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2016 Mid Year State of the Mobile Industry

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2016 Mid Year State of the Mobile Industry

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The 2016 Mid-Year State of the Mobile Industry Report dives into stats and reports from January to June 2016. It takes a look at mobile devices, mobile user behaviors, mobile apps, mobile video, mobile advertising, ad blocking, SMS, social media, OTT messaging, email, mobile search, mobile couponing, mobile commerce and payments, mobile's influence in retail, the Internet of Things and wearables.

The 2016 Mid-Year State of the Mobile Industry Report dives into stats and reports from January to June 2016. It takes a look at mobile devices, mobile user behaviors, mobile apps, mobile video, mobile advertising, ad blocking, SMS, social media, OTT messaging, email, mobile search, mobile couponing, mobile commerce and payments, mobile's influence in retail, the Internet of Things and wearables.

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2016 Mid Year State of the Mobile Industry

  1. 1. State  of  the  Mobile  Industry 2016  Mid-­‐Year  Report
  2. 2. It is amazing when you stop and think about what the last nine years have brought us since the iPhone was first introduced. The first advertisement for the iPhone aired on February 25, 2007 during the Academy Awards and released four months later. The smartphone craze took hold of us all. Now, 78% of global consumers have smartphones (Deloitte, “2016 Global Mobile Consumer Trends). India has reached 1 billion mobile subscriptions (2015, Telecom Regulatory Authority of India). 72% of 11-­‐ 12 year olds in South Korea own a smartphone (2016 “Computer in Human Behavior”). Although Australia’s mCommerce growing nearly three times the speed of online, 4 billion people across the globe still don’t have access to the Internet. This is most evident in countries with low GDP in Africa where, for example, only 5% of Uganda’s population have smartphones. Like any game-­‐changing technology that alters human behavior, disruption crashes across every industry. The music industry has been turned on its ear by companies like Pandora, Spotify, Amazon and Apple. Spotify now has 30 million subscribers and Apple has between 11 and 15 million depending on the sources you read. Spotify belongs to the Unicorn group. Unicorns are thought to be mythical private companies that have ascended to $1 billion evaluation or more. The sharing economy has also gained ground and disrupted status quo. 70% of consumers have used companies like Lyft, Airbnb and Uber. Speaking of sharing, a mom who used her smartphone to capture and post a video to Facebook Live as she tried on a Chewbacca mask from Kohl’s amassed over 153 million views. Introduction $3.1TIn  revenue  generated  by  mobile  industry  in  2015 $5.1B2016  sales  generated  by  VR   (estimated)
  3. 3. We’ve seen the stats that talking on the phone is rated as an infrequent activity. That’s changing. Not because we’re making more phone calls, but because four in ten smartphone owners regularly use voice recognition. We convert voice to text, ask Siri, Cortana or Google Now questions or control our phones with our voice. These technologies are getting smarter and better at understanding us. Apple and Microsoft have opened up their voice recognition to developers. Companies are popping up like viv.ai, made up of Siri developers, who plan to take building a simple intelligence for everything to the next level. Currently 1/3 of the top 100 retailers utilize beacons. This number is set to grow to 85% by year’s end. Virtual Reality (VR) and augmented reality (AR) are knocking on the door of main stream. People have watched 1 million hours of VR content on Samsung Gear devices according to Facebook’s Mark Zuckerberg. Meanwhile, Google sold 5 million Google cardboard VR headsets. That’s several numbers to process. While on their own, they make us think, but the decisions drawn from them and resulting actions are what’s most important. We have entered the time period where we have to assume that everyone is a mobile user. In some form or fashion, whether it’s the device or indirectly because of the inception of the device, mobile drives commerce and innovation. Introduction 30%Of  Mobile  World  Congress  attendees   booked  travel  using  AirBnB
  4. 4. 1.4B smartphones were sold in 2015 led by Samsung, Apple and Huawei. A big number that isn’t necessarily a good number. Globally, Apple sales flatlined and were down in Q1 2016 by 16%. Android sales increased growing Android’s market share to nearly 6 times that of iOS. Android developer woes continue as the fragmentation increases. iOS enjoys the fact that they have over 90% of phones on the same version and 98% distributed over two versions. Android is forced to deal with over 16 different versions and none over 20%. It only took 7 months for 84% of iOS users to upgrade to iOS 9. Meanwhile Android only converted 7.5% of users to Android 6 in 6 months. Don’t rest your Android OS hopes on new smartphones to increase the number of phones with the same version. Only 48% of consumers plan to buy a new smartphone this year according to Accenture, down 6 points from last year. More and more users are waiting to replace their phones until it dies. Devices Top  Smartphone  Platforms 3  Month   Avg.  Ending  Feb.  2016  vs.  3  Month   Avg.  Ending  Nov.  2015 Total  U.S.  Smartphone  Subscribers  Age  13+ Source:  comScore  MobiLens Share  (%)  of  Smartphone  Subscribers Nov-­‐15 Feb-­‐16 Point  Change Total  Smartphone   Subscribers 100.0% 100.0% N/A Android   53.1%   52.7%   -­‐0.4   Apple   43.1%   43.9%   0.8   Microsoft   2.8%   2.5%   -­‐0.3   BlackBerry   1.0%   0.8%   -­‐0.2   Male Female Gender Android iOS OS More  than  once  a  year Once  per  year Once  every  2  years Once  every  3  years Less  than  once  every  3  years Frequency  US  smartphone  owners   purchase  a  new  smartphone
