Mobile internet boom continues, driven by Social Networking Players like Facebook

Over a quarter of young people are using social networking sites on their mobiles every day, a CCS Insight report has claimed. The growth in mobile internet usage is so strong, said the report, that operators are relying on it to fill revenue gaps as profit margins fall.

CCS found that consumers are increasingly using the mobile internet as a force of habit, with one in five respondents admitting that they log on to their preferred social networking site ‘several times a day’.

Facebook is still the star attraction of social networking on the mobile internet, with hits outnumbering Twitter, MySpace and Bebo combined. However, there is room for further improvement on overall mobile internet usage, with around a quarter of respondents still not using the internet on their mobiles at all.

Paolo Pescatore, report author and head of mobile content at CCS Insight, told Mobile: ‘The phenomenal growth in mobile internet usage is removing the strain on voice and text for operators. The web is revolutionising the way people use their mobiles and big brands are starting to invest huge amounts in it.’

Mobile reported in November last year that internet usage of mobiles was up almost 50% within a year. The growth was attributed to the availability of cheaper unlimited data packages, faster network speeds and more browsing-friendly handsets.

The CCS Insight ‘Report on Mobile Internet Usage 2009’ gathered the opinions of 1,000 people, aged between 16 and 35.

Apple and RIM accounts for 35% of the mobile phone industry's total operating profit

The Wall Street Journal reports on research from Deutsche Bank analyst Brian Modoff showing that Apple and Research in Motion together accounted for approximately 35% of the mobile phone industry's total operating profit in 2008 while only representing 3% of total unit sales. Apple's share of industry profits clocked in at approximately 20% while holding only just over 1% of the unit market share.

The two companies' outsize share of profits underlines the shift in the wireless industry toward feature-rich devices accenting easy-to-use software and away from an emphasis on hardware. Smart phones account for only about 13% of total cellphone sales globally, but the segment is growing, despite a drop in the broader cellphone market. Apple and RIM had about 32% of the smart-phone market between them in the first quarter, estimates IDC.

Moreover, Modoff estimates that Apple and Research in Motion will reach a combined 5% of unit sales for 2009, raking in roughly 58% of the total industry profit between them.

The report notes that wireless carrier subsidies provide the driving force behind such large profits for leading smartphones such as Apple's iPhone and Research in Motion's BlackBerry lines. Apple reportedly receives about $400 in carrier subsidy for each iPhone, while BlackBerry sees about $200 and the typical basic cellphone about $100. Among manufacturers dominating the basic cellphone market, only market leader Nokia is able to leverage its economies of scale to pull in a greater share of industry profits (55%) than its corresponding unit market share (46%). But even Nokia has seen its unit market share and profits slip as customers increasingly adopt more sophisticated smartphone models from smaller competitors.

Apple reveals 5.2m iPhone sales in Q2 2009

Apple has reported impressive revenue and profit growth in its financial results for Q2 2009.
The company generated revenues of $8.34 billion during Q2 (its third quarter), up 12% year-on-year. Meanwhile, its net profits jumped 15% to $1.23 billion.

iPhone was the star of the quarter, with 5.2 million being sold. The figure includes the new iPhone 3GS, which launched in June.

While the year-on-year jump in iPhone sales is a huge 626%, that's largely down to the fact that the iPhone 3G didn't come out until July last year, meaning that sales weren't spectacular during Q2 of that year.

Apple says it sold 10.2 million iPods in Q2 this year, down 7% year-on-year. It's tempting to suggest that mobile handsets - including the iPhone - are finally cannibalising iPod sales - something that's been predicted by analysts for some time.

Last week, Apple announced that it now has 40 million iPhones and iPod touches in consumers' hands and capable of accessing the App Store, which has now generated more than 1.5 billion app downloads.

UK's Mobile Operator 3 opens up ad space on laptop users’ screens

Mobile operators are getting ever more inventive about where they can sell advertising, with UK disruptor 3 this week opening up its mobile broadband dashboard to advertisers.

The dashboard acts as a mobile broadband user’s connection manager and launches every time a user connects to the internet. 3 said it will be visible to more than one million mobile broadband users, accounting for more than 30 million impressions every month.

