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Global mobile statistics 2012 Part C: Mobile marketing, advertising and messaging

June 2012: The essential compendium of need-to-know statistics. Beware of media hype and mobile myth – put your mobile strategy on a sound footing with the latest research and stats from credible independent experts. Volumes of SMS, MMS, mobile email and IM; messaging revenues; OTT messaging services; A2P; mobile ad expenditure and top mobile ad networks.



FINDING YOUR WAY AROUND THE MOBILE STATS COMPENDIUM:

Home: Full index of contents and highlights • Section A: Mobile subscribers; handset share • Section B: Mobile Web; 3G • Section C: Mobile marketing, advertising and messaging • Section D: Consumer mobile behavior • Section E: Mobile apps, app stores • Section F: Mobile payment, NFC, m-commerce, m-ticketing and m-coupons • Section G: Mobile financial services (MFS) and m-banking • Section H: VC investment in mobile.


SECTION C: Mobile marketing, advertising and messaging

1) SMS - the king of mobile messaging
2) Mobile email, instant messaging and MMS
3) Global messaging revenues
4) The impact of OTT messaging services
5) Application to person (A2P) messaging.
6) Expenditure on mobile advertising and marketing worldwide
7) Mobile advertising in Japan, US, China
8) Top mobile ad networks
9) Consumer reaction to mobile ads
10) Why advertisers need a mobile-friendly site


1) SMS - the king of mobile messaging

Portio Research (Febuary 2012): 7.8 trillion SMS trillion messages were sent in 2011. SMS traffic is expected to reach 9.6 trillion in 2012.
• By 2013 worldwide SMS revenue is forecast to break the USD 150 billion mark for the first time next, and will continue to grow for the next two years.
• Portio says: “SMS is not dead. SMS is still the king and will remain so for some time to come”
Informa (May 2012): 5.9 trillion SMS messages were sent in 2011. SMS traffic is expected to reach 9.4 trillion messages by 2016. • However, Informa forecasts that SMS’s share of global mobile messaging traffic will fall from 64.1 percent in 2011, to 42.1 percent in 2016, as it loses share to mobile instant messaging (IM).

2) Mobile email, instant messaging and MMS

Portio Research (Febuary 2012):
• 669.5 million people used mobile email in 2011, this is expected to grow to 2.4 billion by 2016.
• 207 billion MMS were sent in 2011, rising to 276.8 million in 1016.
• Mobile IM is used by 7.9 percent of mobile subscribers, this is projected to rise to 30.9 percent in 2016.
Informa (May 2012):
• Global mobile IM traffic (from operators and OTT providers) will increase from 1.6 trillion messages in 2011 to 7.7 trillion messages in 2016, doubling its share of global messaging traffic from 17.1 percent in 2011 to 34.6 percent in 2016.
• In 2016, 387.5 billion MMS will be sent, representing 1.7 percent of global messaging traffic.
Juniper Research (June 2011): Mobile IM users will exceed 1.3 billion by 2016. “While IM services have some advantages, such as real-time communication and apparent absence of cost, the market is fragmented by different services [AOL’s AIM, Blackberry Messenger, Microsoft’s Windows Live, Skype and Yahoo! Messenger] which cannot communicate with each other.”

3) Global messaging revenues

Portio Research (Febuary 2012): The worldwide mobile messaging market is worth US$202 billion in 2011, rising to $310.2 billion in 2016. Asia Pacific generated the highest mobile messaging revenues in 2011. In 2011, the main contributors to messaging revenues were SMS 63.5 percent; MMS 15.3 percent; Mobile email 16.2 percent and mobile IM 5.0 percent.
Informa (May 2012) predicts that the IM market will be worth US$16 billion in 2016, of which mobile operators will take 54 percent of revenues and OTT messaging service providers, such as WhatsApp and iMessage), will take 46 percent. Also in 2016, mobile e-mail will generate $32 billion in revenues and MMS $20.7 billion.

4) The impact of OTT messaging services

Portio Research (Febuary 2012): Over-the-Top (OTT) messaging traffic hit 3.5 trillion messages in 2011 and will continue to grow at a CAGR of 42.2 percent and reaching 20.3 trillion by the end of 2016. But SMS traffic (and revenue) will continue to grow.
• OTT messaging services, also referred to as next-generation messaging services, offer Web-based messaging services to mobile users who subscribe to the same service (and/or use the same handset). Assuming the customer has a flat-rate mobile Web package these messages are free or almost free. While these services are often earning negligible revenue for the OTT service providers, they are taking messaging revenues from operators as well as contributing to ever increasing data traffic on mobile networks.
Ovum (April 2012): predicts that network operators will lose $23bn in mobile messaging revenue in 2012, as they lose custom to IP-based (OTT) social messaging services such as KakaoTalk (South Korea), WhatsApp and Facebook.

