Presentation given at Internet World, Earl's Court, London on Tuesday 27th April, 2010

1. Internet World
mobile marketing: internet or “App”?
Jason Cross
27th April 2010

2. Agenda
• Market overview
• Which route to choose?
• Technology – what will the near-future look like?
2

3. Market Overview (UK)

4. Context
Mobile marketing is still in its early stages but growing
rapidly
- Currently there are 76m mobile devices in use in the UK by 13+ population of 48m
- There are more mobiles worldwide (4bn) than any other consumer electronic
good except radios (1.5bn TVs, 1.4bn internet PCs etc)
- One in ten of all UK internet pages is viewed on a mobile device
- As adults we each send an average of six text messages (SMS) per day; a figure
which shows no sign of slowing
- The vast majority of brands engage in some form of mobile marketing, e.g. CRM texts,
apps or a presence on the mobile internet
- Few brands are fully leveraging the opportunity on mobile across marketing/loyalty,
customer service and m-commerce
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5. “The mobile phone will become the primary means
of accessing the Internet worldwide by the year
2020.”
Pew Internet & American
Life Project
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6. Messaging volumes continue to grow (UK)
Data revenues are now larger than those from voice
Billions of Messages sent
SMS (Left hand scale) MMS (Right Hand Scale) Growth Rate
100 1.0
90 28% 0.9
80 0.8
70 0.7
60 0.6
50 165% 0.5
40 0.4
30 0.3
20 0.2
10 0.1
0 0.0
2003 2004 2005 2006 2007 2008 2009
Source: OFCOM August 2009.
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7. Mobile internet usage now significant (40% UUs)
Strong growth in mobile internet usage driven by fall in data costs
Subscribers accessing mobile internet
14,000,000
24% year on year
13,000,000 growth between
12,000,000 2008 and 2009
11,000,000
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09
Source: Comscore 3 month rolling average
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8. 50% of unique internet users have ordinary phones
However smartphone owners are heavier users of mobile internet
Mobile internet access amongst all phone subscribers in the UK
(Adults 13+ for the 3 months ended Jan 10)
GooglePalm
MS
2% 0%
RIM 5%
10%
Apple
14%
Non Smart
Phone
50%
Smart OS used by Nokia, SonyEricsson etc
Symbian
19%
Source: ComScore. Note, Operating Systems: Microsoft or Palm or RIM or Symbian or Apple or Google
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9. Smart-phones are the fastest growing handset type
Smart phones represent nearly a quarter of the market – but UK still
dominated by older handsets (which CAN still access the internet)
%age of Smart Phones in the UK Breakdown of Smartphone operating systems in the UK
(Adults 13+ for the 3 months ended Jan ‘10) (Adults 13+ for the 3 months ended Jan ‘10)
Google Palm
Microsoft 3% 0%
11%
Symbian
46%
(5.1m)
RIM
Non Smart Smart 19%
Phone Phone (2.1m)
77% 23%
(11m)
Apple
21%
(2.3m)
Smart-phones, of which there are 11m in use in UK, are defined by particular operating systems and have specific platforms for developers
Source: ComScore Jan 10
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10. Smart phone growth in the UK
the strong growth of smart-phones continues – taking approx. 3 years for a
new mobile technology to become market dominant
Number of Smart Phones subscribers in the UK (000s)
(Average number of subs for the 3 month ended)
14,000
+39%
4M Jan 10
12,000
10,000 +41%
YOY
8,000
6,000
4,000
2,000
0
Sept 07 Sept 08 Sept 09 Jan 10
Source: ComScore. Note, Operating Systems: Microsoft or Palm or RIM or Symbian or Apple or Google
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11. Text and picture msgs reach twice as many UUs
However messaging is not transactional like mobile internet and apps
• Text (SMS) and picture messaging
50,000
(MMS) are used by 92% and 58%
45,000
respectively
40,000
35,000
• Apps and the mobile internet used
30,000
by 30-35% but growing rapidly
25,000
• Many apps are games and come
20,000
pre-installed
15,000
• Downloading new apps or
10,000
allowing apps to update content or
5,000 transact requires the mobile
0 internet
Apps Mobile LBS MMS SMS
Internet
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12. More msgers in 55+ group than any other
25-34 age band are the most prolific users of mobile media features
Number of subscribers in the UK (000s) Index vs population as a whole
(Average number of subs for the 3 month ended Jan 10) (Average number of subs for the 3 month ended Jan 10)
13-17 18-24 25-34 35-44 45-54 55+ 13-17 18-24 25-34 35-44 45-54 55+
14,000 0 100 200
12,000
Apps
10,000
Mobile
8,000 Internet
6,000
LBS
4,000
`
2,000 MMS
0
Apps Mobile LBS MMS SMS SMS
Internet
2.3% of all mobile users visited a mobile internet retail site in last 3 months of 2009
Source: ComScore
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13. Internet accessed on mobiles by all age groups
internet sites are increasingly looked at “on the go” across devices
Percentage of subscribers in each age and sex band who access mobile internet
70%
61% 61%
60%
50% 48% 47%
44%
40% 38%
31% 29%
30% 27%
20% 16%
13%
10% 6%
0%
13-17 18-24 25-34 35-44 45-54 55+
Female Male
Data: Three month average ending Jan 10
Country: UK - N= 15,824 mobile phone users
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14. Mobile reaches all social segments
Mobile has greater geo-demographic reach than fixed line internet
Percentage of UK Population take-up
100%
90% 90%
85%
82%
80% 76%
72%
60% 57%
40% 35%
20%
0%
AB C1 C2 DE
Own a mobile phone Have fixed internet at home
Source: Ofcom, 2008
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15. Email accessed on mobiles by all age groups
Emails is read “on the go”: ensure your emails and links are mobile friendly
Percentage Accessed email (work or personal) from mobile
50%
45%
39%
40%
32%
30% 27% 27%
22%
20% 18%
16%
14%
11% 10%
10%
5%
0%
13-17 18-24 25-34 35-44 45-54 55+
Female Male
Data: Three month average ending Jan 10
Country: UK - N= 15,824 mobile phone users
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16. Which route to choose?

