spain

Pola

nd

Ru

ssia

Ne

therla

nd

s

Ro

man

ia

Pen

etr

ati

on

%

Us

ers

in

millio

ns

Reach of selected Social networking tools in selected countries

Facebook

Linked In

Twitter

FB Pen

LI Pen

Tw Pen

Source: Social Bakers; Semiocast

Social stats - mobile versus online

• Facebook continues to dominate with

mobile users exceeding web in 2012

• Google+ shows the largest growth for

any Social platform (but users are

being created automatically)

• Twitter has the fastest growing mobile

user base worldwide

• Instagram (now owned by Facebook)

was mobile app based, but recently

released a desktop version

• Pinterest has a massive gender bias

with 80% of users female

• Other new tools emerge - Vine is the

latest social tool - easy to

watch short-form video

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

Facebook Google+ Twitter Instagram Pintrest

Web

Mobile

Global unique monthly users

Source: Global web index 20th Jan 2013

What do people do on mobile social - instant sharing

Pinterest drives more referral traffic than Google+, YouTube and LinkedIn COMBINED (but less than Facebook)

66% of mobile-first Twitter users tweet whilst watching TV

And they’re 63% more likely to click on links and follow more brands

than non mobile twitter users

Instagram: 40m photos a day, 8,500 likes and 1,000 comments per second

YouTube: 3 hours of video is uploaded per minute via mobile devices

Facebook Messenger 56.7m active mobile users – But that’s

way behind the several hundred million WhatsApp is estimated

to have

Source: Mashable June 2012; Tune in with Twitter Jan 2013; Instagram Jan 2013; YouTube Blog

Social discovery is about to get better

The way people search the web is changing and companies such as Facebook, Amazon

and Apple are positioning themselves from their own unique vantage point to try and steal a

march on Google.

Google Now is predictive, it ’anticipates your next move’ based on behavioural data,

direct consumer input, time of day, geo-location and environment.

Amazon handles more product-related searches than any other company, provides

high quality crowd-sourced results and even offers (manual) image based search.

Apple’s iPhone-based voice search Siri is improving with each software version.

Facebook’s social graph data is being released for public search (beta underway)

to help apply knowledge of what your friends like to your searches.

Facebook has started to leverage their reach on mobile

• Facebook revenues were up 40% in Q4 compared to the

previous year with mobile at $306m, double the previous

quarter

• On average, ‘page post ads’ in the feed had a 14%

higher ROI and generated a 45 times higher click-

through rate than standard marketplace ad’s

• Mobile ads had a 1.9% higher click rates and 46% lower

CPCs than those on the desktop version

Source: New York Times

43

Social is the new water cooler - it’s where people hangout and share stuff

Mobile is the device that acts as the glue between digital channels and the consumer

Social is the platform that can do the same

Ad spend is set to explode in this area - but a mobile-specific approach is required

as targeting capabilities and formats are evolving rapidly

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- Exponential growth

- New formats on mobile

- Calls to action from TV, Outdoor, Print for ‘multi-screen’

MOBILE

ADVERTISING

£0.00

£1.00

£2.00

£3.00

£4.00

£5.00

£6.00

£7.00

2010 2011 2012 2013 2014

£4.10 £4.78

£5.45 £6.00

£6.66

Digital advertising spend defies media budget cutbacks

Source: eMarketer, Nov 2012; Advertising Association/Warc, Expenditure Report, Jan 2013

UK Digital Ad Spending, 2010-2014

£ billions

• Whilst digital ad spend is still increasing, other channels have been reduced

• TV and Radio are predicted to be on the increase with budgets in 2013

• TV in particular is becoming increasingly digitally ‘connected’

• 2012 has seen brands explore Facebook calls to action in the end-frame

And mobile ad spending experienced exponential growth

Source: eMarketer projections against IAB UK/PwC data, Nov 2012; eMarketer, Dec 2012;