  5. 5. Americans are tethered to their phones. 67% of Americans never try to unplug from technology. They always have their smartphone, tablet or laptop with them. Half of teens admit to being addicted to their phones. According to Google’s Micromoments, 87% of people always have their smartphone at their side, 68% check their phone within 15 minutes of waking up, check their phones 150x a day and use mobile more than desktop to access the Internet. The same can be said for media access. Users spend 3 hours a day on our mobile devices which is 17% more than desktop. Luckily, global mobile network connection speeds grew 20% in 2015 to help keep up with the high demand from users. “Help” because smartphone usage grew43%, app usage grew58% and time spent on smartphones grew117% in the US in 2015. Smartphone owners in the US eat through an average of 2.5GB per month. Global data traffic grew 74% to reach 3.7 exabytes per month by the end of 2015, that’s 3.7B gigabytes. The US consumed 9.6B gigabytes for the entire year, up 300% from 2013. One-­‐third of all North American web traffic now comes from mobile devices. For 60% of smartphone users, their smartphone is their primary Internet source. For a more global perspective, mobile has given access to 2.5B people in developing countries. This accounts for about 40% of the developing world’s population. The GSMA predicts that number will be 3.8B in 2020 (nearly 60% of the population). These numbers are nice but what does it translate to? Smartphones and tablets together account for 70% of brand’s digital engagement time according to comScore. 94% of smartphone owners use the device to search for local business information. 84% of smartphone shoppers use their phone in the store. Smartphone research is an important part of the experience. Online pre-­‐purchase researching (webrooming) is predicted to drive $1.8T in retail sales in 2017. Mobile is an important part of this. Consumers want a seamless experience across all devices. Unfortunately, about half of consumers say the integration between brick-­‐and-­‐mortar, online and mobile needs improvement. An excellent mobile experience is imperative for businesses trying to attract Millennials. Mobile  User  Behaviors 48% 33% 25% Initial  Mobile  Search Search  Engine Branded  Website Branded  App 8BNumber  of  time   smartphones  are  checked  in   the  US  every  day
  6. 6. Apple users spent $1.1 billion on apps and in-­‐app purchases over Christmas and New Year making this 2015-­‐2016 holiday season the biggest ever for the Apple App Store. When you stop to consider the app ecosystem was worth $0 before 2008, it’s mind-­‐boggling to think the ecosystem is predicted to be $101B by 2020. Marketers take note, mobile is 70% of consumers’ interactions with a brand according to Adobe DigitalIndex. Americans spend over 3 hours/day on mobile. With nine out of every ten minutes spent in apps, app’s importance cannot be understated. Don’t expect your users to stay long though. 73% of app sessions are 1 minute or less with an average of 72 seconds per session. Despite users visiting 25 apps per month, 80% of the time is spent on their top three apps. Ten or fewer apps are opened per day by 92% of smartphone owners. Messaging and social consume 34% of the time spent on mobile with entertainment and gaming coming in at 17% and 15%, respectively. iOS and Android won the mobile OS wars long ago with a 98% death grip on smartphones. While Google apps enjoy faster growth, Apple is where the money is. The majority of the 638B apps downloaded from 2008-­‐2013 belongs to Google but the lion share of the $99B in revenue belongs to Apple. Apple has made great strides to improve their app approval process by reducing the time from 8.6 days one year ago to 1.6 days today. It’s important to make the 5.7M app developers around the world happy. These numbers sound great but the usage, or lack thereof, as time goes by can be disheartening (5% within 30 days). What steps can be taken to improve it? Minimize the information required. 60% of users decide not to download or continue usage after realizing how much information they are required to share. 43% will uninstall for the same reason. Make sure you have a quality app. 96% of users will install a 4-­‐star app, 50% will download a 3-­‐star app, but only 15% will download a 2-­‐star app. Apps 62% 18% 11% 6% 3% Reasons  people  looked  at  or  picked   up  their  phones Notifications Killing  time Looking  for  something Accident Other 1.62BApp  downloads  estimated   for  2016-­‐2020
  7. 7. Onboarding communication is important. Onboarding with push and another channel like email or SMS during the first week of installation will increase the customer retention 130% over 2 months. Multiple channels are vital since 30% disable all mobile push notifications. If you’re lucky enough to rank as one of the user’s favorite apps, 50% will opt-­‐in to receiving push messages. Optimize your push messages. Twenty-­‐four characters or less increases conversion rates and adding an image increases the likelihood the customer will respond to a call-­‐to-­‐action (CTA) by 57%. Personalized message sent to the app increases conversion by 27% and personalized message delivery times (when they are usually engaged with the app) drives up conversions by 38%. You’ve paid 40% more for an install on Android than you did last year. You have added 34% of users based on peer reviews. You’ve kept them through the first week. Now what? Keep up the communications. Find ways to keep the users engaged. 90% of users who engage with an app on a weekly basis for the first month of install will continue to use the app. By this time, a habit has formed and you have them hooked. Apps can be a difficult and costly business. User expectations are high. If the app runs slow, 48% of the users will uninstall. 72% of users will uninstall apps if they rarely open it. However, users will rewardyour efforts if done correctly. Apps 100%Google  Play’s  install  lead  over  iOS 40-­‐70Number  of  apps  on   smartphones Estimated  revenue  generated   from  app  between  2016-­‐2020 $324B
