The importance of mobile in the lives of consumers

In total, there are 60 million people in the UK, of which 48 million own mobile phones, although there are 70 million active mobile connections (active = in the last 90 days). Unsurprisingly, the profile of mobile users is fairly similar to that of the UK population.

According to the Mobile Life European Report1, the British population tend to use the full range of mobile features:

• Over half of them have used Bluetooth.
• 37% have recorded a video using a mobile handset.
• 27% have downloaded a music track.
• Almost half of the British mobile population (46%) have accessed the internet using their mobile.
• 25% have uploaded pictures or videos to the internet through their mobile.
• 20% of the research respondents said that they used GPS.
• 18% watched TV or video clips.
• 9% used their mobile to pay bills.
• 8% bought products using their mobile.

The greater use of full functionality means that the mobile phone is the most important possession for 1 in 6 people in Britain – this increases to 1/3 of individuals when looking at those aged 16-24. No wonder they are emotionally reliant on their phones… indeed, 1 in 6 British people agree with the statement “I would feel unwanted if a whole day went by when my phone didn’t ring or receive a text message”.

As it is often the case with new technologies, mobile internet users tend to skew to 18-34 year-old men. However, as with online a few years ago, this is expected to even out as usage grows.

Mobile internet usage is predicted to be driven by infotainment (entertainment information, e.g. sports and news) consumption, as with the internet in the early days.

Monetising audiences via profiling

Mobile operators own extensive records of their customers. Whilst operators need to respect their customers’ privacy and not share personal profile information with third parties, there is great commercial potential in creating consumer clusters based on socio-demographic characteristics, spend, usage and other behavioural information, and providing this to advertisers for precise audience targeting.

This information will be available soon on an aggregated basis, as these databases are built and populated, and as common standards are achieved.

Market growth

The mobile internet advertising industry is predicted to gather momentum over the next few years, driven by the rollout of new technologies and services from media owners and network operators, and by the steady adoption of new services by consumers.

As the handset sector continues to evolve, it will ultimately drive the market for mobile internet access. By the end of 2006, there were 7.8m 3G connections in the UK, up from 4.6m for the previous year. Penetration is expected to continue to increase rapidly over the next few years as 3G-only operator 3 (logo) has been joined by other mobile network operators (MNO) which have started migrating their subscribers onto their 3G networks.

The below graph shows that over a third of people with 3G equipped phones are accessing news and information on mobile sites at least once a month:



Additionally, most mobile handsets now have internet capability. Nearly four out of five handsets sold in the first quarter of 2006 were internet-enabled3. Moreover, the introduction of unlimited data tariffs at prices as low as £5 a month means that cost will no longer be a barrier to growth of mobile internet usage.

The growing number of partnerships between mobile network operators and online media owners is accelerating the improvement in mobile internet sites and enhancing customer experience to a level approaching that available to users of fixed-line internet.

The graph below from M:Metrics provides a brief overview of the activities of mobile subscribers in the UK. As you can see, search activity and information such as news and entertainment are the most popular areas of usage. Utilities like the weather and maps for directions are also popular on mobile.



Finally, the prevalence of more advanced mobile technology in the near future will offer advertisers the opportunity to reach large numbers of consumers with more sophisticated marketing communications. Rich media will be used to convey stronger brand messages or to demonstrate products and services through the use of sound and pictures.

For these reasons, amongst others, the UK mobile advertising market in Western society is expected to grow to £187m by 2011. According to forecasts from Strategy Analytics, growth will be driven by display advertising, followed by search.

Penetration of mobile and mobile internet

For several years there have been more mobiles than landlines but in 2006, for the first time, mobile penetration of households exceeded that of fixed lines in the UK. There are now more households with a mobile and no landline than the other way round. This shows that the consumer is embracing the convenience of always having their mobile to hand. It is this convenience factor that means mobile has the potential to overtake the PC as the preferred way to access the internet.

At present Vodafone estimates 27% of its customer-base regularly uses the mobile for browsing, collecting emails or instant messaging; all of which use the same WAP protocol. Vodafone predicts this figure will reach at least 50% by 2010.