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Study: Consumers Increasingly Receptive to Mobile Ads

Street Fight

Over the past few years, it hasn’t been uncommon to hear proclamations that the “year of mobile” is finally nigh — that the platform with so much promise would finally hit a tipping point and begin to dominate in terms of brands’ ad spending. It’s unclear if we’ve reached that point, exactly, for advertisers, but consumer engagement with mobile does appear to have gone mainstream.

A new study released by xAd and Telmetrics finds that consumer engagement with mobile ads has increased dramatically over the past few years. In the two companies’ 3rd Annual U.S. Mobile Path-to-Purchase study, conducted by Nielsen, nearly 50% of mobile shoppers said that they found mobile ads informative/helpful — up from 22% in 2013. In addition, 40% of respondents reported clicking on mobile ads, and nearly half of those said they went on to take secondary actions (like viewing a website or searching for additional information).

Telmetrics CEO Bill Dinan said that the results of the study over several years indicate a real evolution in the way that consumers engage with their devices as mobile becomes more and more mainstream as an advertising platform.

“People are becoming more receptive to mobile ad content — whether it’s in a website, or in an app,” said Dinan. “People are becoming more used to ads being there. People are becoming more engaged with ads. Publishers are trying to figure out how to make ads more relevant. And as a result, we’re seeing more of these secondary actions.”

The secondary actions appear to be a key indicator of purchase intent for mobile shoppers.  The study found that consumers who took these kinds of actions after clicking on an ad were likely looking to convert quickly and find nearby businesses to satisfy what they were looking for — 50% wanted to make a purchase within an hour, and 70% went on to make the purchase. These actions are all very local — with 67% of these shoppers looking for a business within five miles to satisfy their needs, and 18% looking for a location within one mile.

Dinan said that with engagement established, more advanced metrics are now needed to understand mobile’s effectiveness in driving purchases: “We’ve figured out how to get people engaged, the next part is for these publishers and these agencies to make sure they can capture the right and relevant metrics to leverage the engagement.”

The study seems to indicate that the increasing relevance of ads is a big factor in spurring engagement. Over 40% of mobile users in the study said they clicked on an ad because it was relevant to their interests or purchase research. Coupons and discounts were big drivers of engagement, and more than 50% of respondents said location was an important factor to an ad’s relevance, up sharply over two years.

According to Dinan, the distinction that many marketers make between mobile and desktop is starting to fall away. “Mobile is digital, digital is mobile — that’s the point we’re at now,” he said. “The mobile device is my portal to my day; my digital sherpa; my guide to life.”

WhatsApp tops Facebook Messenger

Warc

WhatsApp, the instant messaging service, has overtaken Facebook’s own Messenger service to become the top chat app in the world outside of China, a new survey has revealed.

According to the latest Mobile Messaging survey by GlobalWebIndex, an online market research firm, WhatsApp was used by nearly 40% of the worldwide mobile internet audience each month of its survey covering Q2 2014.

Based on the usage of instant messaging tools by 600m adults aged 16-64 across 32 markets, the survey found the audience for this activity has grown 30% over the past two years.

Despite the growth of WhatsApp, which Facebook is in the process of acquiring for $19bn, Facebook Messenger saw a sharp rise in usage in some countries. In the UK, for example, it has increased from 27% in Q4 2013 to 40% by Q2 2014.

GlobalWebIndex attributed this to Facebook’s decision to remove the messaging component from its main app and transfer it to the Messenger service.

After Facebook Messenger were Skype (32%) and Line (10%) in terms of global usage, but other apps tracked in the survey – such as Snapchat and WeChat – were used by relatively small percentages globally or were limited to particular markets.

WeChat, for example, was the top chat app in China – perhaps unsurprisingly – and used by 84% while Snapchat was the most popular in mature markets.

Snapchat secured 14% of the mobile audience in the UK, US and Ireland, but also scored highly in Canada and Australia, and it remained very popular among teenagers. Nearly half (48%) of 16-19 year-olds in the UK used the service.

WhatsApp was most used in South Africa (78%) and Malaysia (75%), but was also dominant in Argentina, Singapore, Hong Kong, Spain and India.

