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The rise of mobile

Posted 18 September 2014.

​by Kathleen Gunther

​The world in which we live has undoubtedly changed. The advent of the smartphone has not only changed the way we communicate with each another, but also changed how businesses and brands connect with consumers. The increase in smartphone penetration – New Zealand has 65% penetration – combined with changing user behavior has created new opportunities that brands can capitalise on.

Mobile advertising revenues in New Zealand are rapidly increasing. According to the latest IAB PWC figures Q3 2013, there has been 104%+ year on year growth – the fastest growing of any medium. That said, we are still very much in the very early stages of this journey and investment is struggling to keep pace with the phenomenal consumer uptake. Currently mobile advertising in New Zealand only accounts for 2% of total digital spend, falling some way behind more advanced markets such as the United Kingdom (16%) and United States (15%).

With regard to numbers, the adoption of mobile is staggering. Globally there are 1.6 billion+ smartphone users (that’s 30% penetration) but what is even more impressive is how quickly it has reached this number. As a medium, it took radio took 72 years to get to one billion users, television 67 years, and personal computers 32 years. Smartphones had one billion users in just five years.

The smartphone revolution will only accelerate as devices and data become more affordable. Countries such as Brazil, Russia, India, Indonesia and China are likely to fuel much of the growth. The first experience of the internet by consumers in these markets is likely to be via a mobile device rather than a fixed desktop PC. Initiatives, such as Mozilla’s $25 dollar smartphone primarily aimed at the emerging markets, will only expedite this trend.

In reality, the majority of brands and marketers have been slow to respond to these changes in consumer habits. Digital analyst, Mary Meeker, suggests that while mobile now accounts for 25% of all global Internet traffic, it only accounts for 11% of total digital spend. There is significant disparity between these numbers.

Rather than compete against or cannibalise digital budgets, it is argued that mobile advertising dollars need to be redistributed from the less accountable, declining and more traditional mediums such as print and television.

Both print and television over-index in terms of investment compared to the amount of time spent. In the United States, mobile accounts for 20% of total media consumption time, yet only 4% of media investment. Compare this result to print, which has only 5% of total media time but a staggering 19% of
investment.

There are an estimated 2.8 billion people connected online - with smartphones currently capable of making up 1.6 billion of this number! What is really exciting for brands is the change in behavior with smartphone users. Users love their smartphones and are spending an increasing amount of time on them.

Leading ‘mobile first’ brands such as Google, Amazon, Facebook, Instagram, and Twitter offer guidance and lessons learned. These brands provide experiences that have mobile at the very heart. Facebook, for example, realised early that the majority of its users were on a mobile device as opposed to desktop
PC. In creating ‘mobile first’ experiences, it is helping to future proof its own businesses.The majority of brands should take note from that, or at least consider the famous Charles Darwin quote,

“It’s not the strongest species that survive, it is the one most adaptable to change”

There is growing evidence that if brands do not react to this shift to mobile soon, then they are certain of becoming less relevant in today’s world, and extinct in tomorrow’s.