The document provides an overview of trends in the mobile marketing industry. It discusses how smartphone penetration is slowing in established markets as emerging markets see continued growth. It also covers the rise of Android and decline of other platforms, the projected increase in mobile ad spending, the growing popularity of tablets, and the expansion of mobile commerce. Additionally, it summarizes trends around the evolution of ad networks and real-time bidding, the impact of 4G networks, increasing use of social media and apps on mobile devices.

1. James Hilton – CEO | james@mcsaatchimobile.com

2. Welcome to
M&C Saatchi
Mobile
The worlds largest specialist mobile
marketing agency
Access to M&C Saatchi’s full strategic
resources
Over 80 full-time mobile experts
Multi-award winning

3. Local
knowledge
& a unique
global reach

4. Our core mobile offering
Strategy
Mobile advertising production

5. agenda
Introduction – overview of the market
TRENDS
1. Smartphone penetration is slowing in established markets –
while emerging markets are on the rise
2. The platform shift
3. Mobile ad spend to skyrocket in 2013
4. The year of the tablet
5. Mobile retail to explode
6. The evolution of the ad network, DSP’s & RTB
7. 4g to accelerate the rich media ad space
8. The rise of social and facebook on mobile
9. Apps vs. mobile web
10. The market is constantly changing

6. The future of digital

7. The medium is now 20
years old.

8. So, how does
the market look?

9. 2+ billion people online
Global internet population
(millions)
Source:
Interna-onal
Communica-on
Union.
Google

10. 2/3 of the world left to go
Global internet population
(millions)
Source:
Interna-onal
Communica-on
Union.
Google

11. HOWEVER…

12. Most of the affluent community are
already online
Distribution of global income
Source:
UN
Human
Development
Report,
Trends
In
Global
Income
Distribu-on

13. So the market’s more
mature than you think.
Meanwhile, something
profound happened last
year…

14. PC growth started to slow
Global PC shipments by manufacturer
Source:
Gartner.
IDC

15. Smartphone sales grew past pc sales
Global internet device sales
Units
Source:
Gartner.
IDC.
Strategy
Analy-cs,
company
fillings.
BI
Intelligence
es-mates

16. Tablets are starting to take over
Global computer shipments
(thousands)
Source:
Gartner.
IDC.
Strategy
Analy-cs
company
releases

17. So the future is mobile
G-20 internet access
Consumer
Broadband
Connections
(millions)
Source:
Boston
Consul-ng
Group,
Mary
Meeker,
Kleiner
Perkins,
Morgan
Stanley
Research,
Berg
Insight

18. Where are we in the
mobile revolution?
& what are the essentials
you need to know?

19. Trend 1.
Smartphone penetration is
slowing in established markets
while emerging markets are
on the rise

20. Globally, we’re still early…
Global smartphones vs. mobile phone users 2012
Global Users
(millions)
Source:
Strategy
Analy-cs,
interna-onal
Telecommunica-ons
Union.
Note:
Some
users
own
more
than
one
device

21. But growth tends to
slow after 50%
penetration

22. US & other markets are past halfway
US smartphone penetration
Source:
Nielsen

23. Most mature markets
are now over 50%
France 51.4%
Germany 48.4%
Italy 51.2%
Spain 63.2%
UK 62.3%
Source:
Comscore:
October
2012
MobiLens
report

24. smartphone growth is slowing
US smartphone Market: year over year net adds
Users
Added
(million)
Source:
comScore.
Nielsen

25. Most future US & UK smartphone
buyers will be older & less affluent
Smartphone penetration by age & income
Source:
Nielsen

26. the focus is now on markets like china
who now account for 25% of sales
Global smartphone shipments
(thousands)
Source:
Gartner.
IDC.
Strategy
Analy-cs,
Canalys,
BII
es-mates

27. developing markets such as
brazil, Russia, Indonesia and
China will drive much of the
volume of growth in 2013.
They will generate 70-80%
of additional shipments this year –
38% of the global total.
Source:
Canalys

28. Trend 2.
The platform shift

29. Right now, mobile is a two-horse race
Global mobile OS market breakdown
Source:
Gartner.
IDC.
Strategy
Analy-cs.
BII
Intelligence
es-mates,
and
company
fillings

30. Android is the largest
platform globally
Smartphone Market Share by OS (global)
Share of
Global Unit
Sales
Source:
Gartner

