CANADA DIGITAL MARKETING 2015: MOBILE AND SOCIAL GROWTH
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1 Prepared for DX3, March 11 12, 2015 CANADA DIGITAL MARKETING 2015: MOBILE AND SOCIAL GROWTH As marketers continue to ask how to reach and engage with consumers in the upcoming year, the answers are largely digital. In Canada, 77.9% of the population will go online at least once a month in Mobile internet ad spending more than doubled in the country in both 2012 and 2013, and digital video ad spending is estimated to grow 51.6% in With total digital ad spend, including both mobile and other internet ads, estimated to grow 11.5% this year, advertisers in Canada continue to embrace the growing digital landscape and look to new channels for a digital presence. emarketer is the official insights partner of DX3
2 Dear DX3 Attendee, emarketer is excited to return to Toronto as the official insights partner of DX We are pleased to make Canada Digital Marketing 2015: Mobile and Social Growth available to all attendees. This roundup consists of articles and interviews with industry thought leaders on topics such as mobile, video and social media. With this content, we give you a glimpse into the data and insights emarketer focuses on, addressing the question of how consumers spend time and money, and what marketers are doing to reach them in today s digital world. As the digital marketing landscape continues to expand, we hope you find this research valuable. We invite you to learn more about emarketer s approach to research and why an emarketer subscription is the go-to industry-standard resource for the world s leading retailers, brands, media companies and agencies. Best, David Iankelevich Vice President, Marketing emarketer, Inc. 11 Times Square, Floor 14 New York, NY sales@emarketer.com
3 Mobile Internet Ad Spend Skyrockets in Canada Spending on mobile internet ads to grow by 119.2% this year Mobile internet ad spending is still growing by triple-digit rates in Canada, according to emarketer s latest estimates of paid media spending in countries around the world This year, advertisers in Canada will spend CA$715.7 million ($668.9 million) on mobile internet ads, including all internet-based ad formats served to mobile phones, tablets and other connected devices. This year s 119.2% increase will be the last year of triple-digit growth, though growth will be only half as strong in 2015, we predict, and by the end of our forecast period will have slowed to 28.4% annually. That year, 2018, advertisers will devote more than CA$2.58 billion ($2.41 billion) to paid mobile internet media. The super-fast growth in mobile internet ad spending will help propel mobile from 9.4% of total digital ad spending in Canada last year to 18.8% by the end of 2014 and as high as 51.3% by The shift toward mobile will be most dramatic in search: emarketer expects a majority of digital search dollars to go toward mobile in Canada by 2017, with nearly two-thirds of search spending happening on mobile platforms by Mobile Internet Ad Spending in Canada, millions of C$ and % change 116.0% C$ % C$ % C$ Mobile internet ad spending C$1, % 2015 C$1, % 2016 % change C$2, % 2017 C$2, % 2018 Note: includes banners and text links, classifieds and directories, direct response/lead generation, (embedded ads only), rich media, search, sponsorships and video; excludes SMS, MMS and P2P messaging-based advertising; CAGR ( )=51.2% Source: emarketer, June 2014; confirmed and republished, Sep Mobile Internet Ad Spending Share of Digital Ad Spending in Canada, by Format, Mobile display % of digital display* Mobile search % of digital search** Mobile other % of digital other*** 12.2% 11.3% 0.7% 22.9% 22.8% 1.1% 32.4% 33.4% 1.2% 39.8% 42.4% 1.2% 47.5% 52.4% 1.2% % 63.4% 1.5% Mobile total % of digital total 9.4% 18.8% 27.4% 34.6% 42.4% 51.3% Note: *banners and text links, rich media, sponsorships and video; includes ads such as Facebook's News Feed Ads and Twitter's Promoted Tweets; **paid listings, contextual text links and paid inclusion; ***classifieds and directories, direct response/lead generation, (embedded ads only) Source: emarketer, Sep Canada Digital Marketing Roundup Copyright 2014 emarketer, Inc. All rights reserved. 3
