2011 - Review of the Year
Oh what a year that was. So much going on, at such breakneck speed, that it was hard, at times, to keep up. What better way to end the year then, than with a round-up of the highlights of the past 12 months in mobile marketing.
We have tried to keep this brief, but with the best part of 2,500 stories to summarise, we apologise if our version of brief doesn't quite tally with the accepted one. But if our roundup helps you get a feel for what's been going on over the past 12 months, in return for just 10 minutes or so of your time, we hope you'll forgive us...
The first month of 2011 was dominated by Apple, with two pieces of good news, and one bad. The first positive note was the announcement of record first quarter net profits of $6bn (£3.9bn), up from the previous quarter’s $4.31bn.
Apple was also celebrating the 10 billionth app download from the App Store. The magic number was achieved when Gail Davis of Orpington, Kent in the UK downloaded Paper Glider, and walked away with a $10,000 iTunes Gift Card for her trouble. But on a more sombre note, the company also revealed that CEO Steve Jobs was taking medical leave from the company to concentrate on his health – a sad precursor to what would happen later in the year.
Away from Apple, there were a couple of standout stats, as eBay revealed that it had clocked up almost $2bn of mobile sales in 2010, up from just $600m in 2009, and FutureSource Consulting released a report revealing that mobile web traffic had doubled during 2010.
And in the year’s first big deal, mobile data solutions provider Motricity acquired mobile marketing, advertising and analytics solutions provider Adenyo, for an initial consideration of $100m.
February was all about acquisitions, as Synchronica bought Neustar’s Instant Messaging (IM) business for $251,000; mobile app development firm Antenna Software snapped up mobile internet software company Volantis Systems; SurfKitchen was acquired by Teleca; and Mobile Interactive Group (MIG) took control of technology, marketing and services company Golden Bytes International, together with its operations in the Netherlands and Belgium.
While not quite an acquisition - yet - the other big news was Nokia’s announcement that it was entering into a strategic partnership with Microsoft, plus the associated restructuring. The jury is still out on how that will end up, though later the same month in his keynote address at Mobile World Congress, Google CEO Eric Schmidt admitted to the company’s disappointment that Nokia had opted for Windows Phone 7 over Android, telling delegates: “We would have loved that they had chosen Android, but they chose the other guys. We would like them to choose Android at some point in the future, and the offer remains open. We think Android would have been a good choice for Nokia, and we did try."
Elsewhere, Google lost the services of AdMob’s first employee Russell Buckley, who seemingly found the big corporate culture, even in a place as funky as Google, not to his liking. He couldn’t stay out of things long, however, fetching up at mobile couponing firm Eagle Eye Solutions just a few weeks after leaving Google.
Apple and Google were both in the news in March, Apple launching the iPad 2, and Google admitting that some 260,000 Android phones had been hacked by dodgy apps. There were lots of impressive stats flying round. A report from Berg Insight revealed that smartphone shipments had risen by 74 per cent in 2010, while another, this time from research 2guidance, revealed that paid apps had generated £280m in the UK during the same year.
Meanwhile, O2 Media announced that its O2 More opt-in advertising service had signed up 2m O2 customers, while the annual IAB/PwC study of the UK mobile advertising market revealed that mobile ad spend in the UK had more than doubled in the past 12 months, rising by 116 per cent.
In other news, the Swedish Post Office announced plans for an SMS-based service, in which customers would text in for a unique code, which they would then write on the letter as proof of payment of postage. And the London Organising Committee of the Olympic Games (LOCOG) denied reports in the Independent newspaper in the UK suggesting that mobile phones could be among a list of items banned from events at the London 2012 Olympics, even going so far as go confirm to Mobile Marketing that spectators would be allowed to take still images and video footage of events on their phones.
