Future of mobile
To coincide with today’s MediaTel Group ‘Future of Mobile’ seminar, Nielsen’s Ed Kershaw discusses the mobile market and the success of the mobile internet.
The mobile industry sometimes seems as if it’s running at two speeds: a technological explosion, and the much slower adoption of mobile as a valuable medium for marketing and advertising.
At an exhilarating rate, mobile technology is undergoing rapid expansion in several directions at once. Having shrugged off the murky beginnings of WAP and the dominance of operator portals and just when we thought it was actually all about the iPhone, there is a rising tide of anticipation for phones based on Google’s Android operating system.
Interestingly, the iPhone’s initial appeal peaked among the 25-34 age-group, and although an increasing number of older customers are now buying the phone, 34% of owners are 25-34.
By contrast, 46% of Android phones are owned by 35-44 year olds (vs 23% of iPhone owners). A breakthrough moment in this happened in October, with the launch of the first UK pay-as-you-go Android smartphone: the TMobile Pulse. The widely rumoured iPhone price war among operators hasn’t happened yet, but when Vodafone joins the party after Christmas, lower prices may drive the iPhone into both younger and older age-groups than it currently occupies.
3G networks are commonplace now in Western Europe and beyond, and the operators are investing again in even faster connectivity. Nobody questions anymore the need for fast mobile networks. Faster networks obviously drive higher mobile internet usage, but the effect is magnified when combined with a reasonable data plan. And riding on the back of these handsets and networks is an amazing explosion in creativity from what used to be called the ‘mobile content’ industry. Apple App Store has over 100,000 apps available – some brilliant, some pointless – and developers small and large are seeing real revenues from the billion or more app downloads.
The Google Android Market may not be as large yet (about 16,000 apps, and no official numbers released on downloads so far), but offers the same ingenuity and buzz (and a growing number of identical apps to those on iPhone). Nokia’s online service Ovi, among others, has joined in with its own app store.
This flurry of activity means that fragmentation – the bane of mobile developers’ lives, isn’t going to disappear. If I want to have, for example, RoadSync on my phone to check my work email, I can choose from Android, three flavours of Symbian, Windows Mobile, Palm OS and Java. Plus, there are now several different flavours of iPhone/iPod Touch to support.
Mobile applications are themselves moving beyond games and the highly popular app versions of the most popular websites (Facebook, Twitter etc). New browser technology will mean that browsing the internet will not remain a poor cousin to dedicated apps. Mobile websites that can access address books and GPS data will blur the distinction between apps and websites further. With “augmented reality”, it really feels like the future of sci-fi films has arrived: using your phone camera, information, maps and (inevitably) advertising appear in real time according to where you are and what you’re pointing at.
The promise that has been made to consumers since the early days of WAP is now very much a reality.
Alongside this explosion of creativity, is the real world getting engaged yet? Are these just the playthings of young, educated, well-off males? Despite some large FMCG companies investing heavily in mobile, the biggest mobile advertiser in the UK is undoubtedly the British Government, in the form of the Central Office of Information.
Some ad agencies are still telling their clients that mobile is not that important, that it’s a bit niche – which we can interpret as they themselves being ignorant and nervous of what mobile can offer to brands. The typical spend of a mobile ad campaign is small, and nobody won a D&AD award for an SMS campaign.
Instead, advertisers themselves seem to be leading the way, using specialist boutique mobile agencies who relish the opportunity to apply their creativity to major brands. Over 20% of Lufthansa flyers now check in on their mobile phones, receiving a barcode and doing away with paper boarding cards altogether. Coca Cola regularly entices its consumers to engage through simple, SMS-based direct response campaigns. And if we look beyond our own shores to Turkey or South Africa, we can see a mobile display advertising market worth tens of millions of pounds.
Recent numbers from Nielsen show that the big drivers needed for mobile internet advertising to flourish – smartphone penetration and mobile internet usage – are rising steadily. The number of people in the UK who are using the mobile internet increased to 10.4 million in the third quarter of 2009, and UK smartphone ownership is now up to 6.2 million.
Perhaps 2010 will the year when we finally stop asking ourselves ‘When is the year of mobile?’