  8. 8. According to a study from IAB last year, 50% of US respondents view content on mobile devices. Over 35% watch videos that are longer than 5 minutes on a daily basis. We’ve talked about multiple screens for several years but not only are they using mobile while watching TV, 22% of users are watching streaming video while watching TV. Mobile is having a dramatic effect on sporting events as the NBC streams the Olympics in Rio. This is nothing new as all of Wimbledon and soccer’s Euro 2016 was too. 17% of soccer fans watched at least one match on their mobile phone and 40% stayed up-­‐to-­‐date with highlights, clips, stats and news from the tournament. As mobile video grew 6x faster than desktop in 2015, it’s making an impact on purchasing. Consumers are 1.8x more likely to purchase after watching mobile video advertising. This translates to 52% of consumers feeling more confident in the products they planned to purchase and purchases are up with 40% of users buying a product after watching a video. Possibly this rise is assisted by a retention rate that is 34% better than non-­‐video ads. Users are also more likely to watch a video on mobile (83%) than desktop (53%). Retail (19%), tech (18%) and consumer packaged goods (16.5%) understand this and combined, make up over 50% of all campaigns ran during Q4 2015. As the mobile video ad spend doubled in 2015, 87% of marketers rated video marketing as effective. The percentage of US marketers that plan to increase their spend rose to 65% for 2016. This is no passing fad as consumers spent 39 minutes per day in 2015 watching video on mobile devices compared to three minutes in 2011. Mobile trumps the plateauing desktop/laptop viewership by 15 minutes. Video 1.8xMore  likely  to  purchase  after   mobile  video  ad  than  non-­‐view 48%Of  Millennials  are  viewing  videos   solely  on  mobile
  9. 9. Of course social media is a big player in the amount of video watched. Searches for how-­‐to videos on YouTube increased 70% over 2015. 74% of Millennials follow brands on YouTube. Not to be left out, Facebook logs 8B video views/day. However, 85% of videos on Facebook are viewed without audio. Get your close captioning ready. Twitter’s numbers aren’t too bad either. 82% of its users watch videos and 90% of them watch on mobile devices. While YouTube users search for specific videos, Twitter users discover new content. Mobile video is the golden child of marketing. The numbers are very positive. The largest downside is that video advertising is one of the biggest complaints of users worried about their data usage. If there was only a way to see if the user is on WiFi or using their carrier data plan and adjust content accordingly. Video 8BFacebook  videos   viewed/day 1.3% 4.5% 7.2% In-­‐Stream  Video Interactive  Pre-­‐ Roll Tap  to  Interactive   Video Video  CTR 87% 27% 21% In-­‐Stream  Video Interactive  Pre-­‐ Roll Tap  to  Interactive   Video Completion  Rate
  10. 10. Mobile advertising is rising at an impressive rate taking spend from other channels even though there are still issues that need to be overcome. A study from MarketsandMarkets says the mobile marketing sector is set for a 4x growth in the next five years totaling around $29 billion by 2021. During this exponential growth spurt ZentithOptimedia predicts that more money will go into Internet and mobile globally than TV commercials with digital advertising growing at 3x the rate of the rest of the industry. The demand for advertising is boosted by large events like the Rio Olympics, the European football championships and the US presidential election. The vast majority of the ad spend surge will be mobile. According to Outsell’s Annual Advertising and Marketing Study 2016, digital advertising and marketing spend will equal “traditional” for the first time in 2016. This is great news on the surface. Unfortunately, mobile represents 63% of time spent online yet only 35% of the online dollars. This continues to be an issue that the ad spend doesn’t correlate with consumer behavior. Not only do consumers spend more time on mobile, there is a higher lift in brand metrics due to mobile ads than desktop in the US. A theory to this brand lift is that mobile ads cover a greater portion of the screen causing them to appear more directly in the consumer’s field of vision. Desktop display ads can be easily overlooked. We are used to seeing desktop ads and where they are placed on the screen making it easier to ignore them. Another theory is that mobile is closer to the point of sale. Unless you’re buying online, it’s rather impractical to carry your desktop everywhere you go. I don’t think I’ve ever seen a person carrying a laptop, much less a desktop, into a store that wasn’t getting it fixed. Mobile  Advertising 1.4 1.3 1.5 1.4 2.3 2.7 3.3 3.7 Aided   Awareness Favorability Likelyhood   Recommend Purchase   Intent Percentage  Point  Lift  in  Brand  Metrics  for   Desktop  and  Mobile  Ads Source:  BSL  and  mBSL Benchmarks,   U.S.  Full  Year   2015 Desktop Mobile
