THE STATE OF. Mobile Adoption. A Survey on the Future of Mobile Messaging. by John Pinson, Senior Manager of Content Marketing, Message Systems

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1 THE STATE OF Mobile Adoption A Survey on the Future of Mobile Messaging by John Pinson, Senior Manager of Content Marketing, Message Systems

2 Mobile Messaging in the Enterprise Message Systems was interested in exploring the state of mobile messaging within the enterprise, with a focus on who is embracing it, how they are using it, and what they are spending on it presently and in the future. And by it we mean mobile messaging in all its various permutations: SMS/MMS text, mobile-optimized , mobile app push notifications and IM chat. Solely in terms of our market position as a vendor of messaging solutions, we at Message Systems have seen a significant uptick in demand for our mobile offerings over the past several quarters. We wanted, however, to get a more detailed, comprehensive view into how businesses and marketing organizations are approaching customer messaging as mobile smartphones and tablets continue to expand as the device of choice for messaging and online activity. Before we dive into our findings, it s important to note that the survey was not conducted in a vacuum. As the messaging technology vendor to many of the world s major social networks, cloud computing firms and consumer technology vendors, we re acutely aware that the messaging landscape is in a state of profound flux. Ten years ago a Message Systems customer using our Momentum platform to deliver could be nearly certain that the messages they sent would be received, opened and read on a desktop or laptop PC with a dedicated wired Ethernet connection to the Internet and usually within a desktop client application such as Microsoft Outlook. Today, however, messages are more likely to be opened and read on a smartphone than a PC. 25% mobile internet traffic has grown from less than 1% in 2009 to over 25% in

3 Context: The Internet is Becoming a Mobile Environment As Mary Meeker highlighted at the outset of her 2014 Internet Trends report, 1 the Internet is fast becoming a mobile environment. Mobile data as a percentage of total worldwide Internet traffic reached 25 percent in May 2014, which is remarkable considering mobile accounted for only 14 percent in May of 2013 and less than one percent of traffic just five years ago. The surging growth of mobile devices is an important driver here: smartphones and tablets together are flying off the shelves, with global shipments now at four to five times the unit volume of TVs and PCs. In many parts of the world, smartphones are now the most-viewed screen, overtaking time spent viewing TV or PCs and laptops. Of course, since text messaging and push notifications are essentially mobile-only messaging channels, the overall businessto-consumer messaging experience today is best understood as primarily a mobile interaction. These trends set the context within which we deployed our survey into the field. Additionally, we moved forward assuming that most businesses were aware of the marketplace changes being driven by mobile, and that most were already adapting their marketing, engagement and customer service practices to address the new messaging environment. But to what extent? That is what we endeavored to find out, and we ve outlined some of the key takeaways from our survey here. 5x global shipments of mobile devices are almost five times that of PCs and TVs. 1 1 Internet Trends

4 SURVEY FINDING #1 Mobile Adoption Surveyed marketers are embracing mobile messaging strategies (and apps) to reach the growing mobile base. At least eight in ten customer messaging decision-makers report that their company currently has or plans to adopt the following in the next year: Push Notifications 80% IM chat 83% MMS text 86% Key Takeaway: The Move Toward Mobile In our view, sizable majorities of marketers realize that the communication landscape is rapidly changing toward mobile channels, and they are acting accordingly to accommodate their mobile customers. Not surprisingly, text and mobile the longest established messaging types are leading the way as channels for reaching mobile customers. At nearly 80% adoption, push notifications are not that far behind, however. We were a little surprised to see 89% of customer messaging decision-makers say their companies have adopted or are planning to adopt mobile optimized / responsive design for . Our very unscientific personal experience is that the vast majority of commercial today is still produced in standard HTML. But it s great to see such a high number of these companies understanding that mobile optimization is a concern to be addressed. Mobile apps 86% Mobile-optimized (responsive design) SMS text 89% 89% 4

5 SURVEY FINDING #2 Push Notifications Ninety-one percent of customer messaging decision-makers currently support, or plan to support in the next 12 months, time-sensitive reminders and notifications through mobile channels. Key Takeaway: Time-Sensitive Messaging Will Be a Key Mobile Tactic In our view, we see this widespread intention to adopt time-sensitive notifications as a realization that mobile is a more time-sensitive environment than the desktop web. More so than with TV or the PC/laptop experience, timeliness and immediacy are key to the mobile experience. Marketers understand that getting information in front of customers at the most opportune time is critical, and they are embracing mobile messaging as the ideal channel through which to do so. 91% support time sensitive reminders and notifications through media channels. 5