Over-the-Top (OTT) messaging v SMS messaging.
  OTT messages SMS messages MMS messages
2011 3492 billion 7844 billion 207 billion
2012 5846 billion 8600 billion 228 billion
2016 20,293 billion 9554 billion 277 billion
Sources: Portio Research Febuary 2012 via: mobiThinking

5) Application-to-person (A2P) messaging

Juniper Research (May 2011): By 2016, application-to-person (A2P) messaging will overtake person-to-person (texting) messaging, being worth more than US$70bn.
• A2P messaging includes messages to or from an application to or from a large number of customers in financial services, advertising, marketing, business administration, ticketing, television voting etc.

6) Expenditure on mobile advertising and marketing worldwide

6a) Global expenditure on mobile ads (search, display and messaging) in 2011 was US$5.3 billion, according to IAB and IHS Screen Digest (June 2012).
• Search draws in the most revenue with $3.3 billion. And expenditure in Asia exceeds North America and Europe.
mobiThinking note: Definitions of the mobile advertising market vary, some estimates include mobile messaging alongside search and display ads – e.g. IAB (below) – some do not – e.g. Gartner (further below). This leads to some discrepancy between data.

2011: Mobile ad spend in US$million, according to IAB and IHS Screen Digest
Region Display Search Messaging Total
Europe 367 900 114 1,380
North America 572 811 295 1,677
Latin America 31 74 83 188
Asia/Pacific 491 1,384 41 1,916
Middle East & Africa 44 124 4 172
Global 1,504 3,292 536 5,333
Source: IAB and IHS Screen Digest (June 2012) via: mobiThinking

6b) Global expenditure on mobile ads is forecast to double every year to US$20.6 billion in 2015, according to Gartner (June, 2011), from an estimated $3.3 billion in 2011.
• Search ads and location ads (paid-for positioning on maps and augmented reality apps) will deliver the highest revenue, while video/audio ads will see the fastest growth through 2015.
• Brand spending on mobile advertising will grow from 0.5 percent of the total advertising budget in 2010 to over 4 percent in 2015.
• Asia will continue to dominate global mobile ad spend, but to a lessening degree from 49.2 percent of mobile ad revenue in 2011 to 33.6 percent in 2015.
Strategy Analytics (April 2012): Advertiser expenditure on mobile media is expected to almost double from US$6.3 billion in 2011 to $11.6 billion in 2012. The US is expected to be the fastest growing mobile ad market with a $4.2 billion spend in 2012. In the US revenue from in-app advertising exceeds revenue from mobile Web display.
ABI Research (June 2011): Global expenditure on mobile advertising is forecast to exceed US$7 billion in 2012 and by 2016 $24 billion will be spent on mobile advertising (which is the same amount as is spent on online advertising in 2011).


Mobile Advertising Revenue by Region, Worldwide, 2010-2015 (Millions of Dollars), according to Gartner
Region 2010 2011 2015
North America 304.3 701.7 5,791.4
Western Europe 257.1 569.3 5,131.9
Asia/Pacific and Japan 868.8 1,628.5 6,925.0
Rest of the World 196.9 410.4 2,761.7
Total 1,627.1 3,309.9 20,610.0
Source: Gartner (June 2011) via: mobiThinking


Further reading:
• Q&A with Gartner for implications.
• What makes Asia Pacific the most exciting mobile market in the world? Interview with Rohit Dadwal, MD Asia Pacific, MMA.

7) Mobile advertising in Japan, US, China

7a) Japan rules the roost when it comes to mobile advertising, based on its highly developed mobile Web.
Mobile marketing and advertising expenditures in Japan in 2009 was 103.1 billion Yen, that's US$1.14 billion (according to Dentsu). Year-on-year growth was 12.9 percent. There are lots more juicy stats in this Guide to mobile in Japan