4 Twitter, Facebook Serve Different Purposes in Canada Huge variation in usage of social graph vs. interest graph networks It s conventional wisdom that Facebook and Twitter have different reasons for being and obvious based on the differences in popularity and content on the services that people treat them differently. But research from Canada conducted by Abacus Data and Full Duplex indicates just how stark the divide is in user perceptions of why they use the social networks. On Twitter, users in Canada were most likely to say they shared content in order to endorse it, at 79% of respondents. That number dwarfed any reason to share via Facebook. Voicing your opinion (58%) and spreading important news (53%) rounded out the top three reasons behind Twitter sharing. Reasons that Internet Users in Canada Share Content on Facebook vs. Twitter, June 2014 % of respondents To endorse content To voice your opinion on certain subjects or articles To spread news you think is important for people to read To provide followers with content that might interest them To show others what you're currently reading To support a cause or specific person To add content to your page/feed To gain followers/build network Facebook 32% 50% 51% 47% 17% 0% 41% 11% Twitter 79% 58% 53% 46% 19% 8% 5% 2% Note: ages 18+ Source: Abacus Data and Full Duplex, "Matters of Opinion 2014," Oct 27, On Facebook, spreading important news and voicing your opinion about it were the top two reasons to share, though somewhat less compelling than they were on Twitter. The No. 3 reason to share via facebook, providing followers with content that might interest them, garned 47% of respondents close to the 46% who did this via Twitter. But relatively few people on Facebook were interested in posting content to endorse it fewer than a third did so. Meanwhile, 41% posted to Facebook just to add content to their feed, while a mere 5% of Twitter users did the same. emarketer estimates that 18.5 million people in Canada use a social networking site at least once per month this year. Canada Digital Marketing Roundup Copyright 2014 emarketer, Inc. All rights reserved. 4
5 Marketing in Canada: Mobile Payments on the Horizon Lack of NFC-enabled phones could be holding back adoption The use of mobile payments is steadily gaining traction in the US, though hurdles to widespread adoption remain. Similar conditions are evident in Canada, where the fragmented market and the lack of devices enabled with near field communication (NFC) are slowing growth and prolonging a mobile payments future. According to May 2013 research from technology market analysis firm Technology Strategies International, half of smartphone owners in Canada said they have used their phones to make payments, and by 2017, there will be almost 3 million regular mobile payment users specifically those making NFC payments. While the majority of digital purchases are being made on desktop devices, smartphone and tablet digital purchases are not far behind. In fact, almost a third of 18- to 34-yearolds are making purchases via their smartphone device, according to an Ipsos Reid survey from July In a February 2014 survey from payment processor TSYS, some 6% of internet users in Canada said they have made a payment at a retail location with a mobile device. That number might seem low because credit and debit cards are still the preferred payment method. TSYS also found that more than two-thirds of respondents reported using their credit and debit cards to pay for purchases. The lack of NFC-enabled smartphones available could be what s holding back adoption. Only 9.6% of smartphone owners in Canada polled by Technology Strategies International said they owned one. That number is expected to increase to 50.0% by Mobile Payment Metrics in Canada, May % + smartphone owners have used their phones to make payments 7.3% reported making a proximity-based payment at merchants other than coffee shops By 2017 there will be almost 3 million regular mobile payment users (specifically for NFC/contactless payments) Note: includes any kind of payment initiated and completed on a mobile device Source: Technology Strategies International, "Canadian Payments Forecast ," June 27, Devices Used to Make Digital Purchases According to Digital Buyers in Canada, by Age, July 2014 % of respondents in each group Desktop/laptop Smartphone Tablet 8% 11% 16% 20% 22% 21% 19% 33% 92% 90% 83% 88% Total Note: n=672; in the past 12 months Source: Ipsos Reid, "2014 Ipsos Canadian Inter@ctive Reid Report," Sep 3, Preferred Payment Method Among Internet Users in Canada, Feb 2014 % of total PayPal/alternative 2% Cash 19% Charge card 7% Other* 3% No preference 3% Credit card 34% Debit card 33% Note: numbers may not add up to 100% due to rounding; *includes prepaid/gift card, store credit card and check Source: TSYS, "2014 Canadian Consumer Payment Choice Study," April 3, Canada Digital Marketing Roundup Copyright 2014 emarketer, Inc. All rights reserved. 5