6 SURVEY FINDING #3 72% currently use location-based mobile strategies. Location Based Strategies Seventy-two percent of customer messaging decision-makers say that their company currently uses location-based mobile strategies or plans to use them in the next 12 months. Key Takeaway: Location, Location, Location As with timeliness, our belief is that marketers understand that location adds an important dimension to communicating with customers on the go. Fewer customer messaging decision-makers say their companies are embracing location-based strategies than those embracing timely reminders and notifications, but they are still a strong majority. It should be noted that these customer messaging decisionmakers were from a very wide range of customer-focused industries. Based on how it s usually depicted in the media and analyst reports, location-based messaging would seem to always revolve around retail scenarios or service-oriented interactions, such as with banking. But even while the survey found variable and not necessarily large percentages from each industry (but rather collectively a large number) it s clear nonetheless that customer messaging decision-makers from various industries such as publishing, media, telecommunications and e-businesses also perceive location-based messaging as potentially valuable for their businesses. 6

7 SURVEY FINDING #4 Prioritize Relevant Content Large percentages of these marketers say their companies either send now or are planning to send messages to customers based on each of the following types of information: Key Takeaway: New Options for Relevance Our view is that the marketers surveyed understand they have many new techniques and possibilities for reaching customers, whether in retail situations, service situations or conditional situations, e.g. weather. The ability to provide relevance based on a growing range of variables opens up many new kinds of customer communication opportunities. 78% 73% 77% 73% Preferences Location Context Behavior 7

8 SURVEY FINDING #5 Evolution of Mobile Eighty percent of customer messaging decision-makers consider it a critical/high priority for their company s mobility and engagement strategy to support a wider variety of mobile devices and platforms over the next 12 months, with 31% calling it a critical priority. Key Takeaway: Device Compatibility is a Major Concern Our takeaway is that the rapid pace of change in mobile is generating a high level of concern among these marketers that they could get left behind the curve, and potentially not be able to reach their customers as freely as they can today. Device vendors, OS platforms and messaging infrastructure providers would be wise to ensure that the mobile Internet continues to evolve as a standards-based environment. Vendors that can remove complexity from the mobile equation are likely to be at an advantage. 80% consider supporting more mobile devices a high priority. 31% say it s a critical priority. 8

9 What s Next? Clearly, the changes to the customer communication landscape being driven by mobile technologies are top-of-mind for a healthy majority of the customer messaging decision-makers participating in the survey. It s worth repeating some key finding from the Meeker Report we mentioned in the introduction to this survey report: 25 percent of all global Internet traffic is now traveling over mobile devices, and most s are now opened and read on mobile devices also. The odds are strong that these figures will continue to grow in the years ahead. The marketers we surveyed, in large part, indicate that they are adopting or plan to adopt the mobile messaging strategies that they will need to get out in front of these changes. Overall, it s Message Systems position that companies that don t already have a mobile messaging plan in place today are likely find themselves playing catch-up at a later date. 9

10 THE SURVEY Working with Harris Poll, a pool of more than 200 customer messaging decision-makers within enterprises across North America were surveyed. Respondents were primarily VP- and director-level marketing executives from industries including banking, travel and hospitality, consumer technology, retail, telecommunications, Internet and e-business, publishing, cloud computing, media and several others. The survey was conducted online by Harris Poll on our behalf in the spring of 2014, and asked respondents from companies with annual revenues of $100M or more their opinions about the state of mobile messaging and how they planned to incorporate mobile messaging into their customer communications strategies. METHODOLOGY This survey was conducted online within the United States by Harris Poll on behalf of Message Systems between April 23 to May 19, 2014 among 208 US full-time employees of companies with an annual revenue of $100M or more, who are employed at the director level or higher in key departments (administrative/executive, customer service, e-business/e-commerce, production/operations, IT, marketing, communications, or advertising), and have at least a major influence in decisions regarding their company s mobile messaging efforts. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact mobilesurvey@messagesystems.com Message Systems, Inc., all rights reserved Guilford Road, Suite 100, Columbia, MD tel: fax: toll free: x312 messagesystems.com