17. What IS an “app”?
• An “app” (short for application) is a specially designed program for mobile phones
• Popularised by Apple for their iPhone, these programs have, in fact been around for
many years, and are available for most recent phones (e.g. the games that come pre-
loaded on your Nokia or Sony-Ericsson, are “apps”).
• They range in size and complexity from a simple flashlight to a complex navigational
GPS system or a medical reference guide
• Some apps, such as those drawing on real-time prices for a retailer, actually require
internet access to be fully functional.
• The “app” button on your handset window is actually akin to a visual internet bookmark
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18. The great debate: pros and cons of apps
But will HTML5 do away with need for apps?
Most apps need to connect to the
Richer experiences not currently web to make them truly useful.
served through mobile internet.
Mobile web is growing rich
interactive functionality and may
Users download & install an app,
soon render apps obsolete for
onto their desktop.
everything apart for games.
Most affluent target demographic With apps, developers have to
and the greatest possible stream consider handset compatibility
of revenue, but a tiny minority of across all platforms, possibly
people.
facing budget constraints.
pros cons
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19. “Since many apps are never launched after being
downloaded, judging success purely by the
number of downloads can overstate the success
of your mobile objectives.
“In order to achieve the highest return from this
channel, you must also have an understanding of
its adoption and effectiveness over time.”
Jascha Kaykas-Wolff, vice president of
marketing at Webtrends, New Orleans
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20. Internet access is going against the grain
Less about “snacking”, more about “real web” access
Q9 For each of the following, please indicate the length of your average mobile internet session?
Length of internet session?
100%
< 5 Mins 5 Mins +
80%
77%
60%
40%
39%
20%
23%
0%
Source: Appetite, Yahoo! March 2010
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21. Mobile experience
44% of mobile internet users blame brands for a bad mobile experience
Q16. When a website doesn’t work on your mobile phone, which of the following do you tend to blame?
Reason for bad mobile experience?
60%
Brand Network The
The Phone
(site) Provider User
40% 44%
34%
29%
20%
0%
5%
Source: Appetite, Yahoo! March 2010
Base: all those who access internet on mobile (n=1,240)
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22. Mobile game makes recycling fun
The Solution:
A mobile game was developed
for Java enabled phones as well
as the Apple iPhone.
It was promoted via the iTunes
App Store, in mobile
Advertising and through PR.
Business Need: Users could text BIN to 62967
to launch a mobile internet site
To extend “Starve your bin”, from where they could
RfL’s fully integrated download the game. Functions:
campaign, to a younger
audience in a fun and The aim is to collect recyclable materials in the • Game
engaging way which recycling bin and leave non-recyclable items for • Forward to friend
educates users about what the bin bag (the ‘Evil Bin’). • Over 20,000
can and cannot be recycled downloads
and encourages them to tell A score leaderboard encourages competition (>12,000 of Java
others. and ‘send to a friend’ functionality makes it viral. game)
INSPIRATION GUIDE: ACQUISITION beinspired@incentivated.com
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Public Sector: Recycle for London www.incentivated.com/publicsector