In other findings, just under two-thirds of WhatsApp users reported that mobile chat apps were now one of their primary forms of communication, with over half confirming that they have overtaken SMS as the way they typically send messages.

Also, over three-quarters of WhatsApp users believed Facebook has no right to sell their personal information to gain ad revenue, and 85% were concerned about how companies might use their conversations without their knowledge.

Chinese Vendors Outpace the Market as Smartphone Shipments Grow 23.1% Year over Year in the Second Quarter, According to IDC

IDC PMS4colorversion  300x99 Chinese Vendors Outpace the Market as Smartphone Shipments Grow 23.1% Year over Year in the Second Quarter, According to IDC

The worldwide smartphone market grew 23.1% year over year in the second quarter of 2014 (2Q14), establishing a new single quarter record of 295.3 million shipments, according to preliminary data from the International Data Corporation (IDCWorldwide Quarterly Mobile Phone Tracker. Following a very strong first quarter, the market grew 2.6% sequentially, fueled by ongoing demand for mobile computing and an abundance of low-cost smartphones. Second quarter shipments were in line with IDC’s forecast and all expectations are that the market will continue apace in the second half of the year and surpassing 300 million units for the first time ever in a single quarter in 3Q14.

“A record second quarter proves that the smartphone market has plenty of opportunity and momentum,” said Ryan Reith, Program Director with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Right now we have more than a dozen vendors that are capable of landing in the top 5 next quarter. A handful of these companies are currently operating in a single country, but no one should mistake that for complacency – they all recognize the opportunity that lies outside their home turf.”

Despite a challenging quarter for Samsung, and to a lesser extent Apple, the strong market demand boosted results for most smartphone vendors. Emerging markets supported by local vendors are continuing to act as the main catalyst for smartphone growth. Among the top vendors in the market, a wide range of Chinese OEMs more than outpaced the market in 2Q14. By far the most impressive was Huawei, nearly doubling its shipments from a year ago, followed by another strong performance from Lenovo.

“As the death of the feature phone approaches more rapidly than before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones. The offer of smartphones at a much better value than the top global players but with a stronger build quality and larger scale than local competitors gives these vendors a precarious competitive advantage,” said Melissa Chau, Senior Research Manager with IDC’s Worldwide Quarterly Mobile Phone Tracker.

Smartphone Vendor Highlights:

Samsung saw the Galaxy S5 ship millions of units this quarter, despite the criticisms leveled at it, while S4 and even S3 volumes remained strong as more affordable alternatives. Collectively Samsung lost 7% market share compared to a year ago, despite having one of the largest smartphone portfolios of all OEMs. To maintain its position at the top, Samsung will need to focus on building momentum in markets dominated by local brands.

Apple’s second quarter is always its seasonal low of the year, but even more so this time in advance of the iPhone 6, with consumers holding their collective breath for the long-awaited bigger screens. Apple enjoyed continued success in the BRIC markets, a good sign that it is building its footprint in emerging markets. Given the pent-up demand, the third quarter could be a drought or a flood, depending on the timing of the next launch.

Huawei’s story centered on 4G LTE pick up, particularly in China, as all three national carriers subsidized 4G handsets like the P7 to encourage consumers to upgrade from 3G. Outside of China, large volumes of its lower-cost Y series fueled growth across most regions. The company continues to focus on broadening its global reach and the 2Q14 results show that the momentum is undoubtedly there.

Lenovo had a record quarter in China despite tremendous pressure from local brands. During the quarter, Lenovo saw increased success from the A788T, as well as the 3G A388T. And while its Motorola acquisition is undergoing approval, Lenovo continued to gain traction in international markets. While less than 5% of Lenovo’s shipments were registered outside of China in the second quarter of 2013, this share nearly tripled in 2Q14, with emerging markets, particularly BRIIC countries, picking up the largest volumes.

LG volumes were largely driven by its L series, helped by models like the L70, which performed well in many markets including the United States. With the G3 launched at the end of the quarter in Korea, greater volumes are expected to show up in the third quarter.