  11. 11. In just over a year of its launch, the Facebook’s in-­‐app ad network has passed $1 billion in annual run rate. Instagram reached over 200,000 advertisers. Click-­‐thru-­‐ rates (CTR) for retail were measured at 0.52% (highest), electronics at 0.41% and entertainment at 0.40%. Unfortunately, 50% of clicks on mobile ads were accidental according to GoldSpot Media. Ad clutter is cited as the biggest challenge of the digital advertising experience by 54% surveyed by Ad Week and ad blocking grew 41% globally. Digital video ad viewability continues to be a top campaign objective in the US. The average viewability rate for digital video ads worldwide was 47% for Q1 2016 according to the ad platform Extreme Reach with little variability in ad lengths of 15 or 30 seconds. The low viewability could be directly related to mobile ads taking 2x longer to load than desktop (Media Ratings Council). While the initial reports sound great for mobile marketing and advertising. There is definite improvement in meeting the consumers where they are, but it’s still a long journey ahead. Speed may kill but slow kills video. Mobile  Advertising 95%Growth  in  mobile   advertising  in  2015 75.9%Of  all  digital  ad  spend  will  be  mobile  by  2020
  12. 12. Ad blocking has certainly been a hot topic the first half of 2016. PageFair reports that 419MM people (22% of the world’s 1.9B smartphone users) are blocking ads on the mobile web. Mobile browsers that block ads grew 90% during 2015. This is nothing new to Asia where 93% of people who block ads reside. The number of North American and European blockers numbers only 14MM combined. Tune expects this number to grow from 24.6% in the US and UK in early 2016 to 80% by late2017. Who’s leading the charge? Millennials. The 2016 Reuters Digital New report found that 18-­‐24 year olds block ads at a much higher rate than any other demographic. This does not paint a rosy picture for marketers eager to communicate with the highly desired younger generation. This younger generation is also more willing to pay to get rid of ads. However, this number is still not great. A majority, 61%, of the younger users are unwilling to pay anything, compared to 82% of over 65 year-­‐ olds that don’t want to pay a dime. As the battle between publishers and ad blockers continue to wage, UK operator Three unveiled plans to trial ad-­‐blocking technology at the network level. This would effectively eliminate all ads for both mobile web and in-­‐app. Welcome news to users who are tired of ads eating into their data usage, especially with video ads on the rise. Publishers are less than joyous at the thought of losing 10% of their revenue over the next 4 years, an estimated cost of $78.2B by 2020. Even though the industry understands a root cause of ad blocking adoption is a poor user experience, this hasn’t translated into visible action to improve the issue, reduce privacy concerns or the increase in malware. It’s time a regulatory group oversee the industry to put some teeth behind an industry that is in such conflict. Ad  Blocking 90%Growth  in  downloads  of  ad   blocking  mobile  browsers  in   2015 $78BCost  to  publishers  who   don’t  respond  adaquately to   ad-­‐blocking  software  threat
  13. 13. Every year I hear the same ol’ line “SMS is dead” or dying. The rumors of its demise continues to be misstated, at least when it comes to marketing and business use. Credence Research estimates the A2P SMS market will expand at a CAGR of 4.9% over the next six years and be worth $78MM by 2022. Two trillion messages are expected to be sent via A2P in 2017. To support the use of SMS marketing techniques, BIA/Kelsey predicts a 40% growth rate of revenues gained by spending generated by SMS in 2017 ($16.8B). Why shouldn’t it? 75% of mobile phones worldwide are enabled to receive SMS messages and expected to rise to nearly 90% in the next 10 years making it imperative that companies include SMS in their marketing mix. SMS marketing campaigns have produced seven times greater effectiveness than email campaigns. In the US, they are permission-­‐based that yield consequences to companies that don’t adhere to the industry regulations. These regulations have reduced the amount of SMS marketing messages perceived as spam to only 10%. With the fragmentation of OTT messaging apps like WeChat and Messenger, lack of push consumer usage, restrictions placed on brands by the publishers and the multitude of social media channels to maneuver, SMS is still an effective channel for brands to reach their customers. SMS $16.8BRevenue  generated  fron SMS   marketing  in  2017 2TMessages  expected  to  be   sent  via  A2P  in  2017
  14. 14. While we’ve seen the traditional players like Facebook, Twitter and LinkedIn plateau, social media as a channel hasn’t. Other players have certainly picked up the baton and continue to run full steam ahead. Smartphone users get their news, are driven to websites and spend most of their mobile time on social sites and apps. Social users are mobile. Of the 2.3 billion active social media users globally, 85% or 1.97 billion of them are active on mobile devices. Parks Associates revealed that 80% of US smartphone owners use social networking apps at least once a day with 35% of them spending at least an hour a day on social media via their mobile device. comScore posted that 61% of social media time spent on the smartphone is in-­‐app. This is an 8% year-­‐over-­‐year increase and poised to continue to grow since apps are built for functionality and providing the smoothest experience possible. As the big 3 social platforms begin to stagnate, Instagram accomplished in less than six years what took Facebook nearly seven, hitting 500 million users. While 80% of its users are outside the US, they have now reached 95MM images and posts shared daily from around the world. Social  Media 50%unique  visitors  access  via  mobile  on  LinkedIn 1510 257 Monthly  Active  Users Facebook Twitter 100 300 Daily  Active  Users Snapchat Instagram