Staying with the Olympics, a report in the Daily Telegraph claimed there would be no mobile coverage on the London Underground in time for the 2012 Olympics, saying that the UK’s four mobile operators had shelved the scheme because it was impossible to get it ready in time, despite the fact that Chinese telecoms giant Huwaei had offered to provide up to £50m worth of technology as a gift from one Olympic nation to another, representing one third of the estimated £150m cost of the project.
NFC was in the news, with a report from Forrester Research concluding that mass adoption of NFC mobile payments was years away, and another from Juniper Research forecasting that one in five mobile phones would be NFC-enabled by 2014.
A study commissioned by Upstream, and conducted by YouGov, concluded that carriers risk large-scale churn if they overcook their attempts to chase third-party advertising income through opt-in ad programs. Undeterred, Orange UK appointed Blyk to run the media sales program for its Orange Shots opt-in service.
Another month, another avalanche of upwardly mobile stats. In the UK, newspaper publisher Mail Online announced that mobile traffic to its website had risen from 3 per cent to 11 per cent of the total over the past 12 months, while a study from mobile ad network Hunt Mobile Ads identified a year-on-year increase in mobile traffic of 156 per cent in Latin America. And a quarterly report produced by Google and the British Retail Consortium revealed that traffic generated by mobile search for retail products had grown by 181 per cent year-on-year between Q1 2010 and Q1 2011. Also on the stats front, Facebook announced that it had clocked up 250m mobile users, and finally, UK budget hotel chain Premier Inn revealed that its mobile app had generated revenues of over £1m in just three months since launching in January 2011.
Two other bits of business: Buongiorno bought mobile content and entertainment firm Dada.net for €28.5m (£25m), and Nokia confirmed that it was handing over software development for its Symbian platform to Accenture, along with plans to reduce its global workforce by around 4,000 employees by the end of 2012. Ouch.
In May, it was all about money, as a study from Simon-Kucher & Partners revealed that 76 per cent of 'Generation Y' consumers (18-26 year olds) would be willing to use mobile banking services, and considered a monthly fee of £5 a fair price to pay. Meanwhile, data from comScore’s MobiLens service found that the number of European smartphone users engaged in mobile banking had risen by 40 per cent since August 2010.
Still on the subject of money, Orange and Barclaycard launched their Quick Tap, NFC-based, contactless mobile payments services in the UK, though they have been pretty quiet about it since. In the US, Google announced the summer launch of its Google Wallet NFC mobile payments app. And mobile ad network InMobi made its move into the mobile payments space with the launch of its SmartPay, performance-based global, mobile payments solution.
All of which made sense in the light of research from eDigitalResearch and eBusiness consultancy Portaltech that revealed that half of all smartphone users use their device to shop. This was a stat that Domino’s Pizza would definitely concur with, as it announced that it had clocked up sales of over £10m through its mobile channels in just eight months. And further credence was given to the concept of mobile payments with the news that Comic Relief 2011 had raised £15.2m via £1, £5 and £10 text donations, representing more than 20 per cent of the overall £74.3 m raised at the time the announcement was made.
Finally, staying with the money theme, Microsoft announced that it was buying Skype for $8.5bn.
Nokia was back in the news in June, as CEO Stephen Elop revealed that the company chose to partner with Microsoft because it didn't want to "give in" to the surge towards Android. Later the same month, Nokia offloaded its Operator Branded Messaging (OBM) business, which provides white-label mobile email and Instant Messaging (IM) services to operators in N. America, to Synchronica. Meanwhile, BlackBerry-maker RIM had its own problems to worry about, as it missed its first quarter profit target, and announced job cuts. On a brighter note, almost inevitably, Apple unveiled the latest version of its mobile Operating System, iOS5, to the usual fanfare.
mCommerce was also in the news, as the UK’s main mobile operators – with the notable exception of 3 - announced plans to create a standalone mCommerce joint venture to enable the rapid development and delivery of new mobile marketing and payment services.