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Worldwide Tablet Market Grows 11% in Second Quarter on Shipments from a Wide Range of Vendors, According to IDC

IDC PMS4colorversion  300x99 Worldwide Tablet Market Grows 11% in Second Quarter on Shipments from a Wide Range of Vendors, According to IDC

The worldwide tablet grew 11.0% year over year in the second quarter of 2014 (2Q14) with shipments reaching 49.3 million units according to preliminary data from the International Data Corporation (IDCWorldwide Quarterly Tablet Tracker. Although shipments declined sequentially from 1Q14 by -1.5%, IDC believes the market will experience positive but slower growth in 2014 compared to the previous year.

“As we indicated last quarter, the market is still being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles,” said Jean Philippe Bouchard, IDC Research Director for Tablets. “We can also attribute the market deceleration to slow commercial adoption of tablets. Despite this trend, we believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific offerings, as illustrated by the Apple and IBM partnership, come to market.”

Despite declining shipments of its iPad product line, Apple managed to maintain its lead in the worldwide tablet market, shipping 13.3 million units in the second quarter. Following a strong first quarter, Samsung struggled to maintain its momentum and saw its market share slip to 17.2% in the second quarter.  Lenovo continued to climb the rankings ladder, surpassing ASUS and moving into the third spot in the tablet market, shipping 2.4 million units and grabbing 4.9% markets share. The top 5 was rounded out by ASUS and Acer, with 4.6% and 2.0% share, respectively. Share outside the top 5 grew to an all time high as more and more vendors have made inroads in the tablet space. By now most traditional PC and phone vendors have at least one tablet model in the market, and strategies to move bundled devices and promotional offerings have slowly gained momentum.

“Until recently, Apple, and to a lesser extent Samsung, have been sitting at the top of the market, minimally impacted by the progress from competitors,” said Jitesh Ubrani, Research Analyst, Worldwide Quarterly Tablet Tracker. “Now we are seeing growth amongst the smaller vendors and a levelling of shares across more vendors as the market enters a new phase.”

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Mobile gadgets outnumber people in these 7 countries

IDG News Service

Wireless broadband subscriptions now outnumber people in seven countries as consumers continue to snap up smartphones and tablets, according to a new report.

Finland, Australia, Japan, Sweden, Denmark, South Korea and the U.S. had wireless broadband penetration of more than 100 percent as of December 2013, the Organization for Economic Cooperation and Development said Tuesday. That means there was more than one wireless broadband subscription per person, usually because consumers have more than one mobile device that can go online. The U.S. just barely crossed the bar, while Finland led the group with more than 123 percent penetration.

Across all 37 OECD countries, wireless broadband penetration rose to 72.4 percent as total subscriptions grew 14.6 percent. The group spans North America, Australia, New Zealand, and much of Europe, as well as Japan, South Korea, Turkey, Israel, Mexico and Chile. It’s sometimes treated as a barometer of the developed world.

Wired broadband subscriptions also grew in 2013, reaching an average of 27 percent penetration. That means there was just over one wired subscription per four people: Wired broadband services, such as cable and DSL (digital subscriber line), typically are shared. Switzerland led in that category with 44.9 percent penetration, followed by the Netherlands and Denmark. The U.S. had just under 30 wired subscriptions per 100 people, while Turkey came in last with just over 11.

DSL still makes up a majority of wired broadband subscriptions, at 51.5 percent, followed by cable with 31.2 percent. Fiber-optic grew to a 16.7 percent share, gradually replacing DSL services. Fiber more than doubled its share of the market in the U.K. and also gained strongly in Spain, Turkey and France. While those countries still have relatively low fiber penetration, Japan and Korea continued to lead the OECD for that technology. Nearly 70 percent of all wired broadband in Japan goes over fiber, and almost 65 percent in Korea.

The OECD has compiled some of its broadband statistics on a portal page. For all the technologies it tracks, the group uses a generous definition of broadband as a service capable of at least 256K bits per second downstream.

Facebook’s mobile app install ad business faces growing competition

Mobile Marketer

While Facebook’s mobile advertising business keeps growing – mobile represented a whopping 62 percent of ad revenue during the second quarter – the social network could become a victim of its own success, particularly on the application marketing front, as a growing number of competitors come out with their own, often compelling offerings.

