The BuzzCity Report A QUARTERLY BRIEFING ON THE MOBILE INTERNET VOL 2, ISSUE 2: APRIL 2012

Transcription

1 The BuzzCity Report A QUARTERLY BRIEFING ON THE MOBILE INTERNET VOL 2, ISSUE 2: APRIL 2012

2 Contents Welcome... 3 Market update... 4 Mobile advertising... 4 Featured markets... 6 India... 7 Indonesia... 8 United States... 9 Nigeria Saudi Arabia South Africa Market forecast Feature: Mobile payments ecosystem BuzzCity. All Rights Reserved 2 of 17

3 Welcome Dear Mobile Colleagues Welcome to the latest edition of The BuzzCity Report. The mobile internet continues to grow, driven by ongoing consumer demand for mobile content as well as a desire to stay connected wherever they are. The number of ads served on our network increased 16% globally over the past three months, to 45.2 billion ad impressions. Markets that stand out this quarter include Nigeria (83% increase in ads served) making this a major mobile market in Africa. We can expect more from marketing activities from mobile VAS services and mobile money is expected to play a large part in driving mobile services in Nigeria. Others that have continued strong existing growth trends include Kenya, Pakistan and Argentina; all these markets showed triple digit growth in Q We expect the growth of mcommerce will continue to drive mobile marketing over these coming months. Two related and recurring topics which are likely to dominate discussions in the mobile industry over the next year are Fragmentation and Over-the-Top services. This report outlines some of our thoughts on these issues. As always, we ve included a round-up of our detailed statistics and analytics, allowing you to see the trends and forces that are shaping the mobile ecosystem. In addition to our market updates, we ve included a primer on the mpayments value chain and some key steps merchants need to consider. KF Lai CEO, BuzzCity 2012 BuzzCity. All Rights Reserved 3 of 17

4 Market update The following commentary provides the headline changes and noteworthy developments in mobile advertising emerging from over 200 countries that we track each month. Key indicators: Q Ads served % of total Number of ads served by BuzzCity s top 20 markets 35,019,434,248 77% Number of ads served by BuzzCity s top 50 markets 41,329,844,356 91% Network total 45,202,768,183 Mobile advertising 1. In the first quarter of 2012, more than 45 billion ad banners were delivered across the entire network of more than 10,000 publisher sites, to reach an average of over 300 million unique users per month. 2. This is a quarter-on-quarter increase of 16% with the top 20 countries delivering 77% (35.0 billion) of all banners served. 3. During the first quarter, the average cost per click across the entire network was US$0.015 per click. (Detailed network monthly statistics are available at planner.buzzcity.com) 4. Notable among the top markets in the first quarter of 2012: a. Demand for Indian and Indonesian audiences picked up early in the New Year and continued throughout the first quarter and increased banners served in India (17%) and Indonesia (10%). b. Demand for US traffic dipped in February but began to climb again in March. c. In 4th place and new to the Billion Club is Nigeria. Nigerian traffic climbed 83% against last quarter and if networks stability continues, traffic is likely to grow to 2 billion ads per quarter. d. In 5th and 6th place are South Africa (18%) and United Kingdom (23%) respectively both of which saw double digit growth in Q1. e. Advertiser activity dipped in Canada, Vietnam, Saudi Arabia and Mexico and growth softened although each market continued to serve some 1 billion ads per quarter. The Network grew 16% against the last quarter with the Top 20 countries delivering 77% of all banners served. f. Kenyan growth continues (29%) and we expect this market to join the Billion Club soon as more advertisers take advantage of mobile audiences. 5. In the coming months, we expect: a. The continued growth of Latin American markets: Argentina (206%), Costa Rica (52%) and Venezuela (6%). b. Across South Asia besides India, Pakistan (169%), Bangladesh (43%), and Sri Lanka (34%) remain key targets for advertisers as CPC rates remain competitive. c. CPC rates to continue to be stabilise as more content makes its way to mobile in many markets. The page that follows lists our top 50 mobile advertising countries, ranked by ads served. These markets served 92% of our total network traffic BuzzCity. All Rights Reserved 4 of 17

