Global Mobile - A World-view by Havas Digital

Global Mobile
A Worldview
August 2009

Consumer trends and practical
opportunities in mobile marketing

Lead Contributors
Sixto Arias
Managing Director
Mobext Spain
sixto.arias@mobext.mobi

Chris Bourke
Managing Director
Mobext UK
chris.bourke@mobext.mobi

Phuc Truong
Managing Director
Mobext US
phuc.truong@mobext.com

Dimitri Dautel
Managing Director
Mobext France
dimitri.dautel@havasdigital.com

Mark Egan
Director of Global New Business
Havas Digital
mark.egan@havasdigital.com

© 2009 Mobext :: Havas Digital

CONTENTS
1. Introduction. .................................................................................... 4
2. Highlights........................................................................................... 5
3. Interesting facts............................................................................ 6
4. Worldwide consumer trends: insights into
what’s driving growth in mobile products
and services...................................................................................... 7
• Asia: focus on Japan and
South Korea. Leaders of the Revolution.............. 7
• Europe: focus on UK and Western
Europe. High Growth........................................................ 13
• North America: focus on
United States. Catching Up......................................... 20
• Latin America: focus on Brazil
and Mexico. Growing Demand................................ 28

5. Coming to a 3rd Screen Near You!............................. 32
• The iPhone Phenomenon
& the Touchscreen Revolution. ................................. 32
• Mobile Video/TV................................................................... 35
6. Mobile in the Mix:
Opportunities for Marketers. .......................................... 37
7. Conclusion: Putting Mobile
in the Mix for your Brands................................................. 51
8. Glossary of terms...................................................................... 54
9. About us and contact details......................................... 55

References. .......................................................................................... 57


GLOBAL MOBILE A WORLDVIEW

INTRODUCTION 1
The mobile platform boasts a dizzying number of options available to marketers – including,
but not limited to: text and multimedia messaging, content and display advertising adapted
for mobile mini-browsers, “conventional” online content and display advertising for PC-like
browsers (from newer smartphones like the iPhone and Android G1), mobile applications,
mobiles games, paid search, as well as proximity-based interaction through outdoor media/
displays and shortcodes used in integrated marketing efforts, both of which cover the “last
mile” for reaching consumers.
The irony of mobile marketing is the enormous penetration of mobile (greater than 100
percent in some countries due to multiple device ownership) and the enormous flexibility
of the aforementioned tactics juxtaposed with the ability for personal, even tailored, com-
munication. To that end, Mobext believes that the mobile platform has enormous potential
to both reach fragmenting audiences and increase interaction between brands and those
audiences. Mobext helps advertisers develop tactics for their brands and feature the plat-
form as an integral component of their marketing strategies.

In this Insight report, we will tackle the following key questions:
• What are consumers doing that is stimulating the growth of mobile marketing?
• What are the evolving capabilities of mobile marketing and what should
marketers do to leverage the channel?
• How does this compare around the world, region by region?
• What relevant case studies of successful campaigns offer insights about
mobile marketing and advertising?

We are always interested in your particular business issues and questions, whether you’re
already a Mobext client or just want to know more about this subject. Please feel free to get
in touch.
Contact your local Mobext contact, the Media Contacts/MPG managing director in your
country, or an author of the Insight report. Phone numbers and e-mail addresses are at the
back of this publication and at http://www.mobext.mobi.



Highlights
Landscape: Growing consumer familiarity with mobile devices. The increasing mass-
2
reach of text and picture messaging in Asia, Europe and America signals that mobile has
evolved from a voice medium to a multimedia communications channel. The next phase of
growth is being driven by consumer demand for digital photography, email, music and ac-
cess to favorite Web applications, anytime and from anywhere.

Possibilities: Measurable experiments central to learning new tactics. Given the diverse
possibilities and the lack of a dominant approach, mobile marketing is at a relatively em-
bryonic stage. A 2008 JupiterResearch survey of US marketers revealed that 26 percent of
respondents engaged in some form of mobile marketing.1 These tactics include direct-re-
sponse text and picture advertising and promotions (SMS/MMS), branded content, quick
response codes (QR codes), paid mobile search, and banner ads. Advertisers who are ad-
vancing their mobile initiatives see the channel as a new opportunity to reach consumers in
a personal way. Marketers are learning that the mobile platform can be used to effectively
target individuals who have opted in to receive communications through text messages,
shortcodes, mobile browsing and purchase of premium digital content.

Recommendations. Given high SMS penetration in the US and Western Europe, Mobext
believes SMS should be offered as a consumer response channel wherever possible, espe-
cially for non-interactive media like traditional television, print and outdoor. As targeting
becomes available, for example, through location-based services like mobile search that are
still in an experimental stage, marketers willing to innovate can break through the clutter of
marketing messages.
Consumer guidelines from industry bodies like the Mobile Marketing Association (MMA)
should be adopted by agencies to effectively plan their initiatives. For example, “pull” mo-
bile marketing is a best practice supported by the MMA. Pull marketing, as in the case of
Bluetooth, is where a consumer sees the opportunity to interact with mobile and actively
initiates contact. A real world example of this best practice is going to the cinema, seeing a
poster and downloading via Bluetooth an ad for an upcoming film or a ringtone for sound-
track of the showing film. This approach contrasts with push mobile marketing, where a cin-
ema randomly sends ads to consumers who pass by. Mobext recommends that marketers
familiarize themselves with the MMA’s best practices, which are updated annually to guide
implementation of shortcode programs, interactive voice response, and off-portal mobile
Web sites. Several executives from Mobext have leadership roles in regional MMAs.

Link to download the MMA Best Practice Guidelines
www.mmaglobal.com/bestpractices.pdf



Interesting facts
In its Q4 2008 results, Nokia estimated that global industry mobile volume in 2008 was 1.21
3
billion devices, or a shipment of 3.3 million units per day.2 Nokia is also estimated to com-
mand roughly 40 percent of the global smartphone market.3
Since the European launch of the ad-supported mobile virtual network operator Blyk in
September 2007, 200,000 16-24 year olds have signed up in the UK by invitation only (as of
9 February 2009).4 On its Web site, Blyk cites case studies of SMS and MMS campaigns with
response rates ranging from 34 percent to 67 percent.5
According to a report from Monocle magazine, mobile TV in Asia reached a tipping-point
back in 2005 when South Korean teenagers downloaded an average of 16 minutes of short-
form video each day.
An NTT Docomo press release from February 2007 announced achievement of a 5 Gbps
transmission speed. 6 A few years ago, the announced goal was a commercially viable 4G
network by 2010.7 Such a network could transmit contents of an entire DVD in under a
minute. To put this in context, based on current 3G data transfer rates in US / Western Eu-
rope, a DVD could take nearly a full day to download.

