How will mobile and mobile marketing progress in the next twelve months?
The coming year will look something like this … a majority of people will have smartphones (older people will be an important demographic), shops will undergo dramatic change, mobile ads will get richer and more interactive, and advertising will be more responsive. Mobile voice control becomes a practical reality and new screens will appear with texture and gesture interaction. The tablet market will continue to rapidly expand, with users interacting (and buying) more than on mobile. In the meantime, governments and brands will need to open up their data and provide APIs for the rest of us to make sense of it all.
Predicting the future is never easy. I have focused on the key trends from 2011 and considered how they are likely to impact on 2012 and beyond. Whilst most of the trends I predicted for 2011 were pretty accurate, there were a few notable exceptions (I have changed my mind about the future of tablets, and Samsung’s Bada hasn’t been exactly earth-shattering).
Everyone gets smarter (especially older people)
2011 was the year that the smartphone took off. Sure, smartphones aren’t exactly new, but in the UK (and elswhere) we reached 50% penetration. Even the developing mobile economies are showing a high rates of adoption and will soon seen a majority of people with smart handsets. The adoption of smartphones by a majority of people changes things everything for brands – as Mary Meeker pointed out in 2011, we have reached critical mass. All advertising a can be responsive. Consumers will ‘Tweet’ and ‘Like’ brands where ever they are. And they can compare prices or stock whilst they are standing in a shop.
One of the most interesting trends is the rapid rate of adoption amongst older adults. Typically early technology adoption has been focused on younger and often male demographics. That has been true of smartphones to date (although BlackBerry skews more towards women) and earlier this year, a UK study found that age, not income was the greatest barrier to smartphone adoption. However data from Nielsen in the US in November showed that the 50+ age group are some of the fastest adopters of smartphones. Although only 18% of the older age group owned a smartphone, they were buying them faster than almost anyone else.
In many ways this is not surprising. Fifteen years ago older adults weren’t using the internet. When they found they could get cheap flights, compare insurance prices or see pictures of their grandchildren, they got online. For example over 20% of UK aged 60+ are on Facebook. Why? They use it for photo sharing with their grandchildren. Similarly, ten years ago, SMS was considered a young persons’ medium but now every demographic sends texts – Comscore report that it is 90%+ across all ages. When technology is useful, old people will adopt it. What is useful about smartphones to an older adult? They can compare prices in shops or provide alerts for things like medication. It’s still early days, but expect the 50+ age group to be an important demographic in the world of mobile marketing.
Shops won’t be shops
2011 saw retailers getting into mobile, largely through the mobile web. Many of them quickly found that over 10% of their sales (Amazon, M&S and Halfords to name just three) were coming from mobile devices.
A consequence of the growing smartphone adoption is the role of shops. A Google IPSOS study this year found that over 70% of people use their smartphones in shops to compare prices. 22% of smartphone owners changed their purchasing decision in the shop as a result of using the device. That changes the game for retailers; shops will become more like showrooms. But it works the other way round as well. Shops no longer need a retail location. The much touted Tesco Homeplus in Korea is a fine example of that. Others have followed though. Net A Porter created pop-up shops in London and New York using image recongition and augmented reality (IR/AR). In Brighton, John Lewis took the Homeplus model to a Waitrsoe store, and the likes of Debenhams and eBay followed Net A Porter’s example. 2012 will be the year when the very idea of a shop is challenged by smartphones.
Mobile advertising gets rich
The disparity between the time people are spending in mobile media and money spent on advertising in it, has been highlighted a number of times in 2011. A study at the end of 2011 found that more ‘media time’ is spent in mobile than in print. However ad spend is less than 1% of the total in mobile, yet 27% in print. There is an argument to say that brands don’t invest in mobile because it simply doesn’t offer the returns. There is a parallel though. When the internet first got big there was no successful advertising model. Then along came Google’s model and they made it big. Arguably the same thing needs to happen in mobile.
Although the mobile ad networks are happy to talk up the channel, so far it hasn’t proved to be massively successful. Click-throughs on display advertising in mobile are currently lower than desktop and the future of Apple’s iAd doesn’t look great, (and their share is falling). However, what Apple did was to show how mobile advertising can be rich, interactive and integrated to the content. If you want to win eyeballs in mobile then you need to be both interesting and unobtrusive at the same time. The best way to deliver that experience is using HTML5. Not only can it deliver rich media but it can also access handset functions like the GPS or accelerometer. It means that adverts can become more like mini-apps, minus the downloading part. 2011 saw a number of rich HTML5 ads from the likes of Tuborg, Autotrader and many more. Google announced that its HTML5 ad support and will shortly be bringing out a (free) creation tool.
The other boost to mobile ads will come from Facebook. Unlike some of their other initiatives, the social network are being cautious and rolling it out slowly. It seems as though mobile advertising is too important for them to get it wrong. Will Facebook ads be rich media? We don’t know at this stage, but such a major ad initiative from them will move the channel forward.