5 BuzzCity Top 50 ( Q1 '12 ) Q1 Rank Q4 Rank Country Banners Served Growth 1 1 India 11,198,095,486 17% 2 2 Indonesia 6,137,166,633 10% 3 3 United States 2,800,350,421 0% 4 11 Nigeria 1,773,096,511 83% 5 8 South Africa 1,313,586,148 18% 6 9 United Kingdom 1,274,172,588 23% 7 4 Canada 1,165,408,515-16% 8 6 Vietnam 1,110,719,977-7% 9 7 Saudi Arabia 1,027,526,525-10% 10 5 Mexico 926,976,358-29% Thailand 891,263,167-11% Kenya 819,968,166 29% Norway 674,052, % Pakistan 665,085, % Bangladesh 601,827,995 44% Argentina 595,683, % China 568,577,515 39% Malaysia 510,545,093 1% Brazil 493,856,509-28% Spain 471,475,274 44% Turkey 434,303,326 26% Ghana 431,146,881 39% Sri Lanka 352,936,783 35% Egypt 335,370,317 48% Germany 334,428,880 51% Sudan 306,652,756 89% United Arab Emirates 296,676,742-19% The Netherlands 258,188,316 6% Iran 257,821, % Philippines 253,840,995 12% France 250,345,720-27% Singapore 243,435,749-28% Romania 229,154, % Costa Rica 210,006,561 52% Italy 204,275,463 9% Venezuela 188,056,916 6% Poland 175,252,280 27% Serbia 164,608,014 9% Ethiopia 159,505,283 50% Brunei Darussalam 142,217,099 8% Korea, Republic of 129,806,867 28% Libyan Arab Jamahiriya 123,904,216 0% Hong Kong 118,188,252 79% Russia 116,249,205-13% Australia 114,572,127-8% Zambia 108,006, % Tanzania 97,065,036 29% Zimbabwe 91,681,340 69% Japan 89,140,729-59% Kuwait 86,996,744 49% 2012 BuzzCity. All Rights Reserved 5 of 17

6 Featured markets The pages that follow provide a snapshot of select markets for March 2012, with demographics, traffic growth and handset info. (To find out about any country not listed in the top 10, visit our campaign planner at planner.buzzcity.com.) Mobile hotspots The Mobile Hotspot badge indicates those countries that we predict are likely to generate rapid and exponential growth in coming months, and with it, excellent value for advertisers. All of these countries display a crucial mix of factors that we look for when we predict rapid growth (these could include falling cost of internet access, heavy promotion of web services, cheaper handsets with better usability, and the rollout of new technologies all leading to rapid consumer adoption). Over the next year, we predict that there will be a lot more competition for advertising in these countries, and it would benefit advertisers greatly to take advantage now, before we start to see the inevitable increases in required bid rates that are likely to follow BuzzCity. All Rights Reserved 6 of 17

7 India Summary The growth of Indian traffic continues as more consumers take to mobiles and demand for content remains high. More mobile content players are also taking to the mobile internet as regulatory pressures limit the number of time SMS and USSD marketing messages are sent to consumers. Early adopters are predominantly male although female participation continues to grow. 12,000,000,000 10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 0 Q Q1 Q2 Q3 Q4 Q Demographics (age and gender) % Male 85% % Over 35 5% Under 20 8% % Female 15% Channels and handsets Mobile Content 29% LG 1.52% SonyEricsson 2.30% White Box 17.60% Glamour & Dating 41% Search/ Portal/ Services 3% Community 10% Entertainment & Lifestyle 17% Samsung Nokia 21.76% 54.63% 2012 BuzzCity. All Rights Reserved 7 of 17

8 Indonesia Summary Top of mind among industry players is still the recovery of the Indonesian mobile VAS. 7,000,000,000 6,000,000,000 Q1 12 saw a second quarter of growth since the October ruling by the Indonesian Ministry of Telecoms (BRTI) that cancelled all subscribed-to VAS services. Key to recovery is the re-building of trust through consumer education. 5,000,000,000 4,000,000,000 3,000,000,000 2,000,000,000 The role of BRTI as an impartial body available to support consumer should re-establish public confidence and encourage consumption of mobile services.. 1,000,000,000 0 Q Q1 Q2 Q3 Q4 Q Demographics (age and gender) % Male 76% % Under 20 4% Over 35 16% % Female 24% Channels and handsets Glamour & Dating 27% Entertainment & Lifestyle 24% Apple Blackberry Samsung 1.14% 1.46% 8.68% Premium Portals 3% Search/ Portal/ Services 9% Community 16% Mobile Content 21% SonyEricsson White Box Nokia 9.88% 25.92% 49.35% 2012 BuzzCity. All Rights Reserved 8 of 17