6 In Canada, Users Search for, Don t Share, Info on Social Nearly half of internet users look for company info on social channels The top information resource used by internet users in Canada to find company information is unsurprising: search, according to a May survey by Ipsos Reid. But social media was not far behind, with 46% of internet users saying they looked at social networks, professional networks and blogs when checking out company info on the web. But what are social media searchers finding when they look up company info on these sites? While nearly half of internet users checked social media for information, a lower 36% of internet users said they bothered to actually share information about companies on social media sites. Much more common was traditional word-of-mouth. Nearly eight in 10 internet users in Canada said they told people they knew about companies more than twice as many as posted to social sites about it. Commenting on company sites or other blogging-related activity was even less common. In spite of an estimated 18.5 million social network users in Canada, or 68% of the internet population there, it seems there is still a major traditional aspect to passing along brand information. Information Sources Used by Internet Users in Canada to Find Company Information, May 2014 % of respondents Search engines 61% Word-of-mouth 50% Company websites 48% Social media* 46% Note: *including social networks, professional networks and blogs Source: Ipsos Reid, "The Evolving Role of Social Media on Corporate Reputation in Canada," July 23, Channels Used to Share Information About Companies According to Internet Users in Canada, May 2014 % of respondents Word-of-mouth Social networks 36% Posting comments company sites 15% Consumer/other blogs 13% Professional networking sites 11% Posting comments news sites 5% Source: Ipsos Reid, "The Evolving Role of Social Media on Corporate Reputation in Canada," July 23, % Canada Digital Marketing Roundup Copyright 2014 emarketer, Inc. All rights reserved. 6
7 Marketing in Canada: Mobile Commerce Has Reached Critical Mass, Says Google Eric Morris Head of Mobile Advertising Google Canada Marketers use a variety of mobile channels, such as apps, mobile search and location, to drive consumer engagement. Eric Morris, head of mobile advertising at Google Canada, spoke with emarketer s Rimma Kats about these channels and how they are rapidly growing. emarketer: What s the current state of mobile in Canada? Eric Morris: Marketers have a habit of wanting to be where consumers are and wanting to be in an environment where they can have impact. Mobile certainly checks both of those boxes. Advertisers today tell us that mobile has transitioned from a conversation about why they should be on mobile to how they should be on mobile. In a sense, the audience is there. It s now about how they take advantage of that to build their brand and deliver sales. emarketer: Do you find that apps really increase engagement with mobile users? Morris: A few years ago, apps were more trendy and there was this mentality where everyone wanted to have an app. Businesses and marketers have realized that apps satisfy a specific need for consumers and not everyone wants an app. If a company builds an app, it has to be unique. Advertisers today tell us that mobile has transitioned from a conversation about why they should be on mobile to how they should be on mobile. One of the best examples is the Starbucks mobile app. It s a great example of a business that is using an app to do something that s useful to push people through their point of sale faster, as well as build retention and loyalty. In that case, an app is very useful and does something different and, frankly, better than a mobile website. That being said, there s limited real estate on a smartphone home screen. Consumers download a lot of apps, but only a small subset of those apps ever get used. emarketer: Is a mobile web strategy viable across device and operating system (OS) types? Morris: It certainly is. It s the preferred channel for people to access information and find businesses online today. It s far easier to just go to a website than have to go to an app store, download the app and set it up. emarketer: What about mobile display? Do you find that this is a challenge for marketers? Morris: Mobile display advertising is a very successful business. If you were to look at the historical growth rate, it has probably grown faster than the traditional desktop display advertising business ever did. emarketer: Will mobile commerce reach critical mass? Morris: Mobile commerce has already reached critical mass. We define mobile commerce as not just people buying things on smartphones. From our research, nearly one in three