23. Marks & Spencer mobile internet site: “Wallace & Gromit”
The Solution:
Offering a family-
oriented fun, quirky,
inventive and
traditionally British
twist to the “Christmas
wouldn’t be Christmas
without…” positioning, Results?
we developed a
mobile wapsite based 31% of profiles were
upon a typically “Heath forwarded to friends/
Robinson”-style family
Business Need: Wallace & Gromit 21% CTR from outbound
invention to help customers choose what SMS
M&S wanted an to ask for from friends and family as a 28% of new visitors
innovative mobile Christmas gift. A viral mechanic supplied an email address
element, to add to their encouraged the spread of the site to M&S
broader Christmas amongst family & friends The long tail – over 5,000
campaign, that would and people attempted to visit the
could engage all their Voila – Wallace & Gromit’s Cracking site in the week AFTER
customers. Christmas Contraption Christmas!
CASE STUDY: Wallace & Gromit’s Cracking Contraption
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Sector: Retail wag.mands.mobi/demo (on your mobile or in Firefox)

24. Jaguar XJ Launch Mobile Campaign
The Solution:
Created a ‘luxury’ mobile
experience using the latest
mobile technology to
showcase XJ and generate
leads for test drives and sales
The mobile internet site is a
beautiful, innovative and creative
custom made site, designed for
high end phones (based upon
analysis of phone types from
previous Jaguar mobile advertising).
Business Need: It is among the first to start
delivering specific Android UE
to complement iPhone functions.
Building on the success of The site allows prospective Jaguar owners to register via
the 2009 mobile advertising their phones for exclusive (mobile-first) updates and
campaign in creating invitations to view the XJ. Registration also unlocks
quality leads for test exclusive content for your phone.
drives that converted to The wapsite is fully integrated into the campaign to Results?
efficient sales, Jaguar maximise fully tracked sales opportunities, with leads
requested a “luxury” delivered into the central test drive database.
www.jaguar.mobi/xj
mobile solution for the Site and campaign still
The site is designed to allow future re-purposing as a
launch of its new XJ destination for mobile advertising (post-launch activity) and live (LA and NY city
model. to cope with a long tail of visits. takeovers in NY)
CASE STUDY: Jaguar XJ model launch (USA)
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Sector: Automotive www.jaguar.mobi/xj (on ANY mobile phone)

25. Tesco store finder iPhone app
Released 5 January 2010
App locates products from
Locate any Tesco Create a Shopping your shopping list
store in the UK List to use in store according to aisle
iTunes & Tesco.com 2010
25

26. Tesco Clubcard iPhone app
Released 8 February 2010
Future plans
• Launching apps for Blackberry & Nokia (Symbian and Java)
• Include scannable vouchers in Tesco Clubcard app
• Update Tesco Clubcard app to include the Tesco Credit Card as a scannable
payment method
This does not work in some stores, no Express stores or self service checkouts
26 iTunes & Tesco.com 2010

