Internet Worldmobile 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?

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

5

“The mobile phone will become the primary means of accessing the Internet worldwide by the year 2020.”

Pew Internet & American

Life Project

6

0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2007 2008 2009

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

SMS (Left hand scale) MMS (Right Hand Scale)

Billions of Messages sent

Source: OFCOM August 2009.

Messaging volumes continue to grow (UK)Data revenues are now larger than those from voice

Growth Rate

28%

165%

7

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

12,000,000

13,000,000

14,000,000

Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09

Mobile internet usage now significant (40% UUs)Strong growth in mobile internet usage driven by fall in data costs

24% year on year

growth between

2008 and 2009

Subscribers accessing mobile internet

Source: Comscore 3 month rolling average

8

Source: ComScore. Note, Operating Systems: Microsoft or Palm or RIM or Symbian or Apple or Google

Mobile internet access amongst all phone subscribers in the UK

(Adults 13+ for the 3 months ended Jan 10)

50% of unique internet users have ordinary phonesHowever smartphone owners are heavier users of mobile internet

RIM

10%

MS

5%

Palm

0%

Google

2%

Non Smart

Phone

50%

Symbian

19%

Apple

14%

Smart OS used by Nokia, SonyEricsson etc

9

Smart-phones are the fastest growing handset type

Breakdown of Smartphone operating systems in the UK

(Adults 13+ for the 3 months ended Jan ‘10)

%age of Smart Phones in the UK

(Adults 13+ for the 3 months ended Jan ‘10)

Microsoft

11%

Google

3%

Palm

0%

Symbian

46%

Apple

21%

RIM

19%Smart

Phone

23%

Non Smart

Phone

77%

Source: ComScore Jan 10

Smart phones represent nearly a quarter of the market – but UK still dominated by older handsets (which CAN still access the internet)

(11m)

(5.1m)

(2.1m)

(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

10

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Sept 07 Sept 08 Sept 09 Jan 10

Number of Smart Phones subscribers in the UK (000s)

(Average number of subs for the 3 month ended)

Source: ComScore. Note, Operating Systems: Microsoft or Palm or RIM or Symbian or Apple or Google

Smart phone growth in the UKthe strong growth of smart-phones continues – taking approx. 3 years for a new mobile technology to become market dominant

+41%

YOY

+39%

4M Jan 10

11

Text and picture msgs reach twice as many UUs

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Apps Mobile

Internet

LBS MMS SMS

However messaging is not transactional like mobile internet and apps

• Text (SMS) and picture messaging (MMS) are used by 92% and 58% respectively

• Apps and the mobile internet used by 30-35% but growing rapidly

• Many apps are games and come

pre-installed

• Downloading new apps or

allowing apps to update content or

transact requires the mobile

internet

12

Number of subscribers in the UK (000s)

(Average number of subs for the 3 month ended Jan 10)

Source: ComScore

More msgers in 55+ group than any other25-34 age band are the most prolific users of mobile media features

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Apps Mobile

Internet

LBS MMS SMS

13-17 18-24 25-34 35-44 45-54 55+

2.3% of all mobile users visited a mobile internet retail site in last 3 months of 2009

Index vs population as a whole

(Average number of subs for the 3 month ended Jan 10)

0 100 200

Apps

Mobile

Internet

LBS

MMS

SMS

13-17 18-24 25-34 35-44 45-54 55+

`

13

Percentage of subscribers in each age and sex band who access mobile internet

Data: Three month average ending Jan 10 Country: UK - N= 15,824 mobile phone users

Internet accessed on mobiles by all age groups internet sites are increasingly looked at “on the go” across devices

