To Mobile Or Not To Mobile? Digital Strategies for Advertisers September 2009

Confidential & Proprietary© 2008 The Nielsen Company

To Mobile Or Not To Mobile?Digital Strategies for Advertisers

September 2009


Confidential & ProprietaryCopyright © 2009 The Nielsen Company

What we’ll be covering today . . . .

Mobile Subscriber

Landscape



Mobile consists of a diverse set of media vehicles, each with their own unique reach and opportunities

259 263 267 272 277

200 203213

224

109 115127 130

57 60 64 66 71

145158 162

174

15 16 18 19 20

223

102

135

Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

Total US subs Text messaging Internet

Downloads Multimedia messaging Video

Mobile Subscribers (in millions)Q2 2008– Q2 2009, National

132M (60%)

68M (31%)

55M (25%)

Audio 39M (18%)

Apps 27M (12%)

Games 23M (10%)

6.8M + 8.4M via web (7%)

UNIQUE USERS (%)

221M



Total Smartphone subscribers increased 72% from Q2 2008 – Q2 2009

Smartphone Subscribers and Device PenetrationQ2 2008 – Q2 2009, All Mobile Subscribers

15.2

18.921.4

24.226.1

10.3%

12.8%

14.5%

16.0%

16.9%

5

10

15

20

25

30

35

Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

0%

5%

10%

15%

20%

TotalSmartphoneSubscribers

SmartphonePenetration

(In

Mill

ion

s)



Smartphone Device Penetration Among Recent Handset Acquirers

Acquired device in the past 6 months, Q2 2008 – Q2 2009

2.5% 2.9%

5.4% 5.7%4.5%

5.0%5.7%

7.8%8.4%

8.8%

8.1%

9.1%

8.5%8.0% 9.2%

Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

All Other

Blackberry

Apple iPhone

Smartphone penetration continues to grow steadily among recent acquirers; nearly one-fourth of new handsets are smartphones

15.6%

17.7%

21.7%22.1% 22.5%



Smartphone Penetration Across Global MarketsAll Subscribers

Smartphone penetration varies by country; Italy and Spain lead the way

*Smartphone penetration represents Q1 2009 data due to survey cadence variances

Question used: B1900Source: Nielsen Mobile Insights, US, Q2 2009; Nielsen Mobile Insights, Canada, Q1 2009; Nielsen Mobile Insights, Europe, Q1 2009

User Profile



The major difference between iPhone users and all smartphone users are Income and Business vs. Personal Usage

Gender

83

119

81

121

40

100

160

220

Femal

eM

ale

Age

86

125

165

105

53

86

150

171

97

53

Income

54

77

95

123

174

46

69

84

115

200

< 35

k

35k-

50k

50k-

75k

75k-

100k

100k

+

Usage

78

158

220

88

137

160

Mobile Demographics, Q2 2009

All Smartphones iPhone

Mobile Media Consumption



$35.40$45.10 $42.00

$6.20

$8.00$8.90

$12.10

$28.20 $37.60

$3.40

$7.90

($5.40) ($4.90)($3.20)

$4.80

$3.10

$5.10

$1.00

$89.35

$57.04

$88.85

($5)

$5

$15

$25

$35

$45

$55

$65

$75

$85

$95

All Subscribers Blackberry iPhone

Total other charges

Data extras

Voice extras

Total taxes & fees

Monthly voice plancharge (MRC)

Service credits

iPhone owners spend nearly as much on data charges ($37.60) as voice plan charges ($42.00) each month

Average Billed Revenue Per Subscriber ComponentAll Lines, Q1 2009, National



12

6.5%

8.7%

14.7%

13.3%

23.4%

21.3%

29.6%

26.3%

35.7%

31.4%

38.0%19.5%

Advanced DataUser

InstantMessenger User

Online GamePlayer

Mobile InternetUser

StreamingMusic User

Software/AppDownloader

iPhone Other Smartphone

User Composition by Advanced Data FeatureQ2 2009

Over 23% of all Streaming Audio users and 13% of mobile Internet users have an iPhone

32%

5%

17%

6%

51%

89%98%

1%1%

All Subscribers All Smartphone iPhone

Advanced DataUser

Voice/SMS User

Voice-Only User

Data vs. Voice-Only UsersQ2 2009

27.8%

38.3%

41.0%

49.0%

54.8%

57.5%



13

46%

89%

98%

44%43%39%38%

87%84%

81%79%

98%97%96%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q2 2007 Q4 2007 Q2 2008 Q4 2008 Q2 2009

All Feature Phones

All Smartphones

iPhone

Advanced data usage is not limited to early adopters; “If you pay for it you will use it”

