Burson-Marsteller and Proof Integrated Communications report: The State of Mobile Communications

Evidence-Based Communications:The State of Mobile Communications

BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS

The use of mobile phones – particularly smartphones – is fundamentally changing how consumers and businesses communicate and engage with each other.

The Evolution of Mobile

Consumer use of mobile devices is growing exponentially – much faster than PC or Internet use

grew – but U.S. businesses have been slow to take advantage of endless opportunities to optimize

stakeholders’ mobile interactions with the brand.

Possibilities for interacting with consumers via mobile go beyond delivering content and enabling transactions. Location-based targeting, real-time comparison shopping and QR codes allow businesses to interact with customers in novel ways.

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Learning what customers are doing via mobile, such as accessing social networks or checking product inventories, opens up opportunities to collect data and target based on

demographics, behaviors and location. Many U.S. businesses find that upwards of 50-70% of their mobile

traffic is from outside the country.

And, beyond customer engagement, mobile can make employees work more efficiently – both in and away from the office – by enabling business applications for mobile use beyond just email and calendaring.

The first step is to optimize current digital content and communications for mobile use. But, ultimately mobile is

about transforming how businesses and their stakeholders interact in a real-time, location-based way.

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1. Mobile is Here - and Growing Quickly

2. Mobile is Transactional

3. Apps are Where It’s At

4. Mobile Users are Social

5. Mobile Users are Diverse

6. Location, Location, Location

7. Mobile Ads, Applications and SMS Drive Revenue

8. Businesses are Behind the Curve

9. Mobile In - and Out Of - the Workplace

10. QR Codes Move West

Top Trends in Mobile

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1. Mobile is Here - and Growing Quickly

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Mobile is now even bigger than desktop use, and data/video usage exceeds voice calls.

• 80% of the U.S. population will have a mobile phone by 2010.• 35% of American adults are using their mobile devices for

wireless Internet access. • The average iPhone user only spends 45% of his on-device

time making voice calls – the rest is spent browsing the web or using applications.

• Video accounts for 69% of mobile data traffic.

Access to the web and applications via mobile is growing and will soon be universal.

• Smartphone usage of both browser and applications has increased more than 110% in the last year.

• By 2011, 99% of mobile phones will be data-capable devices – at minimum they can do basics like sending and receiving SMS text messages.

People are Using Mobile Devices for More Than Just Phone Calls

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Flickr @tak

Sources: Pew Research and Mashable


Mobile Use is Growing Much More Quickly Than PCs or Internet Services Did

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Mobile adoption is growing exponentially and will soon be an

ubiquitous part of daily life.

•The growth rate of iPhone use is 10 times faster than the growth rate of AOL was. (see top chart)

•In 2012, shipments of Smartphones will exceed shipments of PCs. (see bottom chart)

•Even now, 40% of iPhone/iTouch users access the Internet more on their mobile devices than on their desktops.

Adoption of New Technologies(number of users in millions)

Sources: Morgan Stanley and Nielsen


• The speed of mobile adoption growth is far outpacing that of prior technologies, and using mobile to access data and to make transactions is nearing the tipping point. Mobile will soon be the primary digital means that consumers use to interact with brands, friends, retailers and other businesses.

• Companies who are not already engaging with stakeholders via mobile are missing a huge opportunity. And, once mobile is even more pervasive in a few years, businesses who are not in the mobile space risk being squeezed out by competitors.

• “Mobile” includes voice, data, and video – basically any type of consumer or business content that can now be communicated via the Internet. Businesses must think about how to channel all types of content through mobile, not just one.

Implications

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2. Mobile is Transactional

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Any Digital Transaction is Possible Via Mobile

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Mobile users are not passive. They seek information, manage personal finances, interact with others and shop.

Sources: comScore


Mobile Shopping Goes Beyond Transactions – It Influences Purchase Decisions

% Who’ve Used a Smartphone To Purchase…

% Reading Product Reviews on Smartphone Before Purchase

% Likely to Use Smartphone to Check Competitor Prices

Consumers are not only making purchases on mobile devices, but reading reviews, checking store inventories and comparing competitor

prices before making a purchase.

•Google’s new “local inventory checks” allows users to conduct a mobile search for a product and then determine if a store nearby has it in stock.