£0

£200

£400

£600

£800

£1,000

£1,200

2010 2011 2012 2013 2014

£83.00

£203.20

£447.00

£737.60

£1,143.30

UK Mobile Ad Spending, 2010-2014

£ millions

Ads on phones and tablets now account for

an estimated 8.2% of all UK digital ad

spending in 2012

Advertisers spent $36.35 per mobile

internet user in the UK in 2012, higher

than any other market worldwide

Mobile ad spend is growing in both Search and Display

Source: eMarketer, Nov 2012; July 2012

£0.00

£200.00

£400.00

£600.00

£800.00

£1,000.00

£1,200.00

£1,400.00

£1,600.00

2010 2011 2012 2013 2014 2015 2016

UK Mobile Ad Spending, by Format, 2010-11 and projection to 2016

£ millions

Search Display

A survey with entreprise-level clients

found that the clickthrough rate was

highest on smartphones

48

Display: Where is the inventory?

• Top destinations for UK users are Social and Music, Video and Media; however the

UK seems to lag behind the rest of the world in games and electronics

• The art and science of targeting is different on mobile, as cookies are restriced

Source: The state of mobile advertising, Opera, Oct. 2012

Display: Best time to advertise to consumers

Source: Velti Media

• Time of day can be a crucial

element in ad targeting for

mobile

• Different device types reflect

different behavioural patterns

• Factors such as time of day

and day of week show

different spikes of activity

Ad responses by time of day

Mobile Search

• Google has a 95% share of the mobile search market and they pay Apple in the

region of $1bn a year to be the default search on iOS devices

• Google collects 57 percent of mobile ad revenue in the United States, while

Facebook, its nearest competitor, gets just 9 percent

• Google are no longer doing “mobile only” ads – by launching “Enhanced

Campaigns”, all campaigns must now target tablet/desktop only or all devices

(mobile + tablet/desktop)

• Other companies are vying with Google to provide more value, more

seamlessly or reduced friction on mobile devices:

– For example, it’s easier and faster to book a table using the OpenTable app

than it is to search for a restaurant on Google using a mobile browser, click

on the link and then make a reservation

– Even faster is asking Apple’s Siri to book a table for you

Source: http://www.google.co.uk/adwords/enhancedcampaigns

51

Calls to action from traditional media are changing…

o o

• Become a ‘fan’ to stay in touch • Buy in multiple digital channels • Enter online

52

User behaviour on mobile is different to online – it’s less contextual

Mobile ‘downtime’ and ‘free-time’ activities have higher CTR’s than task-oriented utility services

Test, test, test to find out the most successful creative, best channel and time of day

Consider popular second screening channels & platforms as calls to action

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WHAT’S COMING?

Technologies and consumer conventions nearing tipping point in 2013

What to watch in 2013

Payment methods – ‘Contactless’ cards , NFC phones and mobile wallets;

Reduced friction payments and pre-filled details via payment & authentication

systems

Handsets – Samsung will continue to storm ahead.

Windows Phone is still slow for now, BB10 also slow

Tablets – Cheaper Android alternatives will boost volume

of sales to ‘early majority’ level of penetration

Source: Mashable June 2012; Tune in with Twitter Jan 2013; Instagram Jan 2013; YouTube Blog

Connected consumer experiences – as brands start

to drive earned and owned media harder, and

paid advertising becomes increasingly ‘connected’

Appscriptions – With over 13,000 health apps in the Apple app store,

medicine is a trend in mobile (Trendwatching)

What to watch in 2013

Multi-screening applications – with seamless transition between different

devices eg Amazon films and books; gaming and television

formats with increased multi-screening

Local TV – Will emerge across the UK, is expected to be on air by Q3 2013 on

Freeview channel 8 and channel 17 on Sky in almost 20 cities

Screen size – Rising on all devices, with other innovations to

come from watches to fold-out screens

The battle for the 3rd place – with Apple iOS and Samsung Google

jointly taking such huge share, the battle is on for 3rd place.

Several OS for mobile will be launched during 2013; e.g. Firefox

“Mobile moments” – Consumers will try to maximise absolutely every

moment through their mobiles, “urban lifestyles mean that no amount of

(micro) time will be too fleeting” (Trendwatching)

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T H A N K S

For a confidential discussion about how Velti technologies can drive connected customer experiences...

visit Velti.com

Simon Green – Strategic Planning Director [email protected]

Matt Bowden – Strategic Planner

Ana Verissimo – Planner