Advanced Data User PenetrationQ2 2007 – Q2 2009

*iPhone launched in June 2007

*iPhone launched in June 2007



14

Media UsageQ2 2009

iPhone owners over index on both music downloads and video viewing; built-in handset features are emphasized as well

Features Regularly Used on HandsetQ2 2009



15

SMS Usage Penetration Across Global MarketsAll Subscribers

Mobile media adoption occurs at different rates depending on country; China in particular is adopting SMS and Internet

Mobile Internet Usage Penetration Across Global MarketsAll Subscribers



16

AT&T subscribers send/receive more text messages than voice calls; iPhone users even more so – especially teens

275 244 216 195147

1,810

696

234124

38

235134

492

358

Age <12 Age 13-17 Age 18-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64

# of Calls Sent/Received

# of Billed SMS Sent/Received

Average Number of Monthly Calls vs. Text Messages – All AT&T Subscribers

Q1 2009, National

248 232 201 198 170

2,608

775

350

214120

291

69

559601

Age <12 Age 13-17 Age 18-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64

# of Calls Sent/Received

# of Billed SMS Sent/Received

Average Number of Monthly Calls vs. Text Messages – iPhone Users

Q1 2009, National



Page 17

62,195

93,066

740,485

78,537

108,935

119,371

134,643

465,292

256,611

1,269,744Twitter

FOX

Facebook

4INFO

ESPN

Google

The WeatherChannel

ChaCha

43Kix

The Coca-ColaCompany

Top Standard Rate SMS by Transactions (000s)AT&T and Verizon, Q2 2009

Top performing SMS campaigns are coming from a wide variety of sources and genres

Unique Users by SMS Brand

Title # of Unique Users (’000)Transactions per

User

All Titles 50,162 85

Twitter 3,676 345

FOX 4,129 179

Facebook 5,610 83

4INFO 4,617 56

ESPN 805 167

Google 3,796 31

The Weather Channel 1,096 99

ChaCha 2,317 40

43Kix 352 223

The Coca-Cola Company 2,333 27

Source: Mobile Media Measurement – Media SMS Report

Unique Users (000s) by SMS BrandAT&T and Verizon, Q2 2009

4.2B Total Standard Rate

Transactions in Q2 2009

4.2B Total Standard Rate

Transactions in Q2 2009



18

113%

57% 55% 51% 49% 49% 48% 47% 45% 42% 39% 38% 36% 35% 33% 32% 31% 30%24% 19%

9%

187%

Soc

ial N

etw

orki

ng

Sea

rch

New

s &

Cur

rent

Eve

nts

Ban

king

/Onl

ine

Tra

ding

Ent

erta

inm

ent

E-M

ail

Por

tals

Edu

catio

n/E

mpl

oym

ent

Tec

hnol

ogy/

Sci

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Bus

ines

s/F

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ews

Sho

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g/A

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Wea

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Vid

eos/

Mov

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City

Gui

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Map

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Gam

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Foo

d/D

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Spo

rts

Aut

omot

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Mus

ic

Hea

lth/F

itnes

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Tra

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Rea

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ate

Mobile Internet Audience Growth by CategoryJuly 2008 – July 2009, National

Social networking is driving mobile Internet growth

Category / Site# of Unique Users and

Reach

All Mobile Sites 56.2M (100%)

All Social Networking 18.3M (32%)

Facebook 14.7M (26%)

MySpace 7.1M (13%)

Twitter 4.1M (7%)

Mobile Social Networking audience up from 6.4M in

Jul-08 to 18.3M in Jul-09



19

Over 91M subscribers recall seeing some form of mobile advertising

Mobile Advertising Exposure (in millions)National – All Mobile Subscribers

42.4

76.8

91.1

17.9%

29.6%

32.9%

10

20

30

40

50

60

70

80

90

100

Q2 2007 Q2 2008 Q2 2009

0%

5%

10%

15%

20%

25%

30%

35%

Total MobileAdvertisingExposure (inMillions ofSubscribers)

Penetration ofMobileAdvertising

(In Millions)



20

SMS and MMS are the most popular forms of mobile advertising responses

67%

17%

16%

Q2 2009

Viewed Ad,Responded

Viewed Ad, Did NotRespond

Did Not View Ad

Ad Recall and Response Q2 2009

Top Responses Among Ad RespondersQ2 2009

26.0%

14.0%

11.0%

9.0%

8.0%

5.0%

5.0%

5.0%

4.0%

Sent SMS

Sent a Picture or MMS Message

Sent an email (PC or mobile)