9 United States Summary The mobile web grew by 141% in the US in and flattened in Q ,000,000,000 2,500,000,000 Ad spend dipped in February 12 before picking up again in March 12. 2,000,000,000 1,500,000,000 Demand for mobile content continues to be strong and is expected to continue growth seen in the last year as advertisers, particularly mobile VAS, players resume advertising campaigns. 1,000,000, ,000,000 0 Q Q1 Q2 Q3 Q4 Q Demographics (age and gender) Over 35 33% % % Male 67% Under 20 1% % Female 33% Channels and handsets Glamour & Dating 31% Entertainment & Lifestyle 30% SonyEricsson White Box Vodafone 1.63% 1.90% 2.80% LG 4.58% Apple 5.12% Samsung 10.93% Search/ Portal/ Services 3% Community 8% Mobile Content 28% Blackberry Nokia 15.77% 51.81% 2012 BuzzCity. All Rights Reserved 9 of 17

10 Nigeria Summary After a couple of years of fluctuating growth, Nigeria caught up with South Africa and Kenya in March as a key mobile internet market in Africa. In Q Nigerian traffic grew by another 85%. More growth is expected as faster networks are put in place with the launch of 4G services. Among mobile VAS services, mobile money is expected to play a large part in driving mobile services throughout services already eight providers are operational and more are expected to be licensed. CPC rates remain competitive and attractive to VAS marketers. Demographics (age and gender) 2,000,000,000 1,800,000,000 1,600,000,000 1,400,000,000 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000,000 0 Q Q1 Q2 Q3 Q4 Q Channels and Handsets Entertainment & Lifestyle 44% Glamour & Dating 19% LG 2.11% Samsung 3.22% SonyEricsson 3.32% Search/ Portal/ Services 6% Mobile Content 13% Community 18% White Box Nokia 11.74% 73.89% 2012 BuzzCity. All Rights Reserved 10 of 17

11 Saudi Arabia Summary Reach has climbed to 6.6 million unique visitors each month Yet bid rates remain attractive at USD 0.05 per click. This market has remained attractive to advertisers probably because of it high % of mature users. Over 30 s made up 64% of traffic in March ,200,000,000 1,000,000, ,000, ,000, ,000,000 Demographics (age and gender) 200,000,000 0 Q Q1 Q2 Q3 Q4 Q Mobile Content 36% Glamour & Dating 24% Male 73% 0% Information 1% Community 12% Search/ Portal/ Services 13% Entertainment & Lifestyle 14% Female 27% Channels and handsets % % SonyEricsson Apple 0.33% 2.71% Samsung 9.49% Under 20 2% Over 35 13% % Blackberry Nokia 14.48% 72.60% 2012 BuzzCity. All Rights Reserved 11 of 17

12 South Africa Summary The network enjoys a reach of 8.6 million South African users half of whom are females. The South African audience remains attractive to international advertisers. This market has a low % of juvenile surfers (<3%) South African publishers are benefitting from this as competing advertisers keep bid rate at a healthy 13 to 15 cents CPC 1,400,000,000 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000,000 0 Q Q1 Q2 Q3 Q4 Q Demographics (age and gender) % Over 35 23% Female 50% % Under 20 3% % Male 50% Channels and handsets Entertainment & Lifestyle 42% Glamour & Dating 27% Apple White Box 1.38% 1.66% Others 3.94% Samsung 7.63% Search/ Portal/ Services 4% Community 9% Mobile Content 18% Blackberry Nokia 23.65% 57.77% 2012 BuzzCity. All Rights Reserved 12 of 17

13 United Kingdom Summary Mobile ads in the UK grew by 157% on the network in the last year and Q1 growth of 23% suggest event more growth in the quarters to come. Mobile commerce is expected to drive more growth this year and beyond as more users get comfortable with it. By April 2012, the network had a UK reach of 3.8million users and bids remained modest at USD0.06 / click 1,400,000,000 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000,000 0 Q Q1 Q2 Q3 Q4 Q Demographics (age and gender) Over 35 27% % Male 79% % Under 20 2% Female 21% % Mobile Content 28% SonyEricsson White Box 1.88% 3.48% HTC 4.06% Glamour & Dating 20% Samsung Apple 6.72% 9.09% Entertainment & Lifestyle 35% Premium Portals 3% Search/ Portal/ Services 5% Community 9% Nokia Blackberry 9.36% 63.62% 2012 BuzzCity. All Rights Reserved 13 of 17