38%

48%44%

27%

16%

6%

31%

61% 61%

47%

29%

13%

0%

10%

20%

30%

40%

50%

60%

70%

13-17 18-24 25-34 35-44 45-54 55+

Female Male

14

Source: Ofcom, 2008

Percentage of UK Population take-up

90% 90%85%

76%82%

72%

57%

35%

0%

20%

40%

60%

80%

100%

AB C1 C2 DE

Own a mobile phone Have fixed internet at home

Mobile has greater geo-demographic reach than fixed line internet

Mobile reaches all social segments

15

14%

27% 27%

18%

11%

5%

16%

39%

45%

32%

22%

10%

0%

10%

20%

30%

40%

50%

13-17 18-24 25-34 35-44 45-54 55+

Female Male

Percentage Accessed email (work or personal) from mobile

Data: Three month average ending Jan 10 Country: UK - N= 15,824 mobile phone users

Email accessed on mobiles by all age groups Emails is read “on the go”: ensure your emails and links are mobile friendly

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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Richer experiences not currently served through mobile internet.

Users download & install an app, onto their desktop.

Most affluent target demographic and the greatest possible stream of revenue, but a tiny minority of

people.

Most apps need to connect to the web to make them truly useful.

Mobile web is growing rich interactive functionality and may soon render apps obsolete for everything apart for games.

With apps, developers have to consider handset compatibility across all platforms, possibly

facing budget constraints.

conspros

The great debate: pros and cons of appsBut will HTML5 do away with need for apps?

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“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

20

0%

20%

40%

60%

80%

100%

Source: Appetite, Yahoo! March 2010

Internet access is going against the grainLess about “snacking”, more about “real web” access

Q9 For each of the following, please indicate the length of your average mobile internet session?

23%

39%

77%

< 5 Mins 5 Mins +

Length of internet session?

21

0%

20%

40%

60%

Source: Appetite, Yahoo! March 2010Base: all those who access internet on mobile (n=1,240)

Mobile experience44% 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?

44%

34%29%

Brand

(site)The Phone

Network

Provider

The

User

5%

22INSPIRATION GUIDE: ACQUISITION beinspired@incentivated.comPublic Sector: Recycle for London www.incentivated.com/publicsector

Business Need:

To extend “Starve your bin”, RfL’s fully integrated campaign, to a youngeraudience in a fun and engaging way which educates users about what can and cannot be recycled and encourages them to tell others.

Functions:

• Game• Forward to friend• Over 20,000

downloads (>12,000 of Java game)

The Solution:

A mobile game was developedfor Java enabled phones as wellas the Apple iPhone.

It was promoted via the iTunesApp Store, in mobile Advertising and through PR. Users could text BIN to 62967

to launch a mobile internet site from where they could download the game.

The aim is to collect recyclable materials in the recycling bin and leave non-recyclable items for the bin bag (the ‘Evil Bin’).

A score leaderboard encourages competition and ‘send to a friend’ functionality makes it viral.

Mobile game makes recycling fun

23CASE STUDY: Wallace & Gromit’s Cracking ContraptionSector: Retail wag.mands.mobi/demo (on your mobile or in Firefox)

The Solution:

Offering a family-oriented fun, quirky,inventive and traditionally British twist to the “Christmas wouldn’t be Christmas without…” positioning,we developed a mobile wapsite based upon a typically “Heath Robinson”-style Wallace & Gromit invention to help customers choose what to ask for from friends and family as a Christmas gift. A viral mechanic encouraged the spread of the site amongst family & friends

Voila – Wallace & Gromit’s Cracking Christmas Contraption

Results?

� 31% of profiles were forwarded to friends/ family

� 21% CTR from outbound SMS

� 28% of new visitors supplied an email address to M&S

� The long tail – over 5,000 people attempted to visit the site in the week AFTER Christmas!

Business Need:

M&S wanted an innovative mobile element, to add to their broader Christmas campaign, that would and could engage all their customers.

Marks & Spencer mobile internet site: “Wallace & Gromit”

24CASE STUDY: Jaguar XJ model launch (USA)Sector: Automotive www.jaguar.mobi/xj (on ANY mobile phone)

The Solution:Created a ‘luxury’ mobileexperience using the latest mobile technology to showcase XJ and generateleads for test drives and sales

The mobile internet site is a beautiful, innovative and creative custom made site, designed for high end phones (based uponanalysis of phone types from previous Jaguar mobile advertising).It is among the first to start delivering specific Android UE to complement iPhone functions.