Visited internet or mobileinternet site

Click to call

Entered Sweepstakes

Used / Requested mobilecoupon

Searched for location /directions

Made a purchase via mobilephone

47% of ad viewers made a response

in Q2

47% of ad viewers made a response

in Q2



21

Teens are most accepting of mobile advertising

Perceptions of Mobile AdvertisingUS Q2 09

45%

17%

16%

37%

16%

15%

29%

12%

12%

24%

8%

8%

20%

7%

7%

17%

5%

5%

32%

49%

33%

Mobile Advertising isAcceptable if it lowers my bill

Mobile Advertising isAcceptable if it improves

content

Mobile Advertising isAcceptable if it is relevant to

me

13-17

18-24

25-34

35-44

45-54

55-64

65+

2222

Outlook



Garter predicts a large increase in smartphone adoption over the next few years

23



The previous digital revolution could give us clues as to how the Mobile trajectory will play out over the next few years

2424

Internet Audience by Category

20092003

Source: Nielsen Netview




2525


20092003




2626


20092003

Mobile ----------- ?

------- 2009 ------- 2015

Mobile Trajectory

Lag effect of 1-2 year contracts

Wide array of “connected” mobile devices

Falling prices

Mobile commerce

2727

Mandate



28

The way we’re thinking about mobile marketing

High Intensity Research

Low Intensity Research

Retail



The important Mobile Marketing activities can be aligned with consumers’ interactions with devices

The Mobile Advantage

Utility Anytime, anywhere exchanging of information

Enrichment Anytime, anywhere rich media consumption, self-broadcast, instant information access

SMS

Taking pictures

Basic mobile internet (email, IM)

App downloads

Mobile Video/TV

Full track music downloads

Advanced mobile internet (social

networking, LBS)



As Smartphone penetration and engagement rises, there will be greater opportunity to capitalize on the dynamic features of these devices

20092009 20152015

Utility Utility

EnrichmentEnrichment



Best Practices: Provide information to Support a Purchase

What is it?What is it?

Why we like itWhy we like it

Barnes & Noble iPhone AppsBarnes & Noble iPhone AppsBarnes & Noble offers two mobile applications, allowing consumers use their phones to

•Buy and read books (eReader)

•Browse virtual bookshelves

Barnes & Noble offers two mobile applications, allowing consumers use their phones to

•Buy and read books (eReader)

•Browse virtual bookshelvesLimits Need for Planning in Advance – Reference book reviews and recommendations on-the-go

Supports In-Store Experience – Reserve copies at brick & mortar location

Innovative – Take photo of book cover with phone and get access to reviews, product details and more

Personalized – Location-based: get directions to nearest store, find local events

Inspirational – Watch video interviews, browse recommendations

Limits Need for Planning in Advance – Reference book reviews and recommendations on-the-go

Supports In-Store Experience – Reserve copies at brick & mortar location

Innovative – Take photo of book cover with phone and get access to reviews, product details and more

Personalized – Location-based: get directions to nearest store, find local events

Inspirational – Watch video interviews, browse recommendations

For whom?For whom? Shoppers looking to make informed purchase decisions quickly, without having to set aside time for researching before heading to the store

Shoppers looking to make informed purchase decisions quickly, without having to set aside time for researching before heading to the store

Who should be doing it?Who should be doing it?

Retailers (e.g. Consumer Electronics Retailers)Retailers (e.g. Consumer Electronics Retailers)



Best Practices: Coupons, Discounts



Mobile CouponsMobile Coupons

Upload digital coupons to cell phones via coupon aggregators (e.g. shortcut$.com, Cellfire) or retailers/manufacturers (e.g. P&G eSaver)

Upload digital coupons to cell phones via coupon aggregators (e.g. shortcut$.com, Cellfire) or retailers/manufacturers (e.g. P&G eSaver)

Limits Need for Planning in Advance – Allows shoppers to find the best deals on-the-go

Easy & Green – Eliminates clipping and printing coupons

Accessible – Platform can be SMS or MMS, making it a viable option even for those without smartphones

Personalized – Location-based: get directions to nearest store carrying product of interest

Limits Need for Planning in Advance – Allows shoppers to find the best deals on-the-go

Easy & Green – Eliminates clipping and printing coupons

Accessible – Platform can be SMS or MMS, making it a viable option even for those without smartphones

Personalized – Location-based: get directions to nearest store carrying product of interest

For whom?For whom? Cost conscious shoppers looking for the best deal on-the-go, without having to set aside time to hunt for coupons/deals before heading to the store

Cost conscious shoppers looking for the best deal on-the-go, without having to set aside time to hunt for coupons/deals before heading to the store