Estimated* iPhones Around the World

Brazil............. 400,000 Portugal..... 50,000
France.......... 1 million Spain............. 450,000
Mexico. ....... 240,000 US.................... 8 million (and 3.5 million iTouches with Wifi)

Source: *Mobext estimates



Worldwide consumer trends 4
Asia: focus on JAPAN AND South Korea
Leaders of the revolution
For decades, Japan has been the world-leading market for the mobile industry. An early-
adopter culture is combined with well-funded telecom companies and a strong tradition
of research and development. It is no surprise that the Japanese have pioneered many of
today’s 3G mobile products and services. One representation of a market’s mobile sophisti-
cation is the average revenue per user (ARPU) from data services as well as the percentage
of total revenues that data services comprise. When measured along those two axes, Japan
is far and away the world’s mobile leader.8
Philippines ($2.1 - 45%)
Japan
40%

Indonesia
Singapore
Hong Kong
China New Zealand UK
(average across carriers in the country)

Source: Chetan Sharma Consulting, 2009
Germany Austria US
Ireland
Portugal Italy
Belgium Switzerland
Data as % of total revenues

Czech
Malaysia Norway
20% Netherlands
Sweden
South Korea
Denmark
Mexico France
Finland
Canada
Israel Spain
Russia Greece

Turkey
Thailand

10% Brazil
India

Asia
Europe
Americas

$5 $10 $20
Average Wireless Data ARPU (USD) for carriers in a country

South Korea is another mobile powerhouse, where key outputs include pilots of 4G tech-
nologies and trailblazing TV services. In Japan and South Korea, over half of all mobile
subscribers are on a 3G network.



4. Worldwide consumer trends
JAPAN AND SOUTH KOREA

Mobile Internet
To illustrate Japan’s strong demand for mobile services, the country’s population is 127 mil-
lion, and there are approximately 110 million mobile subscribers, according to the year-end
2008 figures from the TCA.9 Factoring in some duplication, the penetration has peaked
around 80 percent of the country’s population. In the mobile market itself, 3G accounts for
almost 80 percent. Explosive growth in mobile Internet usage is mirrored in a rapidly ex-
panding marketing industry. In addition, Asians are much more likely to pay for select kinds
of mobile content than people from other regions.10

Willingness of adults in select countries worldwide to pay
for select mobile content, by region, 2007 (% of respondents)

NORTH LATIN
ASIA EUROPE
AMERICA AMERICA
GAMERS
I am willing to pay for access 8.5% 1.0% 1.6% 1.1%
I am willing to pay a limited
29.5% 12.1% 13.0% 12.6%
amount for access
The activity is important but
43.6% 71.6% 53.7% 64.8%
I do not want to pay for access
I do not mind receiving ads in
18.4% 15.2% 31.8% 21.5%
exchange for free access

INSTANT MESSAGING
28.2% 13.8% 9.9% 8.9%
amount for access
48.0% 76.3% 63.6% 67.9%
16.4% 8.9% 23.4% 21.9%

MULTIMEDIA (MUSIC, VIDEO)
29.9% 8.4% 9.4% 10.4%
amount for access
42.5% 74.2% 57.5% 66.3%
21.5% 16.3% 31.3% 22.0%

NOTE: ages 16+; numbers may not add up to 100% due to rounding
KPMG International, “Consumers and Convergence II”, October 18, 2007
Source: www.eMarketer.com




Handsets and devices
Japanese consumer trends suggest that the role of the desktop computer may soon be
overtaken by radical new 3G smartphones, which bring together all the “must-have” fea-
tures of computers, together with games consoles, camcorders and terabytes of memory.
For marketers, the shift toward mobile computing creates opportunities for new services
that work with the new generation of smartphones – to make life more informative, produc-
tive, and enjoyable.

Cross-platform
New entertainment formats that work across media, including TV, Internet and mobile, address
audience fragmentation while increasing interaction time between brands and consumers.
Audiences at live sporting events are benefiting from new mobile services designed to
enhance viewing experiences. Typically, an advance awareness campaign using outdoor,
printed and online media is used to promote a mobile Web site. During the event, the site
provides a news feed for event visitors, as well as deeper information such as team and
player profiles. There are also branded downloads like games and wallpapers, that can be
used after the event and shared with friends.
For roaming events like golf and motor sports, mobile content can be targeted at audiences
using infrared technology. By tailoring the content and experiences that make up a cross-
platform campaign, Japanese marketers offer a variety of touchpoints that raise awareness
of the activity and increase interaction time with audiences while at the event. This leads to
greater audience retention and return for the brand.




South Korean mobile TV producer TU Media reports that consumption patterns of mobile
video differ from those of traditional TV, with commuting time, lunchtime and even indoors
during office hours being most popular. Another insight is that South Koreans place more
emphasis on the quality of the content they consume over length. The most popular genres
are live sports and news, according to CEO Suh Young-kil, who said so at CommunicAsia in
June 2007. Suh said that the average user watched for over an hour a day.11
Broadcaster-produced content is not all that South Koreans watch on their handsets. Similar
to a high-end sophisticated Webcam setup, the 1-year old SHOW Monitoring System trans-
mits live video from a camera to a phone, perfect for security and surveillance.

M-commerce
The m-commerce landscape in Japan demonstrates the potential future of the retail market
for the rest of the world. M-commerce is expected to grow 45 percent to USD $26 billion in
2011, compared to 2007.12 Shopping with mobile devices is already a mainstream activity
in Japan. A 2007 study from the UK’s Guardian reported that three-quarters of Japanese
consumers said they enjoyed online clothes shopping with their mobile device at least once
a month.13

M-COMMERCE IN JAPAN, 2007-2011 (billions)

2007 $17.9

2008 $20.5

2009 $23.0

2010 $24.5

2011 $26.0

Cybozu Media and Technology, 2007 as cited by US Commercial Service,
“Japan: Service and Retail Franchising”, May 2008

One innovation, which has bloomed from NTT DoCoMo’s e-wallet devices, is called ‘Os-
aifu-Keitai’. Customers wave their specially equipped phone over a reader device to use
them as e-money, e-credit cards, train/plane tickets, membership cards and door keys. The
wallet handsets have contactless integrated circuit (CIC) chips embedded, and there are
50 million of these phones in Japan.14 The e-wallets have become hugely popular, for the
simple reason that they combine convenient timesaving services. Marketing and CRM ap-
plications include bill payment, online banking, and loyalty programs, all of which illustrate
a rich opportunity for service providers who can introduce the e-wallet product elsewhere
in the world. The drawback is security vulnerability since so much personal information is
concentrated in a single device.

© 2009 Mobext :: Havas Digital 10



South Koreans are also as comfortable transacting in m-commerce as e-commerce. Mobile
trends blog mTrends reported that 63 percent of South Koreans make payments with their
mobile phones, nearly everyone buys ringtones, and 37 percent download mobile games.15

Response Mechanisms
The mass-market adoption of Quick Response (QR) codes gives
packaged goods marketers an effective mechanism to direct con-
sumers from product packaging to Web sites. There, they can of-
fer product information and engaging promotional content and
experiences. Ambient media containing QR codes is used within
the media mix to raise awareness, drive traffic, and in some cas-
es provide deeper layers of information – for instance, about TV
characters and plot lines.
As evidence of the huge potential for QR Codes, a ‘What Japan Thinks’ report from 2008
reveals that when the Japanese use a phone to request information about an ad, 42 percent
scan a QR Code, and 35 percent send a blank email (to access the URL from the reply). Sur-
prisingly, a third of those surveyed said they would type a URL directly to access information
– exposing the myth that people won’t enter URLs on mobile devices. Indeed, URLs are a
16

viable response method but should be kept to a minimum length.