Staying with mCommerce, Pizza Express said it would offer free wi-fi in all of its 384 UK restaurants, then soon afterwards, launched an iPhone app that enables diners to pay for their meal through the app, at any point during the meal. Meanwhile, mCommerce trailblazer Marks & Spencer revealed that it had taken a £5,156 order for kitchen units on its mobile site, trumping the previous largest mobile order of £3,280, for two sofas. And Google unveiled its attempt to mobilise the long tail, with the launch of Google Sites Mobile Landing Pages (aka Mobilize), which helps small and medium-sized businesses to create a mobile landing page in a few easy steps.
The good news continued into July, as Betfair reported that it had taken £1bn in bets via the mobile channel in its last financial year. Apple celebrated the 15 billionth download from the App Store, so two and a half years for the first 10bn, six months for the next 5bn… The company also did its usual trick of recording record third quarter profits, of $7.31bn.
The analyst, Chetan Sharma, forecast mobile revenues of $1.3 trillion for 2011, with data making up 24 per cent of the total, while comScore revealed that 42 per cent of UK consumers were using a smartphone, compared to 27 per cent a year earlier.
But amidst the good news, a couple of notes of caution too, both from the analyst, YouGov, which released two reports. The first concluded that, in fact, UK smartphone ownership was stalling, with 35 per cent of adults using a smartphone, only a small increase on the 33 per cent recorded in the previous quarter. The second revealed that these smartphone owners find mobile advertising, for the most part, intrusive, and tend to ignore it. 79 per cent of respondents said they thought mobile ads are intrusive. 88 per cent of respondents said they ignore ads in applications, while 86 per cent ignore them on the mobile web. Both studies were based on responses from 2,082 smartphone owners from YouGov's quarterly Smartphone, Mobile Internet, eXperience tracker (SMIX).
The extent of the problems at RIM were also revealed, as it confirmed that it would be shedding 2,000 jobs, or 10 per cent of its workforce. On a more positive note, Tesco followed Pizza Express’ lead in offering free wi-fi in its stores, though on a more pilot-like basis, trialling the idea in four stores initially. And mobile Demand Side Platform StrikeAd teamed up with Admeld, which helps online publishers sell ad inventory, to bring Real Time Bidding to the UK’s mobile advertising market.
Two deals of note: self-styled personal media company Tigerspike secured an $11m investment from Aegis Media, and eBay splashed $240m on the purchase of Zong, which provides payments through mobile carrier billing.
August, month of sunshine, where everyone downs tools and heads for the beach. Not a bit of it. The action hardly let up. Leading the way was a bevy of big brands, all turning to mobile in different ways. In Denmark, Nestle turned to QR codes for a campaign for its Hjem-IS ice cream brand. In the UK, Kellogg's launched a mobile game for its Krave chocolate cereal brand. Cadbury turned to Augmented Reality, asking consumers to download the Blippar AR app to their phone in order to bring the packaging on several of its chocolate bars to life, converting the pack into a game. And Topshop got into the gamification thing, with a SCVNGR campaign that offered customers rewards for completing tasks such as such as snapping a photo of their favourite ‘back to college’ outfit at Topshop, or telling SCVNGR which item they thought most personifies the brand.
Staying with the High Street, there was some good news for RIM finally, as it emerged that scores of shoppers had been using their BlackBerrys to help each other find the best bargains over the summer. Unfortunately, the “shoppers” in question were looters, and RIM promised to help the UK police any way it could to bring them to justice.
And staying with the legal theme, Apple scored a major victory when it succeeded in delaying sales of the Samsung Galaxy Tab tablet computer, while patent disputes relating to Galaxy features Apple alleged were copied from the iPad were resolved. Apple was granted a preliminary injunction from a court in Dusseldorf which banned Samsung from selling its tablet in every EU member nation except the Netherlands. Apple had already obtained a similar injunction in Australia.