Retailers, Low Intensity Research Manufacturers (e.g. Mass Merchants, Packaged Goods)Retailers, Low Intensity Research Manufacturers (e.g. Mass Merchants, Packaged Goods)



Best Practices: Information & Inspiration



Kraft’s iFood AppKraft’s iFood App

Kraft’s iPhone/iPod Touch application offers recipes, simplifies grocery shopping Kraft’s iPhone/iPod Touch application offers recipes, simplifies grocery shopping

Limits Need for Planning in Advance – On-the-go recipes and grocery list functionality save time, reducing need to plan before heading to the store

Inspirational – Recipes, how-to videos

Personalized – Location-based: get directions to nearest store carrying product of interest; store grocery lists; stick to a set budget

Integrated – Linked to Kraftfoods.com

Limits Need for Planning in Advance – On-the-go recipes and grocery list functionality save time, reducing need to plan before heading to the store

Inspirational – Recipes, how-to videos

Personalized – Location-based: get directions to nearest store carrying product of interest; store grocery lists; stick to a set budget

Integrated – Linked to Kraftfoods.com

For whom?For whom? Power Moms who do not have time to set aside for meal planning before heading to the storePower Moms who do not have time to set aside for meal planning before heading to the store


Retailers, Low Intensity Research Manufacturers (e.g. Pharmacies, Packaged Goods)Retailers, Low Intensity Research Manufacturers (e.g. Pharmacies, Packaged Goods)



Best Practices: Sponsorship



Pepsi Sponsors “Drink Up, Rock Out”Pepsi Sponsors “Drink Up, Rock Out”

As part of its joint sponsorship of “Drink Up, Rock Out” with MTV and the Rock Band game, Pepsi has an iPhone app that lets users turn photos of themselves or friends into their favorite rock stars

As part of its joint sponsorship of “Drink Up, Rock Out” with MTV and the Rock Band game, Pepsi has an iPhone app that lets users turn photos of themselves or friends into their favorite rock stars

Interactive & Fun – Application allows users to share their creations

Taps into Engaged Fan Base – Spreads awareness by appealing to music enthusiasts and gamers

Timely – Tied to highly anticipated release of The Beatles: Rock Band

Interactive & Fun – Application allows users to share their creations

Taps into Engaged Fan Base – Spreads awareness by appealing to music enthusiasts and gamers

Timely – Tied to highly anticipated release of The Beatles: Rock Band

For whom?For whom? Consumers who enjoy using their mobile devices for entertainmentConsumers who enjoy using their mobile devices for entertainment


Retailers and all types of Manufacturers (e.g. Automotive Manufacturers, Consumer Electronics Retailers)

Retailers and all types of Manufacturers (e.g. Automotive Manufacturers, Consumer Electronics Retailers)



Best Practices: Fun & Useful Apps



InformationInformation

Companies provide category-relevant mobile games or applications

•Gillette’s uArt iPhone/iPod Touch application allows men to test out facial hairstyles

•Charmin sponsors Sit or Squat, a bathroom-finder application

Companies provide category-relevant mobile games or applications

•Gillette’s uArt iPhone/iPod Touch application allows men to test out facial hairstyles

•Charmin sponsors Sit or Squat, a bathroom-finder application

Tongue-In-Cheek, But Relevant – Applications provide value, beyond marketing brand

Sharable – Gillette application allows men to share their creations, spreading awareness of Gillette

Tongue-In-Cheek, But Relevant – Applications provide value, beyond marketing brand

Sharable – Gillette application allows men to share their creations, spreading awareness of Gillette

For whom?For whom? Consumers who enjoy using their mobile devices as a one-stop-shop throughout the day, ranging from practical activities to entertainment

Consumers who enjoy using their mobile devices as a one-stop-shop throughout the day, ranging from practical activities to entertainment


Retailers and all types of Manufacturers (e.g. Apparel Retailers, Packaged Goods)Retailers and all types of Manufacturers (e.g. Apparel Retailers, Packaged Goods)



Key Takeaways

• The key driver of mobile growth is good devices and fast, affordable data. If people have it, they will use it…a lot.

• Smartphones are poised for serious growth in sales over the next few years. If you don’t have already have a mobile strategy, it is time to start thinking about one.

• It isn’t just about apps. There are a wide array of mobile marketing activities that can work well for your brand.

• The key to unlocking Mobile is to take advantage of its unique anytime/anywhere enablement of information exchange.

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To Mobile Or Not To Mobile? Digital Strategies for Advertisers September 2009

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Transcript of To Mobile Or Not To Mobile? Digital Strategies for Advertisers September 2009