7b) More than half of U.S. mobile ad spending is local.
BIA/Kelsey (June 2011): U.S. mobile ad spending will grow from US$790 million in 2010 to $4 billion in 2015. Local ad spend will grow from US$404 million to $2.8 billion.
• This makes locally targeted mobile ads 51 percent of overall U.S. mobile ad spending, growing to 70 percent by 2015.
• Mobile local advertising includes ads that target users in specific locations or contain location-specific calls to action.
BIA/Kelsey (April 2012): Mobile local search volume is expected to surpass desktop local search for the first time in 2015, but advertisers will continue to invest more in desktop local search.
• In 2011 mobile users performed 19.7 billion local search queries compared with desktop users 54.9 billion local search queries. In 2015 there will be 85.9 billion mobile local search queries, compared with 84.0 billion queries. In 2011 mobile local search revenues were US$400 million, rising to $3.2 billion in 2016. During the same period, desktop local search revenues will grow from $5.7 billion to $10.2 billion.
• BIA/Kelsey: “While mobile local search volume will exceed its desktop equivalent, ad dollars will remain lower, because advertisers aren’t yet keeping pace with the growth of mobile local ad inventory, but we expect that to evolve.”
emarketer.com (October 2010): US expenditure on mobile advertising and marketing is estimated to be US$416 million in 2009; $743 million in 2010 and will be $1,102 in 2011. In 2010 mobile ad formats were dominated by messaging ($327 million), but display ($202 million) and search ($185 million) will catch up in 2012. Video lags at ($28 million).

Further reading:
• mobiThinking guide to local mobile ad networks 2012 including profiles of xAd and YP.

7c) Mobile advertising in China could be worth US$4 billion in 2015
Data Centre of China Internet (DCCI): Mobile advertising expenditure in 2011 was US$465 million. This is predicted to rise to $897 in 2012 and $3,955 million in 2012.

8) Top mobile ad networks

• No one has yet researched which are the world’s largest mobile ad networks are by revenue, impressions, reach or any other measure, but IDC has made a stab at estimating the top networks in the US.
IDC (December 2011):
The top mobile ad networks in the US are Google, Millennial Media, Apple, Yahoo!, Microsoft and Jumptap.
• Based on its calculations of network revenues, IDC estimates that expenditure on mobile ad expenditure in US was $2.1 billion in 2011 (which is higher than other estimates).
• 70 percent of mobile ad budgets are spent on search advertising, with 30 percent spent on mobile display adverting.
• Google takes the lion’s share of combined search and display revenue with 70 percent market share.
• No other network has more than 5 percent, according to IDC. The next biggest mobile ad networks are, in order, Millennial Media, Apple, Yahoo!, Microsoft and Jumptap.
• mobiThinking note: Ad networks remain very cagy on their revenues. When Millennial Media announced its IPO it revealed its revenues and the extent of its losses for the first time. This secrecy has made it difficult for analysts and pundits to gauge which ad network is biggest… though who says that biggest is best?
Further reading:Analysis of IDC’s statsImplications of Millennial Media’s IPOGuide to mobile ad networks (with in-depth profiles of Millennial, Microsoft, Jumptap and many other networks).

8b) Google’s gross annual revenue from mobile advertising is over US$2.5 billion per year, according to Google’s Q3 2011 earnings call (October 2011). Mobile search advertising rather than display advertising is the main contributor.
• In 2010, Google declared its annual mobile ad revenue to be US$1 billion. Gartner, estimates that Google’s US$1 billion would give it 70 percent of the global mobile ad market.

9) Consumer reaction to mobile ads

• How many people see and react to mobile ads? According to consumer research by The MMA and Lightspeed Research (October 2010), in UK, France and Germany, 45 percent of consumers (especially younger people) noticed mobile advertising and of these, 29 percent responded to it. Of those that responded to the ads, the following went on to make a purchase: Germany 49 percent; UK 47 percent; and France 22 percent.
• The most effective form of ads was opt-in SMS in the UK (40 percent said they were more likely to respond to these) and in France (21 percent); while in Germany it was mobile Web ads (27 percent).
• Time sensitive special offers or discounts (especially m-coupons) were most likely to lead to purchase.
• People were most likely to purchase mobile content such as applications, music and games.

10) Why advertisers need a mobile-friendly site

Google/Ipsos (US consumer Mobile Movement survey April 2011): Of people who react to seeing a mobile ad: 42 percent click on the mobile ad; 35 percent visit the advertiser’s site; 32 percent search for more information on their phone; 49 percent make a purchase and 27 percent call the business.
• 71 percent of smartphone users that see TV, press or online ad, do a mobile search for more information.
• Despite these conclusive findings, 79 percent of large online advertisers still do not have a mobile optimized site, according to Google/Kelsey 2010.


FINDING YOUR WAY AROUND THE MOBILE STATS COMPENDIUM:
Home: Full index of contents and highlights • Section A: Mobile subscribers; handset share • Section B: Mobile Web; 3G • Section C: Mobile marketing, advertising and messaging • Section D: Consumer mobile behavior • Section E: Mobile apps, app stores • Section F: Mobile payment, NFC, m-commerce, m-ticketing and m-coupons • Section G: Mobile financial services (MFS) and m-banking • Section H: VC investment in mobile.



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