• Applications such as the PayPal Mobile iPhone app make mobile shopping even easier. This app was downloaded more than one million times in just three weeks.

iPhone users

Android users

music books, DVDs or video games

movie tickets

iPhone users

Android users

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Sources: Mashable and Compete


Mobile Users are Interested in Coupons, As Well As a Range of Promotional Communications

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ad via SM

S when passi

ng a

retailer w

ith a p

romotion

barcode on sm

artphone

that is

scanned at s

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ad related to

search

conducte

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browse

r

offers th

at can be sa

ved and

pursued at le

isure

offers sy

nched to

indivi

dual

schedule

movie th

eater

offers/pro

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Source: Juniper Research

Consumers are not only making purchases on mobile devices, but reading reviews, checking store inventories and checking competitor prices before making a purchase.


• Mobile is not just a channel for businesses to push out information. As “search” is the top mobile activity, consumers are seeking content and tools relevant to their needs. Companies must position their brands and mobile offerings so they can easily be found via search and are aligned with consumer expectations.

• Online transactions go beyond making purchases. Consumers are using mobile for the entire purchase process: searching for products, reading reviews and comparing prices, locating items in stores and checking inventories, and, ultimately making purchases. As well, consumers are checking bank accounts, points levels, schedules, etc. Companies need to enable the entire business process via mobile, from branding to communications to transactions, not just individual pieces of the process.

• At the same time, some basic mobile offerings are very compelling to consumers, including coupons and promotional codes. Kicking off a mobile presence with coupons can start a mobile relationship with customers that can grow as the business’s mobile offering expands.

Implications

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3. Apps are Where It’s At

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Native Applications vs. Web-Based (Mobile Browser) Applications

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“Native Applications” are programmed for specific mobile phones to be downloaded and live on the phone. “Web-based Applications” live on the company’s website and are accessible through a mobile browser.

Advantages of “Native”

Applications

Advantages of Web-Based Mobile Applications

Creates stickiness with the brand, because the

app lives on the stakeholder’s phone

Can be more easily updated because it does

not live on the user’s phone

Is very marketable Can be used on any phone (i.e., Native apps are

programmed differently for different phones)

Easy for the user to access

Less costly to update


Native Applications are a Driving Force of Mobile Adoption

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Mobile users are downloading tens of thousands of mobile applications

in many categories.

•The highest adoption is of functional applications such as weather and maps (18 million and 17 million downloads respectively). The highest growth (240%) is in social networking applications.

•While online retail is still the lowest category, 3 million online retail applications have been downloaded.

Total Number of Applications Downloaded (in millions)

Sources: comScore MobiLens


The iPhone is Currently the Top Device for Downloading Native Applications

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iPhone and iTouch users have downloaded an average of 47

applications each.

•Android users have downloaded almost half as many applications (22), followed by the iPad (12), BlackBerry (10) and Nokia (5) devices. However, the proliferation of the Android is creeping up on the popularity of the iPhone.

Sources: Morgan Stanley


Mobile Users are Also Using Web-Based Mobile Applications

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Yet only 12% of the top 500 internet retailers have sites optimized for mobile phones.

Sources: Acquity Group and comScore


• Deciding between a native or web-based application should depend on how the business’s stakeholders will use the application.

‐ Native applications make a business’s mobile presence “stickier.” Once a customer has downloaded an application and the brand has a piece of real estate on the user’s mobile desktop there is an opportunity to continually engage with the customer.

‐ However, web-based applications are useful on a variety of mobile devices and can be updated more easily.

• AppMobi, an open source mobile application platform which allows web developers to develop mobile apps for all platforms, will make app development more accessible and inexpensive.

Implications

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• Suggestions for both native and web-based applications include:

‐ Make the application useful. Weather and map applications are the most popular because they are functional. Developing an application with on-going utility (i.e., checking account status, timely informational updates) will create stickiness.

‐ Make the content relevant. As always, engaging and relevant content encourages customers to return to see what’s new.

‐ Make it social. Building applications to connect people (i.e., sharing product reviews, building connections through mutual interests) will make them stickier.

‐ Promote it. Use mobile media to drive awareness of the app, and build in a viral element to spread the word.