3 UK’s sister network in Austria is already running campaigns with brands such as VW, Suzuki, Kia, Peugeot, Mazda, Honda and Land Rover, and claims that companies advertising in this way are seeing a click through rate of up to 6 per cent.

The UK operator is looking for an initial set of exclusive advertising partners and claims launch brands will receive in the region of one to three million impressions each month.

While not specifically targeted at the mobile handset user, 3’s move does lend credence to the claim that in-application advertising is going to be an important part of the evolution of advertising.

Asian markets lead in mobile advertising

Indonesia and India continue to lead globally in its adoption of mobile advertising, while demand across the board has increased 80% in the past year, a survey has shown. The quarterly Global Mobile Advertising Index from mobile ad firm BuzzCity reveals that while mobile advertising activity slowed in Q2, growth remains strong across the 200 markets canvassed.

BuzzCity tracks the growth of the network and, by extension, the growth of off-portal mobile internet use on more than 2,000 publisher sites globally.

During Q2, the BuzzCity mobile advertising network delivered 7.5 billion paid advertising banners, a year-over-year increase of nearly 80% across the network. The numbers however represent a decline of 10% compared to the previous quarter. The slump was due to 600 million fewer impressions on the network in BuzzCity’s largest market, Indonesia.

India continued its growth trend, topping 1 billion banners in the last quarter, while the UK climbed four slots to rank fifth. The US ranked third with 487 million paid advertising banners but was down by 8% on the previous quarter.

Fast movers include Saudi Arabia - which experienced 63% growth on the last quarter, jumping ten spots to number nine - and Kenya, which ranked 10th with 15% growth.

Global handset sales to slip 7.5 per cent this year

Global mobile phone shipments in 2009 is expected slip, but will still hit over one billion, says Yano.
The Japanese research believes the decline will be the first decrease since 2001. Shipments reached a record 1.182bn in 2008.

However, the Tokyo-based firm forecasts global shipments will expand to 1.322bn by 2012 due to stable demand in developing economies in Asia, Latin America, the Middle East and Africa.

Apple applies for license to sell iPhone in China

Apple has applied to the Chinese government for approval to sell the iPhone in China, according to a local media report. An official at China Telecommunication Technology Lab (CTTL) told sina.com that Apple has submitted a 3G iPhone for testing. Apple needs CTTL approval in order to win a Network Access License (NAL) for the W-CDMA phone.

China Unicom, China’s sole W-CDMA operator, originally aimed for a May 17 launch of the iPhone. China Unicom is expected to subsidize iPhone prices and share value-added service revenues with Apple.

Although not yet formally released in China, statistics show that 1 million or more people are using unlocked versions of the iPhone brought into the country. iPhones to be sold through China Unicom are believed to be less expensive than iPhones in the gray market.

Apple App Store downloads hit 1.5bn

Apple announced that iPhone users have racked up more than 1.5 billion application downloads in just one year. The App Store now boasts more than 65,000 apps available to consumers in 77 countries and more than 100,000 developers in the iPhone Developer Program.

The success of Apple’s app store model has prompted many of the firm’s rivals to imitate its strategy, with the firm now offering a direct channel for application developers to target over 40 million iPhone and iPod Touch devices.

The announcement perhaps demonstrates the marketing power Apple has at its disposal, but also shows how the launch of the iPhone App Store has raised awareness about apps in general.

The App Store has facilitated nearly 17 million downloads of the Opera Mini web browser; over 16 million downloads of eBuddy instant messaging; 14 million downloads of Nimbuzz mobile messaging; 10 million downloads of mig33 mobile community; and over 5 million downloads of Google Maps for mobile.

And while mobile advertising has so far proven something of a slow burn, in 2009 the industry’s hottest talking point has been application stores and how mobile advertising may take a technological leap, in terms of user interaction.

The large screens, touch interfaces and advanced functionalities such as accelerometers that are now found on top tier smartphones have certainly captured the imagination of the industry. A small section of the global user base has also proven itself to be enthusiastic for these developments and this has led to suggestions that the future of mobile advertising must be bound inextricably with the future of the application model of mobile internet usage. Advertising will do better, runs the theory, when it appears within applications rather than simple on web pages.