Social Media
Online networks play a major role in Japanese culture, helping to foster a sense of commu-
nity that is often missing from everyday Japanese life.
Mixi, Japan’s largest social networking site, has more members accessing from mobile de-
vices than PCs. Niche social networks, like Mobile Game (often condensed to “Mobaga” or
“Mobagay”) Town from company DeNA, enable the Japanese to connect around passion
areas, games, and minutiae, and have proven to be a big hit. The success of niche social
media demonstrates that the long tail of the Internet creates new opportunities for publish-
ers and broadcasters alike.

starting page game screen profile page avatar in virtual room

Source: http://www.techcrunch.com/wp-content/uploads/2008/08/mobagetown-screens.png




Cyworld, South Korea’s top social networking site, started in 1999, and took off in 2003, the
year it was acquired by telco SK Communications. With near universal reach in the country,
many young Koreans are “Cyholics” and the extension of Cyworld into mobile devices fur-
ther increases Cyworld immersion. Cyworld has extended into the US, China, Japan, and
Taiwan and still has more expansion plans on the horizon.

Cyworld zone:
MINI HOMPY
Map, Video service

ITEM SHOP

MY PICTURE
1. Guest book
2. Photo album
EMOTION 3. Friends list
EXPRESSION 4. Diary
5. Plaza
6. BBS
About service fees 7. Club
Find subscribers 8. “My Cy” (settings)
Registering for fixed payment



UK AND WESTERN EUROPE

Europe: focus on UK and Western Europe
High Growth
Although still trailing the early-adopter cultures of Japan and South Korea, the UK and Ger-
many lead the European region with 65 million and 49 million mobile subscribers, respec-
tively. Individual mobile penetration is fairly saturated with a current 80 percent penetration
of the European population.17

TOP FIVE COUNTRIES REPRESENTED 77% OF EUROPEAN MOBILE MARKET IN 2007
MOBILE PENETRATION AND SUBSCRIBERS BY COUNTRY IN 2007

80 145% 150%

Percentage of Overall Population
Number of Individual Mobile Users (in millions)

133%
60
125%
116% 116% 111%
114% 113% 114%
40 107% 108%
112% 110%
108%
104% 100%
97%
20
86%

4 4 4 3
65 49 48 47 37 13 9 8 8 7 7 6
0 75%
Germany

UK

France

Italy

Spain

Netherlands

Greece

Portugal

Belgium

Sweden

Austria

Switzerland

Denmark

Finland

Norway

Ireland

Number of individual mobile users Active mobile SIM penetration

Source: JupiterResearch European Mobile Forecast, July 2008 (Western Europe)

Mobile Internet
The combination of more affordable and easy-to-use handsets like the iPhone, together
with the roll-out of flat-rate data plans, popular email services from Yahoo! and Google, and
deployment of faster mobile networks (3G and 3.5G), is fuelling steady growth of the mobile
Internet. comScore estimates that one out of four Britons aged 15+ accesses the Internet
using a mobile device.18
In the past, factors that hindered mobile browsing were a lack of knowledge about how
to access the mobile Internet and a lack of awareness of flat-rate data plans. However, op-
erators are increasingly bundling flat-rate data plans along with voice services. IAB UK an-
nounced that the number of people on unlimited data plans doubled in 2008.19




MOST MOBILE SERVICES WILL REACH CRITICAL MASS BY 2011
ADOPTION OF VARIOUS MOBILE SERVICES, 2007 TO 2013

100%
Percentage of Mobile Subscribers

80%

60% Mass market

40%

20%
Critical mass
0%
2007 2008 2009 2010 2011 2012 2013

SMS 72% 73% 74% 75% 76% 76% 76%
BROWSING/INTERNET 23% 28% 33% 38% 41% 45% 47%
MMS 24% 26% 39% 31% 32% 34% 35%
MUSIC 15% 22% 26% 29% 31% 32% 34%
VIDEO/TV 8% 12% 17% 21% 25% 28% 31%
GAMES 16% 19% 23% 26% 28% 30% 31%
E-MAIL 8% 10% 13% 16% 19% 22% 25%
IM 1% 2% 4% 5% 7% 9% 10%

Source: JupiterResearch European Mobile Forecast, July 2008 (Western Europe)

As a whole, most mobile services in Europe are forecasted to reach critical mass by 2011.
3G will be mass market (greater than 50 percent penetration) by 2010 and 3.5G will be mass
market in 2012. By country, Italy leads the way with 20 million 3G subscribers, represent-
ing 41 percent penetration. In 2007, Spain had 9 million 3G subscribers (25%), the UK has
11 million subscribers (23%), and France and Germany 8 million subscribers (16% and 13%
penetration, respectively).20
Three popular consumer activities in the UK for the mobile Internet include listening to
music (23%), accessing news and information on a mobile browser (20%), and accessing
email (13%).21
Trailing the UK, the markets with the strongest uptake for the mobile Internet are Germany,
Italy and Spain, respectively. The impact for the marketing industry is significant, as mobile
marketing advances from direct-response SMS campaigns and mobile Internet sites to new
areas like 3G mobile video, picture messaging and branded games. Although digital adver-
tising spend continues to grow in the region, mobile represented a fraction of advertiser’s
interactive budgets. The slice of the pie is predicted to increase globally over the next few
years. Bernstein Research forecasted that mobile advertising worldwide would quadruple
from $4.2 billion USD in 2008 (7% of online ad spending) to $17.0 billion USD by 2012 (19%
of online ad spending).22




WORLDWIDE MOBILE AD SPENDING ($ BILLIONS AND % OF TOTAL DIGITAL ADVERTISING)

20 18% 20%

16%
16 16%
13%

12 12%
10%
8%
8 8%
6%

4 4%

2.7 4.7 6.8 10.1 13.6 17.5
0 0%
2007 2008 2009 2010 2011 2012
Source: Bernstein Research, “US Internet – The End of the Beginning“, May 2008

Gadgets and devices
Years of phone subsidization in the UK have resulted in many upgrades to smartphone de-
vices. Penetration is also high in Spain and Italy. Regional carrier O2 announced at the end
of February 2009 that it had sold 1 million iPhones (over 16 months). This is surprisingly slow
compared to Nokia’s N95 smartphone, which reached the milestone in seven months in
2007. Nevertheless, the iPhone effect on Web consumption is pronounced, even over other
smartphones. British iPhone users are twice as likely to check mobile email as the typical
smartphone user and two and a half times more likely to access news or information through
a downloaded application.23

MOBILE CONTENT USED BY iPHONE, SMARTPHONE AND MOBILE PHONE USERS
IN THE UK, JANUARY 2009 (% OF TOTAL)

TOTAL TOTAL MOBILE
iPHONE USERS
SMARTPHONE USERS PHONE USERS

Accessed news/info via browser 79.7% 48.0% 19.8%
Accessed e-mail 75.4% 35.4% 13.1%
Listened to mobile music 65.6% 40.5% 22.6%
Accessed news or info via
55.6% 22.1% 6.3%
downloaded application
Accessed weather 55.5% 26.1% 9.2%
Used web search 55.1% 31.9% 12.3%
Accessed social networking site 54.8% 29.6% 12.7%
NOTE: based on three-month average for the period ending January 2009; ages 13+
comScore Mobile as cited in press release, March 26, 2009




In the short term, all handset manufacturers will be affected by the economic downturn as
consumers wait longer to replace their mobile phones. In the long run, however, because
of price reduction and subsidization from retail partners, the 3G iPhone will continue to ap-
peal to more of the mass market, slowly eroding the market share of Nokia, Sony Ericsson
and Samsung. Exclusive relationships between carriers and high-end handsets will become
the norm.