Canadians have bought something on their smartphones. However, for us, mobile commerce means far more than that. If someone is researching a product or service on their phone, and then goes home and buys that product on their desktop or tablet, that s mobile commerce. It s commerce that has been influenced and enabled through a smartphone. The vast majority of Canadians are using their smartphone to research products and services, and it s just the transaction that occurs in a number of different ways. It can occur on the phone. It can occur on another device, like a tablet or a desktop when they are at home or in their office, or it could occur in the physical store. Canada Digital Marketing Roundup Copyright 2014 emarketer, Inc. All rights reserved. 7
8 Marketing in Canada: Real-Time Marketing Grows More Planned, Predictive Trevor Carr President and CEO Noise Digital When it comes to real-time marketing, brands are still trying to mimic and accomplish what Oreo did during the Super Bowl XLVII with its successful You Can Still Dunk in the Dark tweet. However, it is important to plan ahead of time and use more of a predictive approach, rather than a reactive one, according to Trevor Carr, president and CEO of Noise Digital, a full-service advertising agency with offices in Vancouver and Toronto. Carr spoke with emarketer s Rimma Kats about the evolution of real-time marketing and best practices for marketers looking to invest in the space. emarketer: Why has real-time marketing been so hard to execute? Trevor Carr: The inherent structure of how agencies, media agencies and the client work together is still very siloed. Reacting to real-time events and executing proper, creative real-time solutions is difficult unless you have all of those mechanisms of paid media, social monitoring, creative and strategy all linked together. emarketer: How is the definition of real-time marketing evolving? emarketer: What are you doing that s working? It s about integrating your teams your strategy, analytics, media planning and creative teams as well as your accounts people. Carr: We manage a lot of our clients social media channels, just from a peer to media management perspective. The key for us is a combination of reacting to what the community wants and what the community is talking about, and mixing that with paid media. If we re doing a campaign for a lottery client and they re trying to get people to bet on football or hockey games, we can change the creative, the discussion and the match-up in real time across all channels at the same time. It s important to plan those things ahead of time, using more of a predictive approach rather than a reactive approach, and swapping that creative in and out with our paid media channels in conjunction with our social channels. emarketer: How should brands structure for realtime marketing? Carr: It s about integrating your teams your strategy, analytics, media planning and creative teams as well as your accounts people, because it s impossible unless all of those people are literally in the same room together working in conjunction. The time it takes to call someone up, amplify a post and change a creative out, it s just too long to do real-time marketing properly. Carr: Brands are setting up these large war rooms to take advantage of real-time marketing. They are preparing ahead of time, using things like predictive analytics to understand what s going to happen in the future rather than reacting in present day. Canada Digital Marketing Roundup Copyright 2014 emarketer, Inc. All rights reserved. 8
9 The leading research fi rm for marketing in a digital world. Coverage of a Digital World emarketer data and insights address how consumers spend time and money, and what marketers are doing to reach them in today s digital world. Get a deeper look at emarketer coverage, including our reports, benchmarks and forecasts, and charts. emarketer Corporate Subscriptions: The Fastest Path to Insight All emarketer research is available to our clients via an annual corporate subscription. The subscription provides clients with access to all emarketer analyst reports, signature charts, interviews, case studies, webinars and more. See for yourself how easy it is to find the intelligence you need. Learn more about subscription options. Confidence in the Numbers Our unique approach of analyzing data from multiple research sources provides our customers with the most definitive answers available about the marketplace. Learn why. Schedule a personalized demonstration or request a quote today. Go to emarketer.com, call , or sales@emarketer.com.
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