"Almost Nude" Inflight Safety Video

As a follow-up to their body paint ‘Nothing to Hide’ ad campaign, Air New Zealand has begun showing an inflight safety video with the flight crew wearing nothing except body paint.

The video is only shown on Air New Zealand’s domestic flights within New Zealand and is guaranteed to get passengers to pay more attention to safety.

Free Mobile Advertising Whitepaper from Smaato

Smaato has published a whitepaper on Mobile Advertising, titled ‘Higher Revenues with Mobile Ad Optimization & Global Ad Network Aggregation’.

The whitepaper outlines the opportunities available to mobile publishers and developers to monetize their inventory worldwide. It explores how different mobile fill rates can be expected from mobile ad networks and what types of pricing tiers there are for mobile inventory. It also explains how ad revenue optimization works, and helps to realize the true potential of mobile inventory.

Publishers of mobile websites and developers of cool mobile apps face the growing challenge of matching their expanding global popularity with the daunting task of filling their ad inventory associated with those very services, says Smaato. The company is capitalizing on the provision of global mobile ad optimization using its SOMA platform.

You can download the whitepaper for free here.

Jul 1, 2009 (2 days ago) IAB Study Finds Mobile Ads Increase Brand Awareness

A research study from the Internet Advertising Bureau (IAB) and research company Brand Driver, in conjunction with Kit Kat, has found that mobile display advertising can increase brand awareness and recognition.

The UK’s first publicly available mobile brand study to cover effectiveness across a range of mobile properties used a sample of 600 mobile Internet users. Respondents were exposed to banner ads for FMCG brand Kit Kat across four major mobile sites – Orange World, O2 Active, Planet 3 and Heatworld - which promoted free downloads or the chance to win an ipod.
Respondents who clicked on the ads were sent to the relevant page within the Kit Kat mobile Internet site, where they could enter the competition or download free mobile games or wallpapers.

The results of the study have formed the basis for a new set of five IAB guidelines, designed to increase the effectiveness of mobile ad campaigns:

1. Use mobile to raise awareness
The mobile ad campaign had a positive impact on raising awareness of the brand, with a 36% increase in spontaneous awareness levels of Kit Kat and 267% increase in first mention - people spontaneously mentioning Kit Kat before any other brands. Furthermore, 76% of those who had clicked on any Kit Kat banner ads said they would be likely to buy the product.

2. Mobile advertising can be effective across all demographics, but especially 18-34s
The campaign resulted in uplifts across all age groups, and for both men and women. The results were most impressive though among 18-34 year olds. Spontaneous awareness increased by 50% compared to a 21% increase for 35-44 year olds.

3. Brands and mobile Internet sites should put the user experience first
The research found that the context of mobile advertising is extremely important. People that enjoyed the site they were surfing were 76% more likely to recognise the ad. Heavy mobile Internet users were also more receptive to the advertising, and were 80% more like to recall the ad..

4. Mobile display advertising needs a clear focus
The mobile campaign improved perceptions of Kit Kat across all statements asked, particularly “is a product perfect for a break” but the uplift amongst some of the other statements was minor. This means with just one banner creative, you are unlikely to change a vast array of brand metrics, therefore the creative needs to be focused and streamlined according to what you want to achieve.

5. Mobile is more effective when something of value offered
One in four people who saw the Kit Kat banner ad clicked through to the mobile site. Of those who clicked through, 43% had done so because of the competition to win a free iPod. 51% of respondents said they were more likely to interact with mobile advertising if something was offered to them. The results also highlighted the need for mobile creative to be eye-catching and engaging: 41% of respondents who clicked through were simply interested in the advertising.

The research also looked at general attitudes and mobile Internet behaviours. In terms of attitudes to mobile Internet advertising, 72% of respondents expect the amount of advertising on mobile sites to increase over the next couple of years, and 53% would be happy to receive advertising in return for free content.

According to the first IAB-PricewaterhouseCoopers study of mobile ad revenues, expenditure on mobile advertising in the UK exceeded market expectation in 2008 to reach a total of £28.6 million. The market doubled in size on a like for like basis in 2008, increasing by 99.2% year on year.