‐ Optimize it for multiple devices. While the iPhone is the top device for applications, small tweaks can make the app more user-friendly on other devices.

‐ Make it fun. The application should offer something above and beyond what the user can find on the website to give them a reason to download it.

Implications, continued

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4. Mobile Users are Social

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Access to and engagement with social networking tools via mobile is exploding.

•31% of smartphone users have accessed social networks via mobile browser, up from 23% in 2009.

•14.5 million mobile users downloaded a social networking application to their mobile device as of April 2010, up 240% from the prior year.

•Of Facebook’s 500m+ users, 100 million access Facebook through their mobile devices.

•Mobile phone users are far more likely to use Twitter (25%) than those who access the internet solely from wired connections (8%).

Mobile Users Stay Connected 24/7 on Facebook and Twitter

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Sources: comScore MobiLens, Facebook, Pew Research


Consumers Who Use Mobile Social Networks are Demographically Favorable

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Those who use social networks via mobile are more active and more affluent.

•People that use Facebook on their mobile devices are two times more active on Facebook than non-mobile users.

•80% of those who use mobile social networks are between the ages of 18 and 43 – only 58% of those who use social networks online fall in this age range.

•While they skew young, 39% of mobile social network users earn $100K or more.

flickr Chappell Studio


• Because mobile social network users are more active on social networks and more affluent, they are a group worth targeting and building a relationship with.

• For years, people have used their mobile devices to connect with others by voice and text message, and connecting through mobile social networks is an extension of that behavior. The benefit for businesses is the ability to leverage these social networks for real-time, localized and viral communications/promotions. ‐ For example, a consumer in a store may see new product; post a question about the product on

Facebook or Twitter; then, a friend may send her a mobile coupon on the spot to encourage her to try the new product.

‐ A business can also use their Facebook or Twitter presence as a timely way to present information, deals and coupons to consumers to access while out and about.

• Having a mobile device in-hand at all times allows consumers to post reviews of products, restaurants and movies in real-time. Businesses must monitor consumer comments of their brands on Facebook and Twitter in real-time, and they also be prepared to respond and provide customer service as quickly as consumers post these comments.

Implications

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5. Mobile Users are Diverse

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Gender and age influence how people use mobile devices.

•79% of men use their mobile phones to simply "escape” compared with only 61% of women.

•82% of seniors use their mobile phones for information and learning.

•17% of “ultra-affluent” (HHI $200K+) frequently engage in m-commerce compared with 7% of “affluent” (HHI $150K+).

•Almost one-third (31%) of 10 year olds have mobile phones. (see chart)

‐ Also, young people (under 18) are more inclined to use SMS messaging (texting) than older mobile users.

‐ 44% of youths shop with their mobile phones.

‐ One-third of American teens send over 100 text per day and many send as many as 3,000 a week.

Different Strokes for Different Mobile Folks

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Source: flickr user Batikart

Sources: Ruder Finn, Pew Research


African American and Hispanic Mobile Users are Favorable Towards Mobile Shopping

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acce

ss in

form

atio

n about

an it

em fo

r pote

ntial

purchas

e

African American mobile users are relatively more

interested in doing comparison shopping and checking inventories on a

mobile device.

•In addition, mobile banners have been found to be five to 10 times more effective than online banners for reaching Hispanic consumers.

% Interested in Using Mobile Devices for the Following:

Sources: Sterling Commerce, Mobile Marketer


• As with any set of consumers, segmenting and targeting is necessary to deliver the right message to the right consumer at the right time. Different consumer demographic groups are approaching and adopting mobile very differently. Especially with the wealth of information that business can collect from mobile consumers, this data can be used to deliver messages, content and functionality that will be most relevant to each individual user.

• Companies should understand how their target market is using mobile to prioritize what content to deliver via mobile, which mobile channel is most effective (mobile media, applications or SMS, etc.) and what features to prioritize when developing applications.

Implications

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6. Location, Location, Location

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Mobile Users Will Share Their Location to Get Local Information and Deals

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Sources: ChoiceStream and JiWire

disagree, 18%

Forty percent of mobile users take advantage of geolocation features. Over one-half (53%) will share their location for more relevant advertising, 38% are more likely to engage with a locally-relevant ad, 65% are more

likely to buy if they can find retailers locally and 63% will provide location information for relevant content.