  15. 15. Thanks to social media sites like Pintrest, social traffic has become the second biggest driver of traffic to websites only behind direct traffic. With heavy social use, mobile shopping follows. A study from Criteo surveyed UK adults finding that social media users are more likely to purchase on mobile – 19% of daily Snapchat users and 15% of daily Instagram and Pintrest users are buying via mobile every day. This makes sense because users are only a click or two away from buying. It’s about convenience. All is not bright in the social media world. Twitter saw a slight decline in quarter-­‐over-­‐quarter monthly active users in Q4 2015. Ironically Facebook Reactions introduced by Facebook in February gets a sad face as they failed to gain momentum with users. It’s a case of users requesting something that in theory sounds great but doesn’t get used. While ‘love’ is certainly the most popular of the new reactions at 50.8%, ‘love’ accounts for less than one-­‐sixteenth of the amount of likes in the same period. Good news, either users are much more apt to react to positive posts or users are posting more positive posts than negative. We’ve seen a lot of movement in social recently, including Facebook adding reactions, adding bots to Messenger and the splitting off Messenger from the Facebook app. The established 3 have to keep up with the newcomers and some are finding it difficult to do so they are buying the smaller guys like Facebook or selling themselves like LinkedIn. What will Microsoft do with LinkedIn? That remains to be seen. Social  Media 16x   Love 35% 56% 64% 44% 20% 35% 51% 35% 17% 21% 23% 22% FACEBOOK INSTAGRAM SNAPCHAT TWITTER Heavy  users Light  users Non  users How  social  media  usage  impacts  propensity  to  buy   on  mobile  (%  of  users  that  buy  on  mobile)
  16. 16. WhatsApp  passed  1  billion  users  worldwide  as  of  February  2016  sending  64B  message/day,  less  than   18  months  after  the  purchase  by  Facebook.  Six  out  of  the  top  ten  apps  are  messaging  apps.  Facebook   owns  the  top  two  and  three  of  the  top  ten.  With  80%  of  smartphone  users’  time  spent  on  3  apps,  the   importance  of  the  messaging  apps  cannot  be  understated  this  year.  Even  though  these  chat  apps  have   seen  exponential  growth  in  the  US,  it  doesn’t  mean  advertisers  will  be  getting  in  on  the  action   anytime  soon. Messaging $1MMRecords  sold  by  online  vinyl  seller   in  8  months  via  conversational   commerce Ignited by mobile internet and smartphone growth, mobile messaging apps have strengthen and solidified their position as an alternative to SMS with social media elements like group chats and photo sharing. These over the top (OTT) services are just getting warmed up in the US. China has been leading the way with WeChat making commerce a large part of the platform and giving the users a much richer experience. 762 1000 100 WeChat  (China) WhatsApp  (US) Telegram  (Russia) #  of  Monthly  Active  Users  (in  millions)
  17. 17. Like the early days of social media, marketers are experiencing similar conundrums. Where do they focus their efforts? There are so many different chat apps with no clear winner globally or locally in the US. User’s aren’t necessarily exclusive either. 72% of Snapchat users are also active on Facebook Messenger, 54% on WhatsApp ad 51% on Skype. With no standard or regulations like SMS has, app makers are concerned, and rightly so, about spam and abuse thus restricting marketer’s capability of reaching their customers. Facebook has experimented multiple times with advertisements and marketing on the messaging app only to end the trials. Fortunately, they have given marketers chatbots and now there are 11,000 chatbots for users to try. Given the drawbacks of apps, there is a demand for bots. They are easy to maintain and update since they don’t live on the smartphone itself. They will not replace apps but complement them. KLM found that users want private messages. Users are more likely to respond and have longer conversations when the messages are private instead of public. Brands can bring a consistent level of service. Bots also reduce the initial response time improving the customer experience. Currently there are 10,000 companies developing artificial intelligence (AI) chatbots to match the demand for the smoother experience. Messaging apps have a few more years left on them before Rich Communication Services (RCS) starts competing and solving the problem users are going to have soon. The fragmented messaging app market is going to reach a point where consolidation is going to be required. Only the strong will survive similar to what we saw with social media. This time it’s going to be controlled by the carriers though. Messaging Other  mobile   mesaging 25% IM  apps 75% Mobile  messaging  traffic  share Other  mobile   mesaging 98% IM  apps 2% Mobile  messaging  revenue  share
