2014 was definitely a banner year when it comes to mobile ad spending. As we enter 2015, even more advertisers are expected to shift marketing budgets towards mobile in even bigger numbers.
With mobile applications in the app stores numbering well into the millions and over half of Americans now owning smartphones this isn’t surprising.
Looking at marketing budgets, a recent study by eMarketer found that the growth in mobile budgets and mobile application development is taking away from money spent on print, television and digital display advertising.
It is obvious that as mobile grows as an advertising medium that other areas will see reduced budgets. But what is unique this year is that we are starting to see digital display having reduced funds allocated to it for the first time. Digital advertising has been the heavy hitter over the past five years and many assumed that it would continue stay unfazed.
We are seeing changes in consumer behavior. Consumers are starting to lean towards mobile devices like smartphones and tablets over computers. Which means that advertisers who are looking to advertise where their customers are spending time and improve their return on investment are reducing their budgets allocated to other advertising methods and increasing their spending within the mobile medium.
As we watch the growth of smartphones sales it has been clear that this has not been solely a hardware related issue. The mobile applications and features available on the various systems are as much or more a part of the decision process than the hardware itself. Mobile application developers have helped push the industry as well.
“When asked about the main reason behind a handset choice, functionality comes up as the most important factor. Between 44% and 48% of buyers, depending on market, are more interested in functionality than the actual brand of a phone” states Chris Smith, BGR.
According to a new whitepaper from Kantar Worldpanel ComTech, in the U.S., smartphone market penetration stood at 55 percent in the first quarter of 2014 and smartphone sales were 76 percent of all mobile phone sales.
This is generally a sophisticated market that does its homework. “As much as US consumers can be familiar with the term ‘smartphone,’” the report mentions, “they still do their due diligence before purchasing their devices. Only 30% of buyers in Q1 2014 did not conduct any research before buying a smartphone.”
For the 70 percent of consumers who do research prior to their purchase, personal recommendations and advice are huge influences, “One fifth of consumers interacted with store sales assistants before going back into a store to buy, and one quarter sought advice from friends.”
The mobile market has progressively become a tight market. Based on data from comScore, Android leads with just over 50 percent of the market of mobile OS with Apple following behind with 40 percent of the market. When it comes to devices, Apple leads with over 40% of the market and Samsung trailing at just under 30%.
On a local and SMB level the competition is also increasingly tightening as businesses mobile offerings are maturing and competing for market share with their mobile applications and mobile web sites. A new report from B2X and Motorola can help shed light on how businesses can improve their position by including this into their next iPhone application development or Android application development project.
According their report, customer service is the key factor to more mobile customers. B2X polled US smartphone owners about their mobile experience and based on their research post-sales service and customer support was the most important purchase factor for consumers they polled.
“We encourage our customers to utilize applications to improve communication not only to consumers but from consumers,” states Kimber Johnson, Managing Director, Vanity Point. “A quick response to service issues can be invaluable and mobile is the perfect medium to make that happen.”