Mobile Users are Quickly Adopting Location-Based Applications

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Number of FourSquare and Gowalla Users by City

Source: Mashable

The popularity of FourSquare, Facebook Places and Gowalla demonstrate mobile users’ willingness to be identified based on their personal location.

There were 100 million FourSquare “check-ins” in July 2010.

flickr indycolts2k6

•This provides many opportunities for businesses. Starbucks partnered with Foursquare to create a special badge and rewards for being the “mayor” of one of the stores, enabling the “Foursquare Mayor” of the local Starbucks and get $1 off a frappuccino.


Mobile users from around the world are accessing mobile content from every

region.

• Most (94%) of U.S. mobile sites are getting at least some traffic from non-U.S. sources.

• Slightly more than one-quarter (27%) are getting at least one-half of their mobile traffic from non-U.S. sources.

Not Only Local, But Global

flickr Poetic Home

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Sources: Motally


• Location-based targeting is the a critical distinction that makes mobile communications more powerful than other channels. Knowing where a mobile user is - whether if be in a store, with friends, at a restaurant or at the office - can help businesses know which content is most relevant to deliver to the consumer at that moment.

‐ For example, some “shopping-list” applications will allow a user to build a store list; then, the mobile app can identify when the mobile user is near the store and send a coupon or special offer at that time.

• Ensure that location-based mobile tools have high utility and privacy. Consumers are more comfortable sharing their location when they see a tangible benefit to providing their location information – so give them a reason to do so.

• Collect data on where the company’s mobile users are coming from. Offering applications or mobile media in multiple languages or with local nuances may be worthwhile if a substantial number of users are from outside the U.S.

Implications

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7. Mobile Ads, Applications and SMS Drive Revenue

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Mobile Is Generating Revenue

The mobile payments market is expected to quadruple by 2014, reaching $630 billion in

value, which equates to 5% of total e-commerce sales.

•North American mobile commerce sales alone will top $750 million this year.

•The mobile gaming market will top $800 million this year including downloads and ad revenues.

•13% of mobile users have made a mobile purchase.

•PayPal saw a 650% increase in mobile payments on Black Friday in 2008 vs. 2009.

•The amount that consumers are willing to spend varies by type of handset (see chart).

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Sources: ABI research, Juniper, emarketer, Pew Research, Mobile Marketer. PriceGrabber.com


Mobile Users Will Engage With Compelling Mobile Ads

Fifty-two percent of smartphone users have acted on advertisements within

applications.

•Mobile advertising is between 3 and 5 times more effective than online advertising.

•Smartphone owners value applications, but 76% would rather have advertisements in their apps than have to pay for the app itself.

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Your ad here!

Sources: Internet Retailer and JiWire


Mobile Users Will Engage With Compelling Mobile Ads

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• The third season of HBO’s True Blood series was announced with an iPhone ad. Bloody fingerprints appeared wherever the user touched on the full-screen ad, and then blood cascaded down the screen.

– 98% of people who saw the ad engaged with it, and 11% re-opened it to show it to others.

– The video of the iPhone ad was viewed on YouTube over 10,000 times in seven days. The ad resulted in 125,000 Tweets.

– 5.1 million viewers tuned into the True Blood season premiere, marking a 38% increase over the previous season premiere’s viewership.

• In a Dockers’ iPhone ad, users shook the device to see dancer Orbitron dance. Engagement with the ad averaged 42 seconds per viewer.

– Dockers’ achieved a 300% gain in positive social media brand conversations, as well as widespread media coverage.

Sources: Mobile Marketer

BURSON-MARSTELLER EVIDENCE-BASED COMMUNICATIONS 38

SMS Text Messaging is Still Relevant – and Can Drive Revenue

SMS is a top activity among mobile users, particularly youth.

•Almost two-thirds of mobile users sent a text message in March 2010. Texting grew one percentage point during the prior 3 months, which is just slightly lower than the growth of other mobile activities.•Adults 18+ send an average of 10 text messages per day; teenage girls send 100 texts per day.

