The mobile space witnessed some extraordinary activity in the last 12 months, from new devices to new advertising platforms to more widespread adoption from marketers. This activity has dramatically reshaped the mobile landscape. In short, if change was in the air at the end of 2009, it's fair to say that in 2010, change happened. As we prepare to move into 2011, here are the seven key trends to watch in mobile.
Smart, and getting smarter
The advance of smartphones has been a major mobile storyline in 2010, and it shows no sign of letting up in 2011. According to eMarketer calculations, U.S. smartphone users will climb to 60.2 million by year-end 2010, up nearly 50 percent from 2009. Next year will continue to see strong growth, with smartphone users projected to reach 73.3 million by the end of 2011. And whereas just 13 percent of mobile phone users had a smartphone in 2009, smartphone owners will make up 31 percent of the mobile user population in 2011; by 2015, they will represent 43 percent.
Big numbers only tell one side of the story, however. For marketers, the more relevant data comes from how smartphone owners use their devices. Simply put, they do more of everything than their counterparts with feature phones -- messaging, gaming, listening to music, watching video, social networking, shopping, web browsing, news consumption, etc.
For example, comScore released a study in June demonstrating that smartphone users accounted for the majority of key mobile activities: 50 percent of all web browsing, 54 percent of application use, 54 percent of social networking, 55 percent of music consumption, and 66 percent of video consumption. So even though smartphone owners represent a minority of all mobile users, they have a disproportionate impact in terms of mobile content consumption, and, by extension, advertising.
And the veritable arms race that developed in 2010 between supremely capable multimedia smartphones -- such as the iPhone 4 and the Android-based Motorola Droid X, HTC EVO 4G, and Samsung Galaxy S -- is not likely to subside in 2011. To the contrary, with mobile carriers starting to light up their 4G networks, the battle for smartphone supremacy will only intensify, with features, functionality, screen size, and resolution and processing power serving as the primary battlegrounds.
The bottom line is the rapid expansion of the smartphone market, the attractive usage profile of smartphone owners, and their greater receptivity to advertising have forced more marketers to pay closer attention to mobile. With consumers spending an ever-increasing amount of time in front of their mobile devices, marketers can scarcely afford to do otherwise.
New ways to be mobile
As if the raft of new smartphones introduced in 2010 were not enough to whet the appetites of consumers and marketers alike, the re-emergence of the tablet served up a whole new way to be mobile. Tablet-style computers have been available since the early part of the decade but largely failed to make a dent in the marketplace.
Almost singlehandedly (and practically overnight), the iPad managed to resuscitate a lackluster market segment, primarily by straddling the divide between mobile device and computing device far more effectively than any of its predecessors. Of course, Apple's legendary marketing prowess didn't hurt either. eMarketer estimates that the iPad will make up close to 90 percent of the nearly 10 million tablets sold in the U.S. this year.
The next 12 months will see a series of tablet introductions as other manufacturers rush to play catch-up with Apple and capture a piece of this emerging market. eMarketer projects that 24 million tablets will sell in 2011, with the iPad's overall share of the market dropping to 80 percent.
Although tablets might be considered close cousins of the smartphone, the tablet market will develop according to its own dynamic. For example, unlike with smartphones, where device size and the specs needed to compete are fairly well established, tablet manufacturers have more latitude to experiment with different screen sizes and device features. Some tablets will be more phone-like while others will be more computer-like. Regardless of how they are classified, they will make a noticeable dent in PC sales. By 2015, Forrester projects tablets will surge past both netbooks and desktops, accounting for nearly a quarter of total U.S. computer sales.
More important for marketers are the results of an August 2010 Nielsen survey, which found that iPad owners are considerably more receptive and, in some instances, significantly more excited about ads than other mobile device owners. A case in point: 39 percent of iPad owners consider ads on their devices as "new and interesting," compared to 19 percent of all connected device owners. And 35 percent say they actually enjoy viewing ads (especially multimedia ads), double the rate of all connected device owners.
The "iPad effect" extends beyond receptivity to mobile ads. iPad owners were more likely than all connected device owners to have made a purchase (via PC, in-store, by phone, or on-device) as a result of seeing an ad. The combined effect of bigger screens and richer, more engaging ads, including video, is worth watching, particularly as more tablets flood the market. The iPad remains the standard-bearer for now, but it also functions as a benchmark for usage of other similar devices.
Mobile communication goes social
Mobile phones were developed for communication, but does anyone still use their phone to make calls? The answer is yes -- on occasion. Increasingly, when mobile users want to engage in one-on-one communication, they send text messages, which is the mobile equivalent of narrow-casting.
But more often than not, mobile users are opting to broadcast their communications, and that's where social networks come into play. They are rapidly becoming a primary way that mobile users exchange information.
According to Nielsen, social networking was the fastest-growing category among users of both apps and browsers, growing 240 percent and 90 percent, respectively, year over year. eMarketer estimates the population of mobile social networks users will reach 39 million in 2010, up 64 percent from 2009. By 2015, that number will more than double to 79 million.
Twitter users represent something of a vanguard. According to Edison Research, they are nearly twice as likely as all social network users to access networks on their phones (63 percent vs. 34 percent).
Of course, on mobile as on the desktop, Facebook is the heavyweight. It recently announced that its mobile users now number 200 million worldwide, so not for nothing is Facebook's mobile app at or near the top of the list of most popular apps on every major smartphone platform. And should it catch on, Facebook's new unified communications platform, which incorporates email, text messaging, and instant messaging, could help consumers further consolidate their communications on their mobile devices.