Later in the month, Apple would find itself on the receiving end of a lawsuit, as Openwave Systems filed legal complaints against Apple and RIM, in order to protect its intellectual property on how mobile devices connect to the internet. And there was more bad news for Apple, as Steve Jobs resigned as the company’s CEO, owing to his health problems.
So where was the good news? It was in the stats of course. UK regulator Ofcom released a study confirming, in case anyone was in any doubt, that the UK was becoming “addicted to smartphones”. And mobile ad network Mojiva released the results of its Mobile Audience Guide (MAG) EMEA, a three-month study into the mobile phone usage and mobile advertising habits of UK mobile users. The study found that almost 60 per cent of respondents were spending 60 per cent of their online time on mobile devices, creating a growing interest in mobile advertising, with 58 per cent clicking on an ad at least once a week.
The findings were confirmed by another ad network, Millennial Media, whose August SMART Report found that six verticals - Finance, Retail & Restaurants, Pharmaceuticals, Automotive, Entertainment, and Travel - had experienced triple-digit year-on-year growth in terms of their mobile ad spend. They will have been encouraged, no doubt, by the findings of another study, this time from the Internet Advertising Bureau (IAB) and John Lewis, that revealed that mobile advertising increases unprompted brand awareness from 3 per cent to 24 per cent.
In the US, Android continued on its upward trajectory, securing a 41.8 per cent share of the smartphone market in the latest results from comScore’s mobiLens study, and Google looked to build on this position of strength with the acquisition of Motorola’s smartphone business, attracted primarily by its patent portfolio. There was one other acquisition of note, as mobile ad network InMobi bought rich media creative agency, Sprout.
And so to September, when mCommerce hit the headlines again, as fashion retailer New Look reported a 500 per cent year-on-year increase in sales through its mobile site. The figures backed the results of a study from the IAB that found that the average transaction value on mobile had increased by 43 per cent during 2011, to £17.49. A couple of days after that stat was released, however, the IAB also revealed, less encouragingly, that the proportion of UK mobile users that had engaged in mCommerce activity had risen by only 1 per cent, from 51 per cent to 52 per cent, between 2010 and 2011.
But there’s more to mCommerce than sitting at home on the sofa, of course, and September offered, perhaps, a glimpse into the future of in-store retailing, as Global Bay secured a 300-store iPad kiosk deployment from US retail chain, Pacific Sunwear, while in the UK, Debenhams announced its own in-store kiosk deployment.
NFC was also back in the news. In Australia, JCDecaux and Tapit signed a two-year agreement that will see the companies create Australia’s first dedicated NFC Out of Home (OOH) advertising network. And in the US, Google went live with its Google Wallet service, enabling owners of Sprint Nexus S 4G phones to pay for goods and services using a Citi MasterCard credit card, or a Google Prepaid Card, which can be funded with any of the user’s existing credit cards. Don’t hold your breath on those user numbers though – research conducted by Mobile Marketing among 2,000 US and 2,000 UK consumers found that 72 per cent of US respondents had never heard of Google Wallet. In the UK, the figure was 76 per cent…
There were three deals worthy of note. InMobi enjoyed a good day at the office, securing a $200m investment from Japanese internet firm, SoftBank. Mobile marketing firm Velti spent $19m of the cash it raised from its IPO to acquire Air2Web, which provides mobile CRM (mCRM) solutions in the US and India. And IMImobile, which provides technology infrastructure for mobile data, voice and video services to mobile operators, enterprises and media companies, snapped up UK-based digital agency, Skinkers.
Meanwhile, one Dougal Templeton secured what looked, on paper, like the dream job to end all dream jobs, as he was appointed as Vouchercloud’s first director of Christmas, though on second thoughts, it sounds like a job that comes with a certain amount of pressure. Still, his inbox should be pretty quiet for the next few months, you would imagine.