Cross-platform
With a view to fix audience fragmentation, leading broadcasters and producers are pio-
neering new content formats to work across TV, the Web and mobile devices. TV producer
Endemol launched a reality series for Bebo called “The Gap Year” which targets the highly
,
desirable 18 to 24 year old age group, and secured sponsors including Canon, The Royal Air
Force, Tourism Auckland and Tourism Australia.
Channel 4 is a major player whose Short Cuts “catch-up” subscription service offers viewers
highlight packages from its stable of popular entertainment programming. Celebrity Big
Brother is a popular reality TV show that offered Channel 4 audiences free one-minute mo-
bisodes (made-for-mobile episodes) from the series, along with 10-second ads. Trials of the
ad-subsidized mobisodes on Channel 4 mobile show high consumer demand. Advertiser
interest in mobile cross-platform offerings make this content viable for publishers, including
anything from animated banners and program sponsorship to interactive ads, pre and post-
roll ads and viral trailers.
CNN is another prime example of multi-platform distribution. CNN International has sev-
eral prominent distribution deals for CNN mobile video content with telecom operators
around the world, including Vodafone, Sky, Orange and the previously mentioned TU Media
in South Korea.

Source: http://cnnmobile.com/cnni_BN/services.do




A study from CNN International reveals that nearly one fifth of its viewers, 18 percent of the
audience, regularly listen to podcasts and one-third listen to online radio. A further 70 per-
cent read magazines online and 74 percent say they watch recorded TV. CNN says the study
emphasizes the significance of mobile, which is often overlooked but has the same audience
size that the CNN Web site had two years ago. CNN has responded to the increase in the
mobile audience by changing their fixed price of media inventory to a CPM-based model.

M-commerce
Premium mobile content is dominated by entertainment (video, games, music). The five
largest European countries (UK, Germany, France, Italy, Spain) will account for close to 80
percent of the mobile content market by 2013.24 Meanwhile, consider the market for the
early content revenue driver, ringtones. Competition from paid-for music downloads, side-
loaded music (where music is downloaded to PC from fixed-line Internet, then moved from
PC to mobile) and increased access to music through flat-rate data plans all factor into ring-
tone revenue reaching a plateau and likely declining over the next few years.
An example of a typical m-commerce transaction today is the service offered by Transport
for London, which allows people driving into the capital to pay the £8 daily or £160 monthly
traffic congestion charge via text messaging. As the m-commerce market develops, the
challenge for marketers is to design easy-to-use products and use clever campaign ideas
that educate consumers about how to use them.
Finally, the global not-for-profit group GS1 is governed by industrial and retail groups in
order to standardize mobile technologies for accelerated adoption. Technologies include
barcode reader and NFC (near-field communication) applications.

Search
Google dominates mobile browser-based searches in Western Europe, ranging from 63 per-
cent in France to 88 percent in Italy.25 The data does not factor searching through all-in-one
applications like Yahoo! Go or searching via bundled applications, where distribution deals
with carriers play a role.

Top Mobile Search Brands By Mobile Searcher Penetration
Three-month average ending June 2008 (United States and Western Europe)

top brand penetration second brand PENETRATION

France Google 62.9% MSN/Windows Live Search 9.6%
Germany Google 85.1% Yahoo! 9.4%
Italy Google 88.1% Yahoo! 19.5%
Spain Google 82.5% MSN/Windows Live Search 12.1%
UK Google 74.0% Yahoo! 16.2%
Source: comScore M:Metrics MobiLens




Social media
Steady demand for user-created content combined with social tools continue to fuel the
growth of social networks. Flat-rate data-plans are set to do for social networking what
affordable broadband did for the fixed-line Internet. Consumers use more of everything.
As of January 2009, 13 percent of UK mobile phone users access social networking sites. 26
Nielsen Online estimates the figure to be nearly 2 million people, or 23 percent of mobile
Web users.27 Facebook is already the fourth most popular mobile Web site, competing
with BBC properties, Google, and Hotmail.28 The growth of social media for mobile dem-
onstrates how user behavior is evolving from checking weather or airline flight status to
time-intensive interaction.

TOP 10 UK WEBSITES, RANKED BY UNIQUE MOBILE
INTERNET AUDIENCE, Q3 2008 (Millions)

1. BBC NEWS 1.7

2. GOOGLE 1.7

3. BBC WEATHER 1.5

4. FACEBOOK 1.5

5. WINDOWS LIVE HOTMAIL 1.0

6. BBC SPORT 1.0

7. eBAY 0.9

8. YAHOO! MAIL 0.9

9. SKY SPORTS 0.8

10. GMAIL 0.6

NOTE: accessed at least once during each month of the quarter
Nielsen Online, “Mobile Media View” as cited in press release, November 24, 2008

Response mechanisms
A milestone was reached in Britain, following in Japan’s footsteps, when market-leading
daily tabloid publisher The Sun carried out a large-scale pilot of QR code technology in
2007. Consumer response was confirmed a success due to 11,000 readers responding to
QR codes during the first few weeks. A pullout supplement that ran in the tabloid educating
readers about using QR codes was a key factor in the pilot’s success. With big advertisers
like Sky, Twentieth Century Fox, News Corp International and Ladbrokes all participating in




the pilot, it is clear that usage of QR codes will grow over the medium term. Nokia handsets
even come with QR-reading capability pre-installed.29
Another example of QR integration is this year’s launch of the Volvo C70. The pan-European
marketing campaign to launch the vehicle includes QR codes in print media as a method of
piquing consumer curiosity and extending a mechanism for further information gathering.
Finally, Mobext recommends that marketers note the key differences comScore noted be-
tween late 2007 and late 2008 for receptivity and response to SMS ads in Western Europe.
Just about all industries that saw increased volume of SMS ads also had a decreased re-
sponse rate. Conversely, all industries that delivered more SMS ads year-over-year had an
increased response rate. This trend will be an important to keep an eye on.30 As is the case
with email marketing, mobile marketers will be delicately striking a balance with consumers
among promotional offers, message frequency, and response rate.

