Planning Now for the Next Frontier: Opportunities in the US Wireless Market Noah Elkin Senior Analys

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Planning Now for the Next FrontierOpportunities
in the US Wireless MarketNoah ElkinSenior
Analyst, eMarketer, Inc.
Online Publishers Association New York, NY 14
September 2005
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The power of eMarketers research lies in looking
at and analyzing multiple sources
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Enpocket
Ovum
IDC
ARC Group
DOC
Forrester
AMR
comScore
GartnerG2
CTIA
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What well cover

• Overview of US wireless market
• Outlook for mobile advertising, marketing and
  content
• Publishers and mobile opportunities and
  challenges
• Road ahead

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US Wireless Market
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Subscriber population continues to show steady
growth
CAGR, 2005-2009 4.8

• Source eMarketer, September 2005

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US market nearing saturation, but still lags W.
Europe in mobile penetration
Approaching saturation

• Source eMarketer, September 2005

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North America high voice/low data ARPU
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Consumer ARPU declining as voice plans experience
price erosion
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Some US consumers cutting the cord
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High-tech households considering bundled
services
Note Data are for Q2 2005 high-tech HHs are
currently subscribing to at least three bundled
or emerging services Source Telephia, August 2005
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US may end up bucking the global trend
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Other trends in the US mobile market

• Carrier consolidation
• Sprint/Nextel
• Alltel/Western Wireless
• Cingular/ATTWS
• MVNO factor
• Opportunities to target new customer niches
• Way to extend brand for media/lifestyle/
  entertainment companies
• US mobile phone users still more talk than action

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Prospects for Mobile Advertising and Content
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Mobile the Future
of Advertising?
So many things need to be kept in mind while
developing strategies around emerging media
platforms. The first thing to remember, of
course, is that these platforms are called
emerging for a reason. It means they have not
arrived, yet. They are emerging, not
emerged. Jim Meskauskas, iMedia Connection,
June 1, 2005
We are rapidly getting to the point where the
single most important medium that people have is
their wireless device. Its with them every
single moment of the day. Its genuinely the
convergence box that everyone has been talking
about for so many years. Andrew Robertson,
BBDO, April 6, 2005
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Promising future 3 scenarios
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Modest sums, but aggressive growth
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Growth Driver 1 rising interest in the mobile
channel
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Growth Driver 2 use of non-voice applications
is increasing
Source Telephia, June 2005
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Messaging remains leading non-voice application

• Source Enpocket, March 2005

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Applications increasing in usage downloads (esp.
music), browsing and gaming
Note n 41,446 due to a change in definitions
on the survey, n27,765 for ring tone and
wallpaper/screensaver purchases figures are in
thousands, as a of respondents and as a
increase v. prior month Source MMetrics, Inc.,
August 2005
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Growth Driver 3 attractive demographics
Source Pew Internet American Life Project,
March 2005
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Growth Driver 4 increasingly, the consumer is
in control
iPod
Pop-up Spam blockers
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Growth Driver 5 media interaction is growing
2 in August 2004
3 in August 2004

• Source Enpocket, May 2004

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Opportunities and Challenges
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Factors to consider

• Mobile is a channel, not its own strategy
• Leverage mobile for its unique qualities
• Build synergy with other channels
• Focus on hot content areas music, videos, games,
  news
• Repurpose existing content where possible
• Extend the brand to mobile phones
• Set out clear goals and objectives
• Test, measure and refine
• Track consumer behavior

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Approaches to integrating mobile

• Push campaign use program-specific opt-in
  database
• Pull campaign use other media as call to action
  for consumers to participate in a mobile
  promotion
• CRM use wireless channel to bolster customer
  loyalty
• Sponsored content leverage advertisers to
  subsidize delivery of content
• Example Yankees fan who gets game score alerts
  is a more likely candidate to buy team logo
  wallpaper or receive team/MLB merchandise offers

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Getting close to the consumer

• Who is your target audience?
• Whats in it for them?
• Consumers will pay if content is fun or useful
• Build a relationship maintain a relationship
• Phones are PERSONAL!
• Earn permissions use them wisely
• NO mobile spam It's not just like on your
  computer where it costs you time here it costs
  you money (Roger Entner, Ovum)
• Take advantage of the mediums interactivity
• Use pictures, graphics and sound for a more
  compelling call to action

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Working with mobile carriers

• Approach competing mobile operators to maximize
  reach
• Keep in mind network incompatibility issues and
  broad range of devices consumers now use
• Play by the rules
• Carriers want to protect their subscribers
• Know and respect MMA guidelines and any specific
  carrier exceptions
• Remember that the mobile ecosystem is similar to
  broadcast TV circa 1975

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Remember 5 key media and marketing trends

• Consumers skeptical of and resistant to
  advertising
• Yankelovich 59 of consumers feel that most
  advertising has little relevance to them
• Media fragmentation is increasing
• Mass reach efforts are being complemented by
  improved targeting its all about relevance
• Yankelovich 55 would pay a little extra to get
  the kinds of advertising they prefer
• Marketers being held to new levels of
  accountability
• Consumers are more in control

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The Road Ahead
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Turning on, tuning in

• Growing market for mobile entertainment content
  means publishers have new opportunities to pop up
  on consumers handsets
• branded games
• ring tones
• video clips/streaming video
• news updates
• Advent of video clips and streaming video on
  wireless handsets means that TV-style ads cannot
  be far behind

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Mobile search services proliferating

• Recognizes that the user is in control
• Delivers the specific, relevant information
  theyre looking for just when they need it
• Search is hard to live without

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Keep it simple

• Use wireless channel to
• reach, acquire and retain customers
• further develop relationships with existing
  customers
• build brand associations through increased
  contact
• generate sales leads and drive sales (direct
  response consumer contests and promotions/cross-pr
  omotions)

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Towards a new paradigm AOD
Message
Advertiser
Consumer
Information/ entertainment
Consumer
Advertiser
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Thank You!

• For more information please contact
• Noah Elkin
• Senior Analyst, eMarketer, Inc.
• nelkin_at_emarketer.com
• [phone]

Mobile Marketing and M-Commerce