October saw the passing of Apple CEO Steve Jobs, at the age of 56, as he finally succumbed to the pancreatic cancer that had first hit him seven years earlier. Colleagues and competitors alike queued up to offer their tributes to a man who seemed to revolutionise almost everything he touched. Rest in Peace, Steve.
This was also the month in which Apple defied expectations in a couple of ways, Firstly, for once, it disappointed analysts, posting Q4 revenue and profit figures that were down on the previous quarter. Apple put the figures down to customers holding off buying iPhones in September, in anticipation of the launch of its new handset. This was the second surprise from Apple, as it failed to launch the much-rumoured iPhone 5, instead unveiling an update to the existing iPhone 4, the iPhone 4S. No matter - despite the disappointment of iFans the world over, Apple still sold 4m of its new handsets in the first three days.
What would Nokia give for sales figures like that as it unveiled the first fruits of its shotgun wedding to Microsoft, the Lumia 800 and 710 Windows Phone 7 handsets? Initial sales figures suggest the honeymoon period is definitely over.
Still, if anyone at Nokia is feeling a little down, they can always cheer themselves up by looking over at RIM. BlackBerry users suffered a three-day outage in October, and RIM offered a seminal lesson in how not to handle such a crisis, fuelling the ire of its already angry customers. A study carried out by YouGov found that the outage had a severe negative effect on consumers perception of the brand, and on their propensity to buy a BlackBerry, with RIM’s Net Promoter Score (NPS) falling from +15 to -6. As we may have said earlier in this piece, ouch.
There was all sorts of cheer elsewhere, however, as a study from IBM concluded that mobile traffic as a percentage of all retail site visits would hit double figures by Christmas, having grown from just over 4 per cent to 7.2 per cent between November 2010 and May 2011. More stats, this time from the Interactive Media in Retail Group (IMRG) revealed that the average percentage of sales on retail websites attributable to mobile devices had risen from 0.4 per cent at the start of 2010, to 3.3 per cent in Q2 (May - July) 2011.
Looking forwards, rather than backwards, eBay upped its forecast for the amount of revenue it would generate through its mobile channels in 2011, from $4bn to $5bn, revealing at the same time that sales through mobile now accounted for more than 10 per cent of all purchases on eBay UK, and that globally, an item is sold via eBay’s global mobile platforms every second. Domino’s Pizza chipped in with some good news of its own, revealing that it had taken £130,000 of mobile orders in a single day, Saturday 8 October - a major contribution to over £1m of total online sales taken that day.
There was one big deal to report, as Sony bought out Ericsson’s 50 per cent stake in the companies’ Sony Ericsson handset business for €1.05bn in cash.
November was a special month for us, as we celebrated our sixth birthday. If you’re interested to see what our first ever post looked like, you can check it out here. It was also the month in which we unveiled the winners in our 2011 Effective Mobile Marketing Awards program. Pepsi, Debenhams, Sainsbury’s, New Look and Sky were among the brands taking the honours.
Elsewhere, eBay hit the headlines, first submitting a 'Mobile Manifesto' to the UK Government, setting out what the industry and policymakers must do to support the country’s growing digital communications economy. Then it announced that it was opening a ‘pop-up shop' for five days in London at the beginning of December, the twist being that everything on sale would be bought via your phone, or some in-store iPads. Let’s hope visitors to the store were actually buying from eBay. A report from eDigitalResearch and IMRG found that a quarter of UK consumers have accessed the internet on their smartphone while out shopping, with 62 per cent of these admitting that they have accessed a mobile retail site whilst in the store of another retailer.
eBay-owned PayPal released a report that concluded that 2016 will be the year when UK shoppers will be able to use their mobile phones to pay for things on the high street with digital money rather than cash, cheques or cards. In preparation for this day, Telefónica Digital and RIM launched a pilot program of their Telefónica Wallet for BlackBerry service in Spain. Those taking part in the trial can make payments by simply tapping their NFC-enabled BlackBerry phone against a reader.