SMS ADVERTISING AUDIENCE AND RESPONSE RATE IN SELECT COUNTRIES IN WESTERN
EUROPE, BY PRODUCT CATEGORY, AUGUST 2007 AUGUST 2008 (THOUSANDS AND % CHANGE)

RECEIVED SMS AD RESPONSE RATE

AUGUST AUGUST % CHANGE AUGUST AUGUST
2007 2008 2007 2008

Downloads for mobile phone 40,792 35,915 -12.0% 4.4% 3.9%
News or informations 25,929 22,122 -14.7% 2.8% 3.2%
Mobile phone or plan 32,222 31,574 -2.0% 4.6% 4.7%
Entertainment 12,644 11,230 -11.2% 4.3% 5.1%
Total mobile and media sectors 111,587 100,841 -9.6% 4.1% 4.1%

Clothing/fashion 3,982 5,503 38.2% 5.8% 6.4%
Restaurants 1,037 1,424 37.3% 11.6% 15.5%
Cars 4,407 3,731 -15.4% 11.2% 7.9%
Food 1,413 2,162 53.0% 9.2% 12.6%
Financial services 8,963 9,956 11.1% 3.7% 4.7%
Consumer electronics 3,957 4,647 17.4% 6.3% 6.7%
Travel 5,779 6,602 14.2% 4.9% 5.8%

Total non-mobile or media sectors 29,539 34,024 15.2% 6.2% 6.8%

NOTE: France, Germany, Italy, Spain and the UK; three-month averages for periods
ending August 2007 and August 2008
comScore M:Metrics as cited in press release, October 31, 2008



UNITED STATES

NORTH AMERICA: focus on UNITED STATES
CATCHING UP
The US mobile services market had long lagged behind Asia and Europe. However, the
US market has accelerated quickly, thanks in large part to the iPhone. As of June 2008, the
US market had 226 million mobile subscribers and reached the same penetration of 3G
subscribers (28 percent) as the top five countries in Europe. The actual number of US 3G
subscribers was 64 million.31

Mobile Internet
Demand for mobile Internet services has skyrocketed in the last two years (US audience
growth of 74 percent),32 thanks to the combined uptake of flat-rate data subscriptions, a
massive increase in 3G subscriptions, and of course, the iPhone. With quick iPhone prolif-
eration, US mobile Internet penetration (50 million people, representing 18 percent of mobile
subscribers) is higher than the UK and many other Western European countries.33

mobile internet penetration (by market)

18.2%
16.9%
16.0%

13.5% 13.2%
12.4%
11.9%

9.6%

7.1%

4.3%

2.2%

US UK Canada France Italy Spain Russia Germany China Brazil India

Nielsen Mobile. Mobile Internet penetration amongst mobile subscribers. Latest estimates
(US, February 2009; EU, Q1 2009; Canada Q4 2008; BRIC Q1 2008)

Source: The Nielsen Company, The Global Online Media Landscape, April 2009



UNITED STATES

Messaging continues to gain traction through mobile devices, with 53 percent of American
mobile subscribers using SMS, 26 percent using MMS, 15 percent using mobile email and
12 percent using instant messaging services. 34 Lastly, mobile video is growing – up to 10.3
million Americans are watching mobile video. The penetration rate is still in the single digits
(5 percent of American mobile subscribers), a mere blip compared to the estimated 50+
percent penetration of mobile video in Japan and South Korea.35
Although consumer mobile Internet services continue to grow in the region, the mobile plat-
form still represents a tiny fraction of US advertiser’s interactive budgets. eMarketer predicts
this ratio to grow from less than 3 percent in 2008 to 9 percent in five years’ time.

US MOBILE ADVERTISING SPENDING, 2008-2013
(Millions and % CHANGE / % OF TOTAL ONLINE ADVERTISING SPENDING)

10% US Mobile
Advertising
9.0% Spending
+ % change
8%
7.1%

6% Mobile Advertising
4.7% Spending as a
% of Total Online
3.7% Advertising
4% Spending
3.1%
2.8%
$1,410 (41.7%)

$2,390 (69.5%)

$3,330 (39.3%)
$995 (30.9%)
$648 (35.0%)

$760 (17.3%)

2%

0%
2008 2009 2010 2011 2012 2013

NOTE: includes mobile message advertising, mobile display advertising and mobile search advertising.
eMarketer, February 2009


Gadgets and devices
Better marketing of smartphone multimedia features, including photography and music,
has driven a dramatic upgrade cycle in the past few years. Price is a key driver since most
operators subsidize phones. Smartphones now comprise nearly a quarter of the US hand-
set market.36



UNITED STATES

Telecom subsidization makes the 3G iPhone affordable (USD $199) to the mass market. As
alluded to previously, the iPhone has been instrumental in advancing mobile data services,
with 84 percent of iPhone users using email, 82 percent browsing news and information
sites, 59 percent using a news and information application or widget. A surprisingly high 31
percent of iPhone users watch mobile video (likely a mix of QuickTime movie trailers and
YouTube, as heavily promoted by Apple), compared to the 5 percent market average.37

service penetration by smartphone type, us (% OF RESPONDENTS)

64%
Browsing: news info 82%
62%
72%
E-mail 84%
44%
25%
Applications: news info 59%
29%
28%
Access SNS 44%
28%
19%
Music 60%
28%
6%
Video 30%
21%
7% RIM
Downloaded games 32%
11% iPhone
7%
Respond SMS ads 6% Smartphone
6%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Source: comScore MobiLens November 2008

Research firm NPD noted that Research in Motion (RIM) was the top vendor in the US market
in Q1 2009 due to a two-for-one promotion, overtaking the iPhone 3G, and pushing market
share to 50 percent. RIM’s BlackBerry Curve, Storm and Pearl were among the five most popu-
lar models. Meanwhile, the most formidable challengers over the next few years may prove to
be Google’s Android-based phones, which ranked fifth (the T-Mobile G1).38
It took Apple two and a half months in 2007 to reach the one million units sold mark. On its
recent earnings call, T-Mobile announced that it has sold its one millionth G1 phone based
on the Android open-source operating system, meaning it took Google six months. Never-
theless, it is still an impressive feat considering the incredible anticipation and fervor for the
iPhone. The traction has T-Mobile forging ahead with additional handsets based on Android.
Not to be outdone, Apple announced that with the release of its latest iPhone 3G S in late
June sold 1 million units in 3 days.



UNITED STATES

Cross-platform
In response to growing changes in audience behavior, owners and producers of television
content are designing new formats and adapting their business models. For example, the
12 to 34 year old audience MTV serves watches less broadcast TV. In order to address this
trend for the top show “The Hills”, MTV created a virtual version of the show that has al-
ready attracted over two million users. In addition, MTV provides mobile streams of the
show that are simulcast with the TV broadcast. According to MTV, it had 1 million streams of
“The Hills” in Q1 2008.

CBS launched quiz format “Million Dollar Password” as a modern update on the classic “Pass-
word” game show. The program gives its audience choice and control about how to watch
the series, with TV episodes, catch-up clips for the web and a casual game for mobile.
The long-running series America’s Next Top Model is another TV format that has devel-
oped a mobile game to reach its audience. Many American marketers believe it is up to
the broadcasters to invest in achieving sufficient audience before they invest in advertising
content for Web and mobile. A few brave brands are jumping in. History has shown this
mentality pays off – advertisers in novel ad formats and new media benefit from significantly
higher awareness and recall than advertising in tried and true media.



UNITED STATES

M-commerce
Unlike Japan, Americans are not accustomed to using their mobile phone to pay for goods
or services. According to a Nielsen Mobile press release a year ago, less than four percent
of Americans have engaged m-commerce. However, data usage is an indicator of sophis-
tication and ease with the mobile platform. Half of all data-service users say they expect to
participate in mobile commerce in the future. Nielsen’s research found that men are more
likely than women to use their phone for commerce. The biggest hurdle for m-commerce is
similar to the original challenge that faced e-commerce. Forty-one percent of data users not
conducting mobile commerce cited security as their biggest concern.39
Ticket value for m-commerce will grow over the medium term in the US, from cheap items
like mobile content to more expensive items like clothing. Mobext recommend that market-
ers assess their own businesses. Are your customers prepared to engage in m-commerce?
What infrastructure is necessary to accommodate them?