As consumers share more of their interactions more widely through services such as Twitter and Facebook, marketers have increasing opportunities to participate in the conversation. More to the point, consumers are increasingly using these channels to initiate interactions with marketers.
Location, location, location
If not the year of mobile, 2010 was certainly the year of the check-in. Location-aware social networks such as Foursquare and Gowalla experienced explosive growth in 2010, with the total user base nearly tripling year over year according to SNL Kagan. Rapid growth continued even after Facebook launched Places in August, so there is little reason to expect the location ecosystem will not continue to expand in 2011. If anything, having Facebook in the mix will only help in familiarizing people with the check-in and push it beyond early adopters and toward mass adoption.
But as fixated as marketers may be about the popularity of Foursquare et al, the future of location goes well beyond the check-in. Rather, checking in to take advantage of an offer will be the direct-response end point of a longer and larger campaign oriented around user location that starts with branding and awareness-building. Proximity data will help guide marketer messaging at each stage of the purchase funnel, starting with building awareness about the location of a store or product, and becoming progressively more specific to include promotions or offers as a consumer gets closer.
For obvious reasons, retailers have been the fastest to take advantage of location to drive sales, a trend that will see its first major test during the holiday shopping season. However, all signs point to location becoming more of a mainstream component in marketing campaigns for other industries as well. In a recent interview I conducted for an upcoming eMarketer report on mobile geolocation, Alice Lankester, vice president of marketing at Loopt, summed up the reason why: "I think it has to become instrumental because we're all walking around with GPSs in our pockets. And wherever we are is relevant to what we're doing."
Apps go everywhere
By now, we're used to firing up our smartphones and finding an app for just about any use and from all of our favorite brands. But why stop there? Why not extend the walls of those big walled gardens? Well, that's another thing we'll see in 2011, as app platforms spread beyond smartphones and tablets to a growing range of connected devices, including internet-enabled TVs (such as the Android-based Google TV), PCs (through the Mac App Store for Apple computers, for example), and gaming consoles.
The permeation of apps across the device landscape -- a process that will take some time -- has significant implications for marketers. First off, consumers will start to think less about "going online" and instead focus more on always being connected. The browsing "session" will be replaced by omnipresent connectedness as more and more devices and platforms offer gateways to the internet.
One key by-product of this trend is that consumers will care progressively less about the source of the content as long as they get what they want when they want it. Likewise, the use of apps will blur the experience of browsing websites and information.
Another by-product is that marketers will need to figure out how ads can ride along with on-the-go content. In effect, shifting consumption patterns will offer new ways to buy both audience and context, but also the challenge of staying relevant. One half of the battle is showing up in the right place and on the right platform; the other half is pinpointing technology that will enable you to measure how well you achieve that goal.
Mobile content gets real
It takes the right kinds of devices operating on robust mobile and Wi-Fi networks to make mobile content a truly viable business. Until recently, both devices and networks were lacking, and their deficiencies held back the market. But that is no longer the case. Thanks to the continuing advance of smart devices and the growing availability of mobile broadband networks, the mobile content market is fast reshaping itself.
An improved user experience and the ability to access an ever-expanding universe of content from the cloud mean that consumers have to make fewer compromises than before when it comes to the consumption of games, music, and video. More and more, they can play, listen, or watch when, where, and how they want.
These trends will attract many new mobile content consumers in the next five years. In turn, the growing base of users consuming games, music, and video on their mobile devices will lead to new opportunities for publishers and marketers alike, from subscriptions to downloads to advertising. But capitalizing on these opportunities requires some strategic decision-making:
- First, recognize that mobile is part of a larger multiplatform ecosystem. Publishers and marketers have to understand where and how mobile content consumption fits within that ecosystem. Netflix and Pandora are prime examples of companies that understand the need to seamlessly deliver content on-demand or via subscription across TVs, mobile, and PCs.
- Second, solve the monetization question. Free or fee is the central question with all digital content today. In mobile, the focus on smart devices and apps gives that question an added dimension. Finding the right balance between free and fee is in many respects the trickiest proposition. Either way, the value proposition to the consumer and any potential trade-offs have to be clear.
- Finally, tap into sharing mechanisms. Consuming content is an increasingly social experience. The trend toward broadcasting communications on mobile devices extends to activities as well. Publishers and marketers opting for growth over control should enable this instinct to share, taking a cue from streaming music services, which allow users to broadcast favorite artists, songs, and entire playlists. And with social commerce fast emerging as a key driver of sales, content owners will benefit by enabling their audience to do some of their marketing for them.
Mobile advertising finally takes hold
Reaching 1 billion anything is an important milestone. As I noted in my previous column, 1 billion is especially noteworthy when it comes with a dollar sign attached to it. In 2011, mobile advertising in the U.S. will become a billion-dollar business for the first time. And between 2011 and 2014, the market will more than double in size, topping $2.5 billion.
Spending will increase across all major formats, but steeper growth in display (banners, rich media, and video) will be accompanied by a sharper drop in messaging's share of total mobile ad spending. These shifts reflect the evolution of mobile from a channel associated primarily with direct-response campaigns to one that marketers will increasingly use for branding purposes.
In short, the continued development of devices, browsers, and mobile networks, combined with the availability and marketer awareness of richer ad units, will significantly enhance how marketers will be able to use mobile to interact and engage with consumers. The reason? Not only are marketers now more able to deliver immersive experiences, but consumers are also progressively more open to them.