31. Partly because of high
adoption in china
Chinese smartphone market share by platform
Source:
Analysys
Interna-onal

32. And it’s the same two horse
Race in tablets
Tablet market share by platform
Source:
Es-mates
based
on
informa-on
from
IDC,
Strategy
Analy-cs
and
company
filings

33. However Apple is still dominating
app revenue
Mobile app revenue by platform
(millions)
Source:
iSuppli.
Forrester
Research.
Company
releases.
BII
es-mates

34. And ecommerce & web traffic
Source:
Monetate

35. What will happen in 2013
1. Android is on the offensive and will be picking off
individual territories
2. Google says it’s activating 1.3M devices a day
3. By the end of 2013 Google shipments of android devices
should pass 1 Billion
4. android will account for up to 70% of devices shipped

36. Trend 3.
Mobile ad spend to
Skyrocket in 2013

37. The global mobile advertising
market was worth
$6.43B in 2012
it’s forecasted to hit
$23B by 2016
Source:
Berg
Insight

38. In the UK mobile advertising
grew by 120% during 2012.
growth on 2013 is estimated
at 56%
Source:
Flurry
Analy-cs

39. However Mobile Is still the highest
under indexing channel
Ad spend vs. consumer time spent by media (2012)

40. What has been holding
mobile back & why is it
not going to anymore?

41. The belief that the audience
is too fragmented to be
reached effectively
WE can now directly target consumers more accurately than
ever before:
age location past location
connection handset device
content consumed language

42. The belief that
Data And tracking
is elusive
Sophisticated tracking is now up to 99% accurate
We can track beyond the download – deposits, purchase,
usage etc.
DSP’s and RTB changing the landscape

43. The small screen
Constraining
Creative sizes

44. 360 imagery

45. Location
services,
maps
And gps

46. video

47. Trend 4.
The year of the tablet

48. ios has dominated
the mid to high
end tier of the
landscape

49. Android is now
gaining market
share with
multiple
tablets

50. Windows is not
yet out of
the running

51. The 7 inch is
reaching a new
tablet market and
becoming a more
genuinely mobile
device than than
it’s larger cousin

52. Who is going to use the tablets?
Device users plan to use as primary source of news &
entertainment in 2013
Source:
Belkin
Survey
conducted
by
Harris
Interac-ve,
Jan
16,
2013

53. Our
predictions
android will continue to take market share from APPLE
Windows to stay a marginal player
There will be more smartphone / tablet hybrid releases
This year will be the year of the 7 inch

54. Trend 5.
Mobile retail to explode

55. Almost ½ of all
smartphone owners have
purchased via their device
In the last 12 months
Source:
Mintel’s
‘Smartphone
Purchasing
Habits’
report
from
Nov.2012
(UK
only)

56. Purchases via a smartphone
internet users aged 16+ who personally own a smartphone
Source:
GMI/Mintel

57. 47% of consumers use
their smartphone to
search for local
information such as a
store they want to
visit
Source:
Local
and
the
e-­‐tailing
group,
2012

58. 46% look up a store’s
mobile site &
42% check inventory
prior to visiting a
store
Source:
Local
and
the
e-­‐tailing
group,
2012

59. Tablet shoppers
have a higher
propensity to
purchase on the
device

60. What you need to consider?
Tablet customers are worth more to brands
Know your brands mobile touch points – then research,
prioritize & start testing
Ensure you are mobile optimized
Develop a multichannel acquisition strategy on mobile
Include mobile search and local in your mobile strategy

61. Trend 6.
The evolution of the ad network,
The rise of demand side platforms,
& the arrival of Real time bidding

62. The way brands and agencies
buy mobile inventory is
changing
We’re taking control of the
buying process

63. ad networks are changing
Traditional networks (inMobi,
Millenial, Adfonic) are changing
their service offering to become
more sophisticated
…Or being bought by larger telcos
(AdMob / google, Quattro / Apple)
which ads more precision to their
data

64. How?
Bidding directly on inventory via ‘exchanges’
Developing new tools that let buyers target
consumers more accurately
Developing their own ‘bidder’ or using white labeled
DSP’s

65. Now, a new orthodoxy
Is emerging based on
demand side platforms

66. What is a demand side platform?
DSP Enables advertisers / agencies to
buy ads and target consumers in real time
Identify Serve ad
DSP locates
consumer Place bid based on
them
type value