•The Red Cross’ “Text Haiti” campaign for earthquake relief efforts raised $4m in the first 48 hours, and over $32m in the first month.

sent t

ext

message

used a m

obile

application

visite

d mobile

socia

l media sit

e

Sources: comScore MobiLens, Red Cross


• Mobile creates infinite business- and revenue-generating opportunities by taking advantage of a hybrid of traditional and digital marketing and communications channels.

‐ Mobile provides business value through branding, generating awareness and purchase intent, driving viral conversations and generating sales.

‐ Mobile also leverages traditionally offline marketing and communications tactics by enabling mobile couponing, point-of-sale content and promotions, in-store inventory information, etc.

‐ The payoff comes from building a prolonged engagement with the consumer that leads to improved perception, advertising engagement and ultimately sales. Businesses should not be concerned with generating sales from downloading applications, but by the role apps play in generating sales.

‐ As is true with web-based TV services such as Hulu, mobile users are willing to watch ads in exchange for services such as content and applications. This suggests an opportunity for companies to generate revenue from the on-the-go audience without evoking frustration or negative feelings about the brand.

‐ SMS is still an effective revenue-generating channel, especially among young mobile users and for specific initiatives. There are 5 billion texts sent daily in the U.S. vs 310 million Google searches daily. There is an opportunity to communicate with customers the way they communicate with each other.

Implications

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8. Business are Behind the Curve

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While Consumers are Engaged, Many Retailers Have No Mobile Presence

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Considering the number of applications downloaded and consumer willingness to seek out applications, many businesses are not sufficiently engaged.

•80% of US multichannel retailers had no m-commerce capabilities. 42% of retailers who do not have a mobile presence plan to launch one within the next two years.

•Only 12% of the top 500 internet retailers have sites optimized for mobile phones and only 7% have downloadable mobile applications.

• Even companies who are dabbling in mobile do not have a solid mobile strategy. Two-thirds of companies with a mobile presence do not have a formal mobile strategy or are only in the very early stages of developing one.

Sources: Internet Retailer, Acquity Group, Forrester


Marketers Focus on Customers’ Social Network Activities, But Not Mobile

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While marketers have embraced social media as part of their email campaigns, they are not taking advantage of offering mobile-

optimized messages for customers.

•63% of marketers are not tracking whether their email subscribers are viewing messages on mobile devices.

•About two-thirds of marketers are integrating social media into email campaigns, compared with only 25% who are integrating mobile into email marketing by offering mobile-optimized messages.

marketers integrating

social media into email campaigns

marketers offering mobile-

optimized messages

Sources: eROI


• While consumers are quickly adopting smartphones and mobile services, many businesses are hesitant to jump in, citing a lack of revenue streams or low user adoption as justifications. However, as has been demonstrated in this report, mobile users are actively interested in interacting with businesses via mobile.

‐ Engaging with stakeholders via mobile now is imperative. Mobile adoption is growing so much more quickly than PC or Internet adoption, that the majority of consumers will be thoroughly engaged in mobile transactions in the next few years. Businesses that do not start strategizing and developing for mobile now will be left in the dust.

‐ Now is the perfect time to test the effectiveness of different types of mobile media, applications and content. Taking the first step by reaching out to stakeholders via mobile, learning who they are, how they want to interact with the brand via mobile, and developing basic applications to engage with customers can provide learning for future mobile tactics. Then, the business will be ready to engage stakeholders with optimized mobile tools and content when the masses start using mobile as a primary channel for communications and transactions.

‐ Developing a website optimized for mobile browsing is a simple first start. For example, a mobile website might have categories most relevant to mobile customers (i.e., store locators, links to product inventories and contact information) on the first page.

Implications

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9. Mobile In – and Out Of – the Workplace

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Smartphones Have Become a Staple in the Workplace

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The proliferation of smartphones among employees has contributed to the 24/7

workplace, and smartphones are becoming a primary tool for business

communications.

•Firms expect to triple the number of employees using smartphones to 30% in the next three years.

•When employees use smartphones instead of desktop computers, it is usually because they are away from the office, which is becoming more frequent among office workers.

•Almost one-half (47%) of employees with smartphones use them instead of desk phones for work calls at least two-thirds of the time.

I can run the app from any location

I don’t feel like turning on my computer

I need to use the app while commuting

I spend time at locations where I can’t use my computer

My computer is at work, but I need to run the app away from the office

I can run the app more easily and quickly on my smartphone

Sources: RingCentral, Nielsen


BlackBerrys are the Most Common But Not Always the Favorite Smartphone

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Companies most often issue BlackBerrys to employees, but many prefer and choose to

use other smartphones for work.