US ONLINE RETAILERS THAT HAVE A MOBILE COMMERCE SITE,
OCTOBER 2008 (% OF RESPONDENTS)

Have mobile commerce site:
4.4%

Do not have mobile commerce site:
95.6%

Internet Retailer, “Website Design, Content and Rich Media”,
conduced by Knowledge Marketing, January 2009


Following the notion of Osaifu-Keitai, Texas Instruments has been testing cashless pay-
ments where consumers attach a one-square-inch sticker with an embedded RFID chip to
their mobile device. The goal is to offer a tap and go payment service that doesn’t require
consumers to install anything on their mobile device.



UNITED STATES

Search
As in Europe with the fixed-line Internet, Google also dominates browser-based mobile
searching in the US (63 percent compared to 35 percent for Yahoo!), although Yahoo! has
a stronger mobile search presence in the US than in other countries.40 Again, there are
multiple types of searches not captured here – “on-deck” searches, local searches, and
app/widget-based searches. Nevertheless, the fact that Google is synonymous with search
bodes well for the company in the mobile sector.
An intriguing shakeout will be the battle of services from Google (GOOG-411), Jingle Net-
works (1-800-FREE411), and other free directory assistance providers and the mobile opera-
tors’ fee-based services for directory assistance. Mobext believes that the end result can only
be an inevitable loss of the carriers’ revenue stream from directory assistance.

Social media
Among smartphone users in the US, mobile browsing has quickly evolved from quick hits
of checking information like sports scores and weather updates to longer visits of browsing
and interacting with content on social networks. Mobile social networking and blogging is an
increasingly common daily activity. In fact, more than four times as many Americans access a
social networking site or blog with their mobile device on a daily basis than did a year ago.41

“Soon after the launch of the 3G iPhone, Facebook,
with one of the most popular iPhone applications avail-
able, surpassed MySpace in mobile usage in the U.S.”
Source: Nielsen Online, Global Faces and Networked Places: A Nielsen
Report on Social Networking’s New Global Footprint, March 2009

Besides Facebook and MySpace, mobile community MocoSpace announced that it reached
6 million users at the end of last year, primarily through word-of-mouth among its young
members.42 As more people ramp up their use of social media while on the go, mobile will
do what the hyperlink did for Web sites, speeding up the flow of communication and ignit-
ing communities – all of which will make the world feel smaller.
Another social network and micro-blogging service that has exploded onto the scene is
Twitter. According to comscore in March 2009, worldwide visitors to Twitter.com increased
95% from 9.8 million to 19.1 million.
At its core, Twitter is a communication platform that enables its users to quickly and easily
send and read each others’ updates (known as tweets). Tweets are text-based, have a limit
of 140 characters and can be sent via Twitter.com, SMS or through external applications via
API (application programming interface).



UNITED STATES

Media companies such as Viacom and Time Warner to name a few have quickly adopted
Twitter through its many media outlets. By doing so, media companies and regularly users
alike have another method to quickly disseminate (and receive) information to Twitter users.
A recent example that demonstrates the effectiveness of Twitter as a communication ve-
hicle (as well as other social media for that matter) was the sudden death of global pop
icon Michael Jackson. Once it was announced by the media (TV, radio, on-line, etc.) that
Michael Jackson had died, tweets containing “Michael Jackson” comprised 22.61% of the
total tweets (http://mashable.com/2009/06/25/michael-jackson-twitter/). Therefore, if users
followed the many media outlets via Twitter or linked to their friends through the service,
the immediate global awareness of Michael Jackson’s death occurred in minutes.

A “gallery’ of
Twitter ‘Followers”
7 Things to know about Twitter….
http://net.educause.edu/ir/library/pdf/ELI7027.pdf



UNITED STATES

Response mechanisms
One of the highest profile uses of mobile response has been on the popular American TV
show American Idol where viewers are encouraged to use shortcodes to vote for their con-
testant of choice. As a show sponsor, telecommunications giant ATT benefits from text
voting through messaging revenues. However, ATT also received widespread criticism for
sending unsolicited text messages to subscribers that promoted the show.
While campaigning last year, US President Barack Obama encouraged people to sign up for
campaign updates by providing their mobile numbers to have an additional channel by which
to communicate with supporters. Nielsen Mobile estimates that 2.9 million mobile users re-
ceived the text with the announcement of Joe Biden as Obama’s running mate.43
A number of US brands have been actively using shortcode marketing, including Coca Cola
(as part of its “My Coke Rewards” program), Subway, Arby’s, Papa Johns, Domino’s Pizza,
Pizza Hut, BestBuy, Foot Locker. 44 As long as there is a perceived value exchange, US con-
sumers are willing participants.

US MOBILE PHONE USERS WHO HAVE RESPONDED TO MOBILE PHONE
OFFERS, BY OFFER TYPE, MARCH-APRIL 2008 (% OF RESPONDENTS)

Responded to a text message for a product or service
70%

17%

participated in surveys sent to my mobile phone
42%

10%

responded to an e-mail offer for a product or service
30%

7%

responded to a web offer on mobile phone’s internet browser
22%

5%

responded to a coupon offer for a product or service % of responders to
18% mobile offers (n=193)
% of all respondents
4%
(n=800)
NOTE: ages 15+
Direct Marketing Association (DMA), “Mobile Marketing: Consumer Perspectives”
July 2008 cited by Marketing Charts, July 21, 2008



BRAZIL MEXICO

LATIN AMERICA: focus on BRAZIL mexico
GROWING DEMAND
After years of limited Internet adoption and slow broadband growth, Mobext sees a great
growth curve ahead for mobile services and interactive marketing in Latin America. The
region has had economic growth for two years in a row, led by Brazil and Mexico, the coun-
tries with the most Internet users in the region. Latin America’s growth is significant because
mobile will be the primary Interactive screen for a new generation of consumers. Former
Mobile Marketing Association President Laura Marriott noted in July 2008 that mobile pen-
etration in Latin America was six times the PC penetration.45

“Mobile is not simply viewed as an extension of the Web in
BRIC (Brazil, Russia, India, and China), as it is in the US, West-
ern Europe and parts of Asia-Pacific. Mobile is the Internet for
an increasingly large and attractive consumer segment – an
important distinction for marketers to keep in mind.”
John du Pre Gauntt, eMarketer Senior Analyst

Mobile Internet and content consumption
MOBILE SUBSCRIPTIONS AND PENETRATION WORLDWIDE, BY REGION
2005-2008 (MILLIONS AND % OF POPULATION)

NORTH LATIN middle east
EUROPE ASIA-Pacific total
AMERICA AMERICA and africa

2005 224.8 691.7 820.0 232.0 188.2 2,156.7
% penetration 68.4% 73.1% 22.8% 43.1% 18.9% 27.6%
2006 251.5 801.8 1,058.1 296.1 271.7 2,679.2
% penetration 75.9% 90.4% 29.1% 54.4% 26.7% 34.3%
2007 277.0 889.2 1,363.0 362.4 379.9 3,271.6
% penetration 82.8% 100.8% 37.0% 65.8% 36.6% 41.3%
2008 294.0 938.1 1,686.5 425.6 475.1 3,819.4
% penetration 87.1% 106.6% 45.3% 76.3% 44.8% 46.5%