  18. 18. It’s hard to deny the importance of email in the customer journey nor is it believable that email is dead. Like technologies before, it is transforming. It must with the advent of mobile. Mobile email accounts for 15 to 70% of email opens depending on your target audience, product and email type according to eMailmonday’s “The Ultimate Mobile Email Stats.” Litmus “Email Analytics” (March 2016) says that 55% of email is opened on a mobile device. Experian reports that 65% of total email opens occurred on a mobile phone or tablet in Q4 2015 up from 54% the previous quarter. Unfortunately, in 2015, eConsultancy stated that only 21% of companies say they have an advanced mobile email strategy. This is unfortunate since email accounts for 23% of “journey interactions” between brands and consumers. Email is up 270% year-­‐over-­‐year according to Kitewheel. Yet, brands are failing their customers. Only 32% of marketers preview emails in various email clients and browsers, including mobile, before sending. This is a sad commentary on state of email and mobile leading to immediate deletion or worse – users unsubscribing. Progress is being made in the implementation of mobile-­‐optimized templates by 66% of marketers. However most of these templates do not support dynamic content allowing for personalization in the emails. Marketers who optimize their messages for mobile with an entirely responsive email design see improved results in B2B (40.7%) and B2C (38.5%). It’s time the industry catches up. I’m still surprised with today’s emphasis on metrics that 20% of B2B and B2C brands don’t know what impact optimizing their email design for mobile has on results. There is no reason to send emails that are not optimized for mobile. The industry has past the tipping point. Time to get on board. Email 40% 47% 27%29% 52% 18%8% 35% 55% Always Sometimes Never Do  you  use  your  mobile  device  to  sort   through  your  emails  before  you  read  them 14  to  18 19  to  34 56  to  67
  19. 19. 70% 12% 2% 8% 13% 0% 68% 25% 10% 16% 5% 5% 68% 29% 18% 15% 6% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% Delete  it Unsubscribe Read  it  anyway Look  at  it  on  my   computer None  of  these File  it If  you  get  an  ugly  email,  what  do  you  do? 58  to  67 19  to  34 14  to  18
  20. 20. Google handles 2T searches annually. Mobile accounts for more than half of these searches. Google Search rated as the forth most popular app overall in the US. It’s more important than ever to understand how people are searching. So, now that we know apps aren’t going to kill search anytime soon, how are people using search? Voice is becoming an important part of search as 20% of all Android searches are by voice. The average search length is 3.6 words. Two words adding to the string length is “near me.” Mobile comprises 88% of all “near me” searches growing at a rate of 146% year over year. Scott Beatty noted that by 2019, 141B local searches will take place in the US alone. In early 2015, mobile took over desktop for local search volume and the gap is widening dramatically according to BIA Kelsey. Although 77% of searches on mobile devices occur at home or work, mobile search triggers quick online and offline action. These searches drive continued research, visiting a retailer’s website or store, making a purchase or even calling a business. Yes, we do still use phones to make calls. 56% of these calls are made in less than an hour of the search. 80% visit a store within 5 hours of mobile searches. Search 77%Of  mobile  searches  are  at  home   or  work 88%Of  “near  me”  searches  are   completed  on  a  mobile  phone
  21. 21. 24.20% 36.60% 24.00% 9.10% 6.00% Daily Frequently Occasionally Rarely Never How  often  do  you  use  a  phone  to   search  for  a  local  business? Not all mobile searches are created equal. The context differs based on location. For example, food and shopping rule in-­‐store searches. Shopping queries are twice as likely to be in the store. Restaurants and travel trump on the go searches. While at home and at work, searches for arts & entertainment and technology reign supreme. If Google’s Mobilegeddon wasn’t enough for you to warrant a mobile-­‐friendly website as non-­‐optimized sites lost around 10% of their traffic, 45% of people either look for a similar business or refuse to do business with companies who disappoint on mobile. Are you relatively unknown? Don’t fret. 78% of people have discovered a business they didn’t know existed by searching on their phone. So take heart, if you play your cards right, you can be found. Websites aren’t the only links that Google tracks. Google has indexed 100B links within apps. With nearly two-­‐thirds of the searches going through Google, users can search and either be taken to your website or a link inside your app. Everything is searchable. Forget Internet of Things, Google’s giving you Search of Things. Search
  22. 22. The number of coupon prints has been declining 10% annually the past two years. Nothing to stress about as load-­‐to-­‐card mobile and digital coupons have quintupled in that same period. Nearly everyone with a smartphone will search for coupons this year to find the best deal and the greatest value. 55-­‐63% of smartphone owners used a mobile coupon on their phone in Q4 2015 according to Nielsen. Millennials cannot get enough of this discounting method as 96% of Millennials have used mobile coupons. 47% of Millennials have increased their usage in the past year, higher than baby boomers by 21 percentagepoints. It’s long been known that coupons and offers sent through SMS have outperformed other channels like print (10x) and email (6x). Effectiveness isn’t the only change that is happening with the increased usage. Nearly half of shoppers will switch the purchase because of a coupon. SMS and QR codes prompt 50% to make a direct purchase after receiving the offer. If you want to increase mobile payment activity, 60% would be more likely to use mobile payments after receiving a mobile coupon. 36% of customers would like to receive coupons based on location and 39% would spend more if the coupons were personalized. Speaking of location, there were 11MM coupons delivered via beacon in 2015. This number is predicted to grow exponentially to 1.6B by 2020. Millennial’s mobile use and their desire to find a good deal yields a very bright future for mobile couponing. Combining purchase history, geo-­‐location tactics like beacons, CRMs and analytics will create a perfect storm to see this marketing tactic skyrocket as coupon offers are individualized and delivery targeted. Couponing 1.6BCoupons  delivered  annually  via   beacon  in  2020 39%Would  spend  more  if  mobile   coupons  were  personalized