Ads and Everything Become Responsive
When a majority of people have a smartphone in their pocket, they can respond immediately to advertising and brands can use channels such as web or apps to continue the customer journey. There are many ways to get a response. SMS has been an obvious choice for over a decade, but for the last few years advertisers have been keen to use QR codes. There have been many issues with them, not least, the lack of consumer understanding, but it would appear that both brands and consumers are beginning to get QR. For advertising it’s about finding the right context and call to action. For consumers they offer an obvious advantage over SMS. You can respond to an ad without giving out your mobile number and risking endless text messages. In the last year or so, campaigns from Heinz and Kellogg’s have shown that when presented in the right way, QR works.
However a more interesting trend has been image recognition combined with augmented reality (IR/AR). A few apps appeared in 2011, such as Blippar and Aurasma, which allows users to scan an image onto which are over laid more information. Campaigns from the like Marmite and Heinz (not to mention Net A Porter, eBay and Debanhams) showed where IR/AR could go. One interesting thing about the technology is that unlike QR, it is backwards compatible. Any Marmite label would work with the Blippar app, for example. It also lends itself to some more guerilla campaigns. Fiat in Spain used the technology to promote their EVO by making road signs responsive – clever.
The other response mechanism that may be big in 2012 is NFC or Contactless. Although many are touting it as a form of payment, the potential of contactless as a brand communication should not be underestimated. We are seeing NFC appear in many handsets from BlackBerry to Google’s Nexus and there are strong rumours it will be in the iPhone. We are already seeing NFC enable bus stops and posters. In the UK for example, adverts for the 2011 X Men film allowed contactless users to ‘touch in’ for more information. It goes beyond advertising though. NFC chips are so cheap they can be embedded in almost anything. If your washing machine breaks down, you could simply ‘touch-in’ and you will be connected to your nearest mechanic.
Data goes open
This prediction is probably a case of wishful thinking rather than a real trend. Governments opening up their data is not so new and in the last few years people have done some clever things with that open data. However, the potential on mobile has barely been explored. Take London, for example. There are some useful apps around the cycle hire scheme and information relating to the tubes and transportation. But there is so much more that could be done. In early 2012 the Ordnance Survey will provide HTML5 and iOS APIs to their maps. That could create some really fun, interesting applications.
However, where governments are leading, brands should be following. Why shouldn’t every brand create an API to their non-sensitive data? The supermarket, Tesco, already have one for products and barcodes. That’s a start, but it could go so much further. If everyone had an API then developers will create great apps that brands never even thought of.
New Interactions: voice and screens
Last year I wrote about this as a prediction for some way in the future, but it looks like we are already moving beyond the touch screen. First off we have voice interaction. Although Google had voice control, Apple upped the ante with Siri, a more intelligent version. Not to be outdone, Google are looking to create an even more powerful voice interaction tool.
On the new screen front, things are also moving quickly. Although an both Sharp and an Indian company announced the development of 3D mobile screens, there is little demand for them. A more interesting development is that of gesture control. What we have in our Xbox today, will be in our phones tomorrow. In 2011 an Israeli company announced that they were developing technology which would allow mobile handsets to be controlled by gestures, not just touch.
Another technology that has been worked on since the 1950s is ‘electrovibration’, or the ability to change the screen’s texture (or at least the feeling of texture). Nokia have been working on the idea for some time, and a company called Senseg announced that they would be bringing out a texture sensitive screen in 2012. What’s the point? There’s a lot you can do with a texture variation screen. You can create friction, making it harder to pull your finger across different parts of the screen. That’s great for gaming, but it is also useful for maps or other applications where you cannot easily look at the screen, such as driving. From a brand perspective, as mobile advertising becomes richer and more interactive, the new screens will open up a new world of possibilities.
Tablets take off
In spite of my previous pessimism about the potential of the tablet market, the last year has shown how significant it could become. There was a 440% growth in tablet sales from the end of 2010 until November 2011 according to Google. That’s a faster rate of sales then the iPod or iPhone. Some countries we have already seen tablet sales outstripping PC sales. It has largely been driven by the iPad, but other devices are beginning to get a look in. Early reports of the Kindle Fire show strong sales, although much like the iPod, Apple’s tablet will still expected to dominate the market.
But it isn’t just the adoption of the devices, it’s what people are doing with them. The fast, interactive experience of the tablet means that it over indexes on the usage of web browsing and apps etc. Google tell us that 91% of usage is for personal use. These are fun items, not work tools, used to browse, view and shop! A study from the Macquarie Group found that 77% of the total ‘mobile’ data traffic volumes comes from tablet devices.
Similarly when it comes to advertising, engagement in through tablets is considerably greater than smartphones. Take paid search, for example. Macquarie Group found that whilst mobile CPCs were 108% that of desktop, tablets were only 85% of the cost, yet offered a higher click through rate. Google highlighted that even more than smartphones, users want interactive, rich ad content. Whilst magazine subscriptions have struggled on the iPad, but that is as much about the revenue model – consumers don’t value it as much as print. However, when you look at Flipboard, it’s clear that there is a strong market for iPad-based reading. It’s just a case of finding the right format. The iPad is also an important two-screen device. It’s the thing you use when you’re watching TV.
Where does this leave mobile in 2012? There are two things to keep in mind:
Firstly, with more smartphones in everyone’s hands, mobile can be the connective tissue between all brand channels: traditional, digital or social.
Secondly, when it comes to brand engagement, most consumers will reach for their mobile before anything else. Brands now need to think in terms of ‘mobile first’.