NOTE: numbers may not add up to total due to rounding
IDATE and ENTER, “Mobile 2009: Markets Trends”, sponsored by Oesía, February 5, 2009



BRAZIL MEXICO

eMarketer predicts Brazil’s already hefty 140 million subscriber base to grow to 176 million
by 2012.46 Popular consumer behavior includes; 51 percent using text messaging, 15 per-
cent sending receiving photos, and 11 percent accessing music, videos and ringtones.47
Given that a high proportion of Brazilians are pre-paid users, promotions such as free air-
time or alert services have proven extremely popular.
Content revenues are a high growth area. With 73 percent penetration of mobile, 40 per-
cent mobile subscribers accessing the mobile internet, and only 5 percent actually using
the mobile internet (adoption rate), Brazil represents both the largest market in the region
for mobile services as well as the largest upside potential.48 Mexico’s mobile market grew
at a rate of approximately 15 percent per annum, reaching more than 70 percent penetra-
tion by close of 2008. And, at early 2009 Telmex’s sister company, América Móvil (Telcel), still
accounted for around 72 percent of the mobile market. Deployment of 3G service in both
markets translates to richer and more interactive mobile content experiences and advertis-
ing campaigns.

MOBILE PHONE PENETRATION IN MEXICO, 2003-2008
(% OF POPULATION)

2003 29.1%

2004 36.3%

2005 45.1%

2006 52.6%

2007 62.6%

2008 70.3%

Comisión Federal de Telecomunicaciones (COFETEL) with company reports,
“Telefonía Móvil”, March 19, 2009

Gadgets and devices
As noted previously, Nokia commands roughly 40 percent of the global smartphone mar-
ket, but saw a precipitous drop in its Latin American operations in Q1 2009 compared to
the same quarter a year ago.49 The variety of Nokia’s smartphone portfolio provides a major
strategic advantage, including a wide variety of high-end, mid-tier, and basic models.
However, Mexico City-based América Móvil, the largest mobile operator in Latin America,
started selling the iPhone last year and quickly amassed backlogs of consumers. The lower
subsidized price of the 3G iPhone will continue to extend the phone’s reach throughout the



BRAZIL MEXICO

region. Apple may be able to leapfrog key competitors like Nokia and RIM to take a market-
leading position for Latin American smartphone sales.

Cross-platform
Brazil’s growth of online advertising has the potential to be a major catalyst for cross-plat-
form content consumption. Although 3G services are still early, Brazilians are already aware
of cross-platform content. An April 2008 study by Accenture demonstrates that Brazilians
are divided in their demand to watch television on their mobile devices (59%) versus their
PCs (51%).50 Fiat, an active mobile marketer, launched a campaign last year with display ban-
ners on a local carrier and showing video on the mobile Web site.
Federico Pisani Massamormile, CEO of Hanzo and chairman for the Latin American region
of the Mobile Marketing Association, sees participatory TV contributing to future mobile
data revenues.5 1 Mobext believe that this trend bodes well for publishers (and their market-
ing partners) that are developing content for key audiences including teens, young adults
and mobile professionals.

Search
Two mobile operators dominate the playing field in Latin America, Telefónica and America
Movil. In 2007, Yahoo! announced availability of its oneSearch mobile search product for
Argentina, Brazil, and Mexico and distribution deals setting oneSearch as the default search
engine for both companies. Not to be completely excluded, a few months later, Microsoft
announced an alliance with Telefónica to distribute Windows Live Services (Hotmail, Mes-
senger, and Spaces, but minus Search) on all Telefónica handsets, expanding on availability
that already existed in Argentina and Chile.
Meanwhile, Google’s mobile strategy has been centered on its own Android platform rather
than distribution deals. Google is betting on consumer mindshare and reputation for people
to use Google with their mobile devices. This has been a successful strategy for Google so
far, as demonstrated by the market share for browser-based searches in Europe and the US.
The more the pendulum swings in the market toward full-featured smartphones, the stronger
an effect Google has on the market. On the other hand, the more people that use handsets
with only basic email and Web access, the more influence mobile operators and handset
manufacturers influence the regional mobile search landscape.

Social media
In addition to US-centric social networks MySpace and Facebook looking to penetrate the
Latin American market, the two biggest social networks are hi5 and Orkut in Brazil. Hi5
launched hi5 mobile in August 2008 and is optimized to run on a variety of phones, includ-
ing but not limited to, the iPhone, RIM’s BlackBerry, Nokia, Motorola, Samsung, LG, and
Sony Ericcson handsets. The mobile version of the Orkut Web site has been out for a year



BRAZIL MEXICO

and the Orkut Mobile App has recently been released. Like Facebook’s feature of uploading
mobile photos directly to profiles, Orkut also allows users to directly upload mobile photos
to their Orkut profiles.
AirG is a social network player for “on-deck” users as part
of a white label service. Its mobile social network service
covers 19 million mobile users through Telefonica’s Movis-
tar brand in Ecuador, Peru and Venezuela. Custom brand-
ed as Conexion Latina, the service allows users to com-
municate to peers with features like photo profiles, instant
messaging, photo and video sharing, blogging and user
searching. AirG reveals some characteristics of its user
base: a majority of its users spend more than one hour a
day in the community; nearly 60 percent don’t own a PC;
six in ten have at least a high-school education; and the
five most popular handsets used to access AirG retail for
less than $100 with a service contract.
Thanks to a bright outlook for social network growth in
Latin America, mobile communities will be one of the pri-
mary drivers of future mobile usage.

View Facebook profiles
on your mobile



Coming to a 3rd Screen Near You!
The iPhone Phenomenon
5
the Touchscreen Revolution
Arguably, no other handset has jump-started mobile marketing globally as much as the
Apple iPhone. Along with the iPhone, a rash of touchscreen mobile devices are on the
market, including but not limited to, the iPod Touch, BlackBerry Storm, G1 Android, HTC
handsets, Samsung’s Star and Preston, and the upcoming Nokia N97 and Palm Pre. With
the current pace of innovation in handsets, sales of smartphones worldwide are set to dra-
matically increase.

SMARTPHONE SALES WORLDWIDE, 2009 2013
(% OF TOTAL MOBILE PHONE SALES)

2009 14%

2013 38%

Informa Telecoms Media, “Mobile Operating Systems: The impact of open source and
importance of user experience” as cited in press release, March 20, 2009

“Even in this challenging economy, consumers are migrating
toward Web-capable handsets and their supporting data plans
to access more information and entertainment on the go”.

Ross Rubin, director of industry analysis, The NPD Group, in a press release, May 4, 2009
Source: eMarketer, June 2009

Apps (or widgets) on these handsets have challenged the notion that a browser is best for
users to interact online. Like the peripherals ecosystem for iPods, developers are incredibly
busy creating apps for the growing iPhone consumer base (35,000 applications and count-
ing). Apple’s App Store, having recently celebrated its one billionth download from iPhone
and iPod Touch users, has sparked comparable stores from competitors (Android Market,
BlackBerry App World, Nokia’s upcoming Ovi Store, Microsoft’s upcoming Windows Mar-
ketplace for Mobile).