The 62 percent of ad revenue delivered by mobile in the second quarter is up from 41 percent during the same period a year ago and from 59 percent in the first quarter of 2014. Facebook’s new mobile ad network and app install ads drive much of the mobile ad revenue but the company continues to look at ways to broaden its mobile ad business.

“When you think about our mobile ads, I do sometimes think that people think our mobile app install ads are all of the revenue or a great majority of the revenue, and they are not,” said Sheryl Sandberg, chief operating officer at Facebook, during a conference call with analyst to discuss the company’s second quarter financial results. “They are only a part of the mobile ads revenues.

“Our mobile ads revenue is broad based,” she said. “We have large brands advertisers, small, direct response advertisers as well as developers using our mobile ads.

“The mobile app install ads which are run not only by developers but also by large companies that want to get people to install apps are growing. They remain a good part of our mobile ads revenue and we are excited about the opportunities there. But we see our opportunities in mobile ads as much broader than just installing apps.”

Mobile growth
Facebook reported yesterday that its overall revenue grew 61 percent for a total of $2.91 billion during the second quarter of 2014. Of that, $2.68 billion came from advertising, a 67 percent jump from the same period a year ago.

Growth in mobile use on Facebook continues to outpace general use, with mobile daily active user increasing 39 percent for a total of 654 million while mobile monthly active users grew 31 percent for a total of 1.07 billion.

In comparison, overall daily active users grew 19 percent for a total of 829 million and monthly active users increased 14 percent for a total of 1.32 billion.

The company also posted a 138 percent increase in net income for a total of $791 million.

App install ads
Facebook launched mobile app install ads in late 2012 and the offering quickly took off because it meet an untapped need to help developers drive app downloads. In less than two years, Facebook has driven 350 million app installs, per Fiksu.

However, Twitter recently released its mobile app promotion product suite. Fiksu is a partner, helping clients such as Groupon, Dunkin Donuts and Barnes & Noble drive app downloads from Twitter.

“Over the past 12 months, Facebook has enjoyed a leadership position with respect to performance in the app marketing space,” Craig Palli, chief strategy officer at Fiksu.

“While costs of media were often up to ten times greater on Facebook than other channels, they could command this premium because their cost per purchasing user was 28 percent better than other traffic sources, based on the strength of their segmentation tools,” he said.

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China has more people going online with a mobile device than a PC

Reuters

The number of China’s internet users going online with a mobile device – such as a smartphone or tablet – has overtaken those doing so with a personal computer (PC) for the first time, said the official China Internet Network Information Center (CNNIC) on Monday.

China’s total number of internet users crept up 2.3 percent to 632 million by the end of June, from 618 million at the end of 2013, said CNNIC’s internet development statistics report.

Of those, 527 million – or 83 percent – went online via mobile. Those doing so with a PC made up 81 percent the total.

China is the largest smartphone market in the world, and by 2018 is likely to account for nearly one-third of the expected 1.8 billion smartphones shipped that year, according to data firm IDC.

The increase in internet users was mainly driven by mobile, which grew 5.4 percent from the 500 million users at the end of 2013. The number of mobile shoppers surged 42 percent from December through June.

Chinese e-commerce is dominated by Alibaba Group Holding Ltd [IPO-BABA.N], which is preparing for a mammoth initial public offering widely expected to take place in September.

Alibaba’s biggest competitor is JD.com Inc, which specializes in business-to-customer e-commerce in a similar vein to Amazon.com Inc, and is 17.6 percent owned by Alibaba arch-rival Tencent Holdings Ltd.

Other online mobile services with rapid growth from the end of 2013 include music, video,gaming, search, and group-buying, all of which experienced double-digit increases.

The fastest growing services were mobile payment, where users shot up 63.4 percent, online banking, with a 56.4 percent rise, and mobile travel booking, which was up 65.4 percent.

But not all internet activity saw growth. Users of microblogs such as Tencent Weibo and that offered by Weibo Corp fell for the second six-month period in a row, by 1.9 percent to 275 million.

They numbered 331 million at the end of June last year before the government in September started clamping down on “online rumors” which it said threatened social stability.

Blockbuster mobile messaging apps such as Tencent’s WeChat have since become venues of choice for users who want to express views without fear of retribution.