14 Market forecast From the signs we are seeing in this first quarter, 2012, looks set to be another exciting year (or two) for the mobile industry as the mobile landscape becomes more complex and more significant to a wider audience t. As mobile commerce takes centre stage, two related and recurring topics are likely to dominate discussions in the mobile industry over the next year: Fragmentation and Over-the-Top services. 1. Fragmentation: Platforms Wars The platform wars are far from over because the device landscape continues to change. 1. was the year the global sale of smartphones outstripped PC sales perhaps best exemplified by Samsung (who champions Android). As Samsung was a relatively late entrant to the smartphone game, their growth illustrates the demand for affordable and more powerful phones. 2. This demand will continue to drive development of mobile applications / content across different platforms. The race to meet this demand is demonstrated by Nokia and Microsoft who are investing 18 million euros to spur app development for Windows-based smartphones. 3. This is further fuelled by the rapid growth of tablets which (in a very short space of time) is no longer dominated by a single player. Once operators develop data plans across multiple devices, we can expect increased demand for tablet based content. 4. All this means the user experience is fragmented over three screens delivering performance and a unified user experience will be a challenge for many. Developers, marketers and brands need to leverage cross platform tools (HTML5) and develop their campaigns around a three-screen experience with Web (or TV in many cases), tablet and phone. The adoption of HTML5 requires brands and companies to think strategically about their mobile efforts. In order to fully tap into HTML5, it is important for marketers to look at exactly at what they are currently doing on each platform and finding a way to unify these initiatives in an integrated way. 2. Over the Top (OTT) The demand for mobile content keeps growing. There are more and more ways to view it. And this is attracting more players into the game, often in ways that appear to threaten the costs and earnings of carriers. What is OTT? These are services delivered over carrier networks, but which do not directly engage the carriers. Some of the best know examples of OTT services are Google, Yahoo!, Twitter, Facebook, YouTube and itunes. Carriers often perceive these OTT players as a threat because they push data traffic to new heights as surfers consume more content. This should be good news for the carriers, right? Well, only if they charge per MB. Competition between carriers, though, is pushing their margins down and has led to more unlimited surfing plans. The increased traffic is also making demands on carrier infrastructure. Some OTT services compete directly with carrier offering and eat into telco profits. Free mobile messaging is a case in point; consumers who use this service send fewer SMSs. Meanwhile, the brand value and profits of popular OTT companies rise, while carriers become more and more transparent. This OTT revenue is going to re-kindle the debate about their services, namely business models, regulation, technology and invariably 'ownership' of the consumer. Mobile Payments Like the OTT players, telcos want to create new revenue streams based on forming direct relationships with the consumer. There are a number of value-added possibilities -- like offering voic and voice over IP -- but the 2012 BuzzCity. All Rights Reserved 14 of 17

15 most popular at the moment appears to be mobile payments. Carriers are entering the space to clear payments, just like a credit card company but using different technologies. To this end, carriers are forming new relationships and alliances, which explains a slew of announcements about mobile payments, particularly in the US and Europe... Mobile money: Using your phone to transfer cash (22 February 2012) Swedish operators form mobile payment joint venture (18 November ) BNP Paribas and Orange partner to launch the first entirely mobile banking offer in France (26 July ) Vodafone, U.K. Operators, Form Mobile Payment Joint Venture (16 June ) French Mobile Carriers Form a Mobile Payments Joint Venture (4 February ) There are basically two revenue models for the web-based services: advertising and direct sales. So far, carriers -- which have long wanted to leverage 3rd-party earnings from advertisers -- are largely opting for direct sales to consumers via mobile payments, though some are starting to look at ads again too. The UK s three biggest mobile operators... to launch a new advertising network (21 March 2012) SingTel buys US mobile advertising firm Amobee (5 March 2012) 2012 BuzzCity. All Rights Reserved 15 of 17