The site allows prospective Jaguar owners to register via their phones for exclusive (mobile-first) updates and invitations to view the XJ. Registration also unlocks exclusive content for your phone.

The wapsite is fully integrated into the campaign to maximise fully tracked sales opportunities, with leads delivered into the central test drive database.

The site is designed to allow future re-purposing as a destination for mobile advertising (post-launch activity) and to cope with a long tail of visits.

Results?

� www.jaguar.mobi/xj� Site and campaign still

live (LA and NY city takeovers in NY)

Business Need:

Building on the success of the 2009 mobile advertising campaign in creating quality leads for test drives that converted to efficient sales, Jaguar requested a “luxury”mobile solution for the launch of its new XJ model.

Jaguar XJ Launch Mobile Campaign

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Locate any Tescostore in the UK

Create a Shopping List to use in store

App locates products from your shopping list according to aisle

iTunes & Tesco.com 2010

Tesco store finder iPhone appReleased 5 January 2010

26

Tesco Clubcard iPhone appReleased 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

iTunes & Tesco.com 2010

27

Homepage of “On the Go” app

Choose how you wish to find products

Add items to shopping basket

ocadoiPhone App‘Ocado on the Go’ m-commerce app

28THIRD PARTY INSPIRATION GUIDESector: Consumer Goods

Client: Sears

Project: Full Mobile Platform

& apps

Business Need:Forerunner in mobile and named 3rd mobile retailer of the year in USA (Mobile Commerce Daily ’10)� Mobile internet site� SMS services� iPhone Applications� mCommerce on all platforms

Functions:

• Full Mobile platform for mCommerce, SMS, CRM, and iPhone apps

Sears mobile internet site & apps: “Shop Your Way”

The Solution:Mobile internet site offers bespoke local

information and offers. All information are optimised for mobile phones. Offers include gift cards and mobile vouchers.

Customers can also shop on the wapsite to pick up in-store. Sears offers a ‘pick-up in 5 minutes’guarantee. Other services include a store locator.

Personal Shopper iPhone app: customers take a photo of an item on their phone, send to Sears Personal Shoppers and receive back other suggested items via email or phone.

29

Pay using 2D barcode

scanning

Top up your card Use your Starbucks card via

iPhone

Starbucks payment card appAccepted at 1,020 Starbucks stores

30

0%

20%

40%

60%

Source: Appetite, Yahoo! March 2010Base: all who access the internet on mobile (n=1,240)

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?

55%

33%

12%

Don’t mind Via browser Via app

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.

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

34

Augmented Reality examplesAR combines features such as GPS location and camera with app/web

• Launched 8 March 2010 in

Australia

• GPS store locator

How it works:

• iPhone camera, GPS and compass

are used to display, in situ, Pizza

Hut store locations on top of the

real-world view.

• iPhone app

• Launched March 2010

• UK edition

• Promoting performer

Florence Welch

How it works:

• Using your iPhone you

can take pictures or

videos and overlay

Florence’s dancing or

posing image in

different high-fashion

outfits.

GRAZIAPizza Hut

35

• Application available in-store, on

posters, online and via bluetooth

stations

• Launched 2 November 2009 at

my.ikea.com

• Portable planner for interiors

How it works:

• Uses the phone camera to impose

home furniture onto your real-time

home for live product trial

• Launched 17 October 2009

• UK service

• GPS functionality

How it works:

• Customers input their current

locations to the app and can search

homes by type in the nearby area.

RightmoveIKEA

Augmented Reality examplesAR combines features such as GPS location and camera with app/web

36

Thank You

Any questions?

jasonc@incentivated.com

@jcmobile10

www.incentivated.com