27. iPhone App ocado
‘Ocado on the Go’ m-commerce app
Homepage of “On Choose how you wish Add items to
the Go” app to find products shopping basket
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28. Sears mobile internet site & apps: “Shop Your Way”
Client: Sears
Project: Full Mobile Platform The Solution:
& apps Mobile internet site offers bespoke local
information and offers. All
information are optimised for
mobile phones. Offers include gift
cards and mobile vouchers.
Business Need: Customers can also shop on the
wapsite to pick up in-store. Sears
Forerunner in mobile and offers a ‘pick-up in 5 minutes’
named 3rd mobile retailer of guarantee. Other services include a
the year in USA (Mobile store locator.
Commerce Daily ’10)
Mobile internet site
Personal Shopper iPhone app: Functions:
customers take a photo of an item
SMS services on their phone, send to Sears
iPhone Applications • Full Mobile platform for
Personal Shoppers and receive back
mCommerce on all mCommerce, SMS, CRM,
other suggested items via email or
platforms and iPhone apps
phone.
THIRD PARTY INSPIRATION GUIDE
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Sector: Consumer Goods

29. Starbucks payment card app
Accepted at 1,020 Starbucks stores
Top up your card
Use your Starbucks card via Pay using 2D barcode
iPhone scanning
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30. Base your mobile strategy on consumer need
…not on the latest fashionable PR fad
Q22. So thinking of websites that you access on your mobile phone – if there were an app available instead, would
you prefer to download the app or would you still prefer to use the website?
How do you prefer to access a website on your phone?
60% Don’t mind Via browser Via app
55%
40%
33%
20%
12%
0%
Source: Appetite, Yahoo! March 2010
Base: all who access the internet on mobile (n=1,240)
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31. Technology – what will the near future
look like?

32. Pay-Buy-Mobile (mobile wallet – cash & credit)
• 52 mobile operators, serving over 1.7 billion subscribers, are supporting the Pay-Buy-
Mobile (“PBM”) project worldwide. There are live trials and launches in operation right now.
• PBM will enable the mobile phone to be used, instead of cash or plastic credit card, at point
of sale to enable purchase of goods and services
• A Near Field Communication (“NFC”) chip installed on the phone allows the credit card
(stored securely within the mobile’s SIM) to be ‘swiped’. The customer confirms their
transaction by inputting PIN at POS.
• More than one credit or debit card can be stored in the same SIM
• Data transfer uses the same secure process as for conventional credit or debit card
transactions.
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33. Use of mobile barcodes to become ubiquitous?
• The technology is already being used across the world
- “Today, almost every Japanese mobile is pre-installed with a barcode reader as standard
which means that everyone can scan the codes which is one important reason why it is
so popular in Japan”*
• Three has started embedding a reader in their phones in the UK, Orange
plans to follow in early 2010
• Samsung started to embed a reader in all phones in Italy and Belgium
• M&S was the first major retailer in the UK to place 2D Barcodes on-pack
*Source: http://www.telegraph.co.uk – Mobile phone bar code scanners coming to Britain by Danielle Demetriou in Tokyo
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34. Augmented Reality examples
AR combines features such as GPS location and camera with app/web
Pizza Hut GRAZIA
• Launched 8 March 2010 in • iPhone app
Australia • Launched March 2010
• GPS store locator • UK edition
• Promoting performer
How it works: Florence Welch
• iPhone camera, GPS and compass
are used to display, in situ, Pizza How it works:
Hut store locations on top of the
real-world view. • Using your iPhone you
can take pictures or
videos and overlay
Florence’s dancing or
posing image in
different high-fashion
outfits.
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35. Augmented Reality examples
AR combines features such as GPS location and camera with app/web
IKEA Rightmove
• Application available in-store, on
posters, online and via bluetooth • Launched 17 October 2009
stations • UK service
• Launched 2 November 2009 at • GPS functionality
my.ikea.com
• Portable planner for interiors
How it works:
How it works: • Customers input their current
• Uses the phone camera to impose locations to the app and can search
home furniture onto your real-time homes by type in the nearby area.
home for live product trial
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36. Thank You
Any questions?
jasonc@incentivated.com
@jcmobile10
www.incentivated.com
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