December 29, 2014

The Crystal Ball 2015

By Lai Kok Fung, BuzzCity CEO

As we turn the page on 2014, it's that time of year again when we pull out the BuzzCity Crystal Ball to take a look at what the new year has in store for mobile users and the mobile industry.

The past twelve months have been a period of steady growth for the mobile industry.  Here are just a few indicators:
  • Since the start of the year, The BuzzCity Ad Network has delivered over 320 billion ads, up 19% from 2013.
  • The global market for mobile ads is expected to top US$31 billion in 2014.  Digital advertising is on the rise at a time when TV and print ads are stagnant or declining.
  • More than 1 billion smartphones will be sold this year and smartphone penetration is as high as 85% in Singapore, where mobile devices are far more popular than PCs.  More than three-quarters of mobile surfers use smartphones in 75 markets.
Based on what we see from BuzzCity's research and our survey of the overall industry, it's easy to be bullish on the year ahead as well, particularly when it comes to mobile video and m-commerce . . . which leads me to our two predictions for 2015:

1.  Mobile 'TV' Ads Go Mainstream

2.  Online Shopping Drives Retail Sales for Vendors Big and Small

Mobile Video
Prediction:  Mobile 'TV' Ads Go Mainstream

More than 8 in 10 mobile consumers watch videos on their phone, according to a BuzzCity survey.  27% tune in to mobile videos every day.

Some content - like that of Swedish video game commentator and YouTube sensation 'PewDiePie' - is specifically created for the web and would likely not have found a home elsewhere, at least not at first.  (Haven't heard of PewDiePie?  His real name is Felix Arvid Ulf Kjelberg and he's the most popular YouTuber in the world, with some 33 million subscribers and 7 billion views.)

More traditional companies like ESPN and MTV are also creating web-only content.  In some cases, the clips are repurposed from television; in others, the series are new extensions of their brands.

We've seen some very creative use of mobile video over the past year by forward-looking companies like Diageo (which hired Jude Law for a 6-minute Johnny Walker ad) and Nokia (which has teamed up with young celebrities to promote the Lumia phone and its filming capabilities).

In the US market alone, online video ad revenue is expected to reach US$5 billion in two years, up from US$2.8 billion in 2013.  Online video ad revenue is growing significantly faster than any medium, except mobile itself.

As consumers become increasingly accustomed to watching mobile video ads before and during their selected content - and as more and more companies produce interstitials for mobile - we expect video advertising on mobile to go mainstream in the year ahead.

To be successful, video ads shouldn't just stand alone.  They should be linked and integrated with mobile websites or blogs.  South African carrier MTN, Turkish Airlines and Tune Hotels do a good job of this.  The key is to take a Mobile First content strategy and insure that video is part of the plan.

Prediction:  Online Shopping Drives Retail Sales for Vendors Big and Small

Internet shopping used to be the sole domain of companies like Amazon, eBay and Alibaba.  But with 69% of mobile consumers shopping online, we're seeing an increasing number of main street companies offering internet options.

We're also seeing a blurring of the lines between in-store and online commerce.  Many consumers research products online - before entering a store or while there - before making a physical purchase.  Others shop online, but pick up the products at the store.  Digital wallets and other forms of mobile payments are also making headway, further blurring the line between physical and virtual stores.

Over the coming year, retailers will increasingly realise that online commerce does not cannibalise in-store sales, but can actually provide a boost instead.  Supermarkets - which have been offering click-to-collect and click-to-deliver services - will take on the appearance of online malls as companies attempt to create a common shopping experience.  Just take a look at a few existing examples like Pick n Pay in South Africa, Big C in Thailand and Tesco in the UK.

In addition, with large internet companies like Amazon branching out to deliver more and more daily necessities - and manufacturers starting to offer direct sales online, retailers who do not have online offerings will lose market share and risk becoming irrelevant.

What do YOU think?  We'd love to hear your predictions.  Be sure to check back in a year to let us know how BuzzCity's Crystal Ball has performed.

Best wishes for a wonderful holiday season and a prosperous 2015!