  23. 23. Mobile is no longer a small subset of commerce. Shopify found that more than 50% of e-­‐commerce traffic is driven by mobile. Business insider forecasts that by 2020 mobile will account for 45% of the US’s $632B total e-­‐commerce sales. Verizon found that 56% of US adults bought a product or service using an app in 2015. That number grows to 70% when it comes to Millennials. Starbucks has 16MM active users of their mobile app and processes 8MM mobile payments per week. Mobile affects more than purchases through websites, it touches individuals and in-­‐store transactions. Ovum says that 1.61B users will process $271B in 2019, up from $15B in 2014. Venmo, a P2P payments app in the US, said its users sent and received $1B during the month of January 2016, 2.5 times the volume it handled in January 2015. US in-­‐store mobile payment volume is predicted to reach $75B this year according to Business Insider. This estimate is three times the projected volume put forth by PackagedFacts in their report Mobile Payments in the US. While we saw a drop in mobile retail penetration for the first time in Q1 2016, the US holiday spend on mobile increased 59% so the drop is understandable and short-­‐lived. What’s behind this movement? Convenience. Timing couldn’t have been better for the transition in the US as the switch to EMV was painful to consumers and merchants were required to replace their old, tired credit card terminals to newer hardware that could accept mobile payments. It was a perfect storm. According to the Consumers and Mobile Financial Services 2016 report, 45% of consumers use mobile out of convenience. Mobile phones are always within reach, unlike the desktop or the store. People by at home in front of the television, in bed at night, on lunch break, on their commute or at home over dinner, in other words, wherever they’re at. In most cases, convenience is trumping usability. Mobile  Payments  and  Commerce 59%US  holiday  spend  on  mobile   increase 8MMMobile  payments  per  week   at  Starbuck
  24. 24. Last year, mobile influenced $1 trillion in retail sales. Over half, 51%, of purchases made by respondents of a recent UPS study were made online. This affects in-­‐store traffic as half of the shoppers who purchase online, ship to a physical store. Nearly half of these shoppers made additional purchases. Marketers are seeing the importance of mobile in this mix. In 2016, mobile will trump desktop’s importance according to 76% of marketers. We are starting to see an improved focus on mobile as 68% of companies have integrated mobile marketing. However, in a study by Episerver, just under half of the top international retailers still don’t offer an iPhone app. There are still top retailers that haven’t made the investment in a mobile-­‐friendly website. Several take longer than 10 seconds to load which is a killer considering that 50% will abandon a website if it takes that long to load. Yet, 61% will contact a local business if the website is mobile optimized. CMS Report determined that 57% percent of users won’t recommend a business not using a mobile optimized website. Mobile apps and truly mobile-­‐friendly websites must factor into any retailer’s strategy. Keeping the business at the top of their customer’s mind will ensure that their products are never more than a click or tap away. While shoppers are buying more and more online, they still value the physical store. The physical store still provides values and experiences that cannot be replicated by a website or app. Of course, that depends on the customer service and with only 36% of shoppers saying they have experienced helpful associates when returning items, retail isn’t off to a good start on that one. Retail:  Mobile  Influence 80%Consumers  use  a   smartphone  to  shop 79% 73% 55% 55% 54% 0% 20% 40% 60% 80% User  reviews Investigating  price Investigating  a  range  of   color  choices Looking  for  a  more   detailed  product  … Interested  in  whether   the  product  is  right  … Reasons  that  US  female  beauty   buyers  use  their  mobile  phones   while  shopping  in-­‐store
  25. 25. A few years ago it was showrooming that was the fear of brick-­‐and-­‐mortar stores. Then there was webrooming. It’s time to quit complaining about how people shop and provide them what they need to keep doing business with you. Shoppers use their smartphones in your store, nearly 80% of them. They compare prices with competitors (36%), research products (36%), access coupons (31%) and access confirmation emails to pick up products that were purchased online (25%), for example. These numbers swell anywhere from 5-­‐8 points higher for 18-­‐34 year olds according to PwC. Deliotte found that digital influences 49% of in-­‐store sales. Mobile came in at 28%. However, with 75% of female shoppers using smartphones in the store to investigate pricing, that number sounds low. No matter how you measure it, mobile affects shopping, whether it’s online or in the store. We know the store isn’t going anywhere. With 90% of the retail spend happening in the stores and 70% taking place within 15-­‐20 miles of home or work, retailers must figure out how to enhance their efforts with mobile to address cost, control and convenience. Retail:  Mobile  Influence 72%Marketers  believe  mobile  will  be   more  important  to  brand  than   desktop  in  2016 $4BUS  retail  sales  in  2015   driven  by  beacons 10xIncrease  in  retail  sale  driven  by   beacons  in  2016  versus  2015