16 Feature: Mobile payments ecosystem Introduction Long before mobiles became popular, many different types of electronic payments evolved. Central to electronic payments is the payment processor which automates payment transactions between the shopper and merchant. This is typically a third-party service that processes, verifies and accepts or declines (credit card) transactions on behalf of the merchant through secure electronic connections. For many today, the most common payment processor is the Credit Card Company. As mobiles became popular, the mobile carrier invariably took on, among others, the role of payment processor: processing, verifying, accepting or declining transactions for merchants. This first took the form of Premium SMS and a little later, Direct Mobile Billing. Premium SMS Premium SMS is used as a billing mechanism for the purchase of mobile content and for other goods and services (usually mobile-related). The content/service is provided by a third party content provider. Premium Services can include competitions, promotions, TV voting, SMS chat or mobile content purchases such as ringtones, games and screensavers. The consumer sends a payment request via a SMS text message or a USSD to a short code and the cost of the product is applied to their phone bill or their remaining phone credits. The merchant involved is informed of the payment success and can then release the paid for goods. Carriers have charged anywhere from percent of the transaction amount for sales made through premium SMS messages, which is a big reason why many merchants have been slow to adopt this approach. The Internet: Direct Mobile Billing. The consumer can also access the Internet via mobile applications or browsers to make payments. This access makes it possible to link mobile payments directly to the carrier s billing system (and, theoretically, reduces the cost of payment processing). Professional services (mobile payment gateways) have evolved to help merchants link their portals or point of sale to operator billing systems (Direct Mobile Billing / WAP Billing). This facility allows the consumer chooses a mobile billing option at the end of a transaction. The user provides their mobile number when prompted on the website, mobile site or at the checkout counter. They ll then receive a confirmation message, to which a positive response, completes the transaction. The consumer s mobile account is then charged for the transaction. Many see this as a credit card replacement but to be competitive (with credit cards) carriers will have to charge a percentage fee that approaches the single-digit fee that credit cards charge. (In both Premium SMS and Direct Mobile Billing, the consumer s account with the Carrier is central to the approach and is sometimes referred to as a carrier led model of mobile payment) The Internet: More Possibilities Access to the internet via mobiles also means it is possible to link mobile payments to other payment processors, the more familiar being credit card companies. Typically this means credit card data is sent to the bank that issued the card (to verify that the account exists). If there is enough credit in the account to cover the transaction, the customer s bank generates an authorization code, and then places a hold on the cardholder's account for the amount of the sale. At the same time, an acquiring bank, which receives credit card transactions for the merchant, then credits the merchant's account BuzzCity. All Rights Reserved 16 of 17

17 (Here, two banks are involved and this method is also referred to as the bank led model). There are many ways credit card data is sent to the banks. 1. Credit card Terminal the traditional swipe machine a. Mobile Card Readers are basically swipe machines that are plugged into a mobile phone. 2. Payment gateways card details are collected over the internet and passed to the banks involved. The Internet: Adding Value Access to the internet via mobiles also means access to other service providers; particularly those who help ease the challenge of entering credit card data / personal credentials and verification into the phone. These provide internet users with a convenient way to store and use online shopping information in a digital wallet. (E.g. Google Checkout, Checkout by Amazon). The term digital wallet is also increasingly being used to describe mobile phones that store an individual s credentials and utilize wireless technologies such as near field communication (NFC) to carry out financial transactions. As players compete to add value, services are emerging that offer to store and use gift cards, access special offers and store receipts (E.g. Google Wallet, PayPal Wallet) for mobile, online and in-store shopping. In all these cases service providers will need to work with payment processors in the form of Credit Card companies, Carriers or both. Adding Value: Over the Top Mobile internet usage has grown with the use of services flying "over the top, OTT, of (fixed and) mobile networks. These OTT players (E.g. Facebook, Ebay) and device manufacturers (E.g. Apple, BlackBerry) are driving the customer experience and innovation. The revenue generated by Web-based services like Google, Facebook, itunes, BlackBerry, Nokia are proving lucrative and has created a race to value add. This has resulted in various cross alliances to deliver services related to payments that have made the news. Summary Merchants looking to go mobile will need to see which payment gateway to work with. This in particular means looking out for the key factors which represent a basic merchant service framework (on a technology and operational front) that is interoperable among transaction sources. Merchants, after all, should not have to do too much just to adopt a channel for payments. This should be easy for merchants to integrate or opt in / out. Operationally, such a framework should not create a learning curve that would require the services of specialized personnel. Particular areas of service to look out for include:- 1. Management of hardware / application lifecycles. This can include a. The distribution of applications b. Provisioning of compatible hardware c. Activation of service 2. Order Taking and fulfillment 3. Account Management & Associated Services a. Acquire payments b. Route transaction c. Debit/credit Accounts 4. Marketing & CRM services 2012 BuzzCity. All Rights Reserved 17 of 17

18 BuzzCity Pte Ltd 1 Lorong 2, Toa Payoh #02-03, Yellow Pages Building Singapore General enquiries and feedback feedback@buzzcity.com Partnerships and Business Development partners@buzzcity.com Advertising enquiries sales@buzzcity.com For a full list of our global offices and local representation, please visit BuzzCity. All Rights Reserved 18 of 17