67. DSP for mobile
Lack of cookies has forced DSP’s to come up with
alternative methods for delivering critical data
If an advertiser chooses to increase downloads of a
particular app the DSP:
Learns Creates Auto adjusts
Maximizes
patterns of profile of bidding
downloads
traffic traffic type strategy
All refined in real time

68. The old system of
bidding on blind inventory will
become outmoded & inefficient

69. What will real time bidding
bring to mobile?
A system in which data on the bids, available inventory & the
behaviour of consumers is crunched in real time
Instantaneous bids for each impression based on data &
smart algorithms that change constantly in response to
audience changes
Transparency

70. How will this effect marketers?
The mobile DSP will transform the efficiency & effectiveness of
buying mobile inventory.
RTB can improve ad effectiveness by 20-150%*
More & more agencies will have their own DSP
Only knowledgeable specialists can handle these transactions
successfully
*Source:
ICD

71. Trend 7.
4g will accelerate the rich media
space, but not that fast

72. It has been nearly a decade
since the first 3g networks
were launched

73. Now we’re seeing
that excitement
again with
LTE or 4g

74. Everything everywhere launched 4G in
the UK in 2012 – tests showed it to be 5
times faster than 3G

75. By may 2013
vodafone, o2 and
3UK will be able to
launch their own
4g services

76. Who will be using it?
The Early
adopters
due to high Pricing
The vast majority will be
unwilling to break long
contracts to get 4g

77. How will 4g effect
advertising on mobile?

78. More rich media campaigns
Currently most are run across wifi
4G will accelerate consumption – speed and more portable
than wifi hotspots
WE will see more:
• Pre roll video advertising
• Ads combining video, audio & interactive elements
• Gamification ads
• Ads utilizing APS’s

79. Trend 8.
The rise of facebook
& social on mobile

80. Until recently facebook’s
problem with mobile has
been well documented.
Their audience was
migrating to the small
screen but ad revenue
wasn’t.

81. In 2012 facebook started the
change – declaring itself a
mobile first company
launched promoted posts that appear in users news
feeds and was soon making $500,000 a day
Mobile accounted for 23% of Facebook’s $1.33B of
advertising revenue in Q4 2012 - $305M mobile ads sold
Their mobile app-install ads are now being used by 20%
of the 100 top grossing ios apps to attract new users

82. In 2013 Facebook is rolling
out it’s own mobile ad
network
Giving networks the ability to serve ads placed
with FB on 3rd party sites & aps

83. What you need to know for 2013
Social networks will invest in deeper insight to enhance targeting
on mobile
Advancements will be predominantly Facebook & Twitter, but sites
such as google & pinterest will be monitored for new
opportunities
Positive results have been seen though advertising on facebook’s
app – set to improve with investment in targeting & consumer
insight

84. Trend 9.
Apps vs. mobile web

85. In 2012 many expected the
resurgence of mobile web.
But is hasn’t panned out that way.
Android app revenues has doubled Q3-Q4
Facebook and others realized HTML5 was not the solution
The pendulum is swinging back to apps staying for 2012

86. Apple store downloads on pace to hit
60B by mid 2013
Apple app store downloads
Source:
BI
Intelligence

87. Smartphone users spend more time on
apps than web
Total time spent using mobile web vs. apps
Minutes Spent
Per Month
(billions)
Source:
Nielsen
Smartphone
Analy-cs

88. Mobile app revenue is still
growing fast
Mobile app revenue
(millions)
2008
2009
2010
2011
1012
Source:
iSuppli,
Forrester
Research,
company
releases,
BII
es-mates

89. Because Most downloads are free
Mobile app store downloads, free vs. paid 2012
Source:
Garner,
September
2012

90. ‘Fremium’ is the dominant model
Two-thirds of the 100 iphone apps that make the most
money are free to download and generate 100% of
their itunes revenue through in-app commerce
% of free and paid apps % of the top 100 grossing iphone % of top 100 grossing iphone
In iphone top 100 grossing Apps that use in-app commerce Apps that are games
Source:
BI
intelligence
analysis
of
App
Store
data,
Jul.
2012

91. Trend 10.
The market is constantly
changing

92. Stay informed

93. Questions?
info@mcsaatchimobile.com