Extra! Extra! Read All About It (via Mobile)!

eMarketer

When it comes to magazine ads, reader recall is the same for print and tablet versions (52%), according to data released earlier this month by GfK MRI Starch Advertising Research. And based on May 2014 polling by IDG Global Solutions, magazines better hope this is true across all mobile devices—and newspapers should cross their fingers even more.

176330 Extra! Extra! Read All About It (via Mobile)!

The research found that among smartphone and tablet users worldwide whose devices had replaced other media, print newspapers saw the most abandonment, with 50% of tablet owners switching over to mobile news, and 41% of smartphone users doing the same. Print magazines followed: 47% of tablet-toting respondents had replaced them with a digital screen, and 33% of smartphone owners had moved their magazine reading to their phones.

These patterns were the same no matter a user’s age, though replacing traditional media with mobile was slightly more common among younger respondents. Users were less likely to have replaced other digital devices and TVs with a tablet or smartphone, and as a result, the majority multi-screened. Around three in five respondents from both groups used their mobile devices as they used other screens, and again, age didn’t play a huge role.

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Digital marketing budgets will grow

Warc

More than three-quarters of senior marketers in Asia-Pacific think digital, mobile and analytics will change the face of the industry over the next five years, a recent survey has revealed.

According to the regional segment of Accenture’s global study of 600 CMOs in 11 countries, 39% of its 180 APAC participants also expect spending on digital to account for over 75% of their marketing budgets over the same period.

But even though another 42% forecast that their marketing spend on digital will increase by more than 5% next year, only 23% expect their company to be known as a digital business within five years, Campaign Asia reported.

This prompted Accenture to warn industry practitioners that they need to embrace digital in order to survive.

“To be part of the enterprise digital transformation that every business needs to undertake for survival, CMOs need to extend their vision of marketing and its scope,” the report said.

Patricio De Matteis, managing director of Accenture Interactive for APAC, urged marketers to make best use of digital opportunities while also taking account of the customer experience.

“Senior marketing executives are well positioned to assume this role because the opportunities, as well as the potential, lie in the customer, the brand, the interface with the customer and how the customer is empowered,” he said.

He noted that an increasing number of companies are now hiring staff specifically to manage the customer experience and said “the key to success” is in developing an effective omnichannel experience.

This would appear to be an area requiring improvement because nearly three-quarters (73%) of the survey respondents believe it’s “essential” to deliver an effective customer experience, yet only 61% think their company is doing this well.

US mobile e-commerce grows 19-fold

Warc

Mobile e-commerce sales in the US grew from $2.2bn in 2010 to $42.8bn in 2013 and are expected to increase to $50bn by the end of this year, new analysis has shown.

According to e-marketing services provider Custora, that represented growth of 1,875% from 2010 to 2013 while adding that the first quarter of 2014 alone generated $12.2bn in mobile e-commerce sales.

It found direct traffic was the primary driver of mobile phone e-commerce purchases (32.9%) while email marketing drove 26.7% compared to only 20.9% on desktop and 23.1% on tablet.

Organic search accounted for 16%, but social media accounted for less than 1% of mobile orders (0.6% via mobile phones and 0.2% via tablets).

Over a third (37%) of online store visits came via mobile devices by the end of Q1 2014, Custora said, up from 3.4% at the beginning of 2010.

Its analysis – based on over 70m consumers, 100 internet retailers and $10bn in transaction revenue – clearly outlined the growth of mobile, but also showed purchases via a desktop dominated conversation rates, Marketing Land reported.

From January 2013 to March 2014, desktops recorded an average e-commerce conversion rate of 4.3% compared to 2.8% for tablets and 1.4% for mobile phones.

Interestingly, Custora also found online consumers prefer to make their first purchase on a desktop, only moving to a mobile device for repeat purchases after establishing trust with the retailer.

Elsewhere, the study found only 12% of consumers used multiple devices to shop in Q1 2014, although the number doing so has tripled since 2012.

In order to reach these multi-device users, Custora CEO Corey Pierson advised brands to segment them according to the devices they use, Internet Retailer reported.

“The fastest-growing retail brands segment their customer bases and know that different customer segments have unique device preferences, which often translate to varied product category preferences and specific purchasing patterns,” he said.