•Over one-half (57%) use Blackberrys, followed by iPhones (14%).

•Almost one-quarter (23%), use smartphones not issued by their employer for work, particularly Apple iPhones.

•Partly for this reason, 43% of IT workers are concerned about security or IT risk regarding the use of smartphones for business use. I purchased myself

from my company's approved list, 21%

I purchased one that my company may not support 23%

I selected from company's approved list and company purchased, 22%

My company issued it to me, 34%

Sources: Forrester


Email is the Top Activity, But More Sophisticated Tasks are Also Possible

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While email, personal contacts and calendars are the most popular smartphone features used for work, productivity, collaboration and management applications are also used. These apps enable

employees to do substantial work tasks while out of the office.

producti

vity a

pplications

(i.e. w

ord pro

cessi

ng, sp

readsh

eets)

emergency

/critica

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onse

applications

team co

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i.e.

Web co

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arePoint)

invento

ry manage

ment applic

ations

location-base

d applications (

i.e. a

sset

track

ing, GIS,

AVL)

Sources: RingCentral, Nielsen


• As employees become more mobile, businesses need to arm employees with tools to work as efficiently as possible while at home or on the road.

• Providing mobile devices that are best-suited to employee work will ultimately lead to better worker productivity and higher security. Employees will choose devices that are easiest for them to use, and security and other issues may arise if IT teams are not able to support these devices. Companies should at least provide content, tools and support for different types of smartphones.

• Phone and email are the most common tasks conducted on smartphones, but employees are starting to do more sophisticated tasks on these devices. Enabling as many data-access tools and work processes on mobile phones will only serve to make employees more productive while away from the office.

Implications

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10. QR Codes Move West

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Prevalent in Japan since 2003, QR (Quick Response) codes – two dimensional images containing encoded data – will soon be as

ubiquitous in the U.S. as bar codes on products.

• A mobile user takes a picture of a QR code on an advertisement, product, etc. and the photo is received by the company’s server by mobile app or text message. Then the requestor receives relevant video, audio, image or text content on their phone.

‐ JagTag, a leader in text-message based QR code services, recently generated 120,000 responses in a QR code promotion of Sports Illustrated.

QR Codes Turn Ads into Real-Time Engagement Opportunities

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Mobile users are willing to engage with brands, as long as the brands provide

meaningful content in return.

•NYC Media is placing QR Codes on the sides of 2,200 NYC Department of Sanitation trucks. Scanning the codes will take users to a video from NYC Media’s show The Green Apple: Recycling.

•JC Penney is using QR codes for store discounts that can be scanned directly from a phone’s display screen at the register.

‐ The coupons will be available via Web, mobile advertising, email and SMS.

Brands are Using QR Codes to Connect Directly with Mobile Users

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• QR codes are most effective when placed throughout an integrated campaign that includes print ads, in-store displays, direct mail, websites and even iPad ads.

• Think of relevant locations when placing QR codes. For example, airports are a great location for QR codes for branded content that parents can use to entertain their kids, or for managerial thought leadership for business travelers to read on the plane. When mobile users receive content that is relevant to their location, they are more likely to find value within the brand.

• QR codes provide opportunities to deliver much more content that was previously limited by space constraints on ads and packaged goods, such as ingredients, product features, recommendations and other product details. Businesses should consider what type and quality of content they can offer to give mobile users personalized shopping experiences.

Implications

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Jay Leveton

CEO, Proof Integrated Communications

202.530.4696

[email protected]

B.L. Ochman

Managing Director of Emerging Media

[email protected]

Chris Gee

Managing Director of Digital Media

[email protected]

Zach Ambrose

Manager of Digital Media

[email protected]

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Contacts

Ashley Welde

Director, Research & Insights

212.614.4924

[email protected]

Lauren Papp

Client Executive, Research & Insights

212.614.4669

[email protected]

Burson-Marsteller and Proof Integrated Communications report: The State of Mobile Communications

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Transcript of Burson-Marsteller and Proof Integrated Communications report: The State of Mobile Communications