  26. 26. South Korea recently announced an Internet of Things (IoT) network that will be available across the entire country at a low cost of $0.30-­‐2.75/month. This would be a much larger endeavor for the US since South Korea is about the size of Maine. However, the growth of the IoT is astounding. Vision Mobile reports there were 4.5 million IoT developers in the world at the end of 2015 and will more than double by 2020. Samsung announced it will spend $1.2 billion over the next 4 years. Mobile operators, telecom firms and tech companies spent over $31 billion on IoT-­‐related acquisitions and investments between 2011 and 2015. Research firm Ovum tracked 76 deals across eight sectors. According to the research firm IDC, the global IoT market will be worth $1.7 trillion in 2020 with 50 billion connected things (according to Gartner). Between Q3 and Q4 2015, the number of proximity sensors increased from 3.35MM to 5MM. Let those numbers sink in a little before we look a little closer…There are 10 million telematics insurance polices in Europe and the U.S. By the end of 2015, 17.9 million smart homes exist in Europe and North America with estimated growth to reach 35% of all households by 2020. Globally we use 97 million wearables that produce, wait for it…15 petabytes MONTHLY. A petabyte is a million gigabytes. By 2020, according to Berg, there will be 228 million connected wearables shipped. Internet  of  Things $53.8BSales  generated  in  6  years (Grand  View  Research) 97MMWearable  devices  in  2015  generated   15  peteabytes of  monthly  traffic  generated
  27. 27. Earlier I mentioned proximity sensors. We cannot forget those. According to Juniper Research, nearly 1.6 billion coupons will be delivered annually to consumers via beacon technology in the next four years. That’s up from around 11 million last year when we saw 46% of retailers deploying beacons. An estimated 85% of the top 100 retailers are expected to install beacons by the end of this year. One reason for the optimistic estimation comes from a study from Horizon Media which found that beacons offering special discounts would “definitely influence my buying decisions,” and retailers have reported significant higher redemption rates with beacons delivering coupons than by other means. I would be remiss unless I brought attention to a few downsides to the above sunny outlook. Currently, consumers aren’t that enthused about smart homes. 62% see smart home products as being to expensive. 64% state that smart home products are difficult to use. It’s unfortunate that we have run into the same VHS versus Betamax issue in the 1970s and 1980s. What’s worse is that it’s not just two but a couple of handfuls of different “standards” fighting for supremacy making it difficult for not only consumers but developers as well. The other downside comes with 1.6 billion coupons delivered via beacons. How long before consumers turn it off and effectively shut down the beacon network after being harassed with too many messages as they walk through the store. Understanding the customer completely, their behavior, their wants, their needs and their desires are going to be more important than ever if businesses expect the customers not to block them from the most personal device they have. Internet  of  Things 1.6BCoupons  delivered  annually   to  consumers  via  beacons (Juniper  Research)
  28. 28. Apple brought the wearable market to the forefront with their smartwatch. They now control two-­‐ thirds of the world’s smartwatch shipments according to Canalys. However, the astounding number to me is 1,683. That is the number of prototypes that OmSignal designed before settling on the OmBra after noticing the gapin wearable brands that cateredto women. Although Apple owns the smartwatch industry, they don’t own the wearable market. This is becoming more evident as the industry matures as Apple Smartphone sales dropped over 63% in Q1 2016 (1.5MM) from Q4 2015 (4.1MM). The holiday season is over for the Apple Watch. Meanwhile the industry is set for an 18.4% rise in sales (Gartner) and 38.2% rise in shipments (IDC). To make matters “worse” for Apple, only 13% intend to purchase a smartwatch this year. What is driving the increase in wearable sales? Fitness wearables like Fitbit lead the wearable sector as a whole. The lines between fitness and watch are going to continue to blur until they are indistinguishable over the next three years. These fitness devices are cheaper and have more obvious uses than current smartwatches that are seen as more of a luxury device than a practical or helpful one. Wearables 57%Wearable  use  increase in  2015 60-­‐80Times  per  day  Apple  Watch  owners  look  at  their  device
  29. 29. Microsoft Acquire LinkedIn Nokia Acquires Withings CLX Acquires Mblox advanced enterprise cloud communications ShopAdvisor Acquires Retailigence Sailthru Acquires Carnival.io Telenor Acquires Tapad Notable  Mergers  and  Acquisitions   (through  June  2016)
  30. 30. Judd  Wheeler Judd  Wheeler  draws  on  more  than  20  years  of  digital  marketing  and  consulting  experience   for  companies  ranging  from  startups  to  Fortune  500  companies.  Judd  has  produced  the  first   mobile  conference  in  Oklahoma,  presented  as  the  keynote  speaker  internationally  and  wrote   “160  Characters  of  Less:  How  to  Increase  Customer  Loyalty,  Drive  Sales  and  WIN  with  Text   Message  Marketing.”  Judd  Wheeler  works  for  3Cinteractive,  whose  focus  is  enabling  mobile   consumer  engagement  to  extend  connections  between  consumers  and  brands  to  increase   loyalty,  brand  awareness,  and  results.

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