O2 launched a trial 4G LTE (long-term evolution) network in London. The network will run until July 2012, and will cover 40 square kilometres, from Hyde Park to the O2 Arena Greenwich, with key areas, including Canary Wharf, Soho, Westminster, the South Bank, and Kings Cross covered.
Elsewhere, Adobe called time on Flash for mobiles, declaring in a blog post that HTML5 is now “the best solution for creating and deploying content in the browser across mobile platforms”. And Buongiorno teamed up with private equity firm Francisco Partners to rebrand its b2b services, aimed at operators, brands, and manufacturers, as Lumata.
There were a couple of big deals, with Velti splashing more cash to buy Mobile Interactive Group for a minimum $25m, rising to a possible $59m if earn-out targets are achieved. Electronic payment solutions firm VeriFone Systems acquired Global Bay Mobile Technologies, which provides iPad kiosks and other mobile solutions for retailers. And Japanese internet firm Rakuten bought eReading firm Kobo for $315m.
Several firms in the mobile marketing space also succeeded in securing investment financing, including mobile ad-serving firm MADS (€1m); educational apps company Mindshapes ($5m); mobile ticketing tech firm Masabi ($4m); app developer 6Wunderkinder ($4.2m); and mobile tech firm Lumi Mobile (£2m).
The year started with Apple celebrating the 10 billionth download from the App Store, so it was perhaps appropriate that it should end with Google hitting exactly the same milestone with Android Market. Android also moved a step closer to securing a 50 per cent share of the US smartphone market, notching up a 46.9 per cent share for the 3-month period to the end of November, in the latest data from comScore’s mobiLens tracking service.
FMCG/CPG giant Procter & Gamble revealed that it is working with tech firm mobeam to create a mobile couponing system that makes electronic coupons presented on a mobile device readable by the laser scanners used at the checkout, without any additional POS equipment. And Domino’s Pizza continued on its mobile journey, with a 6-sheet Augmented Reality poster campaign to promote its latest pizza deals.
There was encouragement for NFC, as a report from IMS Research hailed 2011 as a “breakthrough year” for the technology, based on a total number of 35m NFC-enabled phones shipped globally during the year. The news on QR codes was less positive, as an exclusive survey of 2,000 consumers in the UK and the US conducted by Mobile Marketing found that most consumers don’t know what a QR code is. But with the ratio at just 50.4 per cent to 49.6 per cent in favour of the don’t knows, there is, perhaps, hope for the technology yet. Certainly, QR codes are starting to pop up all over the place, even if they don’t always link to a mobile site or content…
And the deals continued, as Vodafone Global Enterprise, which manages the communications needs of the network’s largest multinational customers, bought European IT and communications consultancy, Bluefish Communications for £3.14m. Mobile marketing, loyalty and technology company MobileWave signed a deal to acquire Indian mobile tech firm company Ariose Software. And Wireless m2m (machine-to-machine) technology firm Telit Wireless Solutions entered into an agreement to purchase GPS designer and manufacturer, Navman Wireless OEM Solutions, for $3m.
So that was the year that was, and what a year it was. Even at this late stage, we've had to revisit the piece to add in a note about Apple lead designer Jony Ive, who has been knighted in the New Year's honours list. We can't wait to see what 2012 holds, and we will take great pleasure in reporting on as much of it as we possibly can. To which end, we will be back on the case bright and early Tuesday morning.
In the meantime, we wish all our readers, advertisers, sponsors and everyone else we work with, a very happy and prosperous New Year.
- Augmented Reality,
- Location Based Services,
- Mobile Advertising,
- Mobile Applications,
- Mobile Banking,
- Mobile Commerce,
- Mobile Coupons & Barcodes,
- Mobile Entertainment,
- Mobile Messaging,
- Mobile Payments,
- Mobile Search,
- Mobile Social Networking,
- Mobile Ticketing,
- Near Field Communication,
- Everything Else