“Mobile advertising is still in its infancy and consumers are yet to be fully sold on it because marketers need to learn the emerging rules of engagement,” says IAB Head of Mobile, Jon Mew. “What the Kit Kat research tells us is that most effective mobile campaigns follow five simple steps, and we hope that publishing these basic guidelines will help accelerate investment in the medium.”

The last glimpse of Michael Jackson

Michael Jackson’s rehearsal with his dancers on 23rd June, just two days before he died. It would had been a great performance. Tribute to the King of Pop.

Free Mobile Marketing Supplement in The Times

Check out and enjoy this nice-shiny 16-page supplement on mobile marketing here. It’s been produced by Raconteur Media, and Mobile Marketing Mag Editor David Murphy who has been closely involved as an editorial consultant on the project, writing a couple of pieces, advising on content, and generally trying to make the thing as useful as possible to anyone picking it up who can’t quite get their head around what mobile marketing is.

iPhone takes 11 per cent of 1Q09 smartphone sales

Apple sold 3.9 million handsets during the quarter to more than double its market share, says Gartner. Smartphone sales hit 36.4 million units in 1Q09, representing a 12.7 per cent increase from 12 months earlier.

In fact, smartphone sales represented 13.5 per cent of all mobile device sales in 1Q09, compared with 11 per cent in 1Q08.

Gartner attributes the trend to good sales at Research In Motion and Apple, with the latter more than doubling its market share from 5.3 per cent to 10.8 per cent.

This means Apple is now the third-ranked smartphone manufacturer by volume.

Nokia continues to boss the market, however, with a 41.2 per cent share from nearly 14 million units sold.

This compares to 14.6 million units and a 45.1 per cent share in 1Q08.

Symbian accounted for 49.3 per cent of worldwide smartphone operating systems (OS) market share in 1Q09, down from 56.9 per cent a year earlier.

The full 1Q09 global smartphone rankings are as follows:

Company, Sales (units 000), Share (%)
Nokia, 14,991.2, 41.2
Research In Motion, 7,233.6, 19.9
Apple, 3,938.8, 10.8
HTC, 1,957.3, 5.4
Fujitsu, 1,387.0, 3.8
Others, 6,896.4, 18.8

Source: Gartner

Dell earns $3m from Twitter

Computing giant converts tweets into sales at a relatively modest level. The £3 million revenue has been accrued in the two years since Dell began using Twitter, with $1 million of that figure coming in the last six months.

Of course, Twitter is not charging businesses for use of its microblogging network as a sales channel yet, but is expected to do so at some point in the future.

As such, Dell has been tracking the leads it generates from its Twitter posts (six-10 a week to @DellOutlet, half containing exclusive deals) using its own software.

Data now 25 percent of mobile operator revenues

Close to 40 percent of all worldwide mobile operators saw their revenues fall in the first quarter of 2009, compared to just 16 percent in the same period of 2008, according to a new report released by market research firm Strategy Analytics. In addition, mobile service revenues increased just 3 percent in Q1 2009, compared to 8 percent a year earlier. Strategy Analytics notes that shrinking revenue growth is not a problem limited to mature, saturated markets--25 percent of operators in emerging markets also suffered declining revenue growth in Q1. In the U.S., service revenues grew 3 percent in the first quarter to $163 billion, but service revenues fell 1.3 percent in Western Europe, following a 0.5 percent increase in the fourth quarter of 2008.

Mobile data revenues increased 17 percent in the first quarter and now represent 25.3 percent of total operator revenues, up 21.9 percent year-over-year and a 24 percent increase over Q4 2008. Data ARPU grew 3.6 percent on a global basis and increased 23 percent in North America but fell 7 percent in the Asia-Pacific region. Based on the limited number of operators reporting detail, Strategy Analytics reports that messaging services declined to 53 percent of data ARPUs in Q1, down from 57 percent in 2008--based on the limited number of operators reporting detail, Strategy Analytics notes that messaging revenues declined to 53 percent of data ARPUs, down from 57 percent in 2008. Non-messaging data ARPUs increased by 11 percent annually.