5. Coming to a 3rd Screen Near You!

NUMBER OF MOBILE APPLICATIONS DOWNLOADED BY US SMARTPHONE OWNERS,
BY MANUFACTURER, MARCH-APRIL 2009 (% OF RESPONDENTS)

APPLE RIM PALM MOTOROLA TOTAL
n=104 n=237 n=56 n=84 n=830
0 2% 32% 23% 36% 27%
1-5 15% 46% 50% 37% 44%
6-10 22% 15% 18% 13% 14%
11-15 15% 4% 5% 4% 5%
16-20 18% 1% 2% 4% 4%
21-30 10% 0% 2% 0% 2%
31+ 17% 1% 0% 7% 4%
NOTE: numbers may not add up to 100% due to rounding. Compete, Inc. provided yo eMarketer, May 2009

iPhone leading the field in Apps – total downloads and range of App cat-
egories – largely based on the novelty of its Touchscreen functionality and
its lead in working with App developers for iPhones...

LEADING MOBILE APPLICATION CATEGORIES DOWNLOADED BY US SMARTPHONE OWNERS,
BY MANUFACTURER, Q1 2009 (% OF RESPONDENTS IN EACH GROUP)

iPHONE RIM PALM MOTOROLA ALL OWNERS

Games 79% 26% 44% 33% 37%
Music 55% 12% 20% 27% 28%
Entertainment 78% 19% 16% 24% 26%
Weather 57% 18% 19% 24% 24%
Navigation 33% 22% 9% 27% 21%
News 43% 16% 20% 18% 18%
Social networking 35% 21% 9% 11% 16%
Utilities 42% 10% 15% 18% 16%
Business 25% 11% 5% 16% 13%
Travel 29% 11% 2% 10% 12%
Finance 32% 11% 5% 17% 11%
Productivity 27% 6% 15% 14% 11%
Sports 23% 13% 7% 10% 11%
Education 23% 6% 9% 12% 9%
Photography 20% 5% 5% 10% 9%
Books 23% 3% 11% 5% 8%
Healthcare and fitness 19% 3% 13% 8% 8%
Lifestyle 29% 3% 2% 10% 8%
Reference 28% 4% 5% 11% 8%
Other 2% 4% 5% 4% 4%
Compete, Inc., “Smartphone Intelligence Report” as cited by MediaPost, May 5, 2009




The iPhone’s Safari browser is able to render a Web site as-is. Therefore, it may be tempt-
ing to think that the mobile Internet is now simply an extension of the fixed-line Internet.
However, a touchscreen interface still requires design and content differences for a user “on
the go.”
As a result, when building out a mobile presence, marketers have to keep in mind these
implications for the mobile Internet:

• Different menu sizes: due to the limited display, most menus take up most, if not all, of
the visible area. Menus have to be concise.
• Direct linking: tailoring to the “on the go” mentality is key. It is imperative to minimize
the number of levels a consumer has to drill down. When producing content for mo-
bile users, provide direct links that enable users to quickly and easily retrieve nuggets
of information.
• No rollover/mouseover effects: the main gesture for touchscreen handsets is swiping
for navigation. Whereas a hovering pointer exists with a laptop or desktop computer, a
touchscreen device does not have an equivalent pointer. Marketers and content produc-
ers accustomed to menus and panels expanding with a mouseover action need to adjust
and provide an alternative compelling user experience.
• Limited scrolling: another best practice is to minimize scrolling to a single direction and
also to limit the amount of scrolling necessary.
• Utility of apps/widgets: there is a finite amount of room on handsets. That said, users will
make room for apps that provide the most benefit, whether that benefit is productivity,
savings, income, or entertainment. Avoid creating an app/widget without a clear benefit or
else it will eventually be part of the apps “graveyard” (with adverse brand image effects).




Mobile video/TV
Outside Asia, mobile video/TV is a medium for much of the world that is far from main-
stream. With some exceptions (including the examples we have cited as well as operators
like 3 Italia and Swisscom), one of the obstacles is investment, a chicken-and-egg situation.
Marketers believe broadcasters should invest in the medium but many are reluctant to do so
without accompanying advertising revenue. Therefore, the primary income stream for video
service providers and content owners is subscription revenue, which leads to the second
historic challenge with mobile video/TV-network infrastructure and handset development in
each region capable of supporting a video-consuming mobile audience.

TYPES OF MOBILE APPLICATIONS DOWNLOADED BY US MOBILE PHONE
USERS*, DECEMBER 2008 - FEBRUARY 2009 (% OF RESPONDENTS)

GAMES 61.6%

LOCAL DIRECTORY APPLICATIONS 53%

MUSIC APPLICATIONS 50.5%

CHAT/INSTANT MESSAGING 40.1%

31.6% SOCIAL NETWORKING APPLICATIONS

10.3% VIDEO PLAYER APPLICATIONS

9.1% NONE OF THESE

1.5% NOT SURE

NOTE: n=497, * who have downloaded mobile applications
Skype survey conducted by Zogby International, provided to eMarketer, March 17, 2009

Video/TV applications will take some time to reach critical
mass, but will surely gain popularity in years to come.

As mentioned previously, the iPhone 3G has ignited all kinds of consumption, including
mobile video. US mobile video operator MobiTV is slowly building, having reached 6 mil-
lion subscribers.52 A key question is how content owners choose to apply the lesson learned
from the Internet content explosion – paid subscriptions for premium content giving way to
free content distribution. Given bandwidth costs and a limited viewing audience, ad-sup-
ported models are unlikely to be sustainable in the near term.




What’s more, because mobile video requires more bandwidth, a key consideration of its
growth depends on the mobile carriers. Can their networks support more users consuming
mobile video? A prime example of the carriers’ weariness of mobile video is that fact that
ATT recently prohibited the use of Slingbox mobile’s iPhone app on its 3G network; it can
only be used via wifi. These network constraints may be addressed as carriers introduce
next generation data transmission technology such as WiMax and LTE.
How much of an impact will YouTube have? Consider the recent deal forged with sports
cable network ESPN for an ESPN video player on YouTube. Chances are, YouTube will con-
tinue to be a tremendous force on the digital video landscape for the foreseeable future.
The launch of a Hulu iPhone app could also prove to be a game-changer for mobile video,
both in the US and overseas, depending on the success of Hulu’s international efforts.

Source: http://www.flotv.com

From an advertising standpoint, marketers have already proven that they can successfully
attract audiences to watch mobile videos about products or services they find relevant. Yet
the hurdles of scale and a fragmented marketplace mean that mobile video/TV advertising
has a long way to go before being regularly considered alongside other media vehicles.
While these are the same hurdles podcasting faces as an advertising medium, mobile vid-
eo/TV has a much brighter outlook in the longer term. While podcasting has a small head
and a very long tail, mobile video/TV will have a much larger head of content, thanks to
established producers (television networks) porting their professional content across plat-
forms. Again, Mobext can help you navigate this area to optimize your marketing spend.


Global Mobile - A World-view by Havas Digital

Global Mobile - A World-view by Havas Digital